"Hispanic" is a ridiculously over-broad racial category in the US because "Mestizo" and "Mulatto" are considered to be offensive terms.
The Spanish race descriptions (Negro, Mulatto, Mestizo) all went out of fashion around the same time, the latter two perhaps 10-20 years before the first. Mulatto was a term frequently used in the South as a term of abuse - if you wanted to pick a fight with a man you would accuse him or his wife of being a Mulatto (this was also somewhat true among blacks; it had a connotation as an epithet similar to "oreo" today).
