Social Welfare

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Chapter 17 Social Welfare
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THEME A American Welfare in Comparative
Perspective
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1. Americans have generally been had a more
restrictive view of who is entitled to receive
government assistance.
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2. We have been slower than other countries to
adopt many of the components of the welfare
state.
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3. We have insisted that the states (and to a
degree private enterprise) play a larger role in
running welfare programs.
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4. We believe in equality of opportunity but not
equality of results.
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THEME B Welfare Politics As Majoritarian Politics
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1. Social Security Act of 1935 2. Economic
Opportunity Act of 1964 (War on Poverty) 3.
Medicare Act of 1965 4. Family Support Act of
1988 5. Welfare Reform Act of 1996 (Temporary
Assistance for Needy Families --TANF)
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Social Security and Medicare account for 2/3 of
all federal welfare expenditures.
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Majoritarian welfare programs Social Security
Act of 1935

• Great Depression of 1929 local relief
  overwhelmed
• Elections of 1932 Democrats and Franklin
  Roosevelt swept in
• Legal and political roadblocks was direct
  welfare unconstitutional?
• Fear of more radical movements
• Long's "Share Our Wealth"
• Sinclair's "End Poverty in California"
• Townsend's old age program
• Cabinet Committee's two-part plan
• "Insurance" for unemployed and elderly
• "Assistance" for dependent children, blind, aged
• Federally funded, state-administered program
  under means test

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A client welfare policy AFDC

• A client welfare policy AFDC
• Scarcely noticed part of Social Security Act
• Federal government permitted state to
• Define need
• Set benefit levels
• Administer program
• Federal government increased rule of operation
• New programs (e.g., Food Stamps, Earned Income
  Credit, free school meals)
• Difficult to sustain political support
• States complained about federal regulations
• Public opinion turned against program
• Composition of program participants changed

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Medicare Act of 1965

• Medical benefits omitted in 1935 controversial
  but done to ensure passage
• Opponents
• AMA
• House Ways and Means Committee under Wilbur Mills
• 1964 elections Democrats' big majority altered
  Ways and Means
• Objections anticipated in plan
• Application only to aged, not everybody
• Only hospital, not doctors,' bills covered
• Broadened by Ways and Means to include Medicaid
  for poor pay doctors' bills for elderly

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Reforming majoritarian welfare programs

• Social Security
• Not enough people paying into Social Security
• Three solutions
• Raise the retirement age to seventy, freeze the
  size of retirement benefits, raise Social
  Security taxes
• Privatize Social Security
• Combine first two methods and allow individual
  investment in mutual funds
• Medicare
• Problems huge costs and inefficient
• Possible solutions
• Get rid of Medicare and have doctors and
  hospitals work for government
• Elderly take Medicare money and buy health
  insurance

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Perception is Everything
Family Assistance Act of 1969 - labeled negative
income tax or guaranteed annual income Goal was
to reduce fraud and increase work incentive.
Failed because it got a negative label.
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THEME C - Welfare Legislation Family Support Act
of 1988 and Welfare Reform Act of 1996,
(Temporary Assistance for Needy Families --TANF)
had many of the same goals as Family Assistance
Act of 1969, but portrayed differently
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1. Absent fathers of welfare families would have
child support payments withheld from paychecks
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2. States would be required to provide education
and/or job training to welfare recipients, except
for those individuals with children under three
years of age.
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3. The work program would require fathers in
two-parent families to spend at least sixteen
hours a week in community service in exchange for
welfare benefits
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Passed because of positive image.
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Two kinds of welfare programs

• Majoritarian politics almost everybody pays and
  benefits, for example, the Social Security Act
  and the Medicare Act
• Client politics everybody pays, relatively few
  people benefit, for example, the AFDC program

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Two kinds of welfare programs

• Majoritarian politics
• Programs with widely distributed benefits and
  costs
• Beneficiaries must believe they will come out
  ahead
• Political elites must believe in legitimacy of
  program
• Social Security and Medicare looked like "free
  lunch"
• Debate over legitimacy Social Security (1935)
• Constitution did not authorize federal welfare
  (conservatives)
• But benefits were not really a federal
  expenditure (liberals)
• Good politics unless cost to voters exceeds
  benefits

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Two kinds of welfare programs

• Client politics
• Programs pass if cost to public not perceived as
  great and client considered deserving
• Americans believe today that able-bodied people
  should work for welfare benefits.
• Americans prefer service strategy to income
  strategy

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Figure 17.1 SSI, TANF, and Food Stamp Recipients,
1980-1998
Source U.S. Census Bureau, Statistical Abstract
of the United States, 1999, 382.
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Good News

• Since 1960 in the United States
• 1. The percentage of persons living in poverty
  has declined.
• 2. The percentage of blacks living in poverty has
  declined.
• 3. The percentage of elderly living in poverty
  has declined.

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New York Times

• By ROBERT PEAR Published October 13, 2003
• ASHINGTON, Oct. 12 New government figures show
  a profound change in welfare spending, shifting
  money from cash assistance into child care,
  education, training and other services intended
  to help poor people get jobs and stay off welfare

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New York Times

• Cash assistance payments now account for less
  than half of all spending under the nation's main
  welfare program, Temporary Assistance for Needy
  Families, federal officials say.
• The proportion has been declining steadily since
  1996, when Congress revamped welfare and
  abolished the guarantee of cash assistance for
  the nation's poorest children. The 1996 law
  required most adults to work within two years of
  receiving aid and gave states sweeping authority
  to run their welfare and work programs with lump
  sums of federal money.

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New York Times

• Temporary Assistance for Needy Families is
  financed jointly by the federal government and
  the states. Of the total of 25.4 billion spent
  in 2002, about 11.2 billion was for cash
  assistance and 14.2 billion was for noncash
  benefits

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New York Times

• Since the welfare law was signed in 1996, the
  number of people on welfare has plunged, to 5
  million from 12.2 million, a 59 percent decline.
  The federal government provides a fixed amount to
  the states, 16.5 billion a year, regardless of
  how many people are on the rolls

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New York Times

• The number of people in poverty rose to 34.6
  million in 2002, from 31.6 million in 2000, the
  Census Bureau reported last month. But the number
  of people on welfare continued to decline, to 5
  million in 2002, from 5.8 million in 2000.

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New York Times

• An Ohio official said the new strategy was no
  less expensive than the old one.
• "The cheapest thing to do is to pay a woman to
  stay home and raise kids in extreme poverty," he
  said. "We did that for 60 years.

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SELF - TEST