OConnor

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OConnor Sabato, Chapter 13 Social Economic
Policy

• Presentation 13.2
• Social Welfare Policy

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Key Topics

• The roots of social welfare policy
• Social welfare policy today
• Global politics
• Analyzing visuals
• Join the debate

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The Roots of Social Welfare Policy

• Programs designed to prevent deprivation and
  promote the well-being of citizens
• Two central questions
• Who is deserving of aid?
• What do they deserve?

These questions are at the heart of the
ideological conflict between liberals and
conservatives in America.
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1ai. Roots cont.

• Most American welfare programs began in the 20th
  century
• Rapid urbanization industrialization led to a
  decline of rural, self-sufficient communities
• The Great Depression proved that hard work alone
  could not prevent poverty

Charity and state governments lacked the
resources to respond to the terrible dislocations
created by the Great Depression
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1aii. Income SecurityThe Social Security Act
(1935)

• Marked the beginning of the welfare state in the
  U.S.
• Program was intended to insure greater equality
• SS is a redistributive program

Picture courtesy www.ssa.gov.
Dont understand what redistributive means? Ask
me!
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1aiii. Three Components of Social Security

• Old-age insurance
• Public assistance for the needy, aged, blind, and
  families w/ dependent children
• Unemployment insurance compensation

Employers and employees are required to
contribute a percentage of their monthly pay into
a fund. That fund is then redistributed to those
who are eligible for Social Security payments.
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1aiv. Universal Health Care

• Was considered at the time the SSA was passed
• Faced fierce opposition from the American Medical
  Association (AMA)
• Congress left health insurance out to insure
  passage of the bill

Universal health insurance was a plank in Harry
Trumans and Bill Clintons platforms, but
despite strong evidence that a significant
majority of Americans support the concept,
powerful interests have successfully resisted
legislative attempts to provide health
insurance for all Americans.
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1b. Health Care

• Public health programs have increased life
  expectancy from 47 years in 1900 to 78 years in
  2002
• The first health care service was the National
  Marine Service (NMS) for relief of sick
  disabled seamen
• Medicaid and Medicare publicly shares the burden
  of caring for the poor

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2. Social Welfare Policy Today

• Income security health care programs exist at
  all levels of government
• This class focuses on the national governments
  role
• States, however, are having increasing
  responsibilities passed on to them by the federal
  government

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2a. Income Security

• Protection against loss income due to retirement,
  disability, unemployment, or death
• The poverty threshold for a four-person family
  18,267 (in 2001)
• The distinction between means-tested
  non-means-based programs

Non-means-tested provide assistance to qualified
beneficiaries, while means-tested programs
require that people have incomes below a
specified level to be eligible for assistance.
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2ai. Non-Means-Based Programs

• Similar to private automobile or life insurance
• Contributions can be made by employers,
  employees, or both
• Participation determines eligibility

Such programs are also called entitlement
programs, and Social Security is the largest of
such programs in the United States.
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2aii. Old Age, Survivors, Disability Insurance

• Provides benefits only to retired workers
• The public nature of Social Security
• The current generation in the workforce is
  contributing the benefits that will pay the
  preceding generation of older Americans

Payroll taxes of 7.65 are applied to the first
62,700 of wages or salaries is paid by the
employee, which is matched by the employer
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2aiii. Social Security the Dependency Ratio

• The number of workers paying into the system vs.
  the number of recipients making demands on the
  system
• The Baby Boomer effect the mounting demands
  on the Social Security fund
• Other factors rising life expectancy, lower
  fertility rates, a smaller work force

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2aiv. Saving Social Security

• G.W. Bushs Commission to Strengthen Social
  Security
• Various proposals to certain portions of Social
  Security
• The GOP method encourage personal savings
  combined with tax credits

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2av. Unemployment Insurance

• Provided by payroll taxes paid by employers
• States given a choice of creating their own
  system or let the national government do it
• Most states created their own programs

Unemployment covers employers of four or more
workers, but not part-time or occasional workers.
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2vi. Unemployment Insurance cont.

• Benefits differ considerably from state-to-state
• Weekly benefits range from 401 in Arizona to
  167 in Alabama
• Southern states are less generous (absence of
  labor unions)

Around ½ of the people counted as unemployed at
any particular point in time will be drawing
unemployment checks.
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2b. Social InsuranceMeans-Tested Programs

• Specifically designed to help the needy
• Individuals and familys incomes must fall below
  a certain level in order to be eligible for aid
• Examples include Supplementary Security Income
  (SSI), Temporary Aid to Needy Families (TANF)
  Food Stamps

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2bi. Supplementary Security Income (SSI)

• Subsumed under the Social Security Act as a
  categorical grant-in-aid program
• Financed jointly by the federal and state govts.
• States determine eligibility
• Reconfigured into SSI in 1974

The program was extended to needy people who were
permanently disabled in 1950
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2bii. Personal Responsibility Work Opportunity
Reconciliation Act (PRWORA) (1996)

• The politics of Aid to Families with Dependent
  Children (AFDC)
• The increasing problem of unwed mothers
• The culture of poverty criticism of AFDC
• Replacement of AFDC w/ Temporary Aid to Needy
  Families (TANF)

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2biii. Features of TANF

• Recipients required to work w/in two years of
  receiving benefits
• Unmarried mothers under age of 18 required to
  live with an adult in order to receive benefits
• A five-year limit on aid from block grants
• Requirement that mothers provide information
  about the father in order to receive full
  benefits
• Cutting off food stamps and SSI for legal
  immigrants
• Cutting off benefits for convicted drug felons
• Limiting food stamps for persons 18-50 who are
  not raising children and not working

Has Congress gone too far in limiting access to
welfare?
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2biv. Food Stamps

• Program (1939-1943) was initially intended to
  expand domestic markets on agricultural
  commodities
• Program was reestablished in 1961 as a pilot
  program made permanent in 1964
• In 2002, families of four earning less than
  2,000 per month qualified

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2c. The Effectiveness of Income Security Programs

• Entitlement as a dirty word in contemporary
  political discourse
• The mandatory nature of entitlement programs
• Do entitlement programs improve the lives of
  needy Americans?

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2d. Health Care

• The US spends more of its GDP on health care than
  other democratic nations
• Unfortunately, despite the expense the US ranks
  only 37th in quality of health care
• The rise of the perception that health care is a
  right

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2di. MedicareParts A and B

• Part A all Americans aged 65 are eligible
• Covers hospitalization, some nursing care, and
  home health services
• 700 deductible
• Part B is optional, and covers physicians
  services, outpatient diagnostic services,
  X-rays, etc.

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2dii. Cost/Effectiveness of Medicare

• People are living longer making more demands on
  health care
• Medicare does not cover long-term or catastrophic
  health care
• Attempts to cap Medicare were quickly repealed in
  the face of fierce elderly backlash

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2diii. Medicaid

• Provides comprehensive health care to all who
  qualify as needy under TANF
• In 2000, Medicaid served 40.6 million people at a
  cost of 202 billion
• Most service went to the elderly

Medicaid is financed jointly by federal and state
governments, with the federal role to bridge the
gap between wealthy and poor states.
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2e. New Health Initiatives

• The Balanced Budget Act (BBA) extended the life
  of the Medicare trust fund
• The importance of the Childrens Health Insurance
  Program (CHIP) in providing insurance to 5
  million children of working families
• The Health Insurance Portability and
  Accountability Act (HIPPAA) helped people keep
  their health insurance when they changed jobs

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2f. The Cost of Health Care

• Health care costs were 1.3 trillion in 2000
• Factors contributing to higher costs include (1)
  longer life span (2) more sophisticated
  treatments (3) expansion of private health
  insurance (4) expanded quality and increased
  labor cost (5) and emphasis on cures rather than
  prevention

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3. Global PoliticsComparing Health Policies

• Private expenditures in the U.S. are nearly as
  high as public expenditures in European countries
• Infant mortality is higher in the US than other
  industrialized democracies
• The problem of aging populations will the USs
  privatized system stand up to the strain?

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4. Analyzing VisualsRising Unemployment Rates,
2001-2002

• 22 states suffered a 1.0 increase in
  unemployment between 2001-2002
• 13 states endured a 0.5-0.9 increase
• Only Maine, South Dakota, Montana, Alaska
  Hawaii enjoyed a decrease in unemployment
• Why does unemployment rise in some states and
  drop in others?

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5. Join the DebateShould Welfare Recipients be
Subject to Stricter Requirements?

• Bushs compassionate conservative rhetoric
• We will not leave people in need to their own
  struggle, and we will not leave them to their own
  fate
• Republican and Democratic visions of welfare are
  significantly different
• Which is better?