Welfare- any government aid to the poor.

1

• Chapter 3
• Section 2

2

• Welfare- any government aid to the poor.
• There are two types of Welfare Programs
• Cash Transfers and In-Kind Benefits

3

• Cash transfers- direct payments of money to
  eligible poor people.
• The following programs distribute direct cash
  transfers Temporary Assistance for Needy
  Families, Social Security, Unemployment
  insurance, and Workers compensation.
• In-kind benefits- goods and services provided
  for free or at greatly reduced prices.

4

• Poverty threshold- an income level below that
  which is needed to support families or
  households.
• -The poverty thresholds are created by the states
  and are based on 2 factors
• 1-Size of Family (no more than two adults)
• 2-Income Level for the entire household
• -If a families income level falls below the
  poverty threshold then they can qualify for
  welfare assistance

5

• Since free markets reward the most economically
  productive the less fortunate often suffer.
• As a society we recognize some responsibilities
  to the very young, and very old, the sick, poor,
  and disabled.
• The government tries to provide a safety net.

6

• Various federal, state, and local government
  programs help to raise peoples standards of
  living.
• Since 1930s the main government effort to ease
  poverty has been to collect taxes from
  individuals and redistribute some of those funds
  in the form of welfare.
• Many of these programs were started in the
  1930s due to the Great Depression and the
  economic suffering that went along with it.

7

• Welfare spending increases considerably in the
  1960s. This is because President John F.
  Kennedy visited the Appalachian Mountain Region
  and saw a poverty there like he had never seen
  before. He declared a National War on Poverty.
  After his assassination his Vice President,
  Lyndon Johnson took over and continued this War
  on Poverty. The War on Poverty opened the door
  for more people to receive assistance in welfare
  programs and there were also two new programs
  created during this time that added to the total
  costs.

8

• Welfare payments soared In the 1970s and 1980s
  due to the fact that more people had easier
  access to receive welfare monies.
• In 1990s critics of welfare voiced increased
  concern about people becoming dependent.
• In 1996 the U.S. Congress made sweeping changes
  in the welfare system. Mainly by putting the
  states in control of many programs that the
  federal government used to run. However, the
  federal government would still run Social
  Security and Medicare.

9
TANF

• Temporary Assistance to Needy Families
• This program grew out of the 1990s debate about
  how to ease poverty while decreasing government
  payments to the poor
• TANF replaced the earlier welfare program, Aid to
  Families with Dependent Children

10

• Launched in 1996 as part of comprehensive welfare
  reform TANF discontinues direct federal welfare
  payments to recipients.
• States must adhere to federal rules that create
  work incentives and establish a lifetime limit
  for benefits .
• The reform moves people from welfare dependence
  to the work force.

11

• The Social Security program was created in 1935,
  during the depths of the great depression, when
  many of the elderly lost their life savings and
  had no income.
• Social Security provides direct cash transfers of
  retirement income to the elderly and living
  expenses to disabled.

12

• Unemployment insurance is a cash transfer which
  is funded jointly by federal and state
  governments .
• Unemployment insurance provides money to
  eligible workers who have at least lost one of
  their jobs . It is not for those who have quit a
  job but rather have been either fired or laid
  off.

13

• Workers must show that they have made efforts to
  go get work during each week to get money for
  Unemployment.

14

• Workers compensation provides a cash transfer of
  state funds to workers injured on the job.
• Most employers must pay workers compensation
  insurance to cover any future claims their
  employees might make .
• Workers Compensation has become more and more
  expensive as medical expenses and the number of
  reported on the job injuries have increased.

15

• In 1950 social security extended to 10.5 million
  more recipients and went from ADC to AFDC.
• In 1965, the Medical Care Act created Medicare
  for retirees and the disabled and Medicaid for
  those who qualify based on the poverty threshold.

16

• In 1970 Medicare spent around 20 billion. In 1975
  they spent around 22 billion. In 1980 they spent
  around 45 billion. In 1985 they spent around 75
  billion. In 1990 they spent around 102 billion.
  In 1995 they spent around 190 billion. In 2000
  they spent around 249 billion.

17

• What program was created in 1935 to mainly help
  the elderly?
• A.) Unemployment
• B.) Social security
• C.) workers compensation

18

• 2. How does welfare attempt to raise poor
  peoples standard of living?

19

• 3. Why does poverty exist in a free market
  economy?

20

• 4. What is the difference between cash transfers
  and in-kind benefits?

21

• 5. How is Social Security an example of income
  redistribution?

22

• 6. What are some of the trade-off involved in
  spending on social programs?

23

• 7. Summarize the U.S political debate on ways to
  fight poverty.

24

• 8. Describe the main programs through which the
  government redistributes income.

25

• 9. Assume that the poverty threshold is 8,480
  for an individual and 11,235 for a two-person
  household. Based on a 40-hour week, how much
  would you need to earn per hour in order to be
  above the poverty threshold for..(a) an
  individual and (b) a two-person household?

26

• 10. An old adage states, Give a person a fish,
  feed him for a day teach a person how to fish,
  feed him for a lifetime. Do any of the
  government programs in this section reflect this
  saying? Explain your answer.