Wilson Chapter 17 Social welfare

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Wilson Chapter 17Social welfare
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Who deserves to benefit?

• Insistence that it be only those who cannot help
  themselves
• Slow, steady change in deserving/undeserving line
  
• Alternative view fair share of national income
  government redistribute money
• Preference to give services, not money, to help
  deserving poor

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Late arrival of welfare policy

• Behind twenty-two European nations
• Contrast with Great Britain in 1908
• UK had free school meals, old age pensions,
  public supported medical care.

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Influence of federalism

• Federal involvement "illegal" until 1930s
• Experiments by state governments
• Argued against federal involvement because state
  already providing welfare
• Lobbied for federal involvement to help states

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Majoritarian welfare programs

• Social Security Act of 1935
• Great Depression of 1929 local relief
  overwhelmed
• Elections of 1932 Democrats and FDR 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

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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
• Means test- eligibility test for services
  Income, number of children, age etc. .

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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
• Reagan speech in 1965- Not online

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Reforming 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

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Medicare

• Problems huge costs and inefficient
• Possible solutions
• Get rid of Medicare and have doctors and
  hospitals work for government (Marx would love
  this. .)
• Elderly take Medicare money and buy health
  insurance (Adam Smith would love this. . )
• Delaying the inevitable
• Clinton and surplus
• Add new benefits
• Bush
• Attempted new health care measures, blocked by
  his own party politics
• Obama and recession
• Reform the whole system, health insurance for
  everyone.

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Client welfare policy AFDCAid to Families with
Dependent Children

• Scarcely noticed part of Social Security Act
• Federal government permitted states 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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Two kinds of welfare programs
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Majoritarian politics

• Almost everybody pays and benefits Examples- the
  Social Security Act and the Medicare Act
• 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"
• Costs are hidden from regular public- looks like
  free services or free money
• 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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Client politics

• Everybody pays, relatively few people benefit,
  for example, the AFDC program
• 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
• Some critics say high welfare benefits made some
  young people go on welfare rather than seek jobs