Making it all make sense:

1
Making it all make sense

• Globalization, Program Financing Budgeting, and
  How Services are Delivered

2
The Global Economy

• Everything (policy, economic behavior, poverty,
  immigration etc) is inter-connected.
• Economic activity and control of international
  organizations contribute to migration and poverty
  in others.
• Industrialized countries purchase raw materials
  (lumber, minerals, agricultural products from
  others) and products from others. Workers can be
  exploited by large corporations and growers. Have
  few economic opportunities in home country.
• U.S. and other industrialized nations need
  immigrant labor in order to produce products at
  low costs.

3
Free Trade

• Often trade agreements such as the North American
  Free Trade Agreement NAFTA permit industrialized
  countries to operate unregulated (wages and
  safety) industries in countries such as Mexico.
  This allows U.S. corporations to make the
  products they need because they can pay people
  less in these countries. In addition, there are
  fewer jobs for U.S. manufacturing and service
  industry workers because these jobs have been
  relocated.
• U.S. corporations may purchase products made in
  countries such as China and El Salvador and then
  look the other way when workers are mistreated.
  Some political candidates, unions, and other
  advocacy groups have proposed that NAFTA be
  amended to provide worker protections in other
  countries.
• Large corporations may flood foreign market with
  products or agricultural goods that drive prices
  in those countries down and limit economic
  opportunities.

4
Interest Rates

• The Federal Reserve bank sets the amount it costs
  individuals and corporations to borrow money.
• When interest rates are low, more people can
  borrow and corporations are more likely to
  borrow money to expand their businesses. When
  some businesses expand, they hire more people.
  However, businesses can choose to use this money
  for more technology or to relocate overseas.
• When interest rates are higher, people who save
  rather than spend money are better off. Some
  economists think that saving is better for the
  country than spending because it creates a pool
  of money that the government can borrow to cover
  deficits.
• Rationale for the economic stimulus package is
  that people will use the money to purchase
  products and therefore businesses will be able to
  expand and hire more people. Some economists
  argue that instead of an economic stimulus
  package should focus on infrastructure
  development (such as building roads and bridges).
  This would contribute to more people being hired
  for good paying jobs in the U.S.
• Mortgage crisis is happening because large
  lenders such as banks and mortgage brokerage
  firms sold home mortgages to people who might not
  have qualified for large loans or offered loans
  with no down payments in which the interest rates
  were adjustable. This means that the interest
  rates were set higher the longer the person had
  the loan. As house values decreased, many people
  owed more money than the value of their house.

5
U.S. Economic Policies Internal External
Implications

• U.S. Government typically runs at a deficit, they
  dont take in enough income to cover all yearly
  expenses.
• The Federal government borrows funds from the
  Social Security System and also borrows money at
  low interest rates from countries such as China
  and Germany unless there is enough money at low
  interest rates for them to borrow in the U.S.
• The accumulated deficit from year to year is
  called the debt. The U.S. must repay the debt and
  pay interest on it. The money comes from the
  yearly income of the Federal government.
  Consequently, payment on the deficit takes money
  away from other social programs.
• Because of relationships among U.S. and foreign
  businesses and debt re-payments, financial
  instability in the U.S. contributes to financial
  instability in counties that the U.S. owes money
  to such as China and some of the European
  countries. However, some analysts argue that
  China has contributed to the current problems in
  the U.S. because the trade deficit with China is
  so big, that China has been able to invest some
  of the surplus funds in the U.S. and destabilized
  some aspects of the financial market place.

6
Economic Philosophy and Government Regulation of
the Economy

• Economic Policy is based on a mix of political
  and economic philosophy and research on the
  economy.
• Some of the guiding principles of a conservative
  approach to the economy are in the book Wealth
  of Nations written in the 18th century by Adam
  Smith. Smiths argument was that under
  capitalism, market forces, the act of selling
  and buying automatically creates the best
  economic conditions. Government should not
  interfere with the market some very
  conservative economists believe that interference
  includes regulation of the financial sector
  (including banks) and the provision of welfare
  services.
• One alternative approach, Keynesian economics,
  views government efforts to stimulate the economy
  (through building roads and other types of
  improvements) as essential for a healthy economy.
• Some critics of government policy have argued
  that government typically will intervene in the
  economy to assist large corporations rather than
  middle and low income people. Some types of
  government programs are believed to offer
  subsides to businesses even when they have been
  established to help the poor. For example, in the
  Central Valley, the availability of welfare and
  Medi-cal benefits for eligible farmworkers
  (citizens and legal immigrants) permits ranchers
  to offer only seasonal employment to farm
  laborers. The food stamp program and other
  government food programs also benefit
  agriculture.

7
Impact of the Global Economy on Impoverished
Nations

• U.S. and other western industrialized nations
  control large funds that provide development
  assistance to 3rd World Nations International
  Monetary Fund and the World Bank.
• In order to qualify for loans, the
  non-industrial countries, must reduce government
  expenditures. However, many of these nations are
  so impoverished that what they really need to do
  is spend money on roads, education, and other
  improvements that will aid economic development.
• The World Bank and IMF policies are beneficial
  for the U.S. and other industrialized nations.

8
Immigration Policies

• Industrialized countries hire immigrants to work
  in jobs that require skills or for low wage work.
• Therefore the economy is dependent on a supply of
  labor for this source.
• However, industrialized countries differ in terms
  of policies on legal immigration and access to
  benefits such as welfare and health care. Legal
  immigrants (such as skilled workers and refugees)
  are treated differently that people with few job
  skills or undocumented immigrants.
• Often immigration controls are implemented when
  people become fearful of people who are different
  from them.
• Recent immigration reform proposals in the U.S.
  (i.e. mass deportation or enforcement of
  immigration laws) has failed because employers
  have a vested interest in maintaining a low wage,
  unregulated work force.

9
Basic Principles Government Budgeting

• Programs for the poor (means-tested programs)
  constitute a small proportion of the federal
  budget.
• Government entitlement programs constitute a
  large proportion of state budgets because of the
  matching requirements in federal legislation
  (TANF, Medi-Cal). States also spend a large
  proportion of their budgets on education and
  prisons.
• President/Governor proposes budget. Legislative
  branch may change and must approve the budget.
  President/Governor may veto the budget. Usually
  detailed negotiations take place.
• Fiscal budget year starts October 1 for the
  federal government and July 1 for the state.

10
Social policy discussions have increasingly
targeted three demographic groups for reductions
in service

• Immigrants tightening immigration requirements
  refusing services to undocumented people
  limiting services to permanent residents who are
  not citizens.
• Women requiring work for single mothers on
  welfare. Limiting benefits to welfare mothers who
  have more children. Funding programs to promote
  marriage.
• People with disabilities Supreme Court
  decisions have limited the ability of people to
  sue for reasonable accommodation. Some cuts in
  Federal and state services for children and
  adults with disabilities have been made or are
  proposed.

11
To analyze government budgets

• Look at the percentage of funds allocated by
  program type and for whom these services are
  intended.
• Look at whether allocations for specific
  expenditures increase or decrease from previous
  years.
• Remember that because inflation affects the value
  of a dollars purchasing power, no increase or a
  small increase may actually represent a decrease
  in funds allocated for a specific program.
• No tax pledges mean that funding must come from
  exiting revenue sources, an increase in fees for
  some services, and cuts in some government
  programs and services. No spending curbs with tax
  cuts may increase yearly deficits and the
  national debt.

12
Other recent developments in how the Federal and
state governments allocate funds include

• Privatization using nonprofit and for-profit
  contractors to deliver some services.
• Using faith-based organizations to deliver
  government services.
• De-emphasizing the role of professional service
  providers in the delivery of some services.
• Requiring that all government funded
  organizations use performance based measures in
  assessing whether private contractors are doing
  their job. Reimbursement is based on performance
  sometimes this leads to the exclusion of people
  with severe problems from the service system
  (creaming).

13
Chambers Wedel identify three questions that a
policy analyst should ask about financing

• Where does the money come from (funding
  categories is it distributed equitably).
• What is the amount of funding (how much money is
  spent is it adequate to meet needs)?
• What approaches are used to fund programs?
• How is the money appropriated/allocated or
  reimburse?
• Is the funding mechanism efficient or effective?

14
Types of Funding for Social Welfare Services

• Private Market Place (selling and buying
  services)
• Private Giving (Individuals, Bequests, Service
  Clubs, Corporations/Unions, Foundations,
  Federated/Consolidated Funding example United
  Way.
• Benefits paid to workers (health insurance,
  pension, other fringe benefits)
• Social Insurance (Social Security Medicare,
  Unemployment Benefits). Sources tax on
  employees and employers.
• Public/Government funding

15
Sources of Government Funding

• Federal income taxes on individuals and
  corporations.
• State income taxes on individuals and
  corporations.
• Local income taxes in some states.
• Real estate taxes (local government school
  funding)
• Fees and other revenues

16
Issues in Financing Benefits

• Whether the Social Security and Medicare systems
  can continue to pay for themselves.
• Whether employers will continue to cover the cost
  of employees health insurance.
• Whether employers will continue to cover the
  costs of employees pensions shift to 401k
  plans this puts risks on employees.
• Equity of reliance on property taxes for local
  schools.

17
Service Delivery

• Organizations must have decision-making
  structures.
• Designated Executive Director, CEO, or management
  team.
• Most organizations have centralized
  decision-making structures decisions made by
  one or a handful of people.
• Administrators are the point of the
  organizations contact with external environment.
  
• Consequently, most organizations are hierarchies.

18
Sample Organizational Chart Hierarchy in
Organizations
19
Typical Organization

• Administrators Control Decisions
• Limited Staff/client participation in management
  decisions
• Emphasis in social service organizations on
  professional staff some organizations, however,
  may prefer non-professional staff, volunteers, or
  a mix of all three.
• Organizations may be client-centered (responsive
  oriented toward client advocacy) or
  client/consumer controlled.

20
Decision on organization structure may be
determined by

• Funding source
• Ideology
• Who founded the organization and the
  organizations purpose
• Nature of the service provided
• Auspice (public, nonprofit, for-profit, etc).

21
Example of policy model that focuses on service
delivery (adapted from Gilbert Specht by
Hardina)
Strategies Professional Consumer
Advocacy Case Advocacy Self-Help Advocacy and/or Political Participation of Constituents
Citizen Participation Give decision-making authority only to board members and experts Give decision-making authority to consumers
Coordination Coordinate efforts with other agencies Limited communication and resource sharing with other agencies
Eligibility Requirements Income-testing No income-testing
Staffing Hire only professionals Hire consumers of service
22
Chambers Wedel Model for Evaluating How
Services are Funded

• Fragmented vs. Integrated or Continuous System
  (does applicant need to obtain services from more
  than one program or reapply)
• Degree of access to services
• Degree of program accountability
• Procedures that preserve due process (procedural
  rights)
• Degree of citizen participation in service
  decisions

23
Chambers Wedel Criteria for Evaluating
Eligibility Rules

• Do the eligibility rules make sense in terms of
  targeting a specific population group for
  inclusion in the program.
• Is there ideological consistency between how the
  social problem is defined and the eligibility
  rule. (For example, emphasis on individual versus
  social responsibility).
• Will social stigma affect utilization?
• Coverage can people receive benefits if they
  are not members of the target group?
• Trade-offs associated with the rule. For example,
  do we have to spend more to cover everyone or can
  we accept that some people will be excluded if we
  keep costs down.
• Potential for under and over utilization of
  services.