CHAPTER 19CHAPTER 19

Social WelfareSocial Welfare

I.I. Two types of welfare Two types of welfare programsprograms

► A.A. Benefit most citizens, no means test (Social Security Benefit most citizens, no means test (Social Security and Medicare)and Medicare) 1.1. Represents majoritarian politicsRepresents majoritarian politics 2.2. Questions: who will pay? How much will they pay?Questions: who will pay? How much will they pay?

► B.B. Benefit a few citizens, means tested (Medicaid and Food Benefit a few citizens, means tested (Medicaid and Food Stamps)Stamps) 1.1. Represents client politicsRepresents client politics 2.2. Questions are about legitimacy: Who should benefit? How Questions are about legitimacy: Who should benefit? How

should they be served?should they be served? 3.3. Government acts very differently in regard to these Government acts very differently in regard to these

programs.programs.► a)a) Majoritarian benefit programs are sacrosanct.Majoritarian benefit programs are sacrosanct.

(i)(i) Politicians look for ways to maintain benefits and hide Politicians look for ways to maintain benefits and hide rising costs.rising costs.

(ii)(ii) Will adopt measures that allow tough decisions to be Will adopt measures that allow tough decisions to be postponedpostponed

► b)b) The appeal of client-based, means-tested programs The appeal of client-based, means-tested programs changes with popular opinion.changes with popular opinion.

(i)(i) Established in 1935, AFDC was seen as a way of helping Established in 1935, AFDC was seen as a way of helping poor women whose husbands had died in war or been killed in mining poor women whose husbands had died in war or been killed in mining accidents.accidents.

(ii)(ii) By the mid-1960s, perception of AFDC as encouraging By the mid-1960s, perception of AFDC as encouraging out-of-wedlock births and creating social dependency.out-of-wedlock births and creating social dependency.

(iii)(iii) Had lost its political legitimacy and was abolishedHad lost its political legitimacy and was abolished

II.II. Social welfare in the United Social welfare in the United StatesStates

► A.A. Four factors make social welfare policy different in the Four factors make social welfare policy different in the United States than in other nationsUnited States than in other nations 1.1. Americans generally take a restrictive view of who is Americans generally take a restrictive view of who is

entitled to government assistance.entitled to government assistance. 2.2. America has been slower than other nations to embrace America has been slower than other nations to embrace

the welfare state.the welfare state. 3.3. Americans insist that the states and private enterprise Americans insist that the states and private enterprise

play a large role in administering welfare programs.play a large role in administering welfare programs. 4.4. Nongovernmental organizations play a large role.Nongovernmental organizations play a large role.

► B.B. Who benefits?Who benefits? 1.1. Public insists that it be only those who cannot help Public insists that it be only those who cannot help

themselves.themselves. 2.2. Slow, steady change in popular views, distinguishing Slow, steady change in popular views, distinguishing

between the deserving and the undeservingbetween the deserving and the undeserving 3.3. Alternative view: determine each person’s fair share of Alternative view: determine each person’s fair share of

national income, and the government redistributes money national income, and the government redistributes money accordinglyaccordingly

4.4. American public prefers to give services, not money, to American public prefers to give services, not money, to help the “deserving poor.”help the “deserving poor.”

II.II. Social welfare in the United Social welfare in the United States (cont.)States (cont.)

► C.C. Late arrival of welfare policy in the United States, at least Late arrival of welfare policy in the United States, at least at the national levelat the national level 1.1. Behind twenty-two European nationsBehind twenty-two European nations 2.2. Contrasts between United States and Britain’s 1908 passage Contrasts between United States and Britain’s 1908 passage

of a national system of old-age pensionsof a national system of old-age pensions► a)a) Parliamentary structure and party majority facilitated Parliamentary structure and party majority facilitated

policy changepolicy change► b)b) Unitary government meant programs were nationally Unitary government meant programs were nationally

runrun► c)c) Society was thinking about social classes, accepting an Society was thinking about social classes, accepting an

activist government, making welfare a central political issueactivist government, making welfare a central political issue► d)d) Contemporary reformers in United States focused on Contemporary reformers in United States focused on

political changes instead of welfare policies.political changes instead of welfare policies.► D.D. States and private enterprises play a role in States and private enterprises play a role in

administering programs in the United States.administering programs in the United States. 1.1. Not until the constitutional reinterpretation of the 1930s was Not until the constitutional reinterpretation of the 1930s was

it clear that the national government could enact social policy.it clear that the national government could enact social policy. 2.2. Political arguments regarding federal involvement:Political arguments regarding federal involvement:

► a)a) Opponents argued against federal involvement, Opponents argued against federal involvement, because states were already providing welfarebecause states were already providing welfare

► b)b) But state authorities lobbied for federal involvement to But state authorities lobbied for federal involvement to help themhelp them

II.II. Social welfare in the United Social welfare in the United States (cont.)States (cont.)

► E.E. Nongovernmental organizations administer much of the Nongovernmental organizations administer much of the welfare state.welfare state. 1.1. Contracts and grants are awarded to national nonprofit Contracts and grants are awarded to national nonprofit

organizations, such as Big Brothers, Big Sisters, Jewish organizations, such as Big Brothers, Big Sisters, Jewish Federations, and Catholic Charities.Federations, and Catholic Charities.

2.2. Charitable Choice: 1996 provision that allowed religious Charitable Choice: 1996 provision that allowed religious nonprofit organizations to compete for grants to administer nonprofit organizations to compete for grants to administer welfare-to-work and related policieswelfare-to-work and related policies

3.3. President George W. Bush expanded role of faith-based President George W. Bush expanded role of faith-based organizations in 2001.organizations in 2001.

4.4. Today, faith-based organizations play prominent roles in Today, faith-based organizations play prominent roles in urban welfare-to-work programs.urban welfare-to-work programs.► a)a) Fewer than 10 percent give preference in hiring to Fewer than 10 percent give preference in hiring to

coreligionists.coreligionists.► b)b) Nearly all accept beneficiaries without regard to Nearly all accept beneficiaries without regard to

religion.religion.► c)c) Public opinion supportive of efforts: 75 percent of Public opinion supportive of efforts: 75 percent of

Americans believe faith-based organizations are more “caring and Americans believe faith-based organizations are more “caring and compassionate” in providing servicescompassionate” in providing services

► d) In 2009, President Obama established the White House Office of d) In 2009, President Obama established the White House Office of Faith-Based and Neighborhood Partnerships.Faith-Based and Neighborhood Partnerships.

III.III. Majoritarian welfare policies: Majoritarian welfare policies: Social Security and MedicareSocial Security and Medicare

► A.A. Social Security Act of 1935Social Security Act of 1935 1.1. Great Depression: private charities and city relief programs Great Depression: private charities and city relief programs

were overwhelmed by needwere overwhelmed by need 2.2. Elections of 1932: Democrats, FDR swept into officeElections of 1932: Democrats, FDR swept into office

► a)a) Temporary measures were enacted to provide cash aid to Temporary measures were enacted to provide cash aid to state and local relief agencies and to create public-works jobs.state and local relief agencies and to create public-works jobs.

► b)b) Long-term measures would need to adapt to political Long-term measures would need to adapt to political realitiesrealities

(i)(i) Was direct welfare unconstitutional? Was direct welfare unconstitutional? (ii)(ii) Would it violate American individualism?Would it violate American individualism?

► c)c) Fear of more radical movements challenging FDR in the Fear of more radical movements challenging FDR in the 1936 elections1936 elections

(i)(i) Long’s “Share Our Wealth” plan (Louisiana)Long’s “Share Our Wealth” plan (Louisiana) (ii)(ii) Sinclair’s “End Poverty in California” platformSinclair’s “End Poverty in California” platform (iii)(iii) Townsend’s old-age pension programTownsend’s old-age pension program

3.3. Cabinet Committee’s planCabinet Committee’s plan► a)a) Two kinds of programs:Two kinds of programs:

(i)(i) Insurance for unemployed and elderly, to which workers Insurance for unemployed and elderly, to which workers contribute and from which they would benefitcontribute and from which they would benefit

(ii)(ii) Assistance for dependent children, the blind, and the elderlyAssistance for dependent children, the blind, and the elderly► b)b) Federally funded, state-administered (except for old-age Federally funded, state-administered (except for old-age

insurance) programsinsurance) programs (i)(i) Everybody eligible for insurance programsEverybody eligible for insurance programs (ii)(ii) Means test for assistance programsMeans test for assistance programs

III.III. Majoritarian welfare policies: Majoritarian welfare policies: Social Security and Medicare Social Security and Medicare

(cont.)(cont.)► B.B. Medicare Act of 1965Medicare Act of 1965

1.1. Medical benefits omitted in 1935 in order to ensure Medical benefits omitted in 1935 in order to ensure passage of the Social Security Act.passage of the Social Security Act.

2.2. For thirty years, policy entrepreneurs sought a For thirty years, policy entrepreneurs sought a national-health care plan that would win a congressional national-health care plan that would win a congressional majority.majority.

3.3. Democrats’ big majority in 1964 election altered Ways Democrats’ big majority in 1964 election altered Ways and Means membership (the chief roadblock to the and Means membership (the chief roadblock to the legislation), and its chair became supportive of the program.legislation), and its chair became supportive of the program.

4.4. Proposed bill was designed to avoid objectionsProposed bill was designed to avoid objections► a)a) Applied only to the aged, so that costs would be Applied only to the aged, so that costs would be

limitedlimited► b)b) Only hospitals’, not doctors’, bills were covered Only hospitals’, not doctors’, bills were covered

so that doctors would not be regulated.so that doctors would not be regulated. 5.5. Actually broadened by Ways and Means to include Actually broadened by Ways and Means to include

Medicaid for the poor and to pay doctors’ bills for the elderly.Medicaid for the poor and to pay doctors’ bills for the elderly. 6.6. Passed both houses with partisan vote; Democrats Passed both houses with partisan vote; Democrats

voted in favor and Republicans voted against.voted in favor and Republicans voted against.

III.III. Majoritarian welfare policies: Majoritarian welfare policies: Social Security and Medicare Social Security and Medicare

(cont.)(cont.)► C.C. Majoritarian welfare program reform needed because Majoritarian welfare program reform needed because costs will soon overwhelm system.costs will soon overwhelm system. 1.1. Problem with Social SecurityProblem with Social Security

► a)a) There will soon be insufficient people paying Social There will soon be insufficient people paying Social Security taxes to provide benefits for every retired person.Security taxes to provide benefits for every retired person.

► b)b) Magnitude of shortfall is estimated to be $4 trillion over Magnitude of shortfall is estimated to be $4 trillion over the next seventy-five years.the next seventy-five years.

2.2. Proposed solutions to Social Security problemProposed solutions to Social Security problem► a)a) Raise the retirement age to seventyRaise the retirement age to seventy► b)b) Reduce benefits for high earners by 10 percentReduce benefits for high earners by 10 percent► c)c) Raise payroll taxes for employers and employees from Raise payroll taxes for employers and employees from

6.2 percent to 6.7 percent6.2 percent to 6.7 percent► d)d) Increase the wage cap from $97,500 to $150,000Increase the wage cap from $97,500 to $150,000► e)e) Have government make investments with program Have government make investments with program

surpluses.surpluses.► f)f) Let individuals invest some of their Social Security tax Let individuals invest some of their Social Security tax

payments.payments. (i)(i) Proposed by various advisory commissionsProposed by various advisory commissions (ii)(ii) Rejected by President Clinton, but accepted by President Rejected by President Clinton, but accepted by President

George W. BushGeorge W. Bush (iii)(iii) Popular with younger workers, but two-thirds of Popular with younger workers, but two-thirds of

Americans want to keep Social Security as a guaranteed benefit programAmericans want to keep Social Security as a guaranteed benefit program► (iv) President Obama opposes private investment accounts.(iv) President Obama opposes private investment accounts.

C.C. Majoritarian welfare program reform Majoritarian welfare program reform needed because costs will soon overwhelm needed because costs will soon overwhelm

system. (cont.)system. (cont.)► 3.3. Problem with Medicare: Program is costly and inefficient; costs about Problem with Medicare: Program is costly and inefficient; costs about

$450 billion a year.$450 billion a year. a)a) Since government pays for doctor or hospital visit, people use medical Since government pays for doctor or hospital visit, people use medical

services unnecessarily.services unnecessarily. b)b) Some doctors and hospitals overcharge the government for their services.Some doctors and hospitals overcharge the government for their services. c)c) Doctors and hospitals are paid according to government-approved plan Doctors and hospitals are paid according to government-approved plan

that can change whenever government wants to save money.that can change whenever government wants to save money.► 4.4. Proposed solutions to Medicare problem:Proposed solutions to Medicare problem:

a)a) Eliminate Medicare and have doctors and hospitals work for government.Eliminate Medicare and have doctors and hospitals work for government.► (1)(1) Government-run health care may provide fewer benefits.Government-run health care may provide fewer benefits.► (2)(2) May discourage new health care innovationMay discourage new health care innovation

b)b) Have elderly buy health insurance from private suppliers.Have elderly buy health insurance from private suppliers.► 5.5. Health care issues will remain on the political agenda. Health care issues will remain on the political agenda.

a)a) Baby boomer population is agingBaby boomer population is aging b)b) Government health care expenditures continue to growGovernment health care expenditures continue to grow c)c) The issue is important to powerful interest groups (e.g., AARP)The issue is important to powerful interest groups (e.g., AARP)

► 6. Movement toward health-care reform6. Movement toward health-care reform a) President Obama has proposed comprehensive health care reform.a) President Obama has proposed comprehensive health care reform. b) Cut health care costs for businessesb) Cut health care costs for businesses c) End barriers to health-care coverage for persons with preexisting medical c) End barriers to health-care coverage for persons with preexisting medical

conditions.conditions. d) Create a government health-care plan that would compete with private plans.d) Create a government health-care plan that would compete with private plans.

► 7. In mid-2009, opinion polls indicated that health-care reform was 7. In mid-2009, opinion polls indicated that health-care reform was considered “very important” by half of all voters and “somewhat important” considered “very important” by half of all voters and “somewhat important” by nearly one-third of all voters.by nearly one-third of all voters.

► 8. The plan remains highly controversial.8. The plan remains highly controversial.

III.III. Majoritarian welfare policies: Majoritarian welfare policies: Social Security and Medicare Social Security and Medicare

(cont.)(cont.)► D.D. Client welfare programs: Aid to Families with Client welfare programs: Aid to Families with

Dependent ChildrenDependent Children 1.1. Part of Social Security Act (1935)Part of Social Security Act (1935) 2.2. Administration shared by federal and state Administration shared by federal and state

governmentsgovernments► a)a) States should define “need.”States should define “need.”► b)b) Washington set rules for how program should workWashington set rules for how program should work

(1)(1) Told states how to calculate applicants’ incomesTold states how to calculate applicants’ incomes (2)(2) Required states to give Medicaid to AFDC recipientsRequired states to give Medicaid to AFDC recipients (3)(3) States had to establish mandatory job-training States had to establish mandatory job-training

programs for recipients.programs for recipients. (4)(4) States had to provide child-care programs for States had to provide child-care programs for

working AFDC parents.working AFDC parents. (5)(5) Women had to identify their children’s fathers.Women had to identify their children’s fathers.

► c)c) Washington also created new programs for which Washington also created new programs for which AFDC recipients were eligible.AFDC recipients were eligible.

(1)(1) Food StampsFood Stamps (2)(2) Earned Income Tax CreditEarned Income Tax Credit (3)(3) Free school mealsFree school meals (4)(4) Housing assistanceHousing assistance

D.D. Client welfare programs: Aid to Families Client welfare programs: Aid to Families with Dependent Children (cont.)with Dependent Children (cont.)

► 3.3. AFDC progressively lost political legitimacy over the AFDC progressively lost political legitimacy over the years.years. a)a) States disliked having to conform to burdensome federal States disliked having to conform to burdensome federal

regulations.regulations. b)b) Public believed program encouraged out-of-wedlock births by Public believed program encouraged out-of-wedlock births by

increasing benefits for each new child.increasing benefits for each new child. c)c) Public perceived that many recipients were working, too, and Public perceived that many recipients were working, too, and

thus were undeserving.thus were undeserving. d)d) Politicians concerned that healthy parents were choosing to Politicians concerned that healthy parents were choosing to

receive government assistance instead of working.receive government assistance instead of working. e)e) Changing demographics of recipientsChanging demographics of recipients

► (i)(i) By 1994, only about one-fourth of AFDC mothers were By 1994, only about one-fourth of AFDC mothers were widowed or divorced; half had never been married at all.widowed or divorced; half had never been married at all.

► (ii)(ii) Two-thirds of women received AFDC for eight years or Two-thirds of women received AFDC for eight years or more.more.

► 4.4. AFDC was abolished in 1996; it was replaced by AFDC was abolished in 1996; it was replaced by Temporary Assistance to Needy Families (TANF).Temporary Assistance to Needy Families (TANF). a)a) Block grant programBlock grant program b)b) Had strict federal requirements about work, limited how long Had strict federal requirements about work, limited how long

families can receive federally funded benefitsfamilies can receive federally funded benefits c)c) By 2006, welfare caseloads had declined nationally by 62 By 2006, welfare caseloads had declined nationally by 62

percentpercent

IV.IV. Majoritarian versus client Majoritarian versus client politicspolitics

► A.A. Majoritarian politics: costs and benefits are Majoritarian politics: costs and benefits are widely distributedwidely distributed 1.1. Examples: Social Security Act, Medicare ActExamples: Social Security Act, Medicare Act 2.2. Question of legitimacy central to debate over Social Question of legitimacy central to debate over Social

Security in 1935Security in 1935► a)a) Conservatives argued that nothing in the Conservatives argued that nothing in the

Constitution authorized the federal government to spend Constitution authorized the federal government to spend money this way; welfare is a state issue.money this way; welfare is a state issue.

► b)b) Liberals rejoined that federal government had Liberals rejoined that federal government had obligation to elderly citizens; Social Security is insurance obligation to elderly citizens; Social Security is insurance program, not government expenditure.program, not government expenditure.

3.3. Similar concerns raised in 1965 debate over Similar concerns raised in 1965 debate over Medicare .Medicare .► a)a) Conservatives argued that medical care was Conservatives argued that medical care was

private, not governmental, concern.private, not governmental, concern.► b)b) Liberals rejoined that only the government Liberals rejoined that only the government

had resources to help elderly.had resources to help elderly.

IV.IV. Majoritarian versus client Majoritarian versus client politics (cont.)politics (cont.)

► B.B. Client politics: everybody pays, relatively few Client politics: everybody pays, relatively few people benefit.people benefit. 1.1. To be politically viable, perceived cost must be low, To be politically viable, perceived cost must be low,

and client must be “deserving.”and client must be “deserving.” 2.2. Original AFDC program thought legitimate because Original AFDC program thought legitimate because

it helped mothers who were single through circumstances it helped mothers who were single through circumstances beyond their control; replaced with TANF after public beyond their control; replaced with TANF after public rejected aid for those who became single mothers largely rejected aid for those who became single mothers largely by choice.by choice.

3.3. Legitimacy of beneficiaries often more important Legitimacy of beneficiaries often more important than costthan cost► a)a) For welfare, Americans prefer a service For welfare, Americans prefer a service

strategy to an income strategy.strategy to an income strategy.► b)b) May be willing to bear costs even if high May be willing to bear costs even if high

(prescription-drug benefits for seniors) as long as recipients (prescription-drug benefits for seniors) as long as recipients are perceived as legitimateare perceived as legitimate

IV.IV. Majoritarian versus client Majoritarian versus client politics (cont.)politics (cont.)

► C. Reforming majoritarian education C. Reforming majoritarian education programsprograms 1. President Obama signed the American Recovery 1. President Obama signed the American Recovery

and Reinvestment Act. It had about $5 billion for and Reinvestment Act. It had about $5 billion for early learning programs, $30 billion for college loans early learning programs, $30 billion for college loans and other support for higher education, and federal and other support for higher education, and federal grants totaling nearly $50 billion for elementary and grants totaling nearly $50 billion for elementary and secondary schools.secondary schools.

2. In several years after Bush’s No Child Left Behind 2. In several years after Bush’s No Child Left Behind bill became law, Republicans pulled even with bill became law, Republicans pulled even with Democrats on public trust with respect to education.Democrats on public trust with respect to education.

3. By mid-2009, Democrats had regained an edge 3. By mid-2009, Democrats had regained an edge on the issue.on the issue.