THEME A American Welfare in Comparative Perspective
1. Americans have generally been had a more restrictive view of who is entitled to receive government assistance.
2. We have been slower than other countries to adopt many of the components of the welfare state.
3. We have insisted that the states (and to a degree private enterprise) play a larger role in running welfare programs.
4. We believe in equality of opportunity but not equality of results.
THEME B Welfare Politics As Majoritarian Politics
1. Social Security Act of 1935 2. Economic Opportunity Act of 1964 (War on Poverty) 3. Medicare Act of 1965 4. Family Support Act of 1988 5. Welfare Reform Act of 1996 (Temporary Assistance for Needy Families --TANF)
Social Security and Medicare account for 2/3 of all federal welfare expenditures.
Majoritarian welfare programs Social Security Act of 1935 –Great Depression of 1929: local relief overwhelmed –Elections of 1932: Democrats and Franklin Roosevelt 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 –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
A client welfare policy: AFDC –A client welfare policy: AFDC Scarcely noticed part of Social Security Act Federal government permitted state 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
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
Reforming majoritarian 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 Medicare –Problems: huge costs and inefficient –Possible solutions Get rid of Medicare and have doctors and hospitals work for government Elderly take Medicare money and buy health insurance
Family Assistance Act of 1969 - labeled negative income tax or guaranteed annual income Goal was to reduce fraud and increase work incentive. Failed because it got a negative label. Perception is Everything
THEME C - Welfare Legislation Family Support Act of 1988 and Welfare Reform Act of 1996, (Temporary Assistance for Needy Families --TANF) had many of the same goals as Family Assistance Act of 1969, but portrayed differently :
1. Absent fathers of welfare families would have child support payments withheld from paychecks
2. States would be required to provide education and/or job training to welfare recipients, except for those individuals with children under three years of age.
3. The work program would require fathers in two-parent families to spend at least sixteen hours a week in community service in exchange for welfare benefits
Two kinds of welfare programs –Majoritarian politics: almost everybody pays and benefits, for example, the Social Security Act and the Medicare Act –Client politics: everybody pays, relatively few people benefit, for example, the AFDC program
Two kinds of welfare programs –Majoritarian politics 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" 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
Two kinds of welfare programs –Client politics 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
Figure 17.1 SSI, TANF, and Food Stamp Recipients, 1980-1998 Source: U.S. Census Bureau, Statistical Abstract of the United States, 1999, 382.
Good News Since 1960 in the United States: 1. The percentage of persons living in poverty has declined. 2. The percentage of blacks living in poverty has declined. 3. The percentage of elderly living in poverty has declined.
New York Times By ROBERT PEAR Published: October 13, 2003 ASHINGTON, Oct. 12 — New government figures show a profound change in welfare spending, shifting money from cash assistance into child care, education, training and other services intended to help poor people get jobs and stay off welfare ASHINGTON, Oct. 12 — New government figures show a profound change in welfare spending, shifting money from cash assistance into child care, education, training and other services intended to help poor people get jobs and stay off welfare
New York Times Cash assistance payments now account for less than half of all spending under the nation's main welfare program, Temporary Assistance for Needy Families, federal officials say. The proportion has been declining steadily since 1996, when Congress revamped welfare and abolished the guarantee of cash assistance for the nation's poorest children. The 1996 law required most adults to work within two years of receiving aid and gave states sweeping authority to run their welfare and work programs with lump sums of federal money.
New York Times Temporary Assistance for Needy Families is financed jointly by the federal government and the states. Of the total of $25.4 billion spent in 2002, about $11.2 billion was for cash assistance and $14.2 billion was for noncash benefits
New York Times Since the welfare law was signed in 1996, the number of people on welfare has plunged, to 5 million from 12.2 million, a 59 percent decline. The federal government provides a fixed amount to the states, $16.5 billion a year, regardless of how many people are on the rolls
New York Times The number of people in poverty rose to 34.6 million in 2002, from 31.6 million in 2000, the Census Bureau reported last month. But the number of people on welfare continued to decline, to 5 million in 2002, from 5.8 million in 2000.
New York Times An Ohio official said the new strategy was no less expensive than the old one. "The cheapest thing to do is to pay a woman to stay home and raise kids in extreme poverty," he said. "We did that for 60 years.