Social Welfare policies (some notes copied verbatim from WWNorton website)
Equality of opportunity
The ability to freely use individual talents and wealth to reach
one's full potential.
Ideal is enshrined in the Declaration of Independence: "all
men [and women] are created equal" and have the right to
Equal opportunity does not mean equal result. The United
States is predicated on everyone having an opportunity to
succeed, but this is not guaranteed. Different educational
opportunities, class backgrounds, and discrimination result
in different outcomes.
Premise of equality of opportunity led to antidiscrimination
laws, desegregation, and mass public education.
US Bias against the welfare state
Strong faith in individualism
Frontier alleviated poverty by allowing relocation to Western
Citizens conceive two classes of poor: deserving and
Deserving poor are widows, orphans, and others rendered
dependent by some misfortune
Undeserving poor are able-bodied persons who are unwilling
Private charities take care of the poor, not the government
Foundations of welfare state
Social Security Act of 1935 established two categories of
welfare: contributory and noncontributory.
Contributory programs such as Social Security (eligibility begins at 62, no means test)
Financed by taxation, known as forced savings
"Old age insurance"
Financed by equal contributions from the employee
· Current workers support retired workers (amounts to a slight shift of $ from rich to poor, and much more significant shift of $ from young to old)
Medicare established in 1965 provides medical insurance to those over 65 (no means test) in 2003 prescription drug coverage was added
Known as public assistance programs or welfare
Eligibility determined by means testing
Means testing: procedure that requires applicants
to show financial need for assistance
Examples: Aid to Families with Dependent Children (1935) for single parents with children
Medicaid (1965) medical service for the poor
Supplemental Security Income (1974) blind and disabled receive support
Food stamps coupons can be exchanged for food
Goldberg v. Kelly (1970) inaugurated concept of
"entitlement" recipients have a due process right to receive benefits if they are eligible and programs exist (programs can be cut)
Benefits cannot be terminated without due process
Arguments against welfare state
Welfare state costs too much money.
Welfare state is too paternalistic.
Welfare state is too redistributive.
Welfare state is an example of a moral hazard.
Moral hazard: danger or probability that a policy will
encourage behavior or bring about problem it was
designed to prevent (people with theft insurance will not lock their cars as often, people will not work as hard because welfare programs will make sure they dont starve, encourages women to have more children because they get more $$ per child, discourages marriage because male income not needed and would often make women ineligible for entitlements)
Arguments for welfare state
Welfare state is good fiscal policy. (increases consumption in economic downturns)
Welfare state is paternalistic. (enforced savings)
Welfare state is a savior of capitalism.
Bismarck: "I will consider it a great advantage when we have
700,000 small pensioners drawing their annuities from the state,
especially if they belong to those classes who otherwise do not
have much to lose by an upheaval and erroneously believe they
can actually gain much by it."
Welfare state is politically essential.
Government has a responsibility to its citizens
Madison: "justice is the end of government."
Personal Responsibility and Work Opportunity Reconciliation
Act of 1996
Ended program known as AFDC (Aid to Families with
Created TANF block grants to the states (Temporary Assistance to Needy Families)
· Gave states greater flexibility in creating programs (child care, job training, transportation)
Imposed five-year time limit on TANF benefits
Imposed work requirement after two years of receiving
Since 1996, welfare rolls reduced by over 50 percent
What will happen to former welfare recipients in an
Has reduced welfare rolls, but not diminished poverty
Future Social Policy issues
· GI Bill (1944) money for secondary ed
· National Defense Education Act (1958) federal spending for math, science instruction after Sputnik launch
School funding is based on local real estate taxes
Results in large disparity in school spending by county
Vouchers (school choice) allow parents to spend tax dollars in a school of
Creates further pressure on poor schools
No Child Left Behind (2001) regular testing required with attention paid to poor, racial minority and special ed student scores consistent failure means students can transfer for free to other schools in the same district
Health care is primarily private Clinton attempted comprehensive reform (died)
40 million U.S. citizens have no health insurance
Oregon leads state efforts to provide health coverage for children
Urban redevelopment focuses on redistributing housing
for the poor to integrate them with the middle class.