Wilson Chapter 17 Social welfare

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

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.

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

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

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..

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 Not online

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

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.

Client welfare policy: AFDC Aid 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

Two kinds of welfare programs

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

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