Social Welfare

Programs Social welfare began with the New Deal Specifically, the Social Security Act –Aimed to help senior citizens –It is the forced savings of the workforce The bill has been expanded to include: –Old-Age Survivors Disability Insurance (OASDI) –Collected through FICA –Monthly payments to retired or disabled workers, spouses and children

–Social Security Disability Insurance (SSDI) Monthly checks to disabled between 50 and 64 –Supplemental Security Income (SSI) Money to the poor, old, blind or disabled –Aid to Families with Dependent Children (AFDC) Grants to state gov’ts to give money to low income families with children The largest welfare program Was overhauled in 1996 Very controversial Burden of overseeing welfare was shifted from federal gov’t to states

Other New Deal acts included: –Wagner-Steagall National Housing Act Public housing for the poor –Fair Labor Standards Act Minimum wage, 40 hour week, must be 16 to work –Works Progress Administration –Civilian Conservation Corps

After WWII, the GI Bill of Rights was passed –Educational & vocational training National School Lunch Act of 1946 National Defense Education Act –In response to SU launch of Sputnik –Money to science education

Turning point in welfare came during Lyndon B. Johnson’s administration –Many laws had to do with the Civil Rights Movt –Others because Democrats believed the gov’t should provide for the poor –Called the Great Society Medicare –Hospital and medical costs of those over 65 and disabled regardless of income

Food Stamps –Coupons based on income and size of family Medicaid –Shared between federal and local governments –Hospital, doctor, drug, nursing home costs for low income people In later years, more acts were passed: –Equal Opportunity Act Legal solutions for employment discrimination 1972 cost of living indexing attached to welfare programs

Reagan Revolution: –Assured people there would always be a “safety net” –Tried to cut back on some Great Society programs –Cut the rate of increase in OASDI and Medicare –Reduced some of the need assistance programs But they began to go back up after 1984 –Also, the AARP effectively lobbied against cuts in Social Security and Medicare

Searching for Solutions Universal healthcare became a goal of the Clinton administration –Idea had been around since Truman –Canada & GB already had it Supporters said we have a lower life expectancy and higher infant mortality rate than Europe US still spends 14% of GNP on health

Factors like malpractice suits, high insurance and health costs and loss of coverage for workers who change jobs led to a call for reform It was evident that access to health insurance was tied to race –Whites were more likely to have coverage Family Medical Leave Act of 1993 –Guaranteed jobs would not be lost for those taking unpaid emergency leave

Clinton threatened to veto any bill that did not include universal healthcare –Hillary Clinton heavily involved in the issue –Both houses produced watered- down versions of Clinton’s bill –But then lobbying efforts kept Congress from voting on the act –When Republicans took office, the matter was dropped –Affordable Care Act (Obamacare) passed in 2010

1996 – law made that an employee could take his insurance with him if he changed jobs Welfare reform high on agendas of most state governors –Many states have instituted work programs aimed at removing people from welfare

When AFDC started it was accepted by people –Over time it became evident that people were abusing the system –Many had jobs on the side, were having extra kids to receive benefits, etc. –By 1994, only ¼ of the women on it were widowed or divorced, ½ of them had never been married at all

–Almost 2/3 of women on it at any given time had been on it for 8 years –Out-of-wedlock births on rise in America –All this combined made it impossible to keep up political support for the program –It was abolished in 1996

It was replaced with the Temporary Assistance for Needy Families (TANF) –Money to families with kids partially paid for with block grants to states. –It limits recipients to no more than 5 years –Also requires them to work, get vocational training, or participate in community service –This is more acceptable to people

In order for welfare programs to work, people must see it as “help for the deserving poor”, rather than “redistribution to produce fair shares” –Most people think that people on welfare should be made to work for their benefits

Means Test = measure to determine that incomes are below a certain level –Some programs are means tested, others are not: OASDI – no means test Medicare – no means test UI – no means test TANF – means test SSI – means test Medicaid – means test Earned Income Tax Credit – means test

Reforming Social Security Social Security running a deficit by early 1980’s Reagan and Congress passed laws that: –Scheduled increases would be slower –A gradual increase in the age a person could receive it –Have federal employees contribute to the system –A portion of benefits taxed if a person made an income over $20,000

This resulted in a surplus in the system –Unfortunately, then the gov’t began borrowing from the system and put in trouble again Many people support privatizing Social Security Since all the social welfare programs are the biggest part of the budget, there is an ongoing effort to find ways to reduce costs while still maintaining their effectiveness