Income Security and Programs Why was the Social Security Act of 1935 so controversial? What are the two cornerstones of social welfare policy in the US?

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Presentation transcript:

Income Security and Programs Why was the Social Security Act of 1935 so controversial? What are the two cornerstones of social welfare policy in the US? What’s the difference between means and non-means tested security? How have entitlement programs affected Congressional budgeting?

Social Welfare Social welfare (income security) has two forms in the US: Entitlements (non-means tested)—all those meeting eligibility requirements are entitled to get the benefits (i.e., Social Security) Means-tested—program that helps those whose income falls below a certain specified level (i.e., Food Stamps) Social welfare policy has developed differently in the US than anywhere else:developed differently –Restrictive view of “deserving” –Slower at embracing social welfare –State government and private groups play a big role in administering social pograms

Effectiveness of Income Security Programs Spending for entitlement programs is mandatory; funds must be provided unless legislation creating the programs is changed Difficult to control spending Have not eliminated poverty, economic dependence, but have improved lives

Social Security Beyond “emergency” programs of ND to provide minimum economic security Beginning of a permanent US welfare state and idea of equity: –Old-age insurance (now SS) –Public assistance for needy, aged, blind, families with dependent children (later disabilities) –Unemployment insurance and compensation –Gov’t taxes to provide funds, but administered by states:taxes to provide funds Payroll tax from lower-income contributors; income tax from higher-income contributors

Other social welfare (non-means) Old age, survivors, disability –Old age=Social Security (regressive) –Question of privatization with increased Baby Boomers drawing SS Unemployment (full-time workers) –Financed by payroll tax –Must be unemployed by no fault of worker –Payment varies by state (south less generous)

Other social welfare (means-based) Supplemental Security Income (SSI) 1974 –Started as grant-in-aid program –For needy elderly, blind, permanently disabled –Must meet income/possession requirement Temporary Assistance for Needy Families (TANF)— replaced AFDC under SS 1996 –AFDC allowed aid for states to determine need –Growing population since 1960 led to increase in those drawing aid, especially unwed mothers –JOBS program 1988 to help ameliorate program –TANF replaces; states given a block grant with requirements: Benefits for only 5 years Those under 18 must live with parents and attend school Reduced aid to those who don’t identify fathers of children Immigrant stipulations Food stamps for only 3 months to those not working/no children

Earned Income Tax Credit (EITC) 1975 –Subsidizes wages of working poor with net cash rebate (no federal income tax) –“pro-work, pro-family” welfare to work –Increase work incentives; refund any SS taxes Food Stamp Program ; 1974 –To reduce malnutrition, combat hunger –1970s/80s huge increase; investigations –26 million in 2007, $33 billion –Other nutritional programs (WIC, school breakfast/lunch, emergency food assistance program)

Controversy Social Security and Medicare (Health) are under scrutiny; the problems of funding them cut across several aspects of the policy-making process. Solutions have been offered, but opposed by a majority:Health –Raising the retirement age to 70 (currently 67) –Freezing retirement benefits –Raising SS taxes –Privatizing SS –Combining the above reforms and allowing citizens to invest a portion of their SS taxes in a mutual fund