Social Policy “The preamble to the Constitution states that ‘We the People of the United States, in Order to create a more perfect union, establish Justice…promote the general Welfare…do ordain and establish this Constitution.’ Social policy is set with this important charge in mind.” - Wood

Social Policy: An overview Government’s responsibility for the welfare of its citizens remains controversial and disputed today Generally 2 types of programs: – Majoritarian- benefits almost everyone Ex. Social Security, Medicare – Client- benefits only a small number Ex. Medicaid, Food Stamps Means tested- must fall below a certain income level to qualify Entitlement programs: government-sponsored programs providing mandated benefits to those who meet eligibility requirements

Social Welfare in the United States 4 Factors shape policy: 1. Who should benefit? Insistence that it be only those who cannot help themselves Slow, steady change in deserving/undeserving line Alterative view: fair share of national income; government redistribute money Preference to give services, not money, to help deserving poor

2. Late arrival of welfare policy By 1935 Social Security Act, we were behind twenty-two European nations Contrast with Great Britain in 1908 – “What ordinary politics brought to England in 1908, only the crisis politics of 1935 would bring to the United States.” – But once the programs started, they grew fast! By 1983, one third of all Americans received benefits from one or more social welfare programs.

3. Influence of federalism Federal involvement “illegal” until 1930s – Why? Powers not delegated are left to states – What changed? Courts constitutional interpretation Experiments by state governments – Argues against federal involvement because state already providing welfare – States lobbied for federal involvement to help them

4. Non-govt institutions play a big role Non-govt institutions get contracts and grants to administer social welfare programs – Ex. Big Brothers/Big Sisters, Catholic Charities 1996 Welfare reform law allowed religious organizations to compete for govt contracts =Charitable Choice (but couldn’t use $$ to preach) – Bipartisan support, programs have increased

Majoritarian welfare programs Social Security Act of 1935 Great Depression of 1929: local relief was overwhelmed Elections of 1932: Democrats & 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 – everybody pays/benefits – “Assistance” for dependent children, blind, aged – everybody pays, some benefit – Federally funded, state-administered program under means test

Majoritarian welfare programs 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 (R-Arkansas) 1964 elections: Democrats’ big majority altered Ways and Means Com. Objections anticipated in plan Applies only to the old, not everybody Only hospital, not doctors’, bills covered Broadened by Ways and Means to include Medicaid for poor; pay doctors’ bills for elderly Passed the Democratic-controlled Congress with ease

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- people would contribute into account invested in Stock Market (better return, but risky) – Combine first two methods and allow individual investment in mutual funds

Reforming majoritarian welfare programs Medicare Problems: huge costs and inefficient Possible solutions – Get rid of Medicare and have doctors and hospitals work for government (Con: slower care, fewer benefits, less innovation) – Elderly take Medicare money and buy health insurance (con: affordability) Delaying the inevitable – Clinton used the surplus to create new benefits (prescription drug plan) – Bush and attempts at new health care measures – Medicare Modernization Act of 2003 (pushed by interests -AARP)

Pros and Cons: Majoritarian politics Programs with widely distributed benefits & costs – Beneficiaries must believe they will come out ahead – Political elites must believe in legitimacy of program Social Security & Medicare seemed great! 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 welfare programs: AFDC (Aid to Families with Dependent Children) Scarcely noticed part of Social Security Act Federal government permitted state to – Define need – Set benefit levels – Administer program Federal government increased rules of operation, added more and more regulations New programs (e.g., Food Stamps, Earned Income Tax Credit, free school meals)

Client welfare programs: AFDC Problems: – States complained about federal regulations – Public opinion turned against program Corruption Weakened the family (got more money for more kids) – Composition of program participants changed 1970: half of women were widowed/divorced 1994: only 1 quarter, the rest never married Also, 2/3 of women were on for 8 years or more! Temporary Assistance to Needy Families (TANF) 1996 – Stricter requirements and limits on how long families could collect – Lowered welfare caseload by 60%

Pros and Cons: 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 (give service/training rather than money) – Charles Murray: high welfare benefits made some young people go on welfare rather than seek jobs – No direct evidence supports Murray

Social Policy U.S. government currently assumes responsibility for – Health care – Welfare – Education