Social Welfare Policymaking Chapter 18

The Social Welfare Debate Two main types: – Entitlement programs: Government benefits that certain qualified individuals are entitled to by law, regardless of need. – Means-tested programs: Government programs only available to individuals below a poverty line. “Deserving” vs. “Undeserving” poor

From Table 18.1 Income, Poverty, and Public Policy Who’s Getting What? – Income: amount of funds collected between any two points in time. – Wealth: amount of funds already owned. Income Quintile Lowest fifth Second fifth Third fifth Fourth fifth Highest fifth

Income, Poverty, and Public Policy Who’s Poor in America? – Poverty Line: considers what a family must spend for an “austere” standard of living. – In 1999 a family of three had a poverty line of $13,470 (2007, $17,170) – Many people move in and out of poverty in a year’s time. – High rates of poverty among unmarried women (feminization of poverty)

Figure Poverty Rates, 1999 Income, Poverty, and Public Policy

What Part Does Government Play? – Taxation. Progressive tax: people with higher incomes pay a greater percentage Proportional tax: all people pay the same percentage of their income. Regressive tax: people with lower incomes pay a greater percentage

Income, Poverty, and Public Policy What Part Does Government Play? – Government Expenditures. Transfer payments: benefits given by the government directly to individuals. Some transfer benefits are actual money. Other transfer benefits are “in kind” benefits where recipients get a benefit without getting actual money. Some are entitlement programs, others are means- tested.

The Evolution of American Social Welfare Programs The New Deal and the Elderly – The Great Depression led many citizens to want the government to help protect against economic downturns and causes of poverty beyond their control. – Social Security Act of 1935 was the first major step by the federal government to help protect people against absolute poverty.

The Evolution of American Social Welfare Programs President Johnson and the Great Society ( ) – Johnson declared a “war on poverty” and created many new programs and it was his leadership that made the difference. – Medicare, school-aid programs and anti- poverty programs were some examples. – Other programs were designed to provide training and jobs, not just transfer payments.

The Evolution of American Social Welfare Programs President Reagan and the Limits to the Great Society – Reagan (like Johnson) played a lead role in getting attention on benefit programs. – Focus shifted to defense and entitlement programs for the elderly – Many programs had benefits reduced, and people were removed from benefit rolls.

The Evolution of American Social Welfare Programs Welfare Reform in 1990’s (Clinton) – Personal Reponsibiltiy & Work Opportunity Reconciliation Act States have fixed $ to run own welfare programs 2 year limit to find work or lose benefits 5 year lifetime maximum.

The Future of Social Welfare Policy The Entitlement Programs: Living on Borrowed Time? – Long-term sustainability of entitlement programs is hotly debated. – What can be done about Social Security? Cut benefits? Raise tax rates? Allow people to invest on their own?

The Future of Social Welfare Policy The Means-Tested Programs: Do They Work? – Programs for the poor are not as popular as programs for the elderly. – The percentage of people in poverty has not changed significantly since the 1960’s. – But there is little agreement on if the programs help people in poverty or not.

The Future of Social Welfare Policy Social Welfare Policy Elsewhere – Many industrialized nations are more generous than the U.S. – But the tax rates are higher in those countries than in the U.S.

Understanding Social Welfare Policy Democracy and Social Welfare – The U.S. has the smallest welfare system. Social Welfare Policy and the Scope of Government – When social welfare costs go up, the size of government goes up. – What goes up is often difficult to bring down.