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2. America’s Democratic Republic Chapter 16: Social Safety Nets

3. Copyright © 2011 Pearson Education, Inc. Publishing as Longman In This Chapter What safety nets are and why government provides them Why safety nets in the United States are less generous than in other rich democracies How social insurance programs differ from means-tested programs Why the elderly have stronger safety nets than the very young Why and how health care reform happened How the interplay between democracy and our 18 th -century constitutional foundations shapes social policies

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5. 18 th -Century Republicanism Framers knew that America was a dynamic society that would grow and change Would not have thought the government would be so inextricably entwined in American’s lives Would have been worried about tyranny

6. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Why Safety Net Programs? All post-industrial, democratic nations have social safety nets Welfare state: a government that attempts to ensure a minimum standard of living for its citizens Social safety net: a range of government programs designed to shield people from economic hardships

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8. Why Safety Net Programs? Structural Factors Fundamental values and beliefs that have political consequences Political Linkage Factors People, influences, and processes that transmit the people’s wants and needs

9. Copyright © 2011 Pearson Education, Inc. Publishing as Longman An Outline of American Safety Net Programs Types Social insurance Means-tested Public assistance Entitlement

10. Copyright © 2011 Pearson Education, Inc. Publishing as Longman An Outline of American Safety Net Programs Costs of the Social Welfare State About 23 percent of U.S. budget Social insurance is largest and still growing Medicare Social Security Means-tested programs are smaller Americans generally approve of social insurance programs but not means-tested programs

11. Copyright © 2011 Pearson Education, Inc. Publishing as Longman An Outline of American Safety Net Programs Conclusions? Most beneficiaries of the American welfare state are Nonpoor Middle age and older Poverty among elderly has declined Poverty among young has increased

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13. Social Insurance Began in 1935 Depression Income for the elderly Programs Social Security Retirement Payroll tax on employees Adjusted for inflation (COLA)

14. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Social Insurance Medicare First introduced in 1935; passed in 1965 Subsidized health care for the elderly Financing is problematic because Health care costs have risen faster than payroll taxes and general tax revenues

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16. Social Insurance Unemployment Insurance Part of original Social Security Act of 1935 Funded by tax levied on employers Give laid-off workers limited support while the look for employment Limited to 26 weeks unless extended by Congress Only about 50 percent of unemployed receive assistance

17. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Social Insurance Do Social Insurance Programs Work? Yes Dramatically reduced poverty among elderly Provided laid-off workers with some financial benefits Enabled elderly to obtain quality health care

18. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Means-Tested Programs Account for a much smaller proportion of the budget Attract the most criticism Contradicts cherished American values Thrift Hard work Self-reliance Family

19. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Means-Tested Programs Temporary Assistance for Needy Families (TANF) Act Passed in 1996 Replaced Aid to Families With Dependent Children Ended the decades-old agreement of support from the federal government

20. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Means-Tested Programs Temporary Assistance for Needy Families (TANF) Act Features Ended welfare as a federal entitlement Turned over to the states the design and administration of welfare States receive block grants from federal government to help finance programs

21. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Means-Tested Programs Temporary Assistance for Needy Families (TANF) Act Features States use grants for direct cash assistance and money for child care, education and training and other services to encourage recipients to enter paid employment Requires heads of family receiving aid to work within two years

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23. Means-Tested Programs Temporary Assistance for Needy Families (TANF) Act Features Federal benefits are limited to five years over lifetime; states can use their own money to extend limits Unmarried teen parents get benefits only if they stay in school and live with an adult States must provide Medicaid and SCHIPP to all qualified individuals

24. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Means-Tested Programs Temporary Assistance for Needy Families (TANF) Act Proponents End welfare dependency Reestablish primacy of family in poor communities Improve income situation of poor Help balance federal budget Welfare roles have diminished Many have entered paid workforce

25. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Means-Tested Programs Temporary Assistance for Needy Families (TANF) Act Opponents Increase poverty, homelessness, and hunger Financially disadvantage children Pay for entry-level jobs is not enough to support a family Poverty rate increased after 2000

26. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Means-Tested Programs Food Stamps Head Start Early childhood intervention program

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28. Means-Tested Programs Health Insurance for the Poor Medicaid State Children’s Health Insurance Program (SCHIP)

29. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Means-Tested Programs Earned Income Tax Credit Allows low-income individuals with at least one child to Claim a tax credit against taxes owed or Receive a direct cash transfer from the IRS

30. Copyright © 2011 Pearson Education, Inc. Publishing as Longman How American Welfare State is Different Less costly Covers fewer people Favors the elderly Less redistributive Requires less from private employers Does not include universal health care

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32. How American Welfare State is Different Factors That Influence the Shape of the American Welfare State Constitutional rules Racial divisions Political culture Business power Weak labor unions

33. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Social Safety Nets in the Democratic Republic Question as to whether Americans have the kind of system they want No universal health insurance coverage Tension between democratic aspirations and republican constitutional principles

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35. Summary Safety net programs protect minimal life standards for groups that may not be able to do so in a market economy American safety net programs differ from other countries; one main difference is the high percentage of aid focused on the elderly as opposed to other groups in need Health care reforms have lead to large expansions in government and changes to governmental function and scope The number and reach of safety net programs in the future will be decided through policy decisions and public preferences in leadership

36. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Question 1 Health care reform legislation passed in 2010 by a Congress dominated by __________. Democrats Republicans Whigs Independents

37. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Answer Health care reform legislation passed in 2010 by a Congress dominated by __________. Democrats Republicans Whigs Independents

38. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Question 2 Welfare states exist in some form in all __________. Communist governments Democracies Theocracies Rich democracies

39. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Answer Welfare states exist in some form in all __________. Communist governments Democracies Theocracies Rich democracies

40. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Question 3 Social security is funded by a __________. Charitable donation Tax deduction Voluntary contribution Payroll tax

41. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Answer Social security is funded by a __________. Charitable donation Tax deduction Voluntary contribution Payroll tax

42. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Question 4 One explanation as to why American social welfare systems are weaker than other countries is the lack of strong _________. Presidents Legislators Courts Labor unions

43. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Answer One explanation as to why American social welfare systems are weaker than other countries is the lack of strong _________. Presidents Legislators Courts Labor unions

44. Copyright © 2011 Pearson Education, Inc. Publishing as Longman Question 5 What positive and negative effects do safety net programs have on the United States?