Chapter 17
Social Policy
Social Policy
Social Policy
Three goals of American social policy:
1. Help people deal with life’s hazards when they are
incapable of doing so on their own.
• Examples: Staying out of poverty during old age or
short-term unemployment, remaining independent when
disabled
2. Promote equality of opportunity
• Primarily as means to long-term economic benefits to
entire society when more are educated, employed
3. Alleviate poverty
Social Policy
• Trace history of welfare state in the U.S.
– Public programs designed to help the poor
• Identify how specific policies designed to promote
equal opportunity
– Education, health, housing
• Contributory and Noncontributory programs
The History of the Social Welfare System
Foundations of the Welfare State
• Social policy before New Deal (1935)
• Limited and mostly local
– Charities central role
• Goal often to reform poor people
– Make self-sustaining in some form if possible
• Little attention to the systemic causes of poverty
(education and health in particular)
The Welfare State
• Early programs distinguished between “Deserving”
vs. “Undeserving” poor
• Those perceived as unable to help themselves and
those who were lazy
• Programs created to aid “deserving” poor
– Orphanages, schools for the deaf and blind
– “Mothers’ pensions” for widows with children
– Veterans’ pensions for disabled veterans
The Welfare State
• Indoor relief
– Assistance provided to a recipient housed in an institution
(a settlement house, hospital, prison or police station, or
poorhouse)
• Outdoor relief
– Assistance provided to a recipient who lived independently
The History of the Social Welfare System
The Welfare State
• Americanization programs
• First large social programs were developed to benefit
waves of European immigrants
• Designed to promote both good health and good
citizenship
• Assistance was discriminatory.
– Black people found it impossible to receive assistance.
– Asian immigrants were excluded.
The Welfare State
• The Great Depression
– National unemployment reaches 20 percent.
– Scale far too large for charities to manage
– Millions of able-bodied, intellectually able, skilled people
without jobs or savings.
– Perceptions of “deserving” and “undeserving” poor
shattered, if not dramatically altered
Foundations of the Welfare State
Foundations of the Welfare State
• Contributory programs: financed in whole or in part
by taxes or other mandatory contributions by present
or future recipients
– Tend to be popular
– People think of as earned benefits because they have paid
into these programs.
• Social Security and Medicare
– Not to be confused with Medicaid
How Do We Pay for the Welfare State?
Foundations of the Welfare State
• For Social Security and Medicare (health insurance
for the elderly), workers and their employers
contribute equally from each paycheck.
– Social Security benefits are tied to contributions.
– Medicare benefits are equal for all; not tied to
contributions.
Foundations of the Welfare State
• Social Security benefits are indexed.
– Amounts reflect cost of living and inflation.
• Otherwise, benefit would be depleted by those changes.
– Each year, a cost-of-living adjustment is calculated.
• 2010 and 2011 no increases, resumed in 2012 though
Foundations of the Welfare State
• Noncontributory programs
– Benefits based on demonstrated need rather than any
contributions made
– Programs in this category widely called “welfare” or “public
assistance”
• Must demonstrate need via means tests
– Federal poverty line determines whether individuals and
families qualify for such benefits.
Foundations of the Welfare State
• Medicaid
– Health insurance for the poor
– Federal government provides matching funds to states
– Payments to health care providers are lower than what
they would receive from other insurers.
• Note: doctors and hospitals do not have to take
Medicaid patients
Foundations of the Welfare State
• Temporary Aid to Needy Families (TANF)
– Several benefits fall under TANF
• Income, education subsidies/discounts, job training
programs, and others varied by states
• Role of states
– Set additional standards for any additional state benefits
above and beyond the federal baseline
Welfare Caseload, 1976–2011
WHO ARE AMERICANS?
Who Benefits from Social Programs?
CHAPTER 17
WHO ARE AMERICANS?
Number of
Recipients, 2009
(in millions)
46.6 million Medicare
12.96 million Unemployment compensation
* 2010 data
SOURCES: U.S. Census Bureau, 2012 Statistical Abstract;
Office of Management and Budget, Fiscal Year 2013 Historical Tables.
CONTRIBUTORY PROGRAMS
52.5 million Old-Age, Survivors, & Disability Insurance
WHO ARE AMERICANS?
Number of
Recipients, 2009
61.825 million Medicaid
(in millions)
33.5 million SNAP (Food Stamps)
7.7 million State Children’s Health Insurance Program*
7.7 million Supplementary Security Income
(for aged, blind, disabled)
4.193 million Temporary Assistance to Needy Families
(TANF)
* 2010 data
SOURCES: U.S. Census Bureau, 2012 Statistical Abstract;
Office of Management and Budget, Fiscal Year 2013 Historical Tables.
3.9 million Veterans Benefits Payments
NONCONTRIBUTORY PROGRAMS
31.3 million School Lunch Program
WHO ARE AMERICANS?
Public Welfare Programs, 2011
(in billions)
$913.038 billion Medical Payments
$724.174 billion Retirement and disability insurance benefits
SOURCES: Congressional Budget Office, “Trends in the Distribution of Household Income between 1979 and 2007,” October 25, 2011, www.cbo.gov/publication/42729;
Jon Bajika, et al., “Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality,” 2012, http://web.williams.edu/Economics/wp/BakijaColeHeimJobs
IncomeGrowthTopEarners.pdf (both accessed 5/23/12).
WHO ARE AMERICANS?
Public Welfare Programs, 2011
(in billions)
$188.405 billion
Income maintenance
benefits
$118.607 billion
Unemployment
insurance benefits
$107.776 billion
Veterans benefits
$58.565 billion
Federal education and
training assistance
$2.8 billion
Other
SOURCES: Congressional Budget Office, “Trends in the Distribution of Household Income between 1979 and 2007,” October 25, 2011, www.cbo.gov/publication/42729;
Jon Bajika, et al., “Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality,” 2012, http://web.williams.edu/Economics/wp/BakijaColeHeimJobs
IncomeGrowthTopEarners.pdf (both accessed 5/23/12).
WHO ARE AMERICANS?
Foundations of the Welfare State
Foundations of the Welfare State
• AFDC/TANF unpopular among voters, elected
officials, and those who do not receive it
• 1996 Welfare reform changes
– Five-year lifetime limit (not more than two years at a time)
– Work or education/training requirement for adults
• Entire household can lose funds if kids skip school
– Less cash assistance: 70%+ of TANF funds are *not* cash
or direct payments to recipients)
Note: above practices have been in place over 15 years now.
Foundations of the Welfare State
• Most expenses for the welfare state come from
increases in Social Security and Medicare.
– Both programs for the elderly
– 57 percent of the federal budget is spent on entitlement
programs
Foundations of the Welfare State
Opening Opportunity
• Additional programs and policies designed to
promote equality of opportunity (not outcome)
- Education
- Health
- Housing - Employment
• Path to economic prosperity
– Grew out of depression-era focus on targeting factors
causally related to poverty
• Funds most often support, not cover, entire costs for
these efforts
Opening Opportunity
• Education
– Public education intended to provide workforce with solid
foundation of skills and knowledge
– Traditionally funded by states and local districts
– Federal government still spends billions on education:
financial aid, research grants, supporting programs in K–12
and college/universities
Education Policies
Opening Opportunity
• Goals of employment and training programs
1. Prepare or retrain workers to fill openings
2. Create work when private sector cannot
• United States funds these programs at a lower rate
relative to education spending
– Schools generally viewed as the locus for training, and job
placement
– Government monies for such programs often filtered into
schools
The American Health Care System
in Comparison
Public Health
• Patient Protection and Affordable Health Care Act
(2010)
– Covers Americans without existing insurance
– Three components:
• State-based insurance exchanges, can’t deny coverage
• Requires uninsured to purchase health insurance
• Subsidies for small businesses and low-income people
– Gradual phase in, full implementation by 2020
– 2012 Supreme Court upholds PPAHCA
Public Health
• Other health-related institutions providing benefits,
grants, programs, other support in medical research,
services and information:
– National Institutes of Health (NIH)
– Centers for Disease Control (CDC)
– Food and Drug Administration (FDA)
• Local health inspectors monitor restaurants and
grocery stores to ensure sanitary conditions.
Health Care Reform
Housing Policies
Housing Policies
• Housing policy: spending focus on promoting
homeownership, not housing for poor
–
–
–
–
Low down payment terms (3 percent)
Generous repayment terms (30 years+)
Favorable interest rates
Home mortgage interest tax deduction
• Section 8 housing vouchers: discounts rent
– Alternative to public housing projects
• Projects far more expensive to build, maintain, and manage
Who Gets What from Social Policy?
• The elderly and the middle class receive far
more in benefits per person than do the poor
or children.
• Groups and social policy, public spending
- Elderly
- Middle class
- Working poor
- Unemployed poor
- Minorities, women, and children
(Of course, minorities and women fall into all of the above
categories as well)
Who Gets What from Social Policy?
• The elderly
– Social Security and Medicaid
• Have lifted many of the elderly out of poverty
– In 1959, 35 percent of elderly were poor.
– In 2008, 9.7 percent were poor.
• Medicaid is extremely good medical insurance.
Who Gets What from Social Policy?
• Why are programs for the elderly so strong?
–
–
–
–
Seen as deserving
Contributory
Vote in very high percentages
Powerful lobbying arm in AARP
Who Gets What from Social Policy?
• The middle class
– Elderly can receive government benefits even if their
children can afford to pay for the benefits on the private
market.
– “Shadow welfare state”
• Tax expenditures for employer-provided benefits
• Mortgage interest deductions
The Working Poor
Who Gets What from Social Policy?
• The working poor
– Earn too much to qualify for welfare programs
– Highly unlikely to own a home
– The jobs they hold provide very limited, if any, health care
or retirement plan options.
• Part-time jobs, even if they hold several of them, most
often do not make such benefits available or affordable.
– Two programs may apply to this group:
• Earned Income Tax Credit, Supplemental Nutrition
Assistance Program (food stamps)
Who Gets What from Social Policy?
• Not working poor (and some working poor)
–
–
–
–
Temporary Aid to Needy Families (TANF)
SNAP
Medicaid
Programs typically aimed at helping children
Many working poor who earn very little qualify for the above
benefits.
Who Gets What from Social Policy?
• Federal poverty definitions (2010)
– One parent, two children, annual income <$18k
– Two adults, two children, annual income < $22k
• 2010 Census: poverty by household type
– 32% of all single-mother households in poverty
– 16% of all single-father households in poverty
– 6% of all two-adult households in poverty
• 22% of all children are poor
Who Gets What from Social Policy?
• Poverty rates by race/ethnicity (2010 Census)
–
–
–
–
10% of all whites in the U.S. are poor
12% of all Asian Americans in the U.S. are poor
27% of all Latinos in the U.S. are poor
27% of all African Americans in the U.S. are poor
More data on poverty and demographics:
www.census.gov/hhes/www/poverty/
Who Gets What from Social Policy?
Who Gets What from Social Policy?
• The welfare to work dilemma
– Child care is often more expensive per hour than the
wages workers earn.
– Good social policy design makes recipients better off by
working.
Public Opinion Poll
Should public schools at the K–12 level remain publicly
funded through state and local taxes? Or, should public
schools be eliminated such that all students/families
pay tuition to the school of their choice (and price
range)?
a) Keep K–12 public education funded by taxpayers
b) End public education funding; all students/families
pay tuition to attend school K–12
Public Opinion Poll
Should welfare benefits—in terms of programs and
direct payments to recipients—be the same in all
states?
a) Yes, all states should address poverty in the same
way, using only federal funds and programs.
b) No, states should be able to address poverty in a
manner they think is appropriate, adding state-level
programs and funds if they wish to do so.
Public Opinion Poll
Should people who decide not to buy health insurance
still receive medical treatment in the event of an
emergency?
a) Yes, people without insurance should still get
medical care in the event of an emergency.
b) No, people who decide not to pay for insurance
should not get medical services.
Public Opinion Poll
Should the federal government spend more to make
college education more affordable?
a) Yes, government should spend more on college
education to make it more affordable.
b) No, keep spending as is, no increase or decrease.
c) Government should cut spending on college
education, cutting current levels.
Public Opinion Poll
Should the federal government encourage marriage as
a means to reduce poverty?
a) Yes, the government should encourage marriage to
diminish national poverty rates.
b) The government should stay out of such personal
matters and should neither encourage or
discourage marriage
Chapter 17: Social Policy
• Quizzes
• Flashcards
• Outlines
• Exercises
wwnorton.com/we-the-people
Following this slide, you will find additional images,
figures, and tables from the textbook.
Health Policy
Digital Citizens
Who Gets What from Social Policy?