AP AMERICAN GOVERNMENT CHAPTER 20:
MAKING SOCIAL POLICY
 The Constitution promises that the federal government will promote the
general welfare.
 The framers clearly wanted the new government to have enough
power to unite an increasingly divided nation.
 President Bush has tried to expand the federal government’s role in
local education, under the Leave No Child Behind Act of 2001 the new
law put important new strings on federal support.
THE ROLE OF GOVERNMENT IN SOCIAL POLICY
 Some Americans ask whether government should be involved at all in
social policies such as childcare, and helping the needy, all of which
were once thought of as purely private responsibilities.
Public versus Individual
 Americans are sharply divided on how much government should do to
care for the needy.
 Some Americans believe that people should take responsibility for their
own mistakes even if that means they must live in poverty- they put
their faith in the free market and believe that the economy will provide
opportunities for those with ambition and a willingness to work hard.
 Other Americans believe that government must step in to help the
needy through social programs such as job training, public assistance,
etc. and they believe that the free market is often unfair, leaving some
behind because of their race or gender, and that the government
should provide a safety net against poverty and prejudice.
 Republicans believe that the national government is part of the
problem, not the solution.
 Democrats are more likely to believe that only the national
government has the resources and jurisdiction to provide adequate
Social Security and ensure that all Americans have equal access.
Public vs. Charity
 4 out of every 10 Americans volunteer each year, and 9 out of 10
contribute to charity.
 Republicans argue that the nation should rely more on charity and less
on government. They point to the history of charitable giving as proof
that society as a whole will seek to remedy social problems without the
higher taxes and big bureaucracy that come with government
programs.
 Democrats believe the national government must provide a safety net
for individuals and a minimum standard of living for ALL citizens.
 Both parties are right.
National vs. State and Local
 Some Americans argue that state and local governments should solve
social policy because states and localities know more about the
specific needs in their communities.
 Others believe that only the national government can ensure that
every American is protected against misfortune, in part because poor
states and localities may not have the resources to provide as much
help as their richer neighbors.
 They have set national standards that require all states and local
governments to provide minimum levels of help.
 Unfunded Mandates- federal programs that are required of states, but
not given federal $ to support them.
THE EARLY HISTORY OF SOCIAL POLICY IN THE UNITED STATES
 An early committed to rugged individualism meant that government,
be it local, state, or national, played only a limited role in people’s lives.
 The Continental Congress actually established the nation’s first social
security system well before the new government was even created.
 Once established in the 1780s, the first social security system for
veterans expanded slowly but steadily as the soldiers aged into
disability or poverty.
 These early programs set two important precedents for contemporary
domestic policy:
 1. They established the notion that some Americans would
automatically entitled to certain government benefits n the basis of
an eligibility requirement such as military service.
 Entitlements- programs such as disability, that provide benefits to
any citizen who is eligible.
 2. These early programs also established government’s right to
restrict some benefits only to those citizens who could actually
prove their need for help.
 Means-Tested Entitlements- programs such as Medicaid and
Welfare where citizens must prove they meet the requirements to
get the government’s help.
TYPES OF SOCIAL POLICY
Social Policy Goals
 Categorical Aid- programs that are restricted to one group of citizens,
such as students, farmers, elderly, etc.
 The first goal is to protect citizens against poverty and personal
misfortune, whether by providing relief for unemployed workers, health
care for the elderly, emergency shelter for the homeless, or school
lunches for poor children, almost all of which are available to citizens
only on the basis of a means test.
 The second goal of federal domestic policy is to raise the quality of life
for all Americans.
Types of Protection
 The nation continues to distinguish between the worthy and unworthy
poor, but the government created two very different federal programs
to protect all Americans from hardship.
 Public Assistance- government aid for the poor, or known as welfare. It
created a precedent for many of the federal government’s later
antipoverty programs.
 Most of this assistance comes through noncontributory programsmeaning that recipients do not have to pay anything in advance to
receive benefits.
 Most federal assistance programs also impose a means test on
participants, which require all applicants to disclose their financial
assets and income to prove they fall below the poverty line, which is
generally calculated as THREE TIMES the amount of money an
individual r family needs to purchase the food for a nutritious diet.
 As of 2001, more than 11% of Americans fell below the poverty line.
 Public assistance in the US today incorporates elements of job training;
transportation subsidies; housing subsidies; free school lunches; food
aid for poor families; pregnant mothers and their young children; and
tax credits for low-income people.
 Corporate Welfare- also provided by the government to favored
industries such as agriculture and steel and
 “Middle Class” Welfare- to college students, homebuyers, and citizenry
through tax deductions for home mortgages, college grants. Etc.
 welfare is generally used for public assistance to the needy including
the following forms:
 direct payments to single parents with young children, the
unemployed, and the disabled.
 Vouchers that can be exchanged for food
 Subsidies that reduce the cost of housing or the provision of public
housing.
 Reduced cost or free access to public transportation, higher
education, or job training.
 Subsidized medical care.
 In absolute numbers, most poor people are white, and more women
are poor than men.
 Women usually get paid less than men for doing the same work and
tend to be employed in lower-paying jobs.
 A women makes .73 cents for every dollar men earn.
 Social insurance- a term that refers to government programs that
provide benefits to anyone who is eligible either because of past
service (veterans) or payments of some kind (social security).
 Some social insurance programs, such as unemployment, provide
benefits only for those in need, while other programs, such as Social
Security, pay benefits regardless of wealth, thereby acting more like a
private saving program or annuity that pays off at a set point in time.
 Many federal assistance programs involve partnership with state
governments. There are 2 reasons:
 1. States have been responsible for protecting their citizens against
hardship since the US was formed.
 2. States and local governments have the administrative agencies
to stay in touch with recipients of aid, whether to make sure they
are actually eligible for support or to provide services such as job
training or school lunches.
 Most federal assistance is designed to set a minimum floor of
support that individual states can raise on their own.
 States act as a check on the federal government’s ability to raise
benefits too far.
THE EXPANSION OF SOCIAL POLI Y IN THE 20th CENTURY
The New Deal
 1933, FDR put the New Deal into practice, where the federal
government began making loans to states and localities to help the
poor, and soon it launched a long list of programs to help older
Americans (social security), the jobless (unemployment) and the poor
(AFDC).
 The first 100 days of the administration produced the most significant list
of legislation ever passed in American history- the Federal Emergency
Relief Administration, Civil Works, etc.
 The “Alphabet agencies” created a host of new programs to help the
poor- WPA, CCC
 The federal government would have a role not just in rebuilding the
economy but in providing a national safety net to catch those in need.
 The New Deal is explained as the “big bang” of domestic policy.
 Social Security- enacted in 1935 and stands today as the
government’s most popular social program. Designed to meet 2
goals:
 1. To provide a minimum income floor for poor beneficiaries
 2. To ensure that benefits bear a relationship t the amount of payroll
taxes a beneficiary actually paid.
 Supported by equal contributions from employers and employees
the program now covers more than 90% of the American work
force.
 EVERYONE benefits, regardless of need.
 Congress finally indexed benefits to rise with inflation in 1975, and
the retirement age will start to rise in 2003 and reach 67 years of
age by 2027.
 Social Security is now the world’s largest insurance program for
retirees, survivors, and people with disabilities.
 Unlike many welfare programs, it is financed not from general taxes,
but from a trust fund into which taxes on employees and employers
are placed- FICA.
 Social Security taxes are now the largest taxes paid by most
Americans.
 Employees had to pay a 7.65% tax on all wages up to $84,900 in
2002, which their employers had to match dollar for dollar.
 Some experts believe that if social security expenditures are not
controlled, more than half of every paycheck will be used to
finance the program by 2040.
 Because people are living longer, the future financial stability of ss
has become a major political issue. When the baby boomers retire,
the number of people receiving benefits will increase in proportion
to those contributing to the system. This increase would not be a
problem if the money being contributed to ss by today’s workers
was put away for their eventual retirement- but much of the money
from today’s workers goes to pay for today’s retirees. Ss is thus a
transfer program where today’s workers finance the retirement of
today’s elderly.
 Ss is still running a surplus, which is invested in Treasury bonds, with
the promise that they will be repaid with interest later.
 There are only 3 possible solutions to the ss problem: cut benefits,
raise taxes, or figure some way to get a higher rate of return on the
surplus. Some reformers think the ss surplus should be invested in the
stock market, but some think it is too risky.
 The New Deal also gave the first help for the unemployed in
unemployment insurance program- administered by state
governments but funded in part with federal unemployment taxes.
Eligible workers can receive benefits for up to 26 weeks in most states.
In period of high unemployment, the federal government also provides
funds for extended benefits up to 39 weeks.
 Infancy and Maternity Protection Act of 1921 was the first to create the
federal Children’s Bureau to encourage states to create new
maternal, infant and early childhood health programs.
 AFDC- passed in 1935, Aide to Families with Dependent Children tried
to shift the focus away from what the mother had or had not done to
deserve poverty and onto the children who suffered whatever the
cause.
 States were given federal money to establish cash grants for poor
families with 2 conditions: states had to match the federal funds with
some of their own, and states had to establish a means test for all
families receiving benefits.
The Great Society
 1960s became known as the Great Society- programs that
dramatically increased the role of the federal government in
education:
 food stamps- gives poor families coupons to purchase the basics of
a healthy, nutritious diet.
 Head Start- designed to help poor children get ready for
kindergarten.
 Medicaid- 1965 created to provide basic health services for poor
families.
 Supplemental Security Income- SSI, to provide an extra measure of
support for elderly poor and the blind or disabled.
 Housing Assistance- created the Dept of Housing and Urban
Development in 1965 to help low income families find affordable,
safe housing.
 Medicare- the federal government pays all of the reasonable costs of
all inpatient hospital care, including drugs, surgery, and postoperative
care, regardless of the beneficiary'’ personal wealth. Like SS, it is
"purchased” through payroll taxes.
 The 1964 election brought 65 new Democrats to Congress, and with
them, the decision to focus exclusively on the elderly, which eased
concerns about the ideas of what conservatives called, “Socialized
medicine”
 Medicare does not cover the cost of prescription drugs, and the costs
of Medicare continue to grow faster than the revenues do.
 The Great Society was seen as a Democratic initiative. Many
Republicans argued then, and still do now, that the Great Society went
too far in expanding the federal government’s role, as well as its
budget.
Reforming Welfare
 Clinton won passage of the Personal Responsibility & Work Opportunity
Reconciliation Act in 1996, which replaced AFDC with TANF
(Temporary Assistance for Needy Families). It promotes the idea that
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individuals should take more responsibility for themselves, and work, not
welfare, is the goal of public assistance.
The burden of administering the new program was shifted entirely to
the states.
The federal government now gives block grants to the states, required
to match those funds.
Federally funded public assistance is limited to 5 years over a person’s
lifetime; recipients must engage in work activities within 2 months of
receiving benefits.
Most welfare benefits were restored to legal immigrants.
The devolution of power to the states in the area of welfare is seen as a
testing ground for the future. If states do well, they may get to set and
implement more social policy.
Since passage of welfare reform in 1996, the number of people on
welfare has declined in every state except Hawaii.
SOCIAL POLICY CHALLENGES FOR THE FUTURE: HEALTH, EDUCATION &
CRIME
 Human resource spending for programs such as Social Security,
Medicare, Medicaid, and child nutrition has more than doubled since
1950.
Health Care
 NIH- National Institutes of Health is a conglomeration of 37 separate
institutes on a 300 acre campus in Bethesda, Maryland that study
infectious disease, etc.
 The Surgeon General of the US is arguably the most visible health care
official in government.
 NIH study causes and seek cures of serious diseases, and grant
fellowships to able scientists and physicians for health research.
 FDA- Food & Drug Administration falls under the health umbrella.
 CDC- Centers for Disease Control- in Atlanta, has a role in homeland
defense by preparing the nation for a possible biological attack.
 Despite its success in making the nation healthier, the federal
government faces two major health care challenges in the future:
containing costs and expanding coverage.
 Health care costs in the US have nearly quadrupled since 1970.
 The costs of children’s vaccines has risen 1,000% in one decade.
 All Americans are paying for the rising costs- 6% of employee
compensation is the cost of health care.
 The good news is that costs have risen because people are living
longer.
 As people live longer, they place greater demands on the health care
system- new and advanced medical technology have all increased
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the costs of health care and placed greater demands on other social
policies such as social security.
Some physicians claim that they have to perform procedures that are
medically unnecessary but are legally essential to reduce the risk of
being sued by patients.
The cost of malpractice insurance in the US is 9 times that in Canada.
Part of the health care problems are avoidable- smoking, etc.
44 million Americans are not covered by Medicaid and they have no
health Insurance.
Postponing medical care because they can’t afford it, these people
then drive the cost of medical care up because critical care is much
more expensive than preventative care or early treatment.
Proposals for Health Care Reform:
 1. Single Payer- a system where the national government, using
broad-based taxes, covers the cost of health care and
hospitalization and sets the rates. Like the system in Canada, it
would provide universal coverage to ALL Americans. Many oppose
due to costs, increase in taxes, decrease in services and
technological advances.
 2. Prepaid Health Plans- HMOs (health maintenance organizations)
where individuals or their employers pay a set amount for each
person covered each year in return for health care and hospital
coverage. There are no national standards of health care quality,
and HMOs aren’t held to any standards.
 3. Employer-Mandated Coverage- currently more than 160 million
Americans get some form of medical insurance as a benefit of their
job. The cost of health care for small businesses may be 10-40%
higher than for large businesses.
 4. Spending Caps- the cost of providing health care each year
consumes a larger and larger share of our gross domestic product,
some have proposed that the national government impose an
overall spending cap on health care that applies not only to public
expenditures, but private ones as well.
 5. Individual Responsibility for Coverage- proposal to apply a free
market approach to health care by abolishing ALL employerprovided benefits and encouraging individuals to buy health
insurance on their own, in much the same way that individuals are
responsible for purchasing their own auto insurance. If individuals
purchased their own health insurance, they might pay more
attention to the costs and monitor their fees more closely.
 6. Medical Savings Accounts- individuals can make tax-deductible
contributions of $1462 a year to a special medical savings account
that can be used to pay medical expenses. Withdrawals for other
purposes are taxable and subject to withdrawal penalty. Would be
an incentive to spend their own money more carefully.
Improving Education
 Education has long been a state responsibility- public schools are
funded, at least in part, by local property taxes.
 Local districts vary from areas with expensive homes to very poor
neighborhoods, and the funds available to schools vary.
 This inequality is only part of the reason for federal involvement in
education.
 1944- Congress passed the GI Bill, guaranteed for paid college tuition
and living expenses for WWII veterans.
 During the cold war, education became part of the national defense.
 National Defense Education Act- 1958, passed to upgrade science,
language and math scores in response to the Soviet launch of Sputnik.
 1964- Congress passed Head Start for preschool children, and the
Elementary and Secondary Education Act (ESEA) which supplied
educational materials for underprivileged public school students and
provided funding for research on how to assist children from
disadvantaged backgrounds.
 The federal government today provides less than .10cents on every
dollar spent on education by state and local governments.
 1954- Brown v Board of Education of Topeka outlawed segregation in
public schools.
 Today more than 1/3 of all college students receive some financial aid
 Americans ask more of their schools than just to educate their childrenschools have to identify and support at-risk students and get them
medical and psychological treatment, identify special education
needs and service them, and seek to socialize students into
acceptable behaviors.
Controlling Crime
 Controlling crime is primarily a state and local matter. The federal
government is usually more a banker than a police officer.
 Congress has intervened on the matter of gun control- because guns
are manufactured and transported across state lines, giving Congress
the power to regulate sales under the Constitution’s commerce clause.
 They have set minimums for the purchase of handguns (21) and
rifles/shotguns (18)
 1993- Brady Handgun Violence Protection Act passed requiring
background check and waiting period on all handgun purchases.
 1994- Congress passed anticrime bill that authorized over $30 billion in
spending on federal crime initiatives. Used to hire 100,000 new police
officers and construct new prisons, and “boot camps” for juvenile
offenders.
 Department of Justice is the federal government office that enforces
its laws, and contains the FBI, and Drug Enforcement Agency as well as
the Bureau of Alcohol, Tobacco and Firearms (ATF)
 Terrorism is clearly the federal government’s top priority in crime today.
 USA PATRIOT ACT- passed in 2001 stands for (Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism) it allows the federal government to have sweeping
authority to conduct secret investigations of suspected terrorists, use
“roving wiretaps” to intercept conversations on any phones that a
suspect might use, and detain any noncitizens believed to be a
national security risk for up to seven days without being charged with a
crime.