Social Welfare Policy GOVT 2305 What is Social Welfare Policy? One Definition: the principles, activities, or framework for action adopted by a government to ensure a socially defined level of individual, family and community well being. – Source. Some online reading: Pearson: Social Policy and the American Welfare State. Cengage: Chapter Outline. Here’s a great website where you lose a hour or two: The Social Welfare History Project. The term is used to describe the policies and programs designed to address poverty and the lack of opportunity in society. In short, these are policies that are addressed to help the poor. These policies can exist on all levels of government. They can also be established by private organizations as well as public institutions. There is a tremendous degree of overlap between social welfare policy and many other types of policies. Health and Education policy, as well as policies related to jobs and criminal justice can fall under the broad heading of social welfare as well. In this section we stick primarily with policies directly related to the poor and how (or whether) they are to be given assistance. We will focus primarily on Social Security and the various policies associated with it, as well as the policies promoted by Lyndon Johnson as part of his War on Poverty. We will also look at the backlash against these programs and determine the current state of social welfare policy. We will focus on what are referred to – often negatively – as welfare policies. The Welfare State Various countries have different views on what provisions and benefits ought to be provided to its citizens. Most countries are far more generous than the United States. And more states are far more generous than Texas. Much of this is the product of the political culture of both. Should a social safety net be provided for the people? Should society guarantee to its citizens a certain standard of living, or should everyone be on their own completely? The following programs and policies are related to social welfare policy: Social Security Medicare Medicaid Head Start Temporary Assistance for Needy Families Unemployment Insurance Social Welfare policy begins with the premise that inequality in income and wealth is a problem that can be addressed by governmental policies. The question is multi faceted: Should government intervene? If so how? And might governmental intervention cause more harm than good? There’s no consensus about that. Some disagree that that poverty is a problem that requires governmental intervention. Social welfare policy is among the most controversial and contentious policies. And even if there is agreement that this is a problem, there is disagreement about what the nature of the problem is. This means that there is disagreement over what the solutions to the problem ought to be. Here’s an ancient question: Why are people poor? Through factors related to the greater society or to individual failings? This distinction matters. Who are the poor? The elderly? Children? Ethnic minorities? Women? Should they all be treated the same? Is poverty similar in all groups, or is it distinct? Childhood poverty as opposed to old age poverty for example. Each is distinct and requires a unique set of policies to address. Questions about the facts associated with poverty. There are disputes regarding the extent of poverty in the United States and what factors make people poor. - See poverties.org. For random background see the Wikipedia on Poverty in the United States, especially its section on measures of poverty. It mentions that poverty can be considered in absolute or relative terms. Absolute poverty is measured by poverty thresholds, which the Census Bureau uses to estimate the number of people in poverty, and by the HHS to determine who is eligible for assistance. So we have two ways to measure absolute poverty: Poverty Threshold Poverty Line The poverty threshold refers to an income level that marks the difference between living and poverty and not living in poverty. The level is based on a formula which focuses primarily on the minimal cost of food needed to sustain a family. Click here for how the formula was established. A family of four is judges to be in poverty if their after tax income is less than three times the amount they would be expected to pay on food based on the thrifty food plan. The "Orshansky Poverty Thresholds.“ The Development and History of the U.S. Poverty Thresholds – A Brief Overview. Next up: a timeline of people below the threshold 1959 – 2009. Criticisms: It might overestimate poverty by not taking into consideration welfare policies that provide assistance in purchasing food. Criticisms: It might underestimate poverty by not taking into consideration other necessities that have experienced greater degrees of inflation than food – shelter and education for example. The poverty guidelines are created by the Department of Health and Human Services to determine financial eligibility for federal programs. These are tied into nondiscretionary programs like Medicare and Medicaid. Click here for the 2012 Annual Federal Poverty Guidelines. Here’s an interesting – constitutional point – what authorization exists within the Constitution to collect this information? Some opposition exists to the very idea that this information be collected since it can lead to calls for federal action. The next slide has links to recent stories about a controversy over whether the Census’ American Community Survey should be funded. - Survey for health, poverty benefits threatened in Congress - Getting rid of census survey is wasteful - Don’t Replace Data With Ideology The point is simple. If people have no statistical evidence of the existence or nature of poverty, there’s little ability to promote policies to address it. Again, both of these measures are related to the absolute level of poverty in the United States. Many policies in existence are tied into these measures. It is often, and controversially, pointed out that absolute poverty in the United States is nowhere near as bad as it is in many foreign nations. Creature comforts can be relatively easily attained – indoor plumbing, televisions, refrigerators, cell phones etc…. In material terms, today’s poor (in the US anyway) live better than the kings of yesterday. So here’s the political question(s): Is absolute poverty in the United States a problem that government should attempt to solve? Could it be that poverty is a condition that has no real solution? Or perhaps the solution to poverty has already been established and sufficient means have been put in place to solve it, its just up to each individual to take advantage of it? Or perhaps there are those who see the existence of poverty as means of ensuring that they stay in positions of privilege. But poverty can also be relative. How poor are people relative to others? This also can have a political component since the poorer one is the less power one has to positively impact policies that affect them. This gets into highly controversial areas. Is income and wealth inequality in the US a problem that requires intervention? Does economic inequality lead to political inequality and does this pose a problem for democracy? Does it also violate basic principles of fairness? Big Issue: How do we know there is inequality in the US? How do we measure it? Economists commonly study the distribution of wealth and income and worry about its effects. And a quick clarifying point: Income refers to how much is earned by and individual or other entity in a given timeframe – usually a year. Wealth refers to the quantity of money, property or other possessions held by an individual or other entity. Inequality in each is different. The most common measure of income inequality is the Gini coefficient. The lower the number the more equal the distribution, the higher the number the less equal the distribution. The following graph shows how inequality has fluctuated over American history. Here is a measure of the inequality of counties in the United States using a different measuring technique, the Thiel index: Notice that two of the most unequal counties in the United State are in Texas: Dallas and Harris Counties. Does this negatively impact politics in the state? In a related note, does this inequality allow for social mobility? We like to think that people in the United States can rise in society relatively easily, but is this true? Is there evidence supporting the idea? Here’s a link to a recent Senate Committee hearing on the subject. It argues that mobility is less likely now than in the past. Assessing Inequality, Mobility, and Opportunity. And commentary on the subject matter. How is economic inequality dealt with by governmental programs? This takes us beyond simple social welfare policy into civil rights policy. Do existing economic arrangements violate the “equal th protection clause” of the 14 Amendment. Is inequality the result of natural, legitimate processes, or is it the product of illegal discrimination? If it is the former, there is no cause for governmental action. If it is the latter, then there is. But there is strong ideological disagreement about this. The traditional conservative point of view is based on individual liberty and tends to hold that governmental actions to address inequality violates the liberty of those with high levels of income and wealth. The liberal viewpoint – which is based on a strong commitment to equality as a value – is that these imbalances are the consequence of discrimination and strong measures need to be taken to address them. Examples include controversies over disparate pay rates – and advancement opportunities - of women and men performing the same jobs. One of the arguments for progressive tax rates – especially steeply progressive rates - is that it helps address inequality in income A brief overview of the history social welfare policies. Here’s a complicating factor: The poor, especially poor males, can be seen as threats to the social order. Laws dealing with the poor are often also concerned with what to do with idle young males who might also be tempted to commit crimes. Keep this in the back of your mind as we proceed. Social policy is not made in isolation. It overlaps with criminal justice policy, education policy jobs policies and many others. Can a society be stable if it has lots of poor people? What if there are many poor, unemployed males? Despite its controversies, social welfare policy has a long history. Let’s have a quick look at it. Care for the poor has been a central feature of many religious traditions for millennia. Religious based support, as well as private charity in general, allows for discretion regarding who is judged deserving of support. This also applies to local governmental control of poverty programs. But this allows for discrimination as well. One of the arguments made in favor of the national government controlling assistance for the poor is that local prejudices cannot enter into who gets assistance and who does not. There is still tremendous ideological conflict regarding what institutions are best suited to provide poverty assistance, as well as practically everything having to do with poverty. We’ll look at some figures below. Like many aspects of American public policy, our approach to the poor is based on British tradition. Poverty within a feudal system was considered to be a function of one’s place in society. Its important to note that keeping lower classes in poverty was a great way to keep them in their places. But it was also assumed that the basic needs of lower classes would be met by those who held higher ranks. They were obligated to do so. Here are some random sites related to poverty in feudal systems. A list of feudal rights. Medieval Life. Outdoor relief referred to assistance given to people to alleviate poverty. This could be in the form of goods like clothing or food, or simply money. Money has always been the simplest form of outdoor relief, but suspicions exist that the funds are not used to relieve poverty, but for other purposes. Britain had a variety of poor laws over its history. The most famous were the Elizabethan Poor Laws. A lingering consequence of these laws is the distinction made between the deserving and undeserving poor. The undeserving poor were either able bodied – and would be put to work – or idle – and could be sent to prison. In extreme cases vagabonds were rounded up, held in stocks and banished from town. They were also sometimes whipped and in extreme cases executed. The idea that unemployment sometimes increase due to economic circumstances took a while to catch on. The deserving poor were those who were old, handicapped or otherwise physically unable to work. Assistance was provided to these people in one of two forms: indoor relief and outdoor relief. Indoor relief was provided by work projects that generally involved moving into a workhouse where accommodations and employment were provided. For poor kids this could be placement in an orphanage or come other institution if the child was actually orphaned, or whose parents were simply unable to take care of them. British government claimed the ability to force people to work and to enforce family responsibility. There were no governmental policies regarding the poor in colonial America. Families were expected to care for needy members and the church could act as an extended family when the family was unable to do so. Poverty policies were primarily charity driven. Workhouses would be established to provide indoor relief and force the poor to work. Many early settlers – those who settled in the moralistic colonies in New England at least – had Calvinist opinions of poverty and the poor. Poverty was the result of moral deficiency. Work was an essential part of life and the able bodied poor were seen as undeserving. Interesting side note: Many of the settlers of Jamestown were members of the nobility and were not used to working for themselves. Historian argue that some of the early hardships there was the result of their unwillingness to work. Its important to note the attention the founding generation paid to happiness and the general welfare in both the Declaration of Independence and the Constitution. As we probably know, the Declaration of Independence, while not mentioning welfare, argues that people have the unalienable right to the pursuit of happiness. But it isn’t clear what it means. The word happiness is mentioned repeatedly by the founders in many writings. “The happiness of society is the end of government.” – John Adams. The Articles of Confederation mentions the poor – not kindly IV. The better to secure and perpetuate mutual friendship and intercourse among the people of the different States in this Union, the free inhabitants of each of these States, paupers, vagabonds, and fugitives from justice excepted, shall be entitled to all privileges and immunities of free citizens in the several States; The U.S. Constitution contains the word welfare. The promotion of the general welfare is mentioned in both the preamble and Article One, Section Eight: . . . To promote the general welfare . . . But it is ambiguous. What does Promote the general welfare mean? Throughout the 19th Century, poverty was seen as being a sign of immorality, idleness and often tied in with alcoholism or drug use. Apparently there was quite the morphine epidemic following the Civil War. The slow transition from rural to urban areas and the increased participation of women in politics began to lead to a change – among many though not all – about the causes of poverty and whether poverty could be dealt with effectively. Poverty in rural areas differed from poverty in urban areas. Opportunities for self sufficiency existed on the farm that did not exist in cities. As cities grew, a new type of poverty developed ,and so did organizations designed to provide charitable assistance. The Progressive Movement began to develop policies to focus on what they believed to the underlying causes of poverty. This led to cooperation with others, like the Temperance Movement. Charity Organization Societies began to spring up in urban areas to address the need of the poor. These included efforts to assess the needs of individuals so that assistance could be effective. The Settlement House Movement was part of this effort. So was the establishment of the profession of Social Work. Members of the profession led the way to redefining poverty from being a condition that results from immorality, to a problem based on the circumstances that surround the urban poor. These can be alleviated with the proper policies. For good background read: Women, Settlements, and the Redefinition of Poverty The women of the settlement house movement documented many environmental problems contributing to poverty in America, factors produced or magnified by America’s rush to industrialize, factors such as poor health due to industrial accidents, tenement fires, polluted factory air, contaminated mass-produced food, and garbage-filled city streets. They redefined poverty from being a condition, to being a problem with a solution. Factors like unemployment, overcrowding, and physical disabilities were seen as leading causes of poverty. Media attention began focusing on the poor. Muckracking journalists began to sensationalize the plight of the poor. One of the principal works was Jacob Riss’ How the Other Half Lives. It revealed to the middle and upper classes the conditions of the poor. Many were unaware of hwo they lived. These provided some support for early efforts to nationalizing antipoverty programs. The question was whether these policy solutions could be adopted and implemented successfully. States began developing agencies for the mentally ill. But not all states provided assistance and the care could be uneven. This led some to argue that the federal government should assume responsibility for these and other programs. Federal involvement in providing social welfare services began as a result of the Great Depression. The Great Depression impacted attitudes about poverty. The severity and breadth of the crisis led people to see poverty as a consequence of factors beyond an individual’s control. For a period of time the poor were not blamed for their conditions. This allowed for a critical redefinition of poverty, one that led to additional support for proposals to actively address. Public work programs were established in order to put the unemployed back to work. Work Progress Administration Civilian Conservation Corps These were designed to allow people to earn incomes, which satisfied the requirement that the able bodied poor work, and was also based on the Keynesian notion that the problem with the economy was a lack of demand. Money in people’s pockets fueled demand and sustained the economy. Some efforts to address the economy were found to be unconstitutional. The Supreme Court had yet to accept the idea that the national government could play a role in regulating the economy. It retained a limited definition of “commerce” so social welfare policymaking was constrained. The major accomplishment was the passage of the Social Security Act which established an old age pension. The act establishes old-age, survivors and disability insurance. This addressed the problem of poverty among the elderly. Unemployment among the elderly topped 50% and the value of their savings had shrunk as a result of the depression. Read up on the history of old age pensions here. This is helpful as well: Historical Background and Development of Social Security The Social Security Act was a large complex bill that established a variety of programs. Click here for the original text of the bill. The bill was designed to ensure that measures would be in place to care for the deserving poor in case of economic crisis – like the Great Depression. Here’s a walk through some of its sections. Title I: Grants to States for Old-Age Assistance. Title II: Federal Old Age Pensions Title III: Grants to States for Unemployment Compensation Administration. Title IV: Grants to States for Aid to Dependent Children. Title V: Grants to States for Maternal and Child Welfare. Title X: Grants to States for Aid to the Blind. Notice that most of these are grants in aid programs. States are encouraged to run these programs with matching amount provided by the national government. The act establishes two types of social insurance programs. The first is Old Age, Survivors and Disability Insurance, which is a federal program. The second is unemployment insurance, which is a grant in aid program run by the states with federal funding. These are paid by the recipient through payroll taxes and are matched by one’s employer. In the case of old age insurance, the amount paid determines the amount received monthly upon retirement. The program is designed to ensure that retirees will be able to survive after they retire, regardless of the condition of the economy. People are forced to provide for their retirement. Unemployment insurance was somewhat novel. In order to insure against job loss due to economic contractions (which means the worker is not morally faulty) the worker and the employer pay into a fund that can be drawn on in case of a layoff or firing due to the economy. The benefits from each of these programs is considered to be a right – an entitlement – because people have bought into them. They are contributory programs. The act also provides grants to states to run public assistance programs based on need. The need is provided to those who normally wee considered the deserving poor: the elderly, the young and the disabled. Federal grants were intended to ensure that states could provide these programs. Not all states are interested in doing so. These are the programs – especially the one originally titled Aid to Dependent Children – that are commonly referred to as welfare. This is marks the birth of the modern welfare state. But the impact was purposely limited in order to minimize any controversy associated with it. Any group considered – even potentially – undeserving was denied coverage. In order to placate Southern Democrats, restrictions were also based on race. Nevertheless, the act was still controversial when debated in Congress and passed into law. Click here for the Legislative History. It was challenged in the courts as soon as it was passed. Click here for a look at the battle over the act’s constitutionality. The act was ultimately judged to be constitutional based on the taxing and spending clause of the constitution. New taxes could be levied for new spending items as long as doing so benefited the general welfare. The case was Helvering vs. Davis. The act led to the establishment of the Social Security Administration, which was once within the Department of Health and Human Services, but is now an independent agency. Social Security (specifically old-age and survivors insurance) is responsible for 36% of the tax receipts from the federal government and 20% of its spending. In FY 2011, this amounted to $819 and $725 million respectively. Social Security revenues are placed in a trust fund. Read here for issues related to the trust fund. Because the act’s constitutionality rested on the tax and spending clause of the constitution, it is considered a revenue bill, and the tax writing committees in Congress have jurisdiction over it. In the House, it’s the Ways and Means Committee ,and specifically its Subcommittee on Social Security. Note the it gets its own subcommittee. In the Senate, It’s the Finance Committee and its Subcommittee on Social Security, Pensions and Family Policy. Any amendments to Social Security, and welfare in general, are considered in those committees. And the act has been heavily amended. The most noteworthy of those amendments happened in 1965. The Social Security Act of 1965 created Medicare and Medicaid. While the original social security programs dealt with providing outdoor relief to the deserving poor, these provided health care for the elderly and those in poverty. Notice how social welfare policy was expanded and overlapped with health policy. Medicare guarantees access to health care (insurance) for those over 65 and the disabled of any age. It is financed like Social Security with a payroll tax deducted from a worker’s paycheck and matched by employers. Like Social Security, it is based on contributions so recipients have a right to the benefits provided. It is an entitlement program. Medicaid is a means tested program (meaning that need has to be established) that provides medical assistance to the poor and the disabled. Medicaid is a grant in aid program that is funded mostly by the federal government but run by the states according to federal guidelines. Payments go to health care providers, beneficiaries can be charged a small co-payment for services received. Hard to remember which is which? You care for the old (Medicare) and aid the poor (Medicaid). Works for me. Both programs are run by the Center for Medicare and Medicaid Services, which is an agency within the Department of Health and Human Services. Together with Social Security, Medicare and Medicaid are 42% of the US budget. Health and Human services are 28% of the Texas budget as well. Medicare and Medicaid were among a variety of programs that expanded the welfare state during the Great Society. Others included The Economic Opportunity Act of 1964. All of these were part of what Johnson referred to as the War on Poverty. The Great Society was Lyndon Johnson’s effort to broaden the reach of New Deal in order to address the root causes of structural poverty. The New Deal primarily focused conditional poverty related to the Great Depression. Many people affected by its programs would not have been in poverty if not for that event. The Great Society dealt with the persistent poverty that occurred whether the economy was expanding or contracting. This made it controversial. An addition controversial change occurred when Aid to Dependent Children (Title IV of the SSA Act of 1935) was expanded to Aid to Families with Dependent Children. Allegations were made that ADC encouraged father to leave families in order to make their kids eligible for benefits. But allowing fathers to stay in with families opened the program up to the charge that the undeserving poor were being benefitted by the program - AFDC. Beginning in the 1970s opposition to Great Society programs began to build. These hit their stride in the 1980s with the election of Ronald Reagan who campaigned against these policies. He argues that existing policies kept people dependent upon them and did not encourage self-sufficiency. Welfare Reform became topical This remains a controversial points: Do welfare programs increase dependency on governmental assistance. Does any type of assistance discourage changes in the behavior of the people receiving that assistance? Are the benefits provided by welfare (especially if the benefits included health and child care) greater than those one would receive by getting a job? Most reform efforts focused on Aid to Families with Dependent Children. It was held that the program did not have strict enough work requirements. A variety of modifications were made to the program to enhance these requirements. These came to a head in 1996 with the passage of the Personal Responsibility and Work Opportunity Act of 1996. Work requirements were put in place, a lifetime limit of five years was placed on the program, and states were given greater flexibility to design their own systems as they saw fit. AFDC had been a grant in aid program. TANF was a block grant program.