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American Government 4/e Thomas E. Patterson | |||||
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American Government 4/e Thomas E. Patterson | |||||
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CHAPTER OUTLINE
Introduction
Two causes for the sudden drop in the number of people on welfare
Booming national economy
Welfare reform act of 1996
Social welfare policy: an area in which opposing philosophies of government collide
Some believe government must provide sustained help for those less equipped to compete in the marketplace
Others argue that welfare discourages personal effort
Welfare was traditionally left up to the states and localities until the 1930s
The chapter’s main points:
Social welfare programs have reduced poverty in the U.S.; poverty affects about one in seven Americans
Welfare policy has been a partisan issue
Social welfare programs are aimed at fostering self-reliance
Americans favor social insurance (social security) over public assistance (AFDC)
A prevailing principle is equality of opportunity that is evident in education
Poverty in America: The Nature of the Problem
The Poor: Who and How Many?
Poverty Line: in 1999 set at roughly $15,000 for an urban family of four
includes more than 35 million people, of whom 15 million are children
Based on annual budget for food, housing, clothing, and other expenses
In-kind benefits—would drop poverty line by about 2 percentage points
Some argue that poverty line is higher: close to $20,000
Poverty more prevalent among certain groups in society
Children constitute 40 percent of poor (one in every five children is poor)
Single-parent, female-headed families most likely to be poor
"The feminization of poverty"
Minorities: 30 percent of African Americans and Hispanics are poor, but only 10 percent of whites
Poverty somewhat more prevalent in rural areas
One in six rural residents, one in eight urban residents
Poverty rate very high in inner city
Suburbs a safe haven from poverty or "the other America"
Living in Poverty: By Choice or Chance?
Murray’s Losing Ground: Welfare creates a permanent underclass of Americans
Underclass prefers to live on welfare, children grow up with little educational encouragement
Still, most people are poor due to circumstances rather than choice
Job loss, desertion by parent, etc.
Holding a full-time job does not guarantee that a family will rise above poverty line
The Politics and Policies of Social Welfare
Introduction
Democrats have initiated nearly all major federal welfare programs
Republicans have accepted role of federal government, but want a small role
GOP voted against Medicare and Medicaid (70 percent in Congress)
Reagan made cuts in social welfare programs a top priority
In late 1960s, welfare spending per poor person nearly tripled
In 1980s, a 20 percent decline in actual dollars per recipient
Job Training
FDR and public jobs—fifth of nation’s work force had them during Depression
Nixon’s program provided jobs for nearly 4 million people
Today, federal government provides only moderate level of funding
Americans strongly favor work programs as alternative to welfare
Americans would use welfare savings to fund job-training programs
1996 Personal Responsibility and Work Opportunity Reconciliation Act
Ended federal guarantee of cash assistance to needy families
Goal: reduce welfare dependency by limiting time recipients can receive
welfare, providing job training
Act gives states incentives to help move people from welfare to work
Special Education: Head Start
Head start provides preschool education for poor children (started in 1960s)
Program was cut in the 1980s, but restored during Bush and Clinton eras
Less than half of eligible children are enrolled
Many who complete the program lose advantage due to home environment
Income and Tax Measures
Average family income exceeds $35,000
Average white family has $15,000 more income than average black family
Top fifth of Americans get half of all income, other four-fifths the remaining half
Bottom fifth of Americans get slightly less than 5 percent
Income taxes in America have not redistributed income
Top tax rate in U.S. is 39.5 percent; in Europe a common rate is 50 percent or more
Fewer tax breaks in Europe; U.S. tax system marginally redistributive
Top 10 percent of U.S. taxpayers pay half of all federal income taxes
Earned Income Tax Credit (EITC)
Reallocates income directly to lower-income persons
About 10 million receive payments (maximum is $3,500)
A transfer payment—government benefit directly given to individual
Individual-Benefit Programs
Introduction—Programs that alleviate personal hardships stemming from old age, job loss
Individual must meet criteria of eligibility
Called entitlement programs (spending determined by number of recipients)
Nature of programs makes spending difficult to control
Currently, federal budget for these programs exceeds $800 billion
Early in nation’s history, ideas of negative government
Idea was that government stayed out of people’s lives
Idea changed with Depression (25 percent unemployment)
Created idea of positive government
Idea that government intervention enhances liberty and security
Today, federal welfare role has increased substantially
Social insurance has public support, high level of funding
Public assistance has public opposition with lower levels of funding
Social Insurance Programs (recipients get insurance benefit under their funded program)
Introduction—more than 40 million receive benefits; social security/Medicare cost $600 billion annually
Social Security (leading social insurance program for retirees)
Funded through payroll taxes on employees/employers (6.2 percent)
Run totally by federal government
Checks go to over 35 million recipients, average more than $650 monthly
Benefits actually funded by payroll taxes on the current work force
Average recipient recovers contributions in less than eight years
"Free benefits" thereafter requires increase in social security taxes
Americans living longer—20 percent of population (55 million) will be over age sixty-five by year 2030; could create a social security crisis
Current debate over how to save social security
Unemployment Insurance (a joint federal-state program)
Individual states set tax rates, eligibility conditions, and benefit level
Average of $180 per week and termination after 26 to 39 weeks
Public sees job loss as personal failure but statistics suggest otherwise
Medicare (enacted in 1965, provides medical assistance to retirees)
Earlier Truman, Kennedy government-paid health care plans were defeated
Funded primarily by payroll taxes (current tax rate is 2.9 percent)
Provides for hospital/nursing home care—recipients pays part of initial costs
Recipient pays most of expenses after 100 days
Does not cover all doctor fees
Enrollees can get fuller coverage through additional insurance
Public support for program is relatively high
Public Assistance Programs (funded from general tax revenues for financially needy)
Introduction—Eligibility is established by a means test
Applicant must demonstrate that he or she qualifies for benefits
These programs have less public support (identified with welfare)
About 25 million Americans receive public assistance
Programs are established by the federal government
Programs administered by the states
Misperception that these programs are among the most costly
Federal government spends three times as much on social security/Medicare
Supplemental Security Income (SSI)
Originated as aid to blind and poor under 1935 Social Security Act
States have some control over benefits and eligibility; also some funding
Now includes disabled
Public is supportive
Aid to Needy Families
Funded by federal government, administered by states
AFDC created in 1930s as survivors’ insurance (father had died)
Objection when program extended to divorced/abandoned families
Attacks centered on unwed minority mothers, skyrocketing costs
AFDC terminated in 1996; replaced by TANF
Tighter guidelines, more flexibility for the states
Clinton: "Nobody knows for sure what will happen" under program
Food Stamps (fully funded by federal government)
Provides in-kind benefit; stamps can be spent only on grocery items
Critics charge recipients are "stigmatized"
Other criticisms: too costly, too many undeserving people receive stamps
1996 law limits eligibility of able-bodied adults with no children
Subsidized Housing
Federal spending mainly on housing vouchers, not actual construction
About 5 million households receive this subsidy
Government spends three times as much on tax breaks for homeowners than on low-income housing
Medicaid (health care for poor people who are on welfare—30 million recipients)
Based on need and funded by general tax revenues
Funding: 60 percent from federal government, 40 percent from states
Costly—absorbs more than half of all public assistance dollars; hurts states
Education as Equality of Opportunity: The American Way
Introduction
In Europe, a higher priority on economic security than in the United States
Reasons relate to cultural and historical differences
In Europe, importance of human equality, class consciousness (parties)
In America, no major labor or socialist parties, no economic leveling
Individualism and Public Opinion
In Gallup poll, Americans chose freedom over equality by 72 percent to 20 percent
Among Europeans, the poll margin was only 49 percent to 35 percent
Americans place trust in marketplace—let poor be given training and education
Equality of opportunity—individuals should have equal chance to succeed on own
Presumption is that people have "an equal chance to become unequal"
Public Education: Leveling Through the Schools
Early dispute between wealthy and "democrats" over public schools
Less than half of $6 billion in aid goes to schools that have widespread poverty
U.S. does educate a broad segment of its population (leader in college-educated)
Level of education related to personal success (annual incomes)
But problems—violence, decline in SAT, poor science/math test scores
Issue of school choice: parents choose school their children will attend
Polls show Americans favor this
Advocates: will force teachers/administrators to do a better job
Critics: plan creates an elite, discriminates against poor and minorities
The Federal Role in Education: Political Differences
Education has traditionally been a state and local responsibility
Over 90 percent of funds come from state and local sources
Yet education has become a national issue
Bush vowed to be "the education president"
Clinton proposed national testing, grants to hire more teachers
GOP lukewarm to federal involvement
Culture, Politics, and Social Welfare
Introduction
Polls show that Americans believe people could get along without welfare
Unwritten principle: Individual must earn benefit or have a convincing need
Inefficient system—much of the money never reaches welfare recipient
Inequitable system—much of the money spent on welfare never gets to the truly needy people
Inefficiency: The Welfare Web
Scores of overlapping programs; many rules and massive paperwork
Administrative costs lower in Europe
Inequity: The Middle-Class Advantage
War on Poverty had problems—weak support, modest appropriations
Much greater support for social security and Medicare
Programs benefit the majority
Good politics for officials to appeal to 40 million social security retirees
Without social security, additional millions of Americans would be poor
But many social security recipients have no financial need for benefits
Only a third are in the lowest fifth of income
Families in top fifth receive more than spent on AFDC, stamps, etc.
Social Security—majoritarian politics at work
Politics of welfare: "contradictory values and competing interests"
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