Goals of this exercise

• Explain the differences between mandatory and discretionary federal spending and between social insurance programs and social welfare programs.
• Provide data on the amount of federal spending allocated to the welfare state generally and social insurance and social welfare programs specifically.
• Explore how the variability with which different economic groups encounter the collective action problem helps to explain the differences in federal spending for “middle class welfare” and aid to the poor.

Principle #1: All political behavior has a purpose. All political actors engage in instrumental acts designed to further their individual goals.

Politicians often engage in federal spending in the area of social policy to meet their policy and political goals.

Principle #4: Political outcomes are the products of individual preferences and institutional procedures.

Different rules govern how much discretion federal politicians have over spending federal dollars in the area of social spending.

Mandatory spending is federal spending over which politicians lack direct control. The benefits provided by mandatory spending are entitlements guaranteed to recipients by law.

Discretionary spending is federal spending over which politicians have considerably more “discretion” about whether and how to spend the money. These programs can change from year to year based on political decisions.

Question 1: What happened to the categories of federal spending (mandatory, discretionary, and interest payments) from 1965 to 2005?

Question 2: How do these budgetary changes affect policymakers who seek to spend money to meet their political goals?

Question 3: How does this affect the ability of the federal government to meet its goals and responsibilities?

What is Welfare? What is Social Insurance?

Welfare policies (also known as “means-tested” programs) like TANF and its precursor AFDC are programs that provide benefits to the poor and needy.

Inasmuch as these programs redistribute the resources of society from those who can pay (the middle and upper classes) to those unable to contribute (the poor), these programs are controversial and politically vulnerable.

Social Insurance policies (also known as “non-means tested” programs) like Medicare and Social Security are programs to which recipients have contributed their own money.

Inasmuch as these programs benefit the middle and upper classes in society, they are so popular that they are nearly unassailable politically.

Question 4: To the extent that the United States has a welfare state, what types of programs use most of the resources?

Question 5: If it is increasingly true that the “welfare state” is dominated by social insurance programs rather than “means-tested” traditional welfare programs, why are “means-tested” programs the subject of so much controversy?

Question 6: To what extent do the political differences between these programs exemplify “Principle #2: the collective action problem”? What benefits do “middle class” and “upper class” individuals have in working collectively? What comparative disadvantages do the poor encounter?

Citations

• Historical Tables, Budget of the U.S. Government, Fiscal Year 2007 (Washington, DC: U.S. Government Printing Office, 2007).
• Theodore Marmor, Jerry Mashaw, and Philip Harvey, America’s Misunderstood Welfare State (Basic Books, 1990).