The Welfare State
Social policies promote a range of public goals. The first is to protect against the risks and insecurities that most people face over the course of their lives. Most spending on social welfare in the United States goes to programs benefiting the elderly, such as Social Security and Medicare. They are the least controversial areas of social spending. Funding for other programs, especially promoting equality of opportunity and assisting the poor, are much more controversial. While Americans believe in promoting equality of opportunity, we have differing views on which social policies are needed and how these policies affect liberty.
I. What type of welfare system existed before the creation of the welfare state in the 1930s?
- For much of American history, local governments and private charities were in charge of caring for the poor.
- Society distinguished between the deserving poor and the undeserving poor.
- Programs provided outdoor relief (cash) and indoor relief (police stations, settlement houses, hospitals).
- States provided mothers with pensions.
- The Great Depression overextended the local governments and private charities and led to a call for increased federal involvement.
II. What are some important examples of contributory and noncontributory welfare programs?
- The Social Security Act of 1935 is the foundation of the American welfare state.
- Programs can be defined as either contributory programs or noncontributory programs.
- Contributory programs include Social Security and Medicare, which are funded by taxes and are adjusted annually (indexing) for cost-of-living adjustments (COLAs).
- Noncontributory programs include Aid to Families with Dependent Children (AFDC) and the new Temporary Assistance to Needy Families (TANF), which provide public assistance to needy families based on means testing.
III. What two major welfare programs were created in 1965? What were the long-term effects of these programs?
- Medicare and Medicaid were enacted in 1967.
- Medicare provides long-term health care for the elderly.
- Medicaid provides health care for low-income individuals.
IV. Has welfare reform been successful? Why or why not?
- The push for welfare reform can be traced back as early as 1960 but began in earnest during the 1990s.
- President Clinton called for “an end to Welfare as we know it,” but it was not until the Republicans took control of Congress in 1995, that a dramatic reform of welfare became law. The law abolished the AFDC and transferred control of benefits to the states under TANF.
- Welfare caseloads, which had begun to decline, plummeted in the years since welfare reform was passed. However, it has not reduced poverty.
- Democrats have proposed new changes to welfare in order to make it more of an anti-poverty weapon, while Republicans have stressed stricter work requirements.
V. How do we pay for the welfare state?
- Only about one percent of the federal budget goes to programs to benefit the poor, while entitlement programs have grown dramatically.
- Social Security is indexed to inflation, and health care costs are driving up the cost of Medicare and Medicaid.
- Record budget deficits have drained the Social Security Trust fund, which has led to doubts about the future of Social Security.
- President Bush and other prominent Republicans have called for privatization of Social Security, but others argue that other, less drastic, solutions are better able to protect Social Security.
- Indeed, critics of privatization argue that the Bush tax cuts for the wealthy is the main reason Social Security is endangered.
Opening Opportunity
I. What policies are aimed at helping the poor break out of poverty?
- Social policies are extremely important at promoting equality of opportunity.
- Education, employment, health and housing policies are aimed at helping the poor break out of poverty.
- Education policies have primarily been handled at the state and local level, but the national government has become increasingly involved in setting educational curriculum.
- Universal compulsory education is considered the single most important force in the redistribution of opportunity in America.
- The national government first got involved in in elementary education after the Soviet Union beat the U.S. into space with the launching of Sputnik.
- George W. Bush greatly increased the federal role in education with the controversial No Child Left Behind Act.
- Some reformers have pushed vouchers and charter schools as alternatives to public education.
- Until recently, neither the federal or state governments were involved in providing health care. Today, the states and the federal government have become much more involved, to the point where Medicare and Medicaid have major impact on state and federal budgets.
- The United States is the only advanced industrial nation without universal health care and our patchwork system is very expensive.
- In 2003, Congress added a costly and complicated prescription drug benefit to Medicare.
Who Gets What from Social Security?
I. Which groups receive the most benefits from social policies? Which groups receive the fewest?
- The strongest and most generous programs are those in which the beneficiaries are widely perceived as deserving and are also politically powerful—the elderly.
- The middle class also benefit from social programs, as beneficiaries of the “shadow welfare state” and from being relieved of the financial burden that would come with providing care for elderly relatives.
- The working poor receive very little (Earned Income Tax Credit and food stamps) from the modern welfare state, because their income excludes them from means tested programs.
- The nonworking poor are provided assistance if they care for children; the benefit levels fail to provide for a standard in excess of the defined poverty income.
- Minorities, women, and children are more likely to experience poverty and are the least likely to benefit from the American welfare state.
Thinking Critically About Social Policy and Equality
I. How has the formation of social policy reflected the debate over liberty, equality, and democracy?
- Liberals argue that more generous social policies are needed if America is to truly ensure equality of opportunity.
- Libertarians and some conservatives believe that government social policy creates more problems than it solves.
- Other conservatives, called “new paternalists,” argue that the government should promote work, marriage and other social values.
Section Menu
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