Domestic policy

1. Chapter 19 Domestic policy

2. Providing Affordable Health Care for All • Health care a central theme of Barack Obama's presidential campaign • About 16 percent of U.S. 2007 GDP spent on health care ($8,000 per person/$4,000 per person in the second highest nation) • Health care costs doubled every decade for the last 30 years • Over 60 percent of all personal bankruptcies due to medical costs • 2012 50 million Americans lacked insurance • Many denied due to arbitrary definition of pre-existing condition • 47,000 deaths per year due to consequences of lack of insurance • Ranked 37th in the world in outcomes

3. Health Care • U.S. only major industrialized nation without universal health care (Germany first in 1870s) • Many programs exist, providing a patchwork quilt of care • Medicare-elderly 1960s • Medicaid-poor 1960s • Children’s Health Insurance Program (SCHIP)- • And now, President Obama’s health care bill

4. Many parts of the program founded in Republican ideas • Teddy Roosevelt calls for major reform • Richard Nixon Comprehensive Health Care Program • Individual mandate-Newt Gingrich and the Heritage Foundation • Medicare Part D-Prescription medication George W. Bush

5. Domestic Policy Making • More than half of government expenditures made on Social Security, health care, education, and immigration • Many designed to address economic inequality • To evaluate, must address questions involving conflicts between freedom and order and freedom and equality • State and local governments must also have capacity to carry out national programs

6. The Development of the American Welfare State • Most controversial purpose of government promotion of social and economic equality • Conflict between freedom and equality • Most modern nations welfare states • Social welfare policy based on concept governments should provide for basic needs of members

7. A Human Tragedy

8. The Great Depression • Initiatives related to the New Deal and the Great Society dominated national policy until reforms in 1980s and 1990s • Extended protective role of government • The Great Depression longest and deepest setback of U.S. economy in history • Began with stock market crash Oct. 24th, 1929 and ended with start of WWII • One in four workers unemployed; more underemployed

9. The New Deal • Franklin Delano Roosevelt, accepting nomination at Democratic Presidential Convention: “I pledge you, I pledge myself to a new deal for the American people.” • Were programs imaginative public policy or source of massive government growth without matching benefits?

10. The New Deal’s Two Phases • First phase aimed at boosting prices and lowering unemployment • Civilian Conservation Corps (CCC) • Second phase aimed at aiding “forgotten people” • Social Security program • Despite programs, poverty and unemployment persisted until WWII

11. The Great Society • President Lyndon B. Johnson re-elected in 1964 with landslide • Used support to promote Great Society programs to combat political, social, and economic inequalities • Vital element was War on Poverty • Economic Opportunity Act (1964) designed to end poverty in 10 years • A hand up, not a handout

12. Retrenchment and Reform • Despite Great Society’s programs, poverty declined but did not disappear • Ronald Reagan used presidency in early to mid 1980s to re-examine social welfare policy • Shifted focus from economic equality to economic freedom • Questioned whether government alone should look after less fortunate

13. Retrenchment and Reform • President Bill Clinton’s proposals aimed at reforming system while protecting basic fabric of safety net • President George W. Bush’s administration greatly expanded welfare benefits for seniors with Medicare drug program

14. Social Security • Government social insurance programs protect individuals from various kinds of loss, regardless of need • First example was workers’ compensation • Social security and Medicare also social insurance programs • These programs examples of entitlements

15. Origins of Social Security • Social insurance programs began in Europe as early as 1883 • In U.S., needs of elderly and unemployed left to private organizations and individuals until Great Depression • In 1935, President Roosevelt signed Social Security Act

16. Social Security Act • Act had three approaches: • Social insurance for elderly and disabled, and unemployment benefits • Grants-in-aid to the states to help destitute • Federal aid to the states to provide health and welfare services

17. How Social Security Works • Most people think of retirement benefits when thinking of Social Security • Program provides other services • Contributions not set aside for individuals but used to fund “pay as you go” system • Program began with more paying into fund than taking out (nine workers to one beneficiary) • Today’s program closer to three workers for each beneficiary

18. Will Social Security Remain Solvent? • Baby boomers begin to retire in 2010 • Current projections show fund exhausted by 2037 • Politicians face dilemma: lower benefits or raise taxes to fund program? • Current workers’ benefits will be paid by future participants • Solvency depends on growth of base • What happens when birthrate falls, unemployment rises, mortality declines, and/or economy falters?

19. Figure 19.1Day of Reckoning

20. Census Data • 49.9 million, or 16.2 percent, of Americans live in poverty • 15 million children live in poverty • 9.4 percent of people over 65 live in poverty (1954 35% lived in poverty, reduction largely due to Social Security benefits. • One in two poor Americans live in a family with a woman head of household

21. Figure 19.2The Feminization of Poverty

22. Welfare Reform • Original poverty programs lacked work incentives • A 1994 poll showed 59 percent of Americans believed welfare recipients taking advantage of system • Personal Responsibility and Opportunity to Work Act reforms enacted in 1996 • Designed to “end welfare as we know it” • Abolished Aid to Families with Dependent Children (AFDC) • Replaced AFDC with Temporary Assistance to Needy Families (TANF)

23. Figure 19.3Families on Welfare, 1955-2008

24. Figure 19.4Poverty in the States

25. Medicare • Social Security Act amended in 1965 to include Medicare for those over 65 • National health insurance first proposed by President Truman in 1945 • Medicare program had Four components: • Part A for hospitalization • Part B for physician’s fees • Medicare + Choice Part C • Part D-Prescription drug plan

26. Medicaid • Participants fall into four groups: • Children under age 21 (29.8 million, or 48 percent in 2008) • Adults (5 million) • Blind and disabled (6 million) • Aged who are also poor (6.1 million) • Last two categories account for over half of Medicaid expenditures

27. Health Care Reform • President Obama signed Patient Protection and Affordable Care Act March 23, 2010 • Compromises required to balance goal of equality of access with desire for freedom from government intervention • Notable provisions in bill include protections for coverage despite pre-existing conditions and mandatory participation • Bill includes subsidies and tax credits to help individuals and small businesses pay for coverage

28. Health Care Reform • Critics of bill concerned about cost – an estimated $940 billion over 10 years • Some, including Congressional Budget Office, believe bill will pay for itself • Those wary of “big government” troubled by additional regulations and bureaucracy • Is mandating individual coverage Constitutional? • Others anxious about effect of reforms on Medicare