Social Policy

1. Social Policy • Programs to cushion risk, provide citizens with security from market • Social insurance: largest part of welfare state • Age, ill health, unemployment, death of spouse • Social Security, Medicare, Unemployment insurance, Worker’s compensation • Benefits working middle class; contributions workers make in form of payroll taxes; “deserving”; benefits keep up with cost of living (indexed) • Public assistance programs • Selective and means-tested; eligible to those whose income/wealth below set limit; not indexed; more controversial • Food stamps, housing assistance, child welfare • Education • Private welfare state; relatively large • Health insurance, pensions from employer • Government subsidizes through tax code, exemptions • More inequitable than government programs in who benefits and by how much • Spending on social insurance, public assistance programs, and state-subsidized private welfare has expanded dramatically since WWII • Still comparatively small (Figure 10.1) • Americans enjoy fewer and less general social rights (e.g., right to health care)

2. Historical Welfare State • Early American welfare state extended social protection to veteran soldiers and mothers (following Civil War) • (1880-1910) ¼ of federal budget spent on pensions for Civil War veterans and dependents • Later “maternalist” welfare state developed aimed at promoting motherhood • Product of Progressive Era • Provided income assistance to single, poor mothers who had to prove “worthiness”; contingent on behavior of mothers • Price of accepting mothers’ pensions was state regulation over lives of women to ensure they conformed to traditional gender roles (i.e., full-time child-centered domesticity) • Unwed mothers often excluded • Many states and localities excluded black mothers (especially in South) • Example of how roles (gender and race) inscribed in social policy

3. New Deal and Beyond • Most dramatic expansion of welfare state (Great Depression) • Staggering unemployment (1/4 workforce jobless); Unemployment  poverty and despair; political action prompted FDR administration to offer federally funded jobs and social welfare • Social reform to address unrest and keep market economy (capitalism) functioning; resisted by corporate community • Social Security Act (1935) • Pensions and unemployment compensation for workers; public assistance to elderly and blind; for poor, single mothers -- Aid to Dependent Children (ADC) • Reinforced conservative nature of welfare state • Continued tradition of localism (states set benefit levels and eligibility requirements) • Benefits set quite low • Institutionalized distinction between “deserving” and “undeserving”; social assistance programs (financed through payroll taxes) vs. public assistance programs (financed through general fund) • Reinforced gender inequalities (men more likely to qualify for social insurance) • Profound racial content (advantaged whites and excluded African Americans); clear example, GI Bill • Fair Labor Standards Act (1938) established minimum wage and 40 hour work week

4. New Deal and Beyond, cont. • WWII halted social reform • After war, resurgent business community and conservative Congress resisted new initiatives; supporters put on defensive • (1946) Full employment policy, (1949) National Health Insurance bill, Truman’s Fair Deal (extending New Deal) all defeated • Unions, liberals used collective bargaining to gain pensions, health insurance, unemployment protection  private welfare system • Employer-based benefits made workers dependent for social protection (health insurance, pensions) on firms; tied workers to employers • Divided workers from each other = workers in corporate sector had less stake in improving, expanding programs for other workers and poor • Businesses offered tax incentives to subsidize employer-based welfare plans • Limited public benefits encouraged reliance on private, corporate welfare plans • Private plans act as brake on further extension of public welfare state • New Deal did not go forward under Truman or back under Eisenhower

5. New Poverty • (1960s) Increasing numbers living in poverty despite booming economy • Poor African Americans in urban ghettos • Faced greater discrimination than earlier groups of immigrants • Postindustrial economy  increasing importance of education, skills; factories relocated to suburbs; service sector jobs don’t pay living wage • Women • (present) 1/3 of all female-headed households in poverty; ½ of all families in poverty • Women earn lower wages; some need to stay home to care for children • Children • (present) poverty rate among children around 20%; 3x’s higher than in Europe • Welfare state generationally skewed (most benefits flow to elderly through expensive programs like Medicare and Social Security) • Poverty today • Good and bad jobs growing in postindustrial economy at expense of blue collar jobs in middle • Service sector characterized by low wages, no benefits, irregular employment • Value of federal minimum wage has declined (Table 10.1) • See page 331, Responsibility for Poverty: What Do You Think?

6. Great Society Program • Last serious effort to address poverty, Johnson (1964) •  democratic electoral victory overcame conservative coalition (Republicans and Southern Democrats) and mobilized protests of civil rights movement • Johnson declared a War on Poverty (Great Society, free of hunger and privation, in State of the Union, 1964) • Government assumed new responsibilities • Federally funded health insurance (Medicare and Medicaid) for aged and poor; New educational opportunities for disadvantaged (Head Start, Upward Bound); Job-training programs (Job Corps); Housing and urban development programs (Model Cities) • Goal  enhance opportunities for poor; federal welfare expenditures nearly doubled (1965-1975) • Short-lived reform period; undermined by unrest and war in Vietnam • Many conservatives thought War on Poverty failed, harmful • Great Society created backlash = polarized electorate along social insurance/ public assistance and race lines • Politicians exploited tensions using “welfare” as code word to appeal to some voters’ fears over crime, taxes, morality, and race; recoil reached peak during Reagan administration (1981-89) • War on poverty: successes • Reduced poverty rate from 19% (1964) to 12% (1979); number living below poverty line declined until Reagan • Government income-support programs biggest factor in decline  reduced malnutrition, increased access to medical care, improved housing, opened educational opportunities

7. Reagan to Clinton • Reagan partially successful in reducing size, scope of welfare state • Slowed spending; slashed Great Society programs • Left New Deal social insurance programs intact • Put welfare state on defensive; conservatives now set terms of debate over social policy • Problem of poverty = increasing poor’s resources  changing the poor’s behavior; blaming circumstances on inadequacies of economy  perverse incentives of welfare state • Clinton’s social policy turned on large federal deficit and conservative definition of welfare problem (public assistance undermined character of the poor) • Abandoned campaign promise to invest in domestic programs to reassure financial markets he was serious about cutting federal deficit • Supported welfare “reform” with Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (1996) • Replaced AFDC with Temporary Assistance to Needy Families (TANF) • States got fixed sums in form of block grants; Two year limits; lifetime limit of 5 years • Welfare rolls declined starting in 1993 with resurgent economy • Grew again in wake of 2008 Great Recession

8. Bush to Obama • Expanded federal role in public education • No Child Left Behind (NCLB) (2002) enacted with aim of closing achievement gap between economically and racially advantaged and disadvantaged schoolchildren; increasingly controversial due to lack of funding • Bush supported Medicare Part D (Medicare Prescription Drug, Improvement, and Modernization Act, 2004); provides prescription drug coverage to all Medicare recipients • Supported by pharmaceutical manufacturers (who lobbied for no price controls, price regulation, and government negotiation with drug manufacturers to secure lower prices) • Increased spending on children’s health (started by Clinton, expanded by Obama) • State Children’s Health Insurance Plan (SCHIP) expanded federal Medicaid spending so states could provide health insurance to children whose families met income requirements • Obama signed Children’s Health Insurance Program Reauthorization Act (2009) • With Medicare Part D, SCHIP, increases in Medicare and Medicaid, health became fastest growing are of welfare state • US at top in expenditures on health (Figure 10.2) • Obama supported Affordable Health Care Act (AHCA) (2010) • Employers (more than 50 workers) must provide affordable insurance; individuals required to carry health insurance (low income eligible for Medicaid; subsidies on sliding scale); state-based insurance marketplaces called exchanges; insurers no longer able to deny applicants coverage based on health status, impose lifetime limits; improved medicare prescription drug benefit; children can remain on parent’s policies until 26 • Hugely controversial; prompted massive lobbying campaign by pharmaceutical industry and health insurance companies; successfully blocked public insurance option

9. Conclusion • Conservative = stabilizes corporate capitalist system; alleviates but does not correct basic structural inequalities; reinforces market by making inequalities and insecurities tolerable • Egalitarian = offers more egalitarian alternative to market; can improve workers’ standards of living making them less dependent on wages, thus reducing power of employers; can spread to other activities, progressively infringing on areas operated on market principles and ability to pay • US welfare system exhibits both = extended protections to vulnerable groups, but in ways that reinforce divisions between workers and the poor, whites and blacks, men and women • Uncertain future; parts under strain (including Medicare, Social Security) • Question of poverty: economic growth alone cannot reduce poverty; only government programs in tandem with successful economy • Goals of welfare state(?): support private economy to increase economic growth; compensate for inequalities generated by political economy; provide security against inevitable and probable hazards; enhance and equalize opportunities; ensure that income and wealth gaps are reduced…what do you think?