Chapter 19 Social Welfare in the U.S.

1. Chapter 19Social Welfare in the U.S. An Overview of Programs

2. Pop Quiz 19 • Log on to www.socrative.com and join room 917563 to take quiz. • You may use notes that you took from the reading. • You may put your Chrome books away when finished.

3. Introduction: 2 kinds of welfare programs today: • Majoritarian: Examples include Social Security and Medicare • Everyone pays through payroll taxes, everyone benefits • Cost are skyrocketing due to aging Boomers • Programs are very difficult to reform • Client: Examples include TANF, food stamps, and Medicaid • Issue today is legitimacy…public opinion a must! BIGGEST DIFFERENCE IN THE TWO?? Majoritarian not means tested, Client programs are! Both are examples of entitlements.

4. Factors Shaping Social Welfare in the U.S. Who is entitled? (Guaranteed by right or legis.) • Americans have a much more restrictive view • “Fair share” view doesn’t mesh with self-reliance Late arrival of welfare in the U.S. • By 1935’s Social Security Act, Europe was 3 decades in! • For US, it took Great Depression to reform Influence of federalism • States were testing grounds…no federal involvement until 1930s (By 1935, 35 states had “old age” pensions) Private entities often administered • 1996 Welfare Reform Act created charitable choice, expanded by George W. Bush in 2001 to include faith-based organizations. Today, $1.2 billion are awarded to these.

5. Majoritarian Welfare History • 1929—Great Depression • 1932—FDR & Dem. Congress elected • Quick Fix: • Money to bail out charities & local governments • Creation of public works job opportunities • Long term Fix: • Cabinet Committee on Economic Security studied European models • Social Security Act of 1935 • 1964—LBJ & Dem. Ways & Means Comm. • Draft of Medicare…applies to hospitalization • Ways & Means add-ons include Medicaid & Medicare doctor visits • Outline parts A, B, & C (The newest part D was created by Medicare Modernization Act of 2003)

6. Social Security Reform! • Social Security • Idea: Provide a source of retirement income through a payroll tax (OASDI: Old Age, Survivors & Disabled Insurance is paid by both employees and employers). EMPLOYEES AND EMPLOYERS ARE THE PRIMARY SOURCES OF REVENUE FOR THE ENTITLEMENT! • Problem • As Boomers age, the amount of people paying into social security is not enough to support retirees. • Solutions • Raise the retirement age to 68-70 • Reduce or freeze amounts of benefits • Raise SS taxes • Privatize Social Security through stock market • Combination of some of these

11. Medicare Reform! • Medicare • Idea: Everyone who is 65 or older is covered by hospital insurance and medical insurance. • Problems • A lot of people use medical services when they don’t really need them • Some doctors and hospitals overcharge the government for their services • Program is bankrupting the social security system • Solutions • Have doctors work for the government • Allow elderly to take funds to buy private insurance or HMOs (Ryan Plan)

14. Client Welfare Programs • All client programs are means tested and come out of general government revenues. • Aid to Families with Dependent Children (AFDC) • Created in response to the Great Depression • Allowed states to define what constituted as a “need” • Led to creation of food stamps, housing assistance, etc. • Abolished in 1996—Replaced with Temporary Assistance for Needy Families (TANF): WHY? • Program lost public support • Recipients no longer “deserving” (Living off the system) • Encouraged out-of-wedlock births

15. Changes in Welfare Programs • Welfare Reform Act of 1996 (Personal Responsibility and Work Opportunity Reconciliation Act) brought many changes: • Abolished AFDC, replaced with TANF • Must participate in job training • Lifetime limits • No increases for additional children • Drastically reduced the number on welfare from 1996-2006 by 62%. Even the Great Recession did not see a significant rise in the number of recipients.

16. Other Client Welfare Programs • SNAP (Supplemental Nutrition Assistance Programs) led to the use of EBT cards in place of traditional stamps to help families buy food. • Supplemental Security Income (SSI) cash payments to blind, disabled or aged whose incomes fall below a determined amount. • Medicaid is an insurance program that pays the medical expenses of persons on government assistance programs like TANF, SNAP or SSI. • EITC: Earned Income Tax Credit allows working families with children to receive money via a tax refund from the government if their income is below a certain level.

17. Results of TANF Reforms

20. Other Social Welfare Issues Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA) or "ObamaCare" • Subsidies available to those who don’t have insurance but do not qualify for Medicaid. • Penalizes those who can but don’t buy health insurance. • Creates buyers’ pools to reduce the overall cost of insurance. •  In National Federation of Independent Business v. Sebelius, decided in 2012, the SCOTUS ruled on a 5–4 vote that the individual mandate is constitutional under Congress's taxation powers, although the law could not have been upheld under Congress's regulatory power under the Commerce Clause.  • Remains extremely controversial.

21. Assignment • Read blue tile 1 and the assignment in tile 2, especially study the insets and visuals in the chapter. • Be working on your legislation templates. • Final AP Gov. lecture is tomorrow!