Income Security and Programs

1
Income Security and Programs

• Why was the Social Security Act of 1935 so
  controversial?
• What are the two cornerstones of social welfare
  policy in the US?
• Whats the difference between means and non-means
  tested security?
• How have entitlement programs affected
  Congressional budgeting?

2
Social Welfare

• Social welfare (income security) has two forms in
  the US
• Entitlements (non-means tested)all those meeting
  eligibility requirements are entitled to get the
  benefits (i.e., Social Security)
• Means-testedprogram that helps those whose
  income falls below a certain specified level
  (i.e., Food Stamps)
• Social welfare policy has developed differently
  in the US than anywhere else
• Restrictive view of deserving
• Slower at embracing social welfare
• State government and private groups play a big
  role in administering social pograms

3
Effectiveness of Income Security Programs

• Spending for entitlement programs is mandatory
  funds must be provided unless legislation
  creating the programs is changed
• Difficult to control spending
• Have not eliminated poverty, economic dependence,
  but have improved lives

4
Social Security

• Beyond emergency programs of ND to provide
  minimum economic security
• Beginning of a permanent US welfare state and
  idea of equity
• Old-age insurance (now SS)
• Public assistance for needy, aged, blind,
  families with dependent children (later
  disabilities)
• Unemployment insurance and compensation
• Govt taxes to provide funds, but administered by
  states
• Payroll tax from lower-income contributors
  income tax from higher-income contributors

5
Other social welfare (non-means)

• Old age, survivors, disability
• Old ageSocial Security (regressive)
• Question of privatization with increased Baby
  Boomers drawing SS
• Unemployment (full-time workers)
• Financed by payroll tax
• Must be unemployed by no fault of worker
• Payment varies by state (south less generous)

6
Other social welfare (means-based)

• Supplemental Security Income (SSI) 1974
• Started as grant-in-aid program
• For needy elderly, blind, permanently disabled
• Must meet income/possession requirement
• Temporary Assistance for Needy Families
  (TANF)replaced AFDC under SS 1996
• AFDC allowed aid for states to determine need
• Growing population since 1960 led to increase in
  those drawing aid, especially unwed mothers
• JOBS program 1988 to help ameliorate program
• TANF replaces states given a block grant with
  requirements
• Benefits for only 5 years
• Those under 18 must live with parents and attend
  school
• Reduced aid to those who dont identify fathers
  of children
• Immigrant stipulations
• Food stamps for only 3 months to those not
  working/no children

7

• Earned Income Tax Credit (EITC) 1975
• Subsidizes wages of working poor with net cash
  rebate (no federal income tax)
• pro-work, pro-family welfare to work
• Increase work incentives refund any SS taxes
• Food Stamp Program 1939-1943 1974
• To reduce malnutrition, combat hunger
• 1970s/80s huge increase investigations
• 26 million in 2007, 33 billion
• Other nutritional programs (WIC, school
  breakfast/lunch, emergency food assistance
  program)

8
Controversy

• Social Security and Medicare (Health) are under
  scrutiny the problems of funding them cut across
  several aspects of the policy-making process.
  Solutions have been offered, but opposed by a
  majority
• Raising the retirement age to 70 (currently 67)
• Freezing retirement benefits
• Raising SS taxes
• Privatizing SS
• Combining the above reforms and allowing citizens
  to invest a portion of their SS taxes in a mutual
  fund