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Social Welfare Programs in the United States

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Title: Social Welfare Programs in the United States


1
Social Welfare Programs in the United States
2
Development of the American Welfare State
  • The creation of the modern welfare state.
  • Types of programs.
  • Cost of the Social Welfare State.
  • Social Insurance Programs.
  • An uncertain future.

3
Nineteenth Century America
  • The state governments provided little in terms of
    social welfare programs the federal government
    provided none at all.
  • Industrialization causes a reduction in
    self-sufficiency.
  • Political pressure to establish government
    programs the Progressive Era, of course.
  • Real change would come as a result of the Great
    Depression during the 1930s.

4
Social Security Act of 1935
  • The beginning of the permanent welfare state in
    America.
  • The act consisted of three main components
  • 1). Old-age insurance
  • 2). Public assistance for the needy, aged, blind,
    and families with dependant children (other
    disabilities added later).
  • 3). Unemployment insurance and compensation.

5
Old-age insurance what we call Social Security.
  • Originally funded by a payroll tax, collected
    from the employer, equal to one percent from both
    employee and employer (higher tax rate now).
  • Benefits were paid to retirees from the beginning
    of the program to recipients who had not
    contributed.
  • OASDI Old Age, Survivors, and Disability
    Insurance.
  • FICA Federal Insurance Contributions Act

6
Assistance for the needy, adult blind, and adult
disabled.
  • The Social Security Act provided federal matching
    funds to assist state programs to assist these
    groups.
  • A 1974 law established the Supplemental Security
    Income program.
  • SSI is administered by the Social Security
    Administration but is funded by general revenues.
  • It does not limit blind and disabled assistance
    to adults.

7
Unemployment Insurance
  • The Social Security Act established a three
    percent payroll tax charged to employers to fund
    the unemployment insurance program.
  • While receiving benefits unemployed workers must
    actively seek employment (yeah, right).
  • Benefits the laid-off worker and the economy as a
    whole. The unemployed still have some spending
    power.

8
Health Care
  • The AMA defeated an attempt to include health
    care in Social Security.
  • The Democratic Party made repeated attempts to
    enact some kind of national heath care system.
  • Among LBJs Great Society programs, Medicare
    (elderly) and Medicaid (poor) passed in 1965.
  • There have been repeated attempts to expand these
    two programs or to replace them with a universal
    health care system

9
Medicare Health Care for the Aged
  • Medicare covers persons receiving Social Security
    and has two components
  • Part A covers everyone when they reach age 65
    covers hospitalization, some skilled nursing and
    home health services. Recipients must pay for the
    first 700 in costs.
  • Part B is optional it covers additional services
    with the costs shared by the system and the
    recipient.
  • A prescription drug program was added in 2004.
  • Costs of Medicare have increased from 2.5
    billion in 1965 to 250 billion in 2004.
  • Financed now by a 1.45 percent payroll tax
    employer matched.

10
Medicaid Health Care for the Poor
  • Provides hospitalization, prescription drugs,
    long-term nursing home care (unlike Medicare) to
    all who qualify for TANF (more on that later) and
    SSI
  • Eligibility has been broadened several times
    since the program began.
  • Jointly financed by state and national
    governments.

11
New Programs
  • CHIP Childrens Health Insurance Program is a
    1997 program to assist working families. An
    attempt to remove a disincentive for welfare
    mothers to accept jobs.
  • HIPPA Health Insurance Portability and
    Accountability Act is a 1996 law which requires
    insurance companies and employers to assist
    insured persons in maintaining coverage during
    job changes. It also minimizes insurance company
    risks in covering pre-existing conditions.

12
Attempts to do even more
  • The Clinton Health Care proposal

13
I Know Im too biased, but look at this anyway.
14
One more wont hurt you.
15
Welfare Payments To the Poor?
  • Entitlements Income security program to which
    all those meeting eligibility criteria (age,
    need, etc.) are entitled. Social Security, SSI,
    Food Stamps, Medicare, Medicaid, etc.
  • Some entitlement programs are means-tested.
  • Means-Tested Programs-----commonly called
    welfare. Entitlement criteria is need.They
    account for a small percentage of the annual
    federal budget but attract much criticism. There
    are several means-tested programs
    including

16
Means-Tested Programs
  • Medicaid Weve already talked about this one.
  • SSI, or Supplemental Security Income Weve
    already talked about this one too.
  • Head Start It helps to prepare about 300,000
    (about 20 percent of those technically eligible)
    preschool children for entrance into public
    schools each year.

17
Means-Tested Programs, continued.
  • Food Stamps Federally funded, state operated
    programs states generosity varies. About 8 of
    all Americans currently receive them. Benefits
    have never exceeded 80cents per person per meal,
    but then they are intended as assistancenothing
    more.
  • Welfare Block Grants Federal funds provided to
    the states to fund welfare direct payment
    programs such as AFDC which was replaced by TANF
    in 1996.

18
The 1996 Welfare Reform
  • Public pressure built for many years to end the
    programs that were believed to be creating
    dependency.
  • Change championed by conservatives (is that odd?)
  • As a candidate for president Bill Clinton
    promises to end welfare as we know it.
  • Republicans take over Congress two years later.
  • Congress passes welfare reform three times
    Clinton finally signs the PRWORA of 1996

19
Personal Responsibility and Work Opportunity
Reconciliation Act of 1996
  • Replaced AFDC with TANF
  • Temporary Assistance to Needy Families
  • Single mothers with children over five must work
    within two years.
  • Unmarried mothers under 18 must live with an
    adult and go to school.
  • Five year lifetime limit
  • Mothers must provide information about their
    childs father.

20
TANF, continued
  • The new law has provisions intended to cut off
    food stamps and SSI to illegal immigrants
  • Cut off cash welfare and food stamps for
    convicted drug felons
  • Limits food stamps to three months in a three
    year period for persons 18 to 50 years old who
    are not raising children AND not working.
  • Obviously, the goal is to encourage work and
    discourage dependence on the welfare system.
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