Social Welfare Programs in the United States

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Social Welfare Programs in the United States
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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.

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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.

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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.

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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

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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.

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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.

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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

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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.

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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.

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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.

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Attempts to do even more

• The Clinton Health Care proposal

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I Know Im too biased, but look at this anyway.
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One more wont hurt you.
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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

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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.

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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.

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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

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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.

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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.