AMERICAN GOVERNMENT

Social Policy
Based on:
We The People: An Introduction to American Politics, 3rd Edition,
(New York: W.W. Norton & Company, 2001)

The Problem:

      The Declaration of Independence documents the strong American belief in equality of opportunity, but large portions of our population lack meaningful opportunities. People earning lower levels of income consist mostly of members of groups that have historically suffered the deprivation of opportunities.

Goals of Social Policies

      Social policies have three major objectives:

      Because a broad spectrum of the population benefits directly at some point in their lives from programs that provide protection for universal risks and insecurities, they enjoy strong popular support.

      Programs to enhance equality of opportunity still produce inequality of results. Programs to help people overcome the consequences of past inequality find opposition faced greater opposition. Some of this opposition reflects a fear of reproducing dependency and stifling initiative, but some of it reflects prejudice against specific groups.

      This form of opposition also afflicts programs to alleviate poverty, which results from past inequalities of opportunity. All Americans recognize that the third of all children who live in families surviving on incomes below the poverty level will not enjoy equality of opportunity. When 8.2% of whites, but 26.1 % of all African Americans and 25.6% of Latinos live below the poverty level, this shows a lack of equal opportunity. The economy has changed and in many single-parent households providers must combine work and family responsibilities, and this raises pressure for the government to provide more assistance. Social policies must reconcile the conflict between the desire to promote self-sufficiency and the ideals of fairness and equality.

      Social policies will be examined from four perspectives:

Development of "The Welfare State:"

      Before 1935, people in vulnerable populations needing support could only find help from private groups. Aid for the poor was considered a public obligation, but provided on a private voluntary basis. Private charity distinguished between the "deserving" and "undeserving" poor. Widows and orphans and others rendered dependent by tragedy were considered deserving. Able-bodied people unwilling to work or newly arrived transients were considered undeserving. Therefore, charity seekers had to submit to economic and moral qualifications on a very subjective basis that incorporated a lot of prejudice. The provision of aid ignored larger conditions that caused unemployment, and instead considered social case work as the promotion of mental hygiene. Gradually, state governments developed programs to aid citizens in difficult conditions. The Great Depression resulted in many middle-class people losing their jobs and businesses, which proved to Americans that poverty could result from failures in the economic system as well as from personal irresponsibility. This forced the drastic revision of standards regarding who was worthy and who was not. This provided the public demand for federal programs.

      In 1935, the Social Security Act established the beginning of the welfare state by creating both contributory and noncontributory programs.

Social security and unemployment compensation programs constitute "forced savings" and they send the message that workers cannot be trusted to save voluntarily for their own retirement or other emergencies. However, it is a radical program because it is not real insurance in the sense of receiving benefits in proportion to their own contributions. Social security is a form of wealth redistribution from younger workers to older retirees. These programs were expanded in 1965 by the addition of Medicare, and in 1972 Congress provided for automatic cost of living raises in the benefits called "indexing."

      TANF represents a federal rather than a national program, meaning that the national government provides grants-in-aid (block grants) to states to administer. It replaced the federal Aid to Families with Dependent Children (AFDC) program in 1996. State based administration allows substantial variation in levels of benefits. For example, in 1998, the federal "standard of need" for a family of three was $542 per month, but benefits varied from $170 in Mississippi to $923 in Alaska. The number of people receiving welfare benefits rose dramatically because new welfare programs started, the government expanded its publicity efforts to encourage the dependent unemployed to establish their eligibility and court rulings made it more difficult for the government to terminate benefits. AFDC benefits were not indexed for inflation, and thus lost one third of their purchasing value over time. Two-thirds of Medicaid goes to the disabled and elderly in nursing homes. However, we must conclude that these programs have improved security for the poor and vulnerable.

      The dramatic rise in spending for social policies in recent decades creates great concern that in the future it will become very difficult to continue to pay for them. The campaign by Republicans controlling the White House and the Senate in the 1980s to institute welfare reform only resulted in a reduced rate of increase in all the major social welfare programs, but very little was actually cut, and welfare began to expand again. "After 1984, expenditures for public assistance programs began to increase at a rate about equal to the rate of general economic growth" (Ginsberg, Lowi and Weir, 2001: 712). Although president Clinton twice vetoed proposals for welfare reform, he signed a third version in August 1996. Under this reform, the number of families receiving assistance dropped by 51% nationally. This reform was instituted at a time of record low unemployment levels. Former welfare recipients were more successful at finding and keeping jobs than many people had expected, but this does not enable us to predict the consequences when unemployment rises again (as it has since the 2001 publication of this edition.)

      Expenditures on entitlement programs (meaning that the recipients have a legal title to the benefits under any conceivable court rulings) have grown from 20% of the federal budget in 1962 to 57% in 1998. These programs are funded by payroll taxes. Most of this spending goes to broad-based programs--at its peak, AFDC accounted for only 1% of the federal budget. Meanwhile, the growth of the elderly population and rising health care costs have dramatically raised expenditures on Social Security, Medicare and Medicaid. This trend lead to the prediction that the Social Security trust fund will no longer be able to cover promised benefits in 2032. However, supporters claim that if minor changes in benefits, taxes and retirement age made now could preserve the system. Escalating health care costs will inevitably create severe budget problems in the future. The basic question remains how to shape social policy to reflect national values.

II. Who benefits in what ways from social policies?

• A) Americans generally consider the elderly as a deserving sector of the population, and they have become a powerful interest group. [Notice that there are 34.4 million Americans over the age of 65 in 1998, and AARP claims a membership of 33 million--admittedly including people as young as 55.] Groups such as the AARP actively lobby congress whenever members contemplate changes. With over 28 lobbyists and 165 policy analysts, they have the manpower and resources to do it. They receive generous benefits.
• B) The middle class benefits from tax exemption for some payments by both employers and employees. For example, tax deductions for mortgage interest has made housing more affordable and improved the living standards on many millions of middle-class people. Businesses deduct their payments for health insurance and pensions. The cost to the treasury of these tax deductions--$300 billion a year--and called "tax expenditures" is a form of social policy benefit for the middle class called the "shadow welfare state."
• C) The working poor receive limited government assistance because they lack the organization and political power to demand greater assistance, even though Americans see people in that sector as deserving help. The help provided through the Earned Income Tax Credit and food stamps is only a very modest supplement for income.
• D) Medicaid and "Temporary Assistance to Needy Families" (TANF) programs aimed at the able-bodied non-working poor only provide help to parents caring for children. Lack of popular support has led to spending reductions for these programs recently.
• E) Minorities, women and children suffer disadvantages in the job market. The increased expenses such as childcare and transportation costs when single mothers go to work often leave mothers with less cash than if they had collected welfare instead of working.

III. How can government policies help break the cycle of poverty?

      Government policy seeks to redistribute opportunities and reduce poverty through four types of programs: education, employment, health and housing.

• A) State and local government policies promoting public education are the single most important force in redistributing opportunities in America. National education policies only came into large-scale operation after World War II, and some after 1957. When the Soviet Union beat the US into space by launching the first satellite, Sputnik, this stimulated federal funding for science and math. General federal aid for education only began in 1965. Public education policy is caught up in two challenges to this monopoly. Both vouchers and charter schools seek to overcome and excessively bureaucratic system and improve flexibility and responsiveness to parents.
• B) The modern welfare state has failed to consistently support employment and job training. Public works employment and training programs as part of the New Deal enjoyed widespread support, but then lost that support after exposure of corruption. Numerous programs have been tried, but have failed through poor administration and program design. For example, all federal job training programs were put under the Comprehensive Employment Training Act in 1973 and funded through block grants, but program failures led congress to abolish it in 1981--one of the only federal programs totally eliminated in the last 20 years. The concept of job training is a popular idea, but policy makers have failed to create a successful policy for this objective.
• C) Although early efforts to promote public health began at the state level, in the 1900s the federal government began to protect citizens against pollution and other sources of health problems. Two-thirds of the nations entire expenditure on health research is funded the National Institutes of health--$7.1 billion in 1989. The Environmental Protection Agency and the Consumer Product Safety Commission represent other social policy initiatives to protect health. Congress has struggle to find ways to limit the rising cost of health care--which was 83% higher in 1991 than twenty-one other industrialized nations. [In response, one must note that the American system spends more on treatment for "extreme care" in situations for which in most other countries, people do not and cannot receive care.]
• D) The federal government is committed to improving the opportunities of the poor through housing subsidies, but these have resulted in many "pork-barrel" programs. The percentage of people living in overcrowded conditions has fallen from 20% in 1940 to 9% in 1970, and the percentage living in "substandard" housing has fallen from 50% to 8%. However, under President Clinton in 1994, HUD Secretary Henry Cisneros spent most of his time consolidating programs, downsizing them and devolving their functions to state and local governments. The budget between 1994 and 1997 was reduced by 10 percent.

IV. How does the welfare state fit with or fulfill American values?

      The modern welfare state creates tension between the values of liberty, equality and democracy. The struggle to reconcile these values in social policy results in contrasting conservative and liberal policy preferences. While conservatives tend to blame individual choices for economic problems, liberals say that opportunities are not equally available and the source of the problems is the economic system. They emphasize the importance of equality of results, even to the extent or arguing for social benefits as a right of citizenship. However, "The idea of "social rights," prevalent in many European nations, has not counterpart in American politics" (734). While the Supreme court expanded protection for political and civil rights, it refused to acknowledge social or economic rights. The main focus of liberal criticism of the system is the failure to prevent the growth of child poverty, which is incompatible with fundamental American ideals. When Americans are asked questions about government social policy in the abstract, they express conservative disapproval of activist government, but express support for particular programs. Both liberals and conservatives fail to fulfill the pragmatic views of most Americans. Most Americans reject the policy extremes, favor programs that work and want reform for all others. This indicates a healthy pursuit of balance among the ideals of liberty, equality and democracy.