GOVT-2305 Test 6 Review: Ch. 18 Social Safety Networks

What are some factors that might explain the rise of social safety net, or welfare, policies that are seen in all western industrialized democracies today?

1) levels of wealth created by the industrial revolution made these programs possible. --frequently argued that businesses and econ elite themselves asked for/supported these policies in order to undermine radical movements for social change. 2) Industrialization leads to breakdown of extended families, which traditionally served as social safety nets. 3) people living much longer and need more care and services

How is the U.S.'s "welfare state" different than those of most Western European Countries? What might explain these differences?

1. Much less costly 2. Covers fewer people 3. Favors the elderly 4. Is much less redistributive 5. Requires less of private employers 6. Lacks universal health coverage. 1. Federalism --not clear who has responsibility --fed gov not seen as having the authority to legislate such programs until 1937 --results in a great variation about states in benefit levels, eligibility, and rules --may also help keep benefit levels low as states worry that generous benefits will attract poor people from other states. 2. Political Culture --individualism --distrust in gov --free enterprise 3. Racial divisions --textbook suggests in more homogenous societies helping out the poor is viewed more akin to helping a neighbor down on his/her luck --racial divisions kept poor people from organizing and pressing gov 4. power of business (see their influence quite clearly in our system of private insurance and health care) 5. Weak labor unions.

What have been the results of TANF?

1. number of people on welfare has decreased 2. many former TANF recipients have entered the workforce and raised their incomes. 3. only a small percentage of TANF recipients have managed to rise above the poverty line in the first few years after leaving the program. 4. poverty rates among former welfare recipients decreased between 1996 and 2000, but have slowly risen since 2000. 5. only 1/4 of families living below the poverty line receive TANF.

What measures might help increase the solvency of the Social Security system?

1. raise payroll tax rate 2. raise or remove income ceiling for social security payroll taxes 3. tax all income, rather than just income from wages and salaries (this change is already scheduled to occur to Medicare payroll taxes.) 4. make social security taxes progressive instead of flat 5. raise retirement age (already in place. 66 is full retirement age as of 2010. Will go up to 67) 6. Cut benefits. Cutting benefits by 13% could also solve the program's fiscal shortfall. (Congress has legislation in place that allows them to eliminate COLAs. Have only done once in 2010.)

What is unemployment insurance? How is it funded?

A social insurance program that provides temporary benefits for people who recently lost their job, benefits based on the previous salary. Funded by taxes on employers rather than payroll taxes. Benefits generally limited to 26 weeks, though can be extended an additional 13 weeks (generally states have to pay for this out of own revenues.). Recipients receive a benefit amount based on previous salary. Average weekly payment in 2007 was $350; in 2009 was $300.

What is meant by the welfare state?

Countries that have a broad set of social safety net programs, where there are extensive benefits and most everyone is covered

Will Social Security "run out"?

Every year, except 2010 and 2011, social security payroll taxes have brought in much more than has been paid out. Result = social security trust fund has a strong positive balance.

What can be said about the effectiveness of Social Security and Medicare taken together?

Goal of social security and Medicare is to reduce poverty among the elderly. Poverty rates among elderly have declined from 48% in 1955 to 9% today. Poverty rates would rise in absence of social security as 1/3 of retired Americans rely on Social Security for 90% of their income, and another 1/3 for 50% of their income. One organization estimates ½ of all Americans over 65 would fall below the poverty line without their Social Security payments. People over the age of 65 have more access to health care today than ever before and are living longer, healthier lives. Very cost effective programs. Social Security is very cheap to run (administrative costs are about 0.6% of benefits distributed.). Medicare rather inexpensive, too.

What is one benefit of Unemployment insurance to the economy as a whole?

One estimate, by Department of Labor, suggests that every dollar paid out in unemployment benefits generates $2.15 in GDP growth. May have negative effects on job creation, as employers are taxed if they then must cut jobs.

What is the State Children's Health Insurance Program? What are the effects of SCHIP?

Program that pays for medical care for poor children not covered by Medicaid. Founded in 1997. Also funded by both states and federal government. (states generally receive matching funds from federal government by some formula that takes into account poverty levels and number of uninsured individuals in the state. I think here in Texas, we get $2.05 from fed gov for every $1, Texas spends on CHIP.). This program has reduce the percentage of uninsured children among families at or below 200% of poverty line from 33% to 15%. Virtually all children currently covered by CHIP would be uninsured without it.

What is the Supplemental Nutrition Assistance Program (or Food Stamps)? What is the goal of SNAP? Has it achieved this goal?

Program where about 47 million people received food stamps in 2013. That is about 1 out of every 7 Americans. 50% were children. It was funded from the Department of Agriculture budget. It states set levels of benefits under federal guidelines. The average benefit in 2012 was $1.48 per meal. The goal is to reduce malnutrition in U.S. They have been successful in achieving their goal.

Be able to recognize accurate evidence supporting your answer to question 18.

Social Security Tax revenue and the trust fund will be sufficient to fund Social Security until at least 2033. After that payroll taxes collected will be adequate to cover 75% of benefits until 2087.

What is TANF?

Temporary Assistance for Needy Families

What is Medicaid?

The country's largest means-tested program, and, when state and federal expenditures are added together, it is almost as expensive as Medicare

What is an entitlement program?

This means is that everyone who qualifies for these benefits must be given them. It also means that spending for these programs is mandatory, as it has already been authorized by underlying legislation.

Is Medicare, as a program, "in trouble"?

Yes because the number of enrollees is rising, Americans are living longer, and healthcare costs continue to rise, current projections have Medicare passing Social Security as the Federal Government's most expensive social program during the next 15 years. Medicare is paying out more than it brings in payroll taxes.

What is Medicare?

a government health insurance program for the elderly

What is Social Security?

a social insurance program created in 1935 to provide income for the elderly, those with disabilities, and family survivors of working Americans such as widows, widowers, and orphans

What are means-tested programs?

benefits are distributed on the basis of need to those who can prove that they qualify

How is Social Security funded?

flat rate payroll tax collected on all income earned from work up to income cap

What are social safety net programs?

government programs that protect the minimum standard of living of families and individuals against loss of income

What are social insurance programs?

programs that provide services or income support (that is direct cash payments) in proportion to the amount of mandatory contributions made by individuals to government trust funds (which today are really filled with government bonds)

How does a program being an entitlement program affect the ability of people to get benefits under the system?

recipients can't be forced to do anything

Who receives benefits under Medicare?

the Elderly

Who receives benefits under Social Security?

the elderly

How are means-tested programs (like TANF and SNAP or foodstamps) generally funded?

through general tax revenues

How are social insurance programs (like social security and Medicare) generally funded?

through payroll taxes

How is Medicare funded?

through payroll taxes