Dimensions of Choice Policy Analysis Paper

Master the skills in CSWE’s core competencies and practice behaviors. The Council on Social Work Education (CSWE) has 10 core competencies that are used as one of the measurements to grant accreditation to social work schools.

The Core Competencies include knowledge, skills, and practice behaviors that all Social Work students must learn. This text will help you master the skills in these core competencies.

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Competency Chapter

Professional Identity

Practice Behavior Examples…

Serve as representatives of the profession, its mission, and its core values

Know the profession’s history

Commit themselves to the profession’s enhancement and to their own professional

conduct and growth

Advocate for client access to the services of social work 6

Practice personal reflection and self-correction to assure continual professional

development

Attend to professional roles and boundaries

Demonstrate professional demeanor in behavior, appearance, and communication

Engage in career-long learning 7

Use supervision and consultation

Ethical Practice

Practice Behavior Examples…

Obligation to conduct themselves ethically and engage in ethical decision-making

Know about the value base of the profession, its ethical standards, and relevant law

Recognize and manage personal values in a way that allows professional values to guide

practice

Make ethical decisions by applying standards of the National Association of Social

Workers Code of Ethics and, as applicable, of the International Federation of Social

Workers/International Association of Schools of Social Work Ethics in Social Work,

Statement of Principles

5

Tolerate ambiguity in resolving ethical conflicts

Apply strategies of ethical reasoning to arrive at principled decisions 4

Critical Thinking

Practice Behavior Examples…

Know about the principles of logic, scientific inquiry, and reasoned discernment

Use critical thinking augmented by creativity and curiosity

Requires the synthesis and communication of relevant information

Distinguish, appraise, and integrate multiple sources of knowledge, including

research-based knowledge, and practice wisdom

9, 8, 3

Analyze models of assessment, prevention, intervention, and evaluation

Demonstrate effective oral and written communication in working with individuals,

families, groups, organizations, communities, and colleagues

CSWE’s Core Competencies and Practice Behavior Examples in this Text

Adapted with the permission of the Council on Social Work Education.

Competency Chapter

Diversity in Practice

Practice Behavior Examples…

Understand how diversity characterizes and shapes the human experience and is critical

to the formation of identity

Understand the dimensions of diversity as the intersectionality of multiple factors

including age, class, color, culture, disability, ethnicity, gender, gender identity and

expression, immigration status, political ideology, race, religion, sex, and sexual

orientation

Appreciate that, as a consequence of difference, a person’s life experiences may

include oppression, poverty, marginalization, and alienation as well as privilege,

power, and acclaim

Recognize the extent to which a culture’s structures and values may oppress,

marginalize, alienate, or create or enhance privilege and power

6, 5, 4, 1

Gain sufficient self-awareness to eliminate the influence of personal biases and values in

working with diverse groups

Recognize and communicate their understanding of the importance of difference in

shaping life experiences

View themselves as learners and engage those with whom they work as informants

Human Rights & Justice

Practice Behavior Examples…

Understand that each person, regardless of position in society, has basic human rights,

such as freedom, safety, privacy, an adequate standard of living, health care, and

education

Recognize the global interconnections of oppression and are knowledgeable about

theories of justice and strategies to promote human and civil rights

Incorporates social justice practices in organizations, institutions, and society to ensure

that these basic human rights are distributed equitably and without prejudice

Understand the forms and mechanisms of oppression and discrimination

Advocate for human rights and social and economic justice

Engage in practices that advance social and economic justice 3, 2

Research-Based Practice

Practice Behavior Examples…

Use practice experience to inform research, employ evidence-based interventions,

evaluate their own practice, and use research findings to improve practice, policy, and

social service delivery

Comprehend quantitative and qualitative research and understand scientific and ethical

approaches to building knowledge

Use practice experience to inform scientific inquiry

Use research evidence to inform practice 8, 4, 1

CSWE’s Core Competencies and Practice Behavior Examples in this Text

Competency Chapter

Human Behavior

Practice Behavior Examples…

Know about human behavior across the life course; the range of social systems

in which people live; and the ways social systems promote or deter people in

maintaining or achieving health and well-being

Apply theories and knowledge from the liberal arts to understand biological, social,

cultural, psychological, and spiritual development

Utilize conceptual frameworks to guide the processes of assessment, intervention,

and evaluation

Critique and apply knowledge to understand person and environment. 7

Policy Practice

Practice Behavior Examples…

Understand that policy affects service delivery and they actively engage in policy

practice

Know the history and current structures of social policies and services; the role of

policy in service delivery; and the role of practice in policy development

Analyze, formulate, and advocate for policies that advance social well-being 9, 8, 7, 5, 4, 3, 2, 1

Collaborate with colleagues and clients for effective policy action

Practice Contexts

Practice Behavior Examples…

Keep informed, resourceful, and proactive in responding to evolving organizational,

community, and societal contexts at all levels of practice

Recognize that the context of practice is dynamic, and use knowledge and skill to

respond proactively

Continuously discover, appraise, and attend to changing locales, populations,

scientific and technological developments, and emerging societal trends to provide

relevant services

9, 8, 7, 6, 2, 1

Provide leadership in promoting sustainable changes in service delivery and practice

to improve the quality of social services

Competency Chapter

Engage, Assess Intervene, Evaluate

Practice Behavior Examples . . .

Identify, analyze, and implement evidence-based interventions designed to

achieve client goals

Use research and technological advances

Evaluate program outcomes and practice effectiveness

Develop, analyze, advocate, and provide leadership for policies and services

Promote social and economic justice

A) ENGAGEMENT

substantively and effectively prepare for action with individuals, families, groups,

organizations, and communities

6, 3

Use empathy and other interpersonal skills

Develop a mutually agreed-on focus of work and desired outcomes

B) ASSESSMENT

collect, organize, and interpret client data

Assess client strengths and limitations

Develop mutually agreed-on intervention goals and objectives

Select appropriate intervention strategies

C) INTERVENTION

Initiate actions to achieve organizational goals

Implement prevention interventions that enhance client capacities

Help clients resolve problems

Negotiate, mediate, and advocate for clients

Facilitate transitions and endings

D) EVALUATION

Critically analyze, monitor, and evaluate interventions

CSWE’s Core Competencies and Practice Behavior Examples in this Text

MySearchLab Connections in this Text In addition to the outstanding research and writing tools and a complete etext in MySearchLab, this site

contains a wealth of resources for social work students.

Below is a listing of the videos and readings found in MySearchLab, keyed to each chapter in this text.

In addition, a wealth of assessment questions (including those based on CSWE’s core competencies) and useful online resources can be found under the appropriate chapters in MySearchLab.

V I D E O S

Grandmothers Raising Grandchildren (1) Military Families (1) 2010 Health Care Legislation, The (2010) (1) * Participating in Policy Changes (1) * Keeping Up with Shifting Contexts (1) Rev. Martin Luther King Jr.’s Speech (2) Great Contradictions of the Twentieth Century, The (2) Working Mothers (2) Responding to the Great Depression: Whose New Deal? (2) * Social and Economic Justice: Understanding Forms of Oppression and Discrimination (3) Republicans and Democrats Divide on Tax Cut (2008) (3) Who Is the Middle Class? (2008) (3) * Applying Critical Thinking (3) America’s Aging Population (4) Single Mothers (4) Supreme Court: No Race-based Admissions (2007) (4) * Assessment (4) Victimizers and Victims Indians (4) * Engage, Assess, Intervene, Evaluate Community Organization (5) * Collaborate with Colleagues and Clients for Effective Policy Action in Community Organization (5) * Attending to Changes and Relevant Services (5) * Engaging in Research Informed Practice (5) * Engaging the Client to Share Their Experiences of Alienation, Marginalization, and/or Oppression (6) * Recognizing Personal Values (6) * Building Alliances (6) * Advocating for Human Rights and Social and Economic Justice (6) Bailout Hearings, The (7) Government Bails Out Automakers, The (7) Tea Party Victories Concern for GOP (2008) (7) Real ID (2008) (7) American Revolution as different Americans Saw It (7) Recession Hits Indiana (8) Ellis Island Immigrants, 1903 (8) Working Poor (8) Raising the Minimum Wage (8) Open Arms (9) Historical Significance of the 2008 Presidential Election (9) Economic Policy Debate at the G20 (2010) (9) YouTube Politics (2008) (9)

* = CSWE Core Competency Asset Δ = Case Study

MySearchLab Connections in this Text R E A D I N G S

Δ Social Workers Involved in Political Action (1) Roe v. Wade (1973) (1) Δ Community to Community (1) Δ Community Heals a Family, The: The Story of the LaSotos (1) Jane Addams, from Twenty Years at Hull House (1910) (1) Frances Perkins and the Social Security Act (1935, 1960) (2) Lyndon B. Johnson, The War on Poverty (1964) (2) Meridel Le Sueur, Women on the Breadlines (1932) (2) Franklin Roosevelt’s Radio Address Unveiling the Second Half of the New Deal (1936) (2) John Kennedy’s Inaugural Address (1961) (3) Jane Addams, The Subjective Necessity of Social Settlements (1892) (3) * Critical Thinking (3) * Policy Practice (4) Δ Decisions, Decisions, Decisions (4) Donald Wheeldin, “The Situation in Watts Today” (1967) (4) Helen Hunt Jackson, from “A Century of Dishonor” (1881) (4) Δ Veterans of the Vietnam War (5) Δ Incarcerated Women (5) Δ Homeless People (5) Δ Mental Health Services Consumers (6) Δ Linguistic, Interpretive, and Ethical Issues (6) Δ Military Veteran Justice Outreach and the Role of a VA Social Worker (6) * Diversity in Practice (6) Andrew Carnegie, “Wealth,” North American Review (1889) (7) Huey Long, “Share Our Wealth” (1935) (7) Δ Baby Boomers: The Story of the Johnsons (7) Δ Adventures in Budgets and Finances (7) Herbert Croly, from Progressive Democracy (1914) (8) Ladies Home Journal, “Young Mother” (1956) (8) Caroline Manning, The Immigrant Woman and Her Job (1930) (8) Abraham Lincoln, The Emancipation Proclamation (8) Jesse Jackson, Common Ground (1988) (8) Δ Golem, Albania (9) Δ Elderly People (9) Δ Divorce, Remarriage and Stepparenting (9) United Nations, Universal Declaration of Human Rights (1948) (9) Bob Stinson, Flint Sit-Down Strike (1936) (9)

* = CSWE Core Competency Asset Δ = Case Study

Dimensions of Social Welfare Policy

Neil Gilbert University of California, Berkeley

Paul Terrell University of California, Berkeley

Boston Columbus Indianapolis New York San Francisco Upper Saddle River

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EIGHTH EDITION

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Library of Congress Cataloging-in-Publication Data Gilbert, Neil. Dimensions of social welfare policy / Neil Gilbert, Paul Terrell. — 8th ed. p. cm. Includes index. ISBN-13: 978-0-205-09689-3 ISBN-10: 0-205-09689-1 1. Public welfare. 2. Social choice. 3. Public welfare—United States. 4. United States—Social policy. I. Terrell, Paul. II. Title. HV41.G52 2013 362.97—dc23 2012009984

10 9 8 7 6 5 4 3 2 1

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Student Edition ISBN 10: 0-205-09689-1 ISBN 13: 978-0-205-09689-3 Instructor Edition ISBN 10: 0-205-09692-1 ISBN 13: 978-0-205-09692-3 à la Carte Edition ISBN 10: 0-205-14984-7 ISBN 13: 978-0-205-14984-1

ix

Contents

Preface xiv

1. The Field of Social Welfare Policy 1 Institutional Perspectives on Social Welfare Policy 2

Kinship 3 Religion 6 Workplace 6 The Market 7 Civil Society 8 Government 10

Evolving Institutions and the Welfare State 11

Analytic Perspectives on Social Welfare Policy 13 Studies of Process 13 Studies of Product 14 Studies of Performance 14

Political Perspectives on Social Welfare Policy 16

Conservative and Progressive Approaches to Planning 18

Why Policy Analysis Is Relevant to Social Work Practice 19

Emerging Issues: Feminist Perspectives on Social Welfare 21

SUMMARY 24

PRACTICE TEST 25

MYSEARCHLAB CONNECTIONS 26

2. The Modern Welfare State 27 The Evolving Welfare State 28

Inception 30 Growth 32 Maturation 33 Transformation 34 Duress 36

Theories of Welfare Growth 37

Is America Exceptional? 39

Welfare Goals 40

Contentsx

Welfare Scope 43 Social, Occupational, and Fiscal Welfare 45 Regulatory Welfare 48 The Welfare State Today—Attack and Defense 50

Emerging Issues: The New Social Accounting and Its Implications 52

SUMMARY 56

PRACTICE TEST 57

MYSEARCHLAB CONNECTIONS 58

3. A Framework for Social Welfare Policy Analysis 59 Benefit Allocations in the Social Market and the Mixed Economy of Welfare 61

Elements of an Analytic Framework: Dimensions of Choice 65 Choices Regarding Allocations and Provisions 66 Choices Regarding Delivery and Finance 66

An Example: The Transformation of Social Services 68

Application of the Framework 72

Social Justice in Public Assistance 73 Equality 76 Equity 76 Adequacy 78

Conservative and Progressive Values in Public Assistance 80

Theories, Assumptions, and Social Choice 82

Emerging Issues: The Search for Equity 85

SUMMARY 88

PRACTICE TEST 89

MYSEARCHLAB CONNECTIONS 90

4. The Basis of Social Allocations 91 Who Shall Benefit? 92

Universality and Selectivity in Income Maintenance 95

Seattle and Denver Income Maintenance Experiments 96 Children’s Allowance 97

A Negative Income Tax for Workers: The Earned Income Tax Credit 98

Child Support and Asset Building 100

Social Effectiveness and Cost Effectiveness 101 Work Incentives 102 Childbearing 104 Family Stability 105 Stigma and Social Integration 106

Contents xi

Another Perspective on Allocation: A Continuum of Choice 107 Attributed Need 108 Compensation 109 Diagnostic Differentiation 110 Means-Tested Need 111

Allocative Principles and Institutional–Residual Conceptions of Social Welfare 111

Operationalizing the Allocative Principles 113

Eligibility versus Access 117

Emerging Issues: Defining and Measuring Poverty 121

SUMMARY 124

PRACTICE TEST 125

MYSEARCHLAB CONNECTIONS 126

5. The Nature of Social Provision 127 Basic Forms: Cash versus In-Kind 128

Alternative Forms: An Extension of Choice 134

Vouchers: Balancing Social Control and Consumer Choice 136

Substance of the Social Provision 140 Expediency of Abstraction 140

Social Provisions as Reflections of Policy Values 143

Cash, Kind, and the Cycles of Public Assistance 146

Emerging Issue: Shifting Provisions for Child Welfare 148

SUMMARY 150

PRACTICE TEST 151

MYSEARCHLAB CONNECTIONS 152

6. The Design of the Delivery System 153 Privatization and Commercialization in Service Delivery 155

Privatization and the Future of Public Social Services 155 Faith-Based Services 158 Commercialization: Services for Profit 160

Promoting Coherence and Accessibility: Service Delivery Strategies 162 Strategies to Restructure Policy-Making Authority 164 Strategies to Reorganize the Allocation of Tasks 169 Strategies to Alter the Composition of the Delivery System 173

Controlling Costs: Conditionality and Managed Care 175

Emerging Issues: Culturally Competent Service Delivery 179

SUMMARY 182

PRACTICE TEST 183

MYSEARCHLAB CONNECTIONS 184

Contentsxii

7. The Mode of Finance: Sources of Funds 185 Sources of Funds 187

The Philanthropic Contribution 188 Voluntary Financing: Not Entirely a Private Matter 190 Functions of Voluntary Services 191 Problems and Issues in Voluntary Financing 193 The Mixed Economy of Welfare 193 Accountability 195 Conservatives and Voluntarism 197 Liberals and Voluntarism 198

Contributory Schemes and Fee Charging 199

Public Financing: Not Entirely a Public Matter 201 Tax Types, Tax Burdens 205 Social Earmarking 209 Taxes and Behavior 210

Emerging Issues: Financing Social Security 213

SUMMARY 216

PRACTICE TEST 217

MYSEARCHLAB CONNECTIONS 218

8. The Mode of Finance: Systems of Transfer 219 Centralization, Decentralization, and Their Ideologies 220

How the Money Flows 223 Transfers and Politics 225 Transfers and Policy Analysis 226

How Transfers Are Conditioned 227 Program Conditions 229 Financial Conditions 230 Beneficiary Conditions 231 Procedural Conditions 232

Devolving Public Welfare 233 Welfare Reformed 234 Terminating the Guarantee 236 Time Limits 237 Race to the Bottom? 238 Welfare to Work 239 The Responsibility Agenda 241 Evidence and Directions 244

Emerging Issues: Immigrants, Social Policy, and the States 246

SUMMARY 251

PRACTICE TEST 252

MYSEARCHLAB CONNECTIONS 253

Contents xiii

9. Policy Dimensions: International Trends in the Twenty-First Century 254 Pressures for Change 255

Directions of Change 260

Emerging Issue: Toward Comprehensive Integration of Work Requirements and Public Aid 264

SUMMARY 266

PRACTICE TEST 267

MYSEARCHLAB CONNECTIONS 268

Notes 269

Photo Credits 285

Index 286

xiv

Preface

This new edition of Dimensions of Social Welfare Policy was prepared in a rather remarkable period for social welfare policy, characterized by the con- tinuing expansion of the American welfare state, a growing awareness of the challenges created by welfare state costs, and increasing attacks on the part of welfare state critics. For all the criticism of welfare over the past thirty years, very few substantive changes actually occurred to slow the growth of social programs and benefits. In the second decade of the twenty-first century, how- ever, government supports for vital elements of the safety net face real and present dangers.

Perhaps the great irony of post-recession social policy, at least to date, has been the dual reality of welfare success and the disparaging tone of pub- lic discourse. Safety net programs such as unemployment insurance and food stamps have clearly diminished the hardships faced by the victims of the recession. On the other hand, potent challenges to the fundamental legitimacy of the welfare state have been raised by powerful political elites as well as from the general population. Despite its role in ameliorating some of the worst distress of the recession, the welfare state is continually maligned. Indeed, it has often been blamed for the recession itself, and for the associated deficits and debt that many view as basic threats to the economic future. One widely read political columnist, Robert Samuelson, has written of the “death spiral of the Welfare State,” arguing that huge pension and health programs, and the aging of the population, have resulted in obligations that outstrip our ability to pay for them.

This new edition of Dimensions, therefore, while maintaining its core analysis of several key elements of social welfare policy, has been revised to give close attention to the controversies that are now so contentious in both the political and the academic worlds about the structure, nature, and charac- ter of the welfare state, the kinds of reforms that may be necessary to protect the solvency and effectiveness of programs, and the ultimate question of the role of the state in advancing national well-being. In addition, several emerg- ing policy issues in the fields of child welfare, antipoverty, and immigration have been addressed. Among the topics covered are the new role of “workfare” in an economy with few jobs, the financing of the biggest U.S. social program, Social Security, the conflict between child safely and family rights, divergent definitions of social justice, and the evolving definition of “official” poverty.

As we have said in previous editions, we recognize that many readers would like a book that provides solutions to the weighty problems of social welfare, whether or not they agree with our views. If they agree, they can con- gratulate themselves on their wisdom; if they disagree, they can affirm their own position by dissecting our biases and our logic. In either case, a book that

Preface xv

gives firm and sure direction generally provides more immediate gratifica- tion than one that analyzes the terrain and debates the hazards of the different roads that can be taken.

Readers are forewarned that they will not find many specific answers to questions of social policy in this book. Rather, we attempt to share the intel- lectual challenges that are confronted in making social welfare policy choices. “Good” and “just” answers to fundamental questions in social welfare policy are not easy to come by. When addressed seriously, these questions require a willingness to abide complexity, an ability to tolerate contradictions, and a capacity to critically appraise empirical evidence and social values. Profes- sionals engaged in the business of making policy choices require patience and intellectual curiosity.

To speak of policy choices implies that plausible alternatives exist. In this book, our second objective is to present and illuminate these alternatives. This edition is organized around what we consider to be basic dimensions of choice in social welfare policy. We place these dimensions of choice in a theoreti- cal framework, providing ways of thinking and analyzing social welfare poli- cies that are applicable to a wide range of specific cases. With this framework, we explore policy alternatives, the questions they raise, and the values and theories that reveal different answers. Ultimately, the purpose of this book is to equip students with the knowledge to come to grips with the complexities of social choice and to appraise and further develop their own thoughts on social welfare policy.

In preparing this eighth edition, we have been gratified by the extent to which our basic concepts of social policy choice-making have remained appli- cable and useful since the book’s original publication in 1974. We are equally impressed with the significant changes in the structure and content of U.S. so- cial welfare programs. When we were preparing the first edition, social welfare was at the apex of thirty-five years of growth fueled by the expansion of social protection through new entitlements and publicly financed programs. As we complete the eighth edition, social welfare provisions are under tremendous pressure from the soaring costs of Social Security benefits and care for the el- derly, the competitive demands of globalization, and a world economy in con- siderable crisis. Established benefits are contracting and programs are being reshaped by increased targeting, privatization, and work-oriented incentives, as entitlement to social protection gives ground to an emerging philosophy of public support for private responsibility.

The assistance of Mary Caplan in the production of this new edition has been invaluable. We thank her for her patience and talent.

For Evan, Jesse, Nathaniel, and Nicole—the lights of my life.

N. G.

For my boys, Josh, Ben, and Sean, with love.

P. T.

1

x

xxx

Competencies in This Chapter (with Practice Behaviors)

Institutional Perspectives on Social Welfare Policy 2 Kinship Religion Workplace The Market Civil Society Government

Evolving Institutions and the Welfare State 11

Analytic Perspectives on Social Welfare Policy 13 Studies of Process Studies of Product Studies of Performance

Political Perspectives on Social Welfare Policy 16

Conservative and Progressive Approaches to Planning 18

Why Policy Analysis Is Relevant to Social Work Practice 19

Emerging Issues: Feminist Perspectives on Social Welfare 21

Summary 24

Practice Test 25

MySearchLab Connections 26

The Field of Social Welfare Policy

1

C H A P T E R O U T L I N E

Professional Identity

Ethical Practice

Critical Thinking

Diversity in Practice

Human Rights & Justice

Research-Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

Chapter 12

The purpose of this book is to develop an operational understanding of social welfare policy by identifying its essential dimensions of choice.

“I don’t think they play at all fairly,” Alice began, in rather a complaining tone,

“and they all quarrel so dreadfully one can’t hear oneself speak—and they

don’t seem to have any rules in particular: at least, if there are, nobody attends

to them—and you’ve no idea how confusing it is all the things being alive: for

instance, there’s the arch I’ve got to go through next walking about at the other

end of the ground—and I should have croqueted the Queen’s hedgehog just

now, only it ran away when it saw mine coming!”

Lewis Carroll

Alice’s Adventures in Wonderland, 1866

Students entering the field of social welfare policy quickly come to feel some- what like Alice at the Queen’s croquet party. They confront a puzzling and complex landscape, with changing features and hazy boundaries.1 Its knowl- edge base is fragmented and less than immediately related to the realities of day-to-day social work. Yet the study of this terrain is central for those who work in the social services because, to a large extent, social welfare policy shapes the forms of practice that professionals use and determines the client systems they serve. To a significant degree, both the supply of and the demand for services reflect social policy choices.

The objectives of this introductory chapter are to provide a general orienta- tion to the field of social welfare policy and to illustrate the interrelatedness of practice and policy analysis. By presenting the subject matter of social wel- fare in its varied aspects, we hope that students will become interested in and comfortable with the subject of policy studies, and recognize its importance and power. The purpose of this book, as the title suggests, is to develop an operational understanding of social welfare policy by identifying its essential dimensions of choice.

We will begin by exploring three major perspectives—institutional, analytical, and political—that illuminate the field of social welfare policy. The focus on institutions identifies the key social structures, like families, churches, and voluntary agencies, that give shape, character, and boundaries to welfare activities. The focus on analysis indicates different approaches to studying and understanding policy, and for relating policy knowledge to social work practice. The focus on politics explores the interrelationships between society and government in the field of social welfare.

INSTITUTIONAL PERSPECTIVES ON SOCIAL WELFARE POLICY

Social welfare policy is an elusive concept, and one could easily exhaust an introductory chapter simply describing alternative approaches to its definition. This we will not do; nor will we review the ongoing discussion over the relationships among social policy, public policy, and social welfare policy.2 Suffice it to say that no single definition is universally, nor even broadly, accepted. However, some effort is necessary to stake out boundaries and to form a common realm of discourse. Skirting the conceptual swamp of social policy, public policy, and social welfare policy distinctions, we will focus instead on examining the functioning of those major institutions in society that structure and provide social welfare.

All human societies organize their essential functions—child-rearing; the production, consumption, and distribution of goods and services; social

The Field of Social Welfare Policy 3

protection; and so forth—into certain enduring patterns of conduct. All societ- ies, for example, maintain institutions with responsibilities and expectations for raising and training the young. One primary institution seldom exhausts the patterns a society uses to deal with its essential functions. Although the family is the primary institution for socialization, for example, it is by no means the only one. Religious and educational organizations and social service agencies also assume some socialization responsibilities, although socialization is not their primary activity.

There are six fundamental social institutions within which the major activ- ities of community life occur: kinship systems, religious organizations, work- place sites, economic markets, civil society, and government organizations. As indicated in Table 1.1, society’s basic day-to-day activities are organized in one or more of these spheres. And each of these spheres, to one degree or another, also carries out important social welfare functions.

Kinship

The family has always served as society’s major institution for social, eco- nomic, and emotional support. The family is also the key instrument of so- cialization, helping society to transmit knowledge, values, and patterns of behavior from one generation to the next. As an instrument of social welfare, families constitute networks of assistance based on blood and mutual attach- ment. Parents, for example, invest in their children’s future by providing for their health, their physical well-being, and their education. And families, in all societies, embody sets of reciprocal obligations to care for and protect one another. More specifically, families play an important role in at least four critical welfare arenas—caring for elderly and disabled relatives, caring for grandchildren, providing economic support, and providing help in emergency situations like natural disasters.

Table 1.1 Institutions, Organizations, and Functions

Social Institutions Key Organizational Forms Primary Functions Social Welfare Functions

Kinship Families Procreation, socialization,

protection, intimacy,

emotional support

Dependent care,

interfamilial financial

support

Religion Churches Spiritual development Faith-based health,

education, social services

Workplace Businesses, factories,

farms

Production of goods and

services

Employee benefits

The market Producers (firms) and

consumers (households)

Exchange of goods and

services for money

Commercial social welfare

goods and services

Civil society Voluntary groups,

foundations, unions,

social agencies

Promote civic and political

participation, strengthen

democracy

Social services, mutual

support

Government Federal, state, and local

governments

Raising and distributing

resources for public

purposes

Antipoverty, economic

security, health,

education, social services

Chapter 14

It is estimated that there are 34 million unpaid caregivers in America pro- viding an average of 21 hours of care per week and spending approximately $2400 yearly per relative.3 Millions of adults provide care to elderly relatives. Family caregivers are overwhelmingly women—mothers, daughters, spouses— and many live with the person needing help. A full 80 percent of all family caregivers provide care seven days a week.4

Providing care for elderly parents is a particular burden for working adults, who often must balance caregiving with their job obligations. A recent study estimated that 15 percent of the workforce actively and regularly provides as- sistance to older family members, often substantially interfering with their careers due to stress and absenteeism. About two-thirds of these working care- givers are women.5 While it historically has been the case that families provide the most important source of care for older parents, adult children also face legal obligations to care for indigent parents. In some 30 states, indeed, filial responsibility laws remain on the books requiring such care for life necessities like food, clothing, and medical attention.6

Many millions of adults raise children with disabilities—often adult children—who suffer severe mental and physical challenges. With the developmentally disabled, in particular, living far longer than in the past, parents often continue to care for their sons and their daughters into old age. And the care, more than ever before, is often technically demanding. Routine assistance—helping with eating, bathing, shopping—continues, but the explosion in home-health technology frequently requires caregivers to maintain ventilators, administer intravenous medicines, and monitor and implement complex treatment regimens. Care that once had to be handled in hospitals is now often delegated to family members.

Nearly three million children live without their parents, some staying informally with relatives, others placed with relatives under the jurisdiction of child welfare agencies. The prevalence of kinship care has grown rapidly since the 1990s, with grandparents in particular serving as foster parents, often assisted by public subsidies.7 Stepping in for drug-abusing sons and daughters who are unable to care for their own children, grandparents often take on the responsibility for full-time custody and care. Today, it is estimated that nearly 3 percent of U.S. children live in some form of kinship care.8

Grandparent care, while it can have its downside, has the potential to advance several important child welfare objectives. Perhaps most importantly, it helps reduce the trauma that typically occurs when children must be sepa- rated from their parents. Living with grandparents certainly reduces the stigma of being a foster child. And keeping care in the (extended) family also helps children maintain their ethnic, cultural, and family identities.9

The role that families play in helping single mothers’ transition from welfare to work is also becoming increasingly clear as welfare reform is implemented. Mothers in poverty often rely on their mothers, and other kin, for childcare, transportation, and financial support, in addition to emotional support and practical advice. While the magnitude of family care that is pro- vided isn’t certain, it appears that nearly half of all single mothers receive an appreciable level of help from their parents.10

Families provide financial and in-kind assistance to their members in a number of ways beyond those mentioned. Such help frequently takes the form of financial assistance such as children helping aging parents with nursing or medical care expenses, or parents helping children to buy homes or deal with financial emergencies.11 Jobless adults also frequently turn to family in hard

The Field of Social Welfare Policy 5

times. “As joblessness persists, credit cards max out and the government’s safety net has grown thin many Americans have turned to a patchwork quilt of family members and friends to stave off eviction, keep their electricity running or cover an unexpected medical bill. It is an underground banking system, complete with lenders and borrowers.”12 Recent census data shows a similar pattern, as adult children, their parents, and their grandparents increasingly live in multi-generational households, pooling resources to keep costs down.13

One very significant source of interfamilial “welfare” is child support, especially income support from absent fathers.14 Child support levels, unfortunately, are low and far from universal—only 40 percent of poor mothers, for example, received court-ordered child support in 2007. Court- ordered awards, furthermore, don’t guarantee payments, so the actual proportion of poor women receiving child support is just 25 percent. Among never-married mothers, just one in four have court orders, and only 14 percent receive payments.15 Nevertheless, custodial low-income parents as a group receive about $16 billion annually in child support payments, a figure that is about a fifth of the value of their public benefits.16

International family aid, “remittances,” provide considerable assistance from immigrants in rich countries to their relatives in the less developed world. In 2006, for example, over $45 billion in “migradolares” (migrants’ dollars) was sent to Latin America from U.S. relatives. In many countries, the value of these gifts exceeds the amount generated by many sectors of the local economy, such as exports and tourism. In Haiti, for example, remittances con- stitute 17 percent of GDP.17

It is estimated that three-quarters of Latino immigrants in the United States send regular support to their native countries. In money transfer offices in Hispanic neighborhoods, customers send electronic money orders regularly to assist parents and siblings back home with housing, food, small businesses, and education. And while most of these immigrants hold low-paying jobs, their payments average about $200 a month. One migrant worker, quoted in the New York Times, said, “We make sacrifices now so that our families can live better and so that one day we will live better back home.”18

Finally, relatives are essential resources in emergencies, both natural and otherwise. As reported by the Washington Post, for example, “hundreds of

Capsule 1.1 Kinship Security

It is patterns of kinship which most often cover us in our undertakings, provide us market opportuni- ties, and even shield us from the importunings of the

state. We do not hope to receive tuition, childcare, or

a kidney from a business associate, but we do from

relatives. Marriage is that device which extends to us

a social security network of obligated kin. . . .

Marriage provides a kind of capital. Married

couples, more than single parents, have parents

and grandparents as a resource. House loans,

emergency aid, care payments, cash gifts, and job

opportunities come disproportionately from these

relatives. Over one-fourth of all new home pur-

chases depend upon gifts from parents. Having four

parents and eight grandparents attached to every

marriage broadens the base of economic support,

for us as for the Inuit.

David W. Murray, “Poor Suffering Bastards: An Anthropologist Looks at Illegitimacy,” Policy Review, 68, Spring 1994, p. 13. Reprinted by per-

mission of The Heritage Foundation.

Chapter 16

thousands of people displaced by Hurricane Katrina seem to be disappearing— into the embrace of their extended families.”19 As in similar relief efforts in the past, it is families that provide the first line of assistance when misfortunes occur, dwarfing all other forms of private agency or government help.

Religion

Religious institutions manifest the spiritual aspect of human society through the ceremonies and observances that form systems of worship. But churches also sponsor elaborate social welfare provisions ranging from informal support and counseling to multimillion-dollar health, education, and social service programs.

The Church of the Latter Day Saints (Mormons), for example, operates over 600 food production projects for the poor, including 20 canneries and nu- merous meatpacking and dairy operations supplied by church-owned welfare farms. One estimate indicates that each year about 200,000 church members receive nearly 32 million pounds of commodities from Mormon storehouses and auxiliaries.20 The Mormons also run Deseret Industries, which provides work and shelter for the elderly and people with disabilities, places mem- bers in jobs through church-sponsored employment offices, and organizes an extensive program of child welfare, foster care, and adoption services.21 Similarly, ultra-orthodox Jews in Borough Park, Brooklyn, have created their own welfare arrangements by pooling resources to support not only religious schools but also a network of social services including group homes, family counseling, and a volunteer ambulance service, in addition to food programs for the poor.

Catholic, Jewish, Muslim, and Protestant welfare organizations, of course, have explicit social welfare objectives, implemented both through profession- alized agencies such as Catholic Charities and more informally through coun- seling by priests, ministers, and rabbis. The range of church-related services has been broadened in recent years by “family ministries” and “family life ed- ucation” programs focused on married couples and their children, premarrieds and singles, and people facing problems such as alcoholism and divorce.22

The potential of sectarian programs expanded considerably in 1996 with the enactment of welfare reform’s “charitable choice” provision, which autho- rized states to contract with religious bodies for antipoverty services. “Faith- based services,” in vogue ever since, are said to harness the enthusiasm and resources and moral character of churches and church members to help solve the problems of the poor.

The magnitude of these programs is growing rapidly. Religious bodies pro- vide billions of dollars in aid to the needy annually. Nearly 500 congregations, for example, participate in the Christian Community Development Associa- tion’s activities to address inner-city problems. Other congregations sponsor drug and alcohol, sexuality, and job training programs, often providing people tangible as well as spiritual resources that help them address life problems.

Workplace

Workplace organizations—factories, farms, universities, corporations, so- cial service agencies—typically promote the welfare of their employees by providing job-related goods and services, along with regular paychecks. One’s job is the most important single source of financial support for most

The Field of Social Welfare Policy 7

U.S. citizens—both by providing the income necessary for everyday life and through welfare arrangements attached to the job, generally known as fringe or occupational benefits. The word fringe, however, seriously understates the im- portance of these benefits, since their value often constitutes nearly a quarter of a typical worker’s overall compensation.

Along with pensions, the most important fringe benefit is health insurance. Unlike most Western nations, which provide health benefits through public programs, U.S. citizens generally obtain their health benefits through their employment; in 2009, indeed, two-thirds of all working adults had employment-related insurance. Health insurance, even when employees share the costs with contributions of various sorts, still costs employers about $3000 per worker per year. On a per car basis, indeed, General Motors spends more on employee health care than it does on steel.23

Many firms also provide benefits such as sick leave, parental leaves, college tuition for the children of employees, gyms, legal and dental services, relocation assistance, and low-cost housing. Unions occasionally provide special benefits to supplement the public system of unemployment insurance. And many human services such as on-site childcare and alcohol and drug counseling are provided as part of company-sponsored EAPs (employee assistance programs). Some companies hire social workers and psychologists for such tasks; others rely on ordained ministers and priests to tend to their employees’ emotional needs.24

The Market

Although there are several ways in which goods and services can be produced and allocated in society—centralized state control is one system, private al- truism another—the most ubiquitous and successful economic institution in modern times for satisfying people’s material desires is the private market- place. Typically identified with capitalism, the market brings together buyers, sellers, and producers in reasonably satisfying and efficient transactions, its “invisible hand” allocating society’s resources according to mutual needs and desires.

Capsule 1.2 The Social Service Congregation

Black inner-city churches have increasingly become social service as well as spiritual institutions. The St. Augustine Episcopal Church

in Oakland, California, sponsored the Black

Panther’s first breakfast program in the 1970s.

The 4000-member Allen Temple Baptist Church,

close by, established its own social work efforts

in the 1980s, creating programs addressing

unemployment, AIDS, drug and alcohol abuse, and

teen violence. Across the bay, San Francisco’s Glide

Memorial Church currently operates nearly 100

separate community programs. Day care provides

over 100,000 hours of licensed part-day and full-

day programming annually. Its daily free meals

program served nearly a million meals in 2009.

Glide also provides HIV testing, mental health

services, crisis interventions, literacy classes, job

training, shelter beds for the homeless and supports

housing for people in recovery. Operating under the

principle that God’s work requires practical charity,

advocacy, and community work, black churches

around the country, and especially in poor urban

neighborhoods, have been leaders in faith-based

social service activities.

From “New Role Thrust on the Black Church” by Gregory Lewis, San Francisco Examiner, February 28, 1993.

Chapter 18

A primary component of the marketplace in advanced economies is the business firm that, together with nonprofit organizations and governments, creates and distributes a nation’s goods and services. Most basic human needs, of course—clothing, food, housing, transportation—are typically met through market transactions among firms and consumers. In recent years, furthermore, there has been a dramatic increase in the involvement of private firms in areas of social welfare that once were largely the domain of nonprofits or government. According to Lester Salamon, a massive “marketization” has occurred as private firms have “upstaged” traditional agencies in almost every service arena.25

Major childcare chains, for example, many operating on the franchise principle, run more than 2000 daycare centers—about 10 percent of all centers nationwide. Even in more traditional social service areas, such as child welfare institutions, group-home care, and residential treatment, more than half of all programs are run by proprietary establishments.26

The biggest profit-making operations of all are in the health field, where major corporations operate 14 percent of all general and 44 percent of all specialty hospitals, own two-thirds of all nursing homes, and hold a 78 percent share of the home-health industry.27 One of the newest and fastest growing parts of the U.S. healthcare system—free-standing emergency centers—is almost entirely a commercial enterprise. Major private corporations such as Upjohn Labs have also expanded into the home-health field and drug and alcohol treatment services.

We don’t want to give the impression that the profit sector is entirely the domain of major corporations. At one end of the market continuum are thousands of individual and small group entrepreneurs who directly provide health and social services. These include private practice psychiatrists, social workers, marriage and family counselors, and laypeople who operate family day care and board and care homes. It has been estimated that as many as 20 percent of the members of the National Association of Social Workers are in private practice for at least part of their work week.28 It is clearly the hope of many MSWs to go “solo,” hang out their shingle, and “do good” providing services that clearly are in demand—most of which revolve around personal relationships, individual insecurities, and sex, alcohol, and drug problems.

Civil Society

The fourth major institution of modern society—civil society—is perhaps the most explicitly focused on social welfare activities. Variously characterized as charity, philanthropy, informal help, or social support, these arrangements express society’s need for mutuality, its recognition of interdependence, and

Capsule 1.3 Butchers, Brewers, and Markets

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We

address ourselves, not to their humanity but to their

self-love, and never talk to them of our own necessi-

ties but of their advantages.

Adam Smith, The Wealth of Nations, 1776.

The Field of Social Welfare Policy 9

One notable development . . . has been a reawakened interest in informal helping systems, and the contributions of nonprofit organizations.

its desire to promote community well-being and to assist the less fortunate. Whether viewed as a function of altruism or enlightened self-interest, civil society constitutes an essential part of community life.

Much of the activity of civil society represents society’s natural response to everyday need. Whereas traditions of self-help go far back in U.S. history, they increasingly constitute a critical resource for millions of people. One notable development of recent years has been a reawakened interest in infor- mal helping systems and the contributions of nonprofit organizations.

How do friends, neighbors, and peers help? Neighbors check in on the sick and disabled, making sure all is well, sometimes helping with housework and cooking and shopping and babysitting. Friends provide loans and emer- gency living arrangements. Self-help groups—small, nonbureaucratic, non- professional—assist people facing emotional problems. College students, for example, serve as peer-to-peer counselors confronting issues such as eating disorders, relationship violence, and sexual harassment. Working face to face with others who share and understand their predicament, millions of people receive psychological support and learn realistic strategies for problem solving.

It is estimated that 7 percent of U.S. citizens belong to self-help groups.29 Among the most common are the following:

• Parents Without Partners (single parents and their children) • La Leche League (nursing and other new mothers) • Candlelighters (the parents of children with cancer) • Alcoholics Anonymous (AA) (recovering alcoholics) • Al-Anon (family members of alcoholics) • National Alliance for the Mentally Ill (families and friends of the

seriously mentally ill)

Beyond self-help and informal support is the extensive and multifaceted system of formal voluntary associations that provide expression to the civic impulse. Organized on a nonprofit basis and aimed at addressing community welfare needs, approximately 66,000 voluntary agencies today provide an array of services for disadvantaged children, families, adults, the elderly, and a variety of special-need populations. These agencies, generally small in size compared to government bodies and governed by citizen boards of directors, coexist with a vast population of other nonprofits serving educational, health, research, and cultural purposes.30

Capsule 1.4 Tocqueville on Mutual Aid

Americans of all ages, all stations in life, and all types of disposition are forever forming associations. There are not only commercial and

industrial associations in which all take part, but

others of a thousand different types—religious,

moral, serious, futile, very general and very limited,

immensely large and very minute. Americans

combine to give fêtes, found seminaries, build

churches, distribute books and send missionaries to

the Antipodes. Hospitals, prisons and schools take

shape in that way.

If they want to proclaim a truth or propagate some

feeling by the encouragement of a great example,

they form an association. In every case, at the head

of any new undertaking, where in France you would

find the government or in England some territorial

magnate, in the United States you are sure to find

an association.

Alexis de Tocqueville, Democracy in America, 1835.

Chapter 110

Capsule 1.5 The Twelve Steps

The 12-step program, pioneered in the late 1930s by AA, has been embraced by self-help groups dealing with over 200 separate problems,

ranging from overeating and gambling to sex and

love addiction.

The 12 “spiritual steps to personal growth,”

the guiding intervention for all “recovery,” were

formulated by Bill Wilson, AA’s cofounder, in 1939.

They are:

1. We admitted we were powerless over alcohol—

that our lives had become unmanageable.

2. Came to believe that a Power greater than

ourselves could restore us to sanity.

3. Made a decision to turn our will and our lives

over to the care of God as we understood Him.

4. Made a searching and fearless moral inventory

of ourselves.

5. Admitted to God, to ourselves, and to another

human being the exact nature of our wrongs.

6. Were entirely ready to have God remove all these

defects of character.

7. Humbly asked Him to remove our shortcomings.

8. Made a list of all persons we had harmed, and

became willing to make amends to them all.

9. Made direct amends to such people wherever

possible, except when to do so would injure

them or others.

10. Continued to take personal inventory and when

we were wrong promptly admitted it.

11. Sought through prayer and meditation to

improve our conscious contact with God,

as we understood Him, praying only for

knowledge of His will for us and the power

to carry that out.

12. Having had a spiritual awakening as the result

of these Steps, we tried to carry this message to

alcoholics, and to practice these principles in

all our affairs.

Copyright © A.A. World Services, Inc.

The Twelve Steps are reprinted with permission of Alcoholics Anonymous World Services, Inc. (“AAWS”) Permission to reprint the Twelve Steps

does not mean that AAWS has reviewed or approved the contents of this publication, or that AAWS necessarily agrees with the views expressed

herein. A.A. is a program of recovery from alcoholism only—use of the Twelve Steps in connection with programs and activities which are

patterned after A.A., but which address other problems, or in any other non-A.A. context, does not imply otherwise.

Government

Governmental institutions, according to the Encyclopedia of the Social Sciences, deal with the “control of the use of force within a society and the maintenance of internal and external peace . . . as well as control of the mobi- lization of resources for the implementation of various goals and the articula-

tion and setting up of certain goals for the collectivity.”31 Among the most important functions of the modern state, of course, are raising and allocating resources for so- cial welfare purposes. So important, and so huge, is the role of public activity in this area that the modern state is often defined as a “welfare state.” And today’s polity, at least in the industrial world, is organized to support welfare. Broadly, the modern state is organized to ensure prosperity and social stability, and, more specifically, material security, by providing minimum standards of health, education, and housing; and protecting against those aspects of modern life that interfere with people’s fundamental well-being.

Practice Contexts

Practice Behavior Example: Social workers

continuously discover, appraise, and attend to

changing locales, populations, scientific and

technological developments, and emerging

societal trends to provide relevant resources.

Critical Thinking Question: How have changes in social institutions affected the roles that

social workers play?

The Field of Social Welfare Policy 11

EVOLVING INSTITUTIONS AND THE WELFARE STATE

The nature of society’s helping arrangements is critically influenced by the balance that exists among the six institutional sectors we have described. Each of the various systems of provision has distinctive characteristics and distinctive strengths and weaknesses. The help that families provide, for example, is imme- diate, emphatic, caring, and unbureaucratic. However, family help can be oner- ous, emotionally exhausting, and costly. Families can be destroyed financially by the needs of sick and dependent relatives. Family care is also limited by ties of marriage and blood. It provides nothing for those beyond the boundaries of fam- ily altruism who are without kin of their own. And families, of course, can be the source of social problems, as in the case of domestic violence and child abuse.

Similarly, while workplace benefits provide critical resources for many employees, they bypass many others, often those with the greatest needs. Approximately a third of all full-time workers, for example, lack employee-based health coverage while many of those with coverage still must pay a substantial share of the overall cost via co-payments, co-shares, and deductibles. And two- thirds of all workers lack any sort of company-provided retirement plan.32

Low-wage, intermittent, and “pink collar” workers rarely have the “arm- load of perks” available to better paid, professional, and unionized employees. And even when benefits are available, they frequently don’t extend to family members. Finally, of course, occupational benefits ignore individuals who are unconnected to the labor market.

Gosta Esping-Anderson calls these disparities in occupational coverage a “severe dissynchrony between individual and collective utility.”33 When a sig- nificant portion of the “privileged” labor force receives liberal benefits, he con- tinues, the “broad solidarity behind the public social security system is likely to diminish,” undermining basic programs that serve the entire community.34

Public services have their own pluses and minuses. Although they can be impersonal, inefficient, and bureaucratic, they can also ensure that all needy individuals are helped and that no one is allowed to fall below a certain mini- mum standard of living. They can redistribute societal resources and promote equality. They can reduce the stigma of private charity, making benefits a right rather than a handout.

Although social welfare functions are distributed among all the major insti- tutions of society, the balance among them varies considerably. In the historical context, welfare functions evolved separately, institution by institution. In the simplest societies, most aspects of life revolve around the family—with religious, governance, economic, and mutual aid activities all organized through the kin- ship structure. As societies grow in complexity, individuals and groups begin to take on discrete social functions, and with increasing specialization there evolve independent religious, governmental, economic, and mutual aid organizations.

If each of the major social institutions of society serves at least some wel- fare functions, is it possible to think in terms of social welfare itself as an institution? This question, it turns out, is one of fundamental conceptual im- portance, although only in recent times has it been explicit. Prior to the twenti- eth century, social welfare was a subject matter of relatively modest scope. The term, indeed, referred mainly to the activities of charitable bodies. It was only when prevailing social arrangements became unable to deal with the emerg- ing needs of industrial life that the publicly organized system of social welfare

Chapter 112

The first major spurt of governmental welfare in the United States resulted from the recognition that the family, religion and economic institutions, and the instruments of voluntary mutual aid and local government were unable to address the enormous social distress caused by the Great Depression of the 1930s.

enlarged. The first major spurt of governmental welfare in the United States resulted from the recognition that the family, religious and economic institu- tions, and the instruments of voluntary mutual aid and local government were unable to address the enormous social distress caused by the Great Depression of the 1930s. This realization resulted in new demands being placed on government, especially the national government. This change—frequently described as a shift from a residual model of social welfare to an institutional one— corresponded to the emergence of the U.S. welfare state.

The traditional (i.e., residual) view is that social welfare itself is not a sig- nificant societal institution, but rather a supplemental activity necessary only when the “normal” helping channels fail to perform appropriately. Viewed as a temporary response to the failures of individuals and major institutions, social welfare is seen as a set of activities that, while necessary at times, is undesir- able and expendable. Residualists argue that it is inappropriate to place social welfare on an equal standing with the primary institutions shown in Table 1.1.

Speaking at the Conference of Charities and Corrections in 1914, Dr. Abraham Flexner expressed one aspect of the residual conception of social welfare in comparing social work with the recognized professions:

A good deal of what is called social work might perhaps be accounted for on the ground that the recognized professions have developed too slowly on the social side. Suppose medicine were fully socialized; would not medical men, medical institutions, and medical organizations look after certain interests that the social worker must care for just be- cause medical practice now falls short? The shortcomings of law create a similar need in another direction. Thus viewed, social work is, in part at least, not so much a separate profession as an endeavor to supplement certain existing professions pending their completed development.35

Competing with this conception is the institutional view of social welfare as a distinct pattern of activities serving not just as a safety net to catch victims of social disorder but also as an integral and “normal ‘first line’ function of mod- ern society.”36 Perceived as a basic social institution, social welfare carries none of the stigma of the “dole” or “charity.” It is seen, instead, as a primary means by which individuals, families, and communities fulfill their social needs.

Much of our understanding of these competing models depends on how we comprehend both the causes and the magnitude of unmet needs in society. In both models, the major institutional structures of society are viewed as ineffec- tive to some degree in meeting people’s needs. The fundamental issues are these: To what extent is this an anomaly reflecting mainly the deficiencies of some individuals and just a small margin of institutional malfunctioning? To what extent is it a normal consequence of institutional limitations and individual fail- ure? An answer of “very much” to the first question and “very little” to the sec- ond relegates social welfare to the status of a residual safety net. Reverse these answers and social welfare emerges as a basic and distinct social institution.

The answers to these questions, however, remain equivocal. In this regard, Wilensky and Lebeaux’s 1958 assessment is still pertinent:

While the two views seem antithetical, in practice American social work has tried to combine them, and current trends in social welfare present a middle course. Those who lament the passing of the old order insist that the [institutional conception] is undermining individual character and the national social structure. Those who bewail our failure to achieve

The Field of Social Welfare Policy 13

utopia today argue that the residual conception is an obstacle which must be removed before we can produce the good life for all. In our view, neither ideology exists in a vacuum; each is a reflection of broader cultural and societal conditions.37

While the debate continues, it is difficult to ignore the vast importance of the social welfare enterprise in modern society, and the primary role of govern- ment in it. Although the development of social welfare as a separate institu- tion doesn’t entirely equate welfare with government—national government in particular—there is no denying that modern societies demand a major public role, a role that is most frequently conceptualized in terms of the welfare state.

ANALYTIC PERSPECTIVES ON SOCIAL WELFARE POLICY

Analysts tend to approach the field of social welfare policy in several interre- lated ways. The major approaches to analysis can be described in terms of the three P’s: process, product, and performance. Each approach examines social policy questions that are primarily relevant to the professional roles of plan- ning, administration, and research. Professionals engaged in these activities devote most of their resources and energies to questions concerning the pro- cess, product, and performance of social welfare policy. In actual agency prac- tice, all three roles may be performed by the same worker. In such cases, the worker tends to draw equally on the knowledge and insights generated by all three modes of study. However, in most large organizations, planning, admin- istration, and research tasks are specialized, and practitioners tend to be more interested in the insights of one analytic approach than in others. Even when the roles of planner, administrator, and researcher are highly compartmental- ized, however, requirements for handling “outside” tasks seep into the job.38

Similarly, it is important to underscore that these three approaches are overlapping and interrelated. This is a shorthand way of saying that concep- tual distinctions tend to capture the core qualities of a phenomenon, but, by their very nature, do not well portray subtle and relative characteristics. Fre- quently, policy analysts may employ different combinations of approaches in their investigations. In the volume Fiscal Austerity and Aging, for example, Carroll Estes and others trace the process of legislative development concern- ing the needs of the aged, describe the various programs that were products of this legislation, and evaluate their performance.39

Whatever the practice, however, it is theoretically useful to distinguish among these analytic approaches because each addresses different types of questions. Later on in this chapter we will describe what we believe to be the policy-relevant tasks of the direct-service practitioner.

Studies of Process

Studies of process focus on the dynamics of policy formulation with regard to sociopolitical and technical variables. Political science and history are two of the major academic disciplines on which process studies are based. Process study is most concerned with understanding how the relationships and inter- actions among the political, governmental, and interest group collectivities in a society affect policy formulation.

Chapter 114

Studies of process are employed as points around which policy assess- ments are organized, usually in the form of case studies of the political and technical inputs to decision making. Process studies may be long-range studies of the development of an entire social welfare system or studies of the develop- ment of specific programs. Examples of the former are James Leiby’s historical analysis, The History of Social Welfare and Social Work in the United States,40 and Heffernan’s political/economic analysis, Introduction to Social Welfare Policy: Power, Scarcity, and Common Human Needs.41 Analyses of specific programs include Martha Derthick’s Uncontrollable Spending for Social Ser- vice Grants,42 Linda Gordon’s Pitied But Not Entitled: Single Mothers and the History of Welfare 1890–1935,43 Gilbert and Specht’s Dynamics of Community Planning,44 and Theda Skocpol’s Boomerang: Clinton’s Health Security Effort and the Turn Against Government in U.S. Politics.45

One powerful analytical tradition, deserving special note, interprets the wel- fare state in terms of class, culture, and oppression. Marxist perspectives continue to be well represented in the literature, with recent examples advancing feminist interpretations of social welfare activities using a vocabulary of sexism and an op- pressive “family ethic.” Views from the left, such as Piven and Cloward’s classic sociopolitical analysis, Regulating the Poor: The Functions of Public Welfare, see welfare programs shaped by dominant classes and interests, whether described in terms of a ruling class, patriarchy, the one percent, or an economic elite.46 The alternative perspective sees fundamental governmental decisions as the result of a broad range of citizen interest, advocacy groups, technical policy experts, elected officials, and individual voters, in addition to “power” groups in business, finance, and their associated elites. This “pluralist” approach denies the determining influ- ence of a dominant class, gender, or race, viewing the welfare state instead as a product of myriad social, political, intellectual, and economic forces.

Studies of Product

The product of the planning process is a set of policy choices. These choices may be framed in program proposals, laws and statutes, or standing plans that eventually are transformed into programs. The analytic focus of product stud- ies is on issues of choice: What is the form and substance of the choices that make up the policy design? What options did these choices foreclose? What values, theories, and assumptions support these choices?

Essentially, the analytic approach employed in this book is that of a prod- uct study. Although widely employed in a variety of academic disciplines, product study is the least developed form of social policy analysis. Analyses usually focus on one or another issue of choice that is germane to a specific policy, but there is no systematic framework for placing the generic issues of policy design in a broad context. Examples of these issue-specific studies are cited in the following chapters as we attempt to explicate a generic view of social welfare policy from this analytic perspective. In Chapter 3, we will address the development and utility of this approach in greater detail.

Studies of Performance

Performance studies are concerned with the description and evaluation of program outcomes. Studies of program outcome are more amenable to objec- tive, systematic observation than studies of process and product because pro- gram boundaries are more sharply delineated. Performance can be measured through the collection of qualitative and quantitative data and through the

The Field of Social Welfare Policy 15

application of a wide range of methodological tools from various academic disciplines. Research methodology as taught in the social sciences and in pro- fessional schools provides the major technological and theoretical knowledge and skill for these kinds of studies.

From this perspective, investigators ask two types of questions: First, how well is the program carried out? Second, what is its impact? With regard to the former, programs are monitored to see what they consist of, whether they are reaching their target population, how much they cost, and so on. Impact is measured as “the difference between pre-program behavior and conditions and post-program behavior and conditions that can legitimately be attributed to the intervention.”47 Some examples of performance studies are Jason DeParle’s American Dream: Three Women, Ten Kids, and a Nation’s Drive to End Wel- fare,48 Besharov and Cottingham’s The Workforce Investment Act: Implemen- tation Experiences and Evaluation Findings,49 and Berrick and Gilbert’s With the Best of Intentions: The Child Sexual Abuse Prevention Movement.50

Performance studies, of course, are frequently carried out by analytic staff attached to the legislative bodies responsible for policy oversight. The U.S. Government Accountability Office (formerly the General Accounting Office), for example, monitors and assesses federal social programs on a regular basis for the Congress. Among their studies are evaluations of Head Start, public housing for the mentally disabled, and McKinney Act Homeless legislation.51

Intellectual debate is generally more vigorous in the arena of process stud- ies than in work concerned with product and performance. That is not to say that there is no controversy with respect to product and performance studies. Rather, the issues at stake in the latter two arenas most frequently stem from the political, economic, and social context within which programs are devel- oped, whereas the issues that underlie process studies are more likely to be related to intellectual and philosophical assumptions about the social context itself. For example, an analysis that is focused on a particular program’s design might deal with such issues as whether there is utility in charging a fee for the use of a social service (as we do in Chapter 7), or whether there are advan- tages or disadvantages to offering benefits in cash versus in kind (as we do in Chapter 5). Analyses of performance seek to measure the effects, effectiveness, and efficiency of social welfare programs. In these studies, the purposes and objectives of the policies and programs are taken as a starting point. But in studies of process, analysts attempt to come to grips with such questions as: What large political and economic forces in society brought about these social welfare policies and programs? What are the factors that determine how com- munities meet changing social needs? The ways analysts deal with these ques- tions are strongly influenced by their own cultural and philosophical values and by their Weltansicht, or worldview.

The concepts used in this book to analyze the products of policy can be applied to social welfare programs in all national contexts. Similarly, the analytic methods used in the study of social welfare policy products (i.e., separating the components of choice in pro- gram design and examining the values and theories associ- ated with these choices) do not vary in any considerable way from one social context to another. However, the study of process is heavily dependent on the analyst’s basic intel- lectual and philosophical assumptions. The analyst is often guided by overarching ideas about the nature of human so- ciety; frequently, analysts may not even be aware of how these assumptions influence their own thinking.

Research Based Practice

Practice Behavior Example: Social workers

use research evidence to inform practice.

Critical Thinking Question: How might we test assumptions about the nature of human

society that affect policy analysis? 

Chapter 116

POLITICAL PERSPECTIVES ON SOCIAL WELFARE POLICY

The classic debate in the politics of social welfare pits conservative versus progressive ideologies, two competing perspectives that offer starkly different expressions of the good society and the proper role of government within it (Table 1.2). Conservatism, premised on a philosophy emphasizing the pursuit of individual (rather than collective) interests, embodies a faith in the opportunities afforded ordinary people to succeed in life by dint of their own aptitudes and ambitions. For many, the widely held belief that achievement and effort go hand in hand constitutes our basic ethos, the primary element of the “American exceptionalism” that accounts for our success as a prosperous, free nation.52

Progressive politics, on the other hand, reflect a very different under- standing of proper conduct in society, one that recognizes the importance of common action on behalf of common goals. The community impulse views social action—not individual action—as the key component of a society’s well-being, and a necessary check on the divisiveness inherent in unchecked self-advancement.

The governing postulate of the conservative perspective holds people responsible for their own fate. This represents the traditional vision of the American Dream—the notion that those who work hard and self-reliantly will be rewarded with material success. The implication, of course, is that those who fail do so because of personal inadequacy, lack of effort, or insufficient skill.

Conservative individualism as a philosophy finds its economic parallel in the principle of laissez-faire, the theory that society works best when people

Table 1.2 Political Perspectives on Social Welfare Policy

The Conservative Perspective The Progressive Perspective

Political Ideology Individualism Collectivism

View of Social Problems Problems reflect bad choices, personal

dysfunction, culture

of poverty

Problems reflect fundamental

socioeconomic circumstances,

barriers to access, lack of

opportunity

View of Markets Unregulated markets and private

property ensure prosperity and welfare

Unregulated markets create

dangerous economic cycles,

unemployment, urban blight,

poverty and inequality, and

environmental degradation

Responsibility of Government Residual perspective—government

should be small—a modest and

decentralized adjunct to private

institutions

Institutional perspective—

government should be large enough

to advance social welfare on behalf

of the broad community

Social Policy Agenda Rely on market, voluntary, and

religious arrangements; provide

a minimum safety net focused on

the poor

Rely on public leadership; provide

broad program coverage to ensure

full opportunity, economic security,

and basic social goods

The Field of Social Welfare Policy 17

can freely advance their own material self-interest within an unimpeded pri- vate marketplace. The social welfare corollary is that the private expression of private interests results in an optimal state of welfare, with the entrepreneur- ial spirit producing jobs, wealth, and economic security for all. As columnist George Will put it, individualism and free-market capitalism have created “the most efficient anti-poverty machine the world has ever seen.”53 When it comes to “social interventions,” priority is given to families, churches, businesses, and private associations, not the state.

The rival perspective is represented in the economic and political ideas, parties, and movements of the left. Long associated with various strands of democratic socialism and modern liberalism, the progressive orientation holds that citizens—as a matter of right—are entitled to a “fair share” in society. For the left, social problems are less the product of personal inadequacy than of socioeconomic malfunction. For much of the twentieth century, the core assumption was that the problems of modern society were rooted in the greedy self-seeking of industrial capitalism. During the Progressive Era and the New Deal, for example, the left was preoccupied with confronting concentrated eco- nomic power and the problems of monopoly.

Nowadays, progressivism is advanced less in the language of socialism and more in the language of socioeconomic factors, disparities, opportunities, and social justice. Although fully reconciled to the basic structures of capitalism, the left nevertheless still views individualism—in personal conduct and in markets—as a source of inequality, social problems, and domination by social and economic elites.

The politics of right and left confront each other most directly in rival views of the role of government. Not surprisingly, conservatives are suspicious of government action. While Ronald Reagan, on several occasions, stated, “The best thing government can do is nothing,” conservatives rarely reject the worth of public action completely. We need a military, public roads, basic educa- tion, and a structure of law to enforce the rules of fair play. But when it comes to social welfare, conservatives generally resist going beyond the minimum safety net required to protect the social order. They resist government action because welfare is seen as undermining personal responsibility and impeding the marketplace. This was the rationale in 1935 for the Republican opposition to Social Security—people wouldn’t responsibly plan for their own futures if they were assured a retirement income—and it is the rationale today for the conservative assault on the welfare state.

Progressives, on the contrary, value government as the expression of the democratic will of the broad citizenry, the one institution in society with the authority to protect the interests of all against the agendas of the few. For

Capsule 1.6 The Individualist Orientation

All of us can sense a disturbing disposition on the part of many to seek solutions to their problems from sources outside themselves. Because

life today is complex and interdependent, we seem

always more ready to lean on government than upon

ourselves. Such an approach can never retain the

health and vigor of America. Rather, we must believe

in and practice an approach founded on individual

initiative, individual self-reliance, individual

conscience, and individual voluntary effort.

Dwight David Eisenhower, 1957.

Chapter 118

Franklin Roosevelt, “liberalism” was simply “plain English for a changed con- cept of the duty and responsibility of government toward economic life.”54 For the left, the mission of government is to balance market forces, to modify the power of elites in favor of the whole, and to ensure economic management for growth, employment, fair wages, and economic security. Whereas conserva- tives advocate the residualism of the “safety net,” progressives stress active public responsibility to guarantee that basic human needs are addressed. In practice, progressive social policy is based on a broad social justice ethic, ad- vancing an allocation of resources that reduces inequalities in society, whether they take the form of income differences or excessive disparities in education, health, or housing.

CONSERVATIVE AND PROGRESSIVE APPROACHES TO PLANNING

The conservative and progressive perspectives can be applied to planning— the process of policy formation—as well as to the actual substance of policy. For many years during the mid-twentieth century, indeed, planning—its hows and whys and by whoms—was one of this country’s most politically divisive issues. At first, the debate followed the traditional contours of leftward–right- ward politics. Friedrich Hayek, for example, writing in 1944, saw the dispute between “modern planners and their opponents” not in terms of the desir- ability of planning per se, but in terms of the merits of alternative planning arrangements and the degree to which they allowed for the expression of in- dividual interests. For Hayek, the question was whether the smaller “natural” institutions of society—individuals and groups—were to be involved in deter- mining their own interests or whether plans would be centrally and bureau- cratically determined. It was the latter course—centrally planned change—that Hayek perceived as the “road to serfdom.”55

Since the 1960s, this dispute has lost its edge. Certainly, the collapse of the planned “command economies” of eastern Europe and the Soviet Union eroded most of the world’s faith in socialist arrangements that relied on centralized long-range schemas for economic and social development. Few modern planners anywhere in the globe still advocate unitary, nationally

Capsule 1.7 The Collective Orientation

Little good is ever said for government as a whole. The public sector of the economy is seen, not as a cause of wealth or form of income,

but a burden on the economic system. We believe

we are enriched by the production of automobiles,

or cosmetics, but depressed and impoverished by

expenditures on public education or food stamps

for the always undeserving poor. [But] public

services are not, in any respect, inferior to private

goods and services. Clean streets are as much

a part of our standard of living as clean houses.

Public health measures are as likely to save

lives as private hygiene. Our liberties are greatly

enlarged by our public services—by good schools,

good law enforcement, ample opportunities

for recreation and self-development. Collective

decision making is, simply, an indispensable

feature of public activity.

John Kenneth Galbraith, 1986.

The Field of Social Welfare Policy 19

determined economic plans. But even before the great upheavals of 1989 and 1990 changed the face of Europe, skepticism had been growing with the very idea that a single national entity could possess the information, vision, and resources to advance the public interest in any sort of fair, efficient, or comprehensive fashion. While systematic planning, in the sense of a process that relies upon a set of evidence-based procedures for thinking about and influencing the future, remains an essential element behind good public policy, the old “rational” planning model—identifying broad community goals, identifying and evaluating alternative strategies to achieve them, selecting the optimal strategy, implementing it, and evaluating results—is rarely possible in a society such as ours with sharp disharmonies of interest, powerfully organized constituencies, and political structures that magnify differences rather than commonalities.

This is not to say that planning for social justice is irrelevant. But it does suggest that effective social planning must be cautious, sensitive to diverse opinion, appreciative of the limits of broad-scale interventions, and able to organize and mobilize common interests on behalf of social change.

WHY POLICY ANALYSIS IS RELEVANT TO SOCIAL WORK PRACTICE

The study of social welfare policy, and the choices and dilemmas involved in its formulation, is of vast importance to professionals who are responsible for carrying out policy—in particular, those who devote the major portion of their energies and resources to direct services.

The social worker providing direct services to clients—whether a mental health worker, disability case manager, probation officer, or protective services worker, to identify just a few—can play an important role in the formulation and execution of social policies. Indeed, it is well recognized that the separa- tion of policy formulation from policy execution is a delicate division, more characteristic of a porous membrane than of the solid line of bureaucratic hi- erarchy. Experienced practitioners often exercise considerable discretion in executing broad directives, and so shape as well as discharge organizational policies.

The importance of practitioner discretion for policy interpretation increases as organizations grow larger and more complex. Too frequently, however, the charge to the practitioner is delivered in clichés like getting “politically involved.” Such demands can be demoralizing to professionals, particularly to those whose major energies are devoted to addressing the complex problems of individuals and families. At best, a general call to arms without more specific instructions about which arms to use and how to use them is only temporarily inspiring; at worst, it is likely to leave many feeling inadequate.

A second reason for the direct practitioner’s sense of inadequacy in policy formulation is that this task is not as well defined as others. In mental health and child welfare, for example, the actual doing (social work) and the objects of one’s work (cases) are relatively clear. Many of the methods used in direct practice allow professionals to work within a series of fairly well-defined roles that usually have a high degree of consonance. The process by which policy is formulated, however, involves a wide range of roles that often strain against one another. Direct service, finally, tends to be individual practice—one social

Chapter 120

. . . policy choices affect the technologies direct service workers use.

worker handling one case. Policy formulation, very differently, involves the efforts of many.

The fact that the direct practitioner’s major functions are remote from the final decision points in the process of policy formulation makes many students less than enthusiastic to take courses in social welfare policy. Direct practitioners are more inclined to concentrate on the development of interactional skills, on learning how to conduct themselves as professionals, and on how to engage clients, colleagues, and community leaders and groups. The study of social choices and social values may seem abstract and theoretical. But professionals who ignore social choices and social values in favor of developing practice skills are like musicians playing background music to a melody that seems to come from nowhere. Like musical themes, the directions and goals that are reflected in social welfare policy are neither accidental nor aimless; they develop because people make choices. One has to understand the range of choices, the values implied in the alternatives, the framework within which these choices are made, the various means by which these choices are implemented, and the methodological tools that can be used to assess the consequences of these choices.

Although direct service workers may be unconcerned with policy design, they are affected by it in important ways. In the long view, policy choices af- fect the technologies direct service workers use. Consider, for example, the ways in which changes in federal policies have affected the character and extent of the social services in the public assistance system. The 1962 amendments to the Social Security Act placed great value on the provision of supportive casework services to welfare clients, and this choice was supported with substantial finan- cial resources. In 1967, federal policy changed, and, along with the administrative separation of income and services, individualized therapeutic interventions were significantly deemphasized in favor of concrete social services like job training and childcare and family planning. These priorities were advanced with “match- ing” grants whereby the federal government paid $3 for every $1 spent by the states. Federal expenditures, in addition, were open-ended, meaning unlimited. Given this enticing arrangement, states expanded their volume of social services and hired many new service workers, and costs by the early 1970s soared to more than $2 billion annually, up from practically nothing a decade earlier.

As a consequence, Congress enacted Title XX to the Social Security Act in 1974, which placed a “cap” (financial limit) on federal expenditures. In 1981, allocations for Title XX were reduced, but states were given virtually free reign in designing social services programs and targeting beneficiaries. Since then, the program’s basic structure has remained virtually intact, although its ability to address social problems has been drastically reduced because funding has remained stagnant in dollar terms, which means significantly reduced in infla- tion-corrected terms. Federal Title XX spending, currently around $1.7 billion annually, is considerably less than half the inflation-adjusted amount of 1981.

Social workers have also been powerfully affected by policy changes out- side of Title XX—policies, for example, that expanded funding for particular types of services. Funding for the homeless, people with HIV/AIDS, and teen runaways expanded the nature and scope of social work services. The wel- fare reform legislation of 1996, which converted public assistance into a block grant, giving states broad authority to use their funds for social services in- stead of cash grants, resulted in a very significant boost for programs like day care, transportation, case management, and substance abuse counseling that supported single mothers transitioning to the workplace.

The Field of Social Welfare Policy 21

Similarly, federal child welfare and mental health policies have structured the nature of social work practice at the service delivery level. The “perma- nency planning” thrust of national child welfare legislation, for example, has powerfully influenced the decisions that local case workers make when trying to balance child safety and family preservation. Decisions concerning substi- tute care when children are unable to live at home—choices between foster care and adoption and kinship care options—similarly are influenced by the federal policy framework.

In the mental health field, the deinstitutionalization of several hundred thousand mentally disturbed individuals after the mid-1970s drastically reduced the need for in-hospital social services while expanding the demand for community-based services. Mental health social workers today, in addition to providing direct counseling, are required to weave together fragmented housing, health, income support, and social service programs on behalf of their individual clients, a job requiring a realistic and thorough understanding of services legislation and service organizations. Practitioners with the conceptual tools to analyze the dimensions of policy are far more likely to be effective in endeavors like these than social workers ignorant of such techniques.

Whether or not the direct practitioner is conversant with social welfare policy, the public assumes that those engaged in providing services possess pertinent information about social welfare programs, their nature, and their consequences. Legislators, politicians, and community groups frequently turn to substance abuse workers, probation officers, and mental health case managers for information and advice, and what they say is treated seriously—whether ill or well-informed—because of their status as professionals. There is, then, at the very least, a professional obligation to be knowledgeable about policy matters.

Finally, many students now being trained for direct practice will, later on, become planners, managers, and researchers because these positions are frequently filled within agencies on the basis of seniority. Direct service professionals who will ultimately perform policy-related roles would be wise to link some part of their formal education to planning, organization, and analysis. From a career point of view, it is essential that the direct practitioner have at least an appreciation of the dimensions of the field of social welfare policy, if not an intimate knowledge of its specializations.

EMERGING ISSUES: FEMINIST PERSPECTIVES ON SOCIAL WELFARE

Recent scholarship has supplied an important new perspective to the conventional models of social policy analysis, a perspective that emphasizes the role of women. Feminist perspectives bring women qua women into the study and interpretation of social welfare in valuable and diverse ways.

One body of research, for example, focuses on the vulnerabilities of women in society—in families, in the workplace, in schools—and documents and analyzes a range of social inequalities. A considerable body of scholarship has examined issues such as violence against women, women’s health, and sexual harassment. The feminization of poverty—the singular economic risks facing single mothers and elderly women—is one concern of significance. Especially

Policy Practice

Practice Behavior Example: Social workers

analyze, formulate, and advocate for policies

that advance social well-being.

Critical Thinking Question: How have policy choices affected your chosen field of social

work practice?

Chapter 122

vulnerable to economic dependency, women are particularly reliant on welfare- state programs. Over 90 percent of all Temporary Assistance for Needy Families (TANF) households are headed by women while women compose nearly two- thirds of all Social Security recipients. Another issue is the wage gap. Women still earn less than 80 cents for every dollar earned by men in similar occupa- tions, and while a portion of this discrepancy reflects personal choice—some women, for example, deliberately choose lower-paying jobs in order to secure the flexibility they need to handle family concerns—much of it results from long-standing prejudices regarding the proper role of women in the workplace.

A separate corpus of study has examined the role of individual women, women’s social agencies, and the women’s movement more generally in the evo- lution of the social work profession and social welfare policies and programs. Historical analyses of women’s roles in the development of income support, social services, and protective legislation for women—such as wage and hour laws governing industry—have significantly expanded our body of knowledge about the reciprocal relationships among social policy, the role women play in society, and the particular circumstances of women facing significant social and economic needs. Theda Skocpol’s Protecting Soldiers and Mothers: The Politi- cal Origins of Social Policy in the United States, for example, focuses on the po- litical mobilization of middle-class women in the Progressive Era a century ago and its role in creating “maternalist” social policies through mothers’ pensions, health programs for women and young children, and workplace regulation.56

A more conceptual scholarship has formulated a body of theory that attempts to explain the evolution and character of social welfare institutions, and social policy itself, as a reflection of deeply rooted, and deeply pernicious, cultural mores and conventions. The feminist left, for example, views the traditional nuclear family as the embodiment of “patriarchy”—male privilege and female servitude. Traditional gender roles give men the responsibility to provide financial support for the family, along with the authority to “head” the household and exploit and subordinate women and children. Women, restricted to the role of wife and mother and confined to the household sphere, are prevented from pursuing opportunities in the broader economic, social, and cultural world.

Feminist scholars and activists—while broadly committed to greater gender equality—differ substantially in their approach to the question of political strat- egy. Christina Hoff Sommers, for example, describes policy remedies to women’s subordination in terms of first- and second-wave feminism.57 First-wave, or equity, feminism reflects the traditional liberal agenda of political rights and expanded opportunity. Equity feminists, in the tradition of the suffragette move- ment of a century ago, focus on practical opportunities for women in all the institutional sectors of society—schools, the workplace, and the political realm. Among the key issues of concern are abortion rights, day care, and child support.

Equity feminists also recognize the importance of choice for women. This not only means opportunities equal to those provided to men, it means support for women who select traditional roles—such as stay-at-home mothers. While recognizing that women face enormous challenges, first-wave feminists are less likely to see women as victims of patriarchy than as common partners with men in an effort to broaden opportunities for all the many categories of society’s disadvantaged and marginalized.

Second-wave feminists take a broader and more radical view. “Gender femi- nists” seek to confront the fundamental inequalities they see as inherent in society’s basic institutions—families in particular. All women—little girls to old ladies— are viewed as victimized by deep and pervasive cultural and social restraints, restraints that impede their progress, limit their possibilities, and significantly

The Field of Social Welfare Policy 23

contribute not only to social problems but also to psychologi- cal and emotional disorders, such as low self-esteem, clinical depression, and anorexia.

Second-wave feminists see society as inherently sexist in its dominant values, and this sexism is “reproduced” in politics, economics, and social policy. Male supremacy, the primary cause of women’s subjugation, must be the primary target of change. Confronting it requires not just liberal reform, political rights, and better social programs, but an overall attack on the inequalities built into the fundamental conventions of our culture, our language, and our understanding of male–female relationships.

In the social policy realm, second-wave feminists interpret the development of welfare legislation as a reflection of women’s subjugation in the family. The traditional role of women as wives, mothers, and “unpaid domestic laborers”—the traditional family model known as the “family ethic” in feminist parlance—powerfully influences the life circumstances of women. As wives and mothers, most obviously, women find their economic opportunities limited. Without savings of their own, without marketable skills that can produce a wage, they are dependent on male breadwinners. Single mothers, the divorced, and the widowed find themselves vulnerable to poverty and insecurity. But the “family ethic,” more generally, also influences the character of the social programs that have developed to address these problems, since the welfare state represents the underlying values and institutions of the broader society. For Mimi Abramovitz, for example, the welfare state has supported “patriarchal dominance while mediating reproductive relations on behalf of the productive needs of capital. The emergence of the modern welfare state, marked by the enactment of the 1935 Social Security Act, signaled the institutionalization of public or social patriarchy.”58

Diversity in Practice

Practice Behavior Example: Social workers rec-

ognize the extent to which a culture’s structures

and values may oppress, marginalize, alienate,

or create or enhance privilege and power.

Critical Thinking Question: How might race, ethnicity or class serve as an organizing prin-

ciple for policy analysis?

Capsule 1.8 Patriarchy and Welfare

During the twentieth century, the expanding welfare state continued to support patriarchal dominance while mediating reproductive relations

on behalf of the productive needs of capital. The

emergence of the modern welfare state, marked

by the enactment of the 1935 Social Security Act,

signaled the institutionalization of public or social

patriarchy. Instead of simply assuming patriarchal

control, the state began to systematically subsidize

the familial unit of production through the provi-

sion of economic arrangements. They redistribute

needed resources, offer nonworking women and

single mothers a means of self-support, and provide

the material conditions for the pursuit of equal op-

portunity. Welfare state benefits that help women to

survive without male economic support subsidize,

if not legitimate, the female-headed household and

undermine the exclusivity of the male-breadwinner,

female-homemaker family structure. As a social

wage, welfare state benefits increase the bargaining

power of women relative to men. . . .

The ideology of women’s roles is deeply encoded

in social welfare policy. It is well known that social

welfare laws categorize the poor as deserving and

undeserving of aid based on their compliance with

the work ethic. But the rules and regulations of social

welfare programs also treat women differentially ac-

cording to their perceived compliance with the family

ethic. . . . Assessing women in terms of the family

ethic became one way the welfare state could medi-

ate the conflicting demands for women’s unpaid labor

in the home and her low-paid labor in the market,

encourage reproduction by “proper” families, and

otherwise meet the needs of patriarchal capitalism.

From Regulating the Lives of Women: Social Welfare Policy from Colonial Times to the Present, by Mimi Abramowitz, 1996. Reprinted by

permission of South End Press.

Chapter 124

This kind of analysis has been critiqued for its preoccupation with gender exploitation and its disdain for the values—love, domesticity, marriage, mother- hood—associated with customary family arrangements. Nevertheless, presenting gender as a central organizing principle for analysis has powerfully modernized policy studies, highlighting a range of issues long ignored or excluded from seri- ous examination. Gender may be a less “determining” status than ever before in history, but women remain vastly overrepresented among the most vulnerable sectors of society. Whatever the ultimate origins of today’s gender inequities— oppression, customs, socialization, law, biology, or ignorance—they clearly need to be challenged. Along with race, class, and ethnicity, gender provides a valuable lens for understanding social policy, assessing it, and transforming it.

SUMMARY

This chapter provides an overview of social welfare policy using institutional, analytical, and political perspectives to illuminate the field. The institutional perspective identifies six fundamental social structures—families, religious groups, the workplace, the market, civil society, and government—that shape helping activities in the United States. The analytical perspective offers sev- eral approaches to studying and understanding policy, and for relating pol- icy knowledge to social work practice. The political perspective explores the complex relationship between government and society in social welfare. It is critical for social workers in all fields to understand the interrelation between policy and direct practice, as social workers play an important role in making, carrying out, and assessing social policies.

Capsule 1.9 Ms. Information

I do not believe that women in American society are oppressed, or members of a subordinate class. It is no longer reasonable to say that as a group,

women are worse off than men. The truth is that

American women are among the freest in the world.

Feminism in this country has become a parody of it-

self. We need a forward-looking movement, guided by

common sense and fairness; instead, we’ve got po-

litical correctness, victim politics, and male bashing.

More women than men now go to college, for

example. Yet for many women’s studies professors

and contemporary feminist leaders such good news

is no news. The most vocal among them persist in

complaining that the United States is a “patriarchy”

that subordinates women. In fact, the more things

improve for women, the angrier their rhetoric grows.

Harvard psychologist Carol Gilligan asserts that

young women in today’s American society undergo a

“psychological foot-binding.” One leading feminist

text refers to American society as a “rape culture.”

Does it really matter that a small group of

statistically challenged activists and scholars say and

believe a lot of false things about women in America?

The answer is that it does matter. Third World women,

many of whom really are grievously subordinated,

desperately need help. But most of our prominent

women’s organizations are preoccupied only with

saving American women from the ravages of patriarchy.

The women’s movement has been hijacked by a small

group of chronically offended gender feminists who

believe that women are from Venus and men are from

Hell. Women who value harmony between the sexes

and who are concerned about the plight of subjugated

women throughout the world will have to find a way to

get the movement back.

From “Ms. Information” by Christina Hoff Sommers, The Wall Street Journal, March 25, 2003. Reprinted by permission from The Wall Street

Journal, © 2003 Dow Jones & Company. All rights reserved.

25

1. What are the two major political perspectives on social welfare policy?

a. Individualist; Residual

b. Conservative; Progressive

c. Residual; Progressive

d. Residual; Institutional

2. Civil society refers to:

a. the private, non-governmental, nonprofit institutions of society.

b. the role the national government plays in social welfare.

c. “fringe benefits.”

d. families and dependent care.

3. An example of a fringe benefit:

a. Food stamps

b. Unemployment insurance

c. Red Cross emergency services

d. Private pensions

4. An example of a performance study:

a. A long range historical study of Social Security

b. An evaluation of Head Start program outcomes

c. A study of the values, theories, and assumptions behind Temporary Assistance to Needy Families

(TANF)

d. A focus group assessment to determine community development goals

5. Not an important reason for direct service workers to become knowledgeable about social welfare policy:

a. Public policies affect the services they can mobilize on behalf of clients.

b. Community leaders often turn to social workers for advice about public resources.

c. The development of interactional skills is aided by a foundation in policy analysis.

d. Direct service social workers who become managers will be helped by a foundation in policy analysis.

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

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6. What are the strengths and limitations of the conservative and progressive models of social welfare? In what ways do poli- cies and programs in your field of social work reflect either, both, or neither of these perspectives?

26

Watch and Review

Watch These Videos

Grandmothers Raising Grandchildren

Military Families

2010 Health Care Legislation

* Participating in Policy Changes * Keeping Up With Shifting Contexts

Read and Review

Read These Cases/Documents

Δ Social Workers Involved in Political Action

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Δ Community to Community

Δ Community Heals a Family: The Story of the LaSotos

Jane Addams, from Twenty Years at Hull House (1910)

Explore and Assess

Explore These Assets

Interactive Case Study: Evolution of Social Welfare Policy

Aspen Institute—http://www.aspeninstitute.org/

Welfare Policy Center—http://www.hudson.org/

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M Y S E A R C H L A B C O N N E C T I O N S

* = CSWE Core Competency Asset ^ = Case Study

27

Competencies in This Chapter (with Practice Behaviors) Professional

Identity Ethical

Practice Critical

Thinking Diversity in

Practice Human Rights

& Justice

Research-Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

x

x x

The Evolving Welfare State 28 Inception Growth Maturation Transformation Duress

Theories of Welfare Growth 37

Is America Exceptional? 39

Welfare Goals 40

Welfare Scope 43 Social, Occupational, and Fiscal Welfare

Regulatory Welfare The Welfare State Today—Attack and Defense

Emerging Issues: The New Social Accounting and Its Implications 52

Summary 56

Practice Test 57

MySearchLab Connections 58

The Modern Welfare State

2

C H A P T E R O U T L I N E

Chapter 228

The test of our progress is not whether we add more to the abundance of those

who have much; it is whether we provide enough for those who have too little.

Franklin Delano Roosevelt

Second Inaugural Address, January 20, 1937

You must rank me and my colleagues as strong partisans of national compul-

sory insurance for all classes for all purposes from the cradle to the grave.

Winston Churchill

Radio Broadcast, March 21, 1943

Central to any consideration of the 20th century are the huge steps taken in the

direction of human well-being . . . in nutrition, in shelter, in the enjoyments,

which no one should minimize, of a modern standard of living. Our century

began with a small number of rich and a large, meager mass. The century

is ending, in the fortunate countries at least, with a very large comfortable

community.

John Kenneth Galbraith

New Perspectives Quarterly, Winter 1996

The contemporary welfare state embodies the idea that government has a sig- nificant responsibility for social protection; in this sense, every modern indus- trial state is a welfare state. All utilize public action to ensure that neither bad luck nor economic distress nor social disadvantage fully determines the life chances of citizens. All have programs explicitly directed to combating misfor- tune and advancing opportunity and, as the U.S. Constitution states, providing “for the general welfare.” And all spend substantially on social welfare—more than for any other single activity. In most, indeed, social welfare spending ac- counts for well over half of all government spending, with the majority of civil servants planning and implementing social programs.

THE EVOLVING WELFARE STATE

Chapter 1 described the development of social welfare in the United States in terms of an evolution from a “residual conception,” where helping was principally a function of families and charities, to an “institutional conception,” where the nation itself provides a broad range of social and economic protections. For Wilensky and Lebeaux, writing in 1958, the residual approach, represented by old-fashioned poor-law welfare (i.e., cash assistance for the poor), coexisted in the United States with an emerging institutional approach—something like the welfare state—represented by social insurance, public education, and other programs designed to help all individuals and families, not just impoverished ones.1 This coexistence remains.

While the evolution from residual to institutional has characterized many societies, the road to the welfare state has followed different contours in dif- ferent countries. In recent years, indeed, a significant body of scholarship has provided a portrait of its distinctive core processes and elements.2 Whatever their individual differences, however, all welfare states have evolved through a series of common historical sequences. These stages, presented in Table 2.1, provide a developmental overview of the welfare state from its inception through the austerity of recent years.

The residual and institutional approach to social welfare coexist in the United States.

The Modern Welfare State 29

Table 2.1 The Evolving Welfare State

Inception

1880s–1930s

Growth

1940s–1950s

Maturation

1960s–Mid-1970s

Transformation

Mid-1970s–2007

Duress

Since 2008

Economic

Developments

Golden era of

unrestrained

capitalism;

economic

dislocations of

industrialization

Triumph of

Keynesian

economics

after the Great

Depression;

powerful post–

World War II

economic

growth; low

unemployment

Sustained

prosperity and

improved living

standards through

the mid-1970s;

1973 “oil shock”

weakens Western

economies

Slower economic

growth; stagnating

personal incomes;

increased

inequality; rise

in European

unemployment;

increased

demands on

social security

and health

programs for an

aging population

Global economic

recession

begins in 2008;

significant

increase in

unemployment

and economic

insecurity; debt

crises and threats

of insolvency in

several countries

Political

Developments

Growth of

democracy;

universal

adult suffrage,

development of

union movement,

social democracy,

modern

liberalism

Broad political

consensus

favoring

increasing social

spending; labor

parties powerful

in Europe,

Democrats in

the United

States

New political

constituencies

advance civil

and social rights

for minorities,

women, the

disabled, and

others

Conservative

resurgence; tax

revolt; weakening

of unions; new

intellectual

critiques of the

welfare state

Broad acceptance

by mainstream

political parties

of the need to

limit government

spending

and debt.

Anti-austerity

demonstrations

throughout Europe

Role of

Government

Beginning of

national welfare

leadership;

decline of private

institutions and

localism

Broad expansion

in national

social financing,

regulation,

“universalization”

of the

constituency

of the welfare

state

New program

emphasis on

social and

economic rights

for minorities,

excluded groups,

and urban poverty

populations; major

increase in public

employment

Reagan (United

States) and

Thatcher (United

Kingdom) seek to

reduce the size

and scope of the

welfare state;

decentralization;

privatization

Austerity efforts

embraced across

Europe and

America

Social Policy Poor-law tradition

gives way to new

initiatives in

social security

(pensions,

unemployment,

health care);

public spending

reaches 5

percent of

gross domestic

product (GDP)

Growth in

coverage of

basic social

security, health

care, public

aid programs,

and family

allowances

Broadened range

of income, health

care, and social

service programs;

public spending

by mid-1970s

averages 25

percent GDP

in Europe, 20

percent in United

States

Fewer new

programs;

erosion of public

assistance;

curtailment in

some social

programs, but

expansion of

Medicare and

Medicaid;

spending levels

stabilize

Social benefits

increasingly

vulnerable as

the welfare state

is blamed for

the economic

crisis; widespread

reforms in

unemployment,

retirement, and

health programs

while benefit

demands soar

(continued )

Chapter 230

Key Events:

Europe

1886: Germany

adopts health

insurance;

1911: England

enacts National

Insurance Act;

1921: Austria

adopts first

family

allowance

1941: British

Archbishop

Temple coins the

phrase “welfare

state”; 1942:

Beveridge Plan

provides welfare

blueprint for

post–World War II

English society

1966: New

Ministry of

Social Security

created in Great

Britain; provides

more generous

supplementary

benefits; 1971:

New benefits

to help the

chronically ill

1979: Margaret

Thatcher

becomes Britain’s

prime minister,

privatizes public

housing and

reduces pension

payments

Reduction

in public

sector wages;

unemployment

insurance

curtailed;

retirement

age raised;

privatization

Key Events:

United States

1913:

Progressive

federal income

tax initiated;

1935: Social

Security enacted

1953: Federal

cabinet-level

Department

of Health,

Education, and

Welfare created

1964: War on

Poverty initiated

by Lyndon

Johnson; 1965:

Medicare and

Medicaid enacted

1980: Ronald

Reagan elected

president; 1996:

Temporary

Assistance for

Needy Families

(TANF) replaces

Aid to Families

with Dependent

Children (AFDC);

2003: Congress

provides drug

coverage under

Medicare

Universal health

care enacted

in 2010;

Congressional

Tea Party

victories in 2010

move politics

to the right;

unsuccessful

efforts to

establish

bipartisan tax

and spending

reforms

Table 2.1 The Evolving Welfare State (Continued)

Inception

The welfare state was born over a century ago in an era of industrial change and great social and political ferment. For long periods prior to the end of the nineteenth century, of course, all nations had some public responsibility for welfare. The British Poor Law, for example, had replaced church responsibility for the relief of pauperism with government responsibility in 1603. But it was not until the invention of social insurance that traditional poor relief—and the dominance of the residual model—began to give way to modern welfare.

Conceived in Germany in the 1880s, and very rapidly spreading through- out the industrialized countries of the world, social insurance emerged in re- sponse to a common set of circumstances—the decline of rural agriculture, the transformation of farmers and peasants into factory workers, and the jeopardy faced by increasing numbers of families as economic cycles of boom and bust disrupted their livelihood. Facing the issue of how to shield families from the hazards of industrial society, government leaders—often joined by labor and business—found an answer in social insurance.

The origins of welfare states throughout the world date to the enactment of these compulsory public programs. Recognizing the growing numbers of peo- ple who faced years of grinding destitution when they could no longer work, social insurance sought to prevent the most common risks of the industrial

The Modern Welfare State 31

order—those associated with illness, old age and death, unemployment, and accidents—rather than dealing with them after the fact. On humanitarian and religious grounds, social insurance provided a minimum cash allotment to help people manage their lives with dignity, without the uncertainties and stigmas of private charity or poor relief. On political grounds, it represented the growing strength of the working class; given a greatly broadened franchise, ordinary people were able to demand, and secure, help from government. And the value of social insurance in promoting social harmony was not lost on the political and economic elites of the era. If workers had something to look for- ward to when they could no longer work, something to protect their families’ futures, they would be far less likely to feel alienated from the labor force, re- sentful of their employers, or partial to radical politics.

The birth of the welfare state is usually traced to Germany’s initiation of health insurance in 1883. Much of Western Europe soon followed Germany’s lead, introducing health, accident, old-age pension, and unemployment programs prior to World War I, with the United States belatedly enacting its national insurances during the Great Depression of the 1930s. Workers’ compensation developed to meet the needs of industrial workers who were incapacitated by accidents. Health insurance responded to the risks of sickness. Pension insurance emerged to help those who grew too old or feeble to work.

The accumulation of these programs made social welfare something very different, in scope and intent, from the traditional poor-law state with its focus on destitution and relief. Social insurance represented recognition that private charity and family support—and help from friends and church members— simply weren’t sufficient in the modern world. So governments took on new protective responsibilities, sponsoring, regulating, and financing insurance programs for certain risks and certain workers. The programs were compul- sory; workers in particular job categories (at first, typically, manual workers and farmers), and often employers, had to participate. These workers, and their employers, had to pay at least a portion of the costs. And, most critically, social insurance provided a legal claim to benefits, making it an essential right of modern political life.

Although social insurance represents the sine quo non of the welfare state, its defining minimum, the emergence of modern welfare was accompanied by significant state action in other areas of social concern. State-sponsored public health and sanitation initiatives were common in the decades immediately before and after the turn of the twentieth century. Broad public education—especially at the secondary level—became commonplace by the outbreak of World War I. Workplace safety legislation and public housing were similarly widespread, and in the interwar period (1918–1939), child allowance programs were initiated throughout Europe providing cash help to ordinary families. Perhaps most significantly, the emerging welfare states all broadened their instruments of taxation—generally by imposing progressive taxes on income—to provide the wherewithal for their rapidly expanding responsibilities.

Finally, the evolving welfare state refined many of the old institutions and principles of poor relief. Called “public assistance” or “social assistance” in the modern era, these means-tested antipoverty programs, typically directed to particular groups of the needy, remained an essential safety net element in Europe and, far more so, in the United States, especially for those not connected to the labor market and therefore not covered by social insurance.

Chapter 232

Growth

The years of the mid-century—the 1940s and 1950s—marked a period of significant expansion in the scope of social welfare activities, and the principal component of that growth, at least in terms of spending, was the elaboration of the social insurance initiatives of the earlier decades. Simply stated, once they had begun, the basic programs of income protection—for retirement, for the loss of a job, for accidents—progressively and insistently expanded in scope and coverage, shielding an increasing portion of the population and absorbing an increasing slice of the budget. With the passage of time, programs that originally had been designed to address narrow circumstances and specific groups were liberalized, amended, and broadened toward universal coverage. At the same time, benefit levels, first established at near-subsistence levels, were liberalized to meet mainstream standards of reasonableness.

In Germany, for example, the original programs of social insurance had been restricted to factory laborers. Within twenty-five years, however, most workers—farm and nonfarm, commercial and industrial—were covered. In England, the system of unemployment safeguards was broadened from its 1911 focus on seasonal employees to nearly the entire labor force.

What this process of expansion produced, especially after World War II, was the inclusion of the middle class in the fabric of the welfare state. As social security benefits were universalized, all income groups grew to rely on public income support. As health, housing, and education programs became basic citizen entitlements, the welfare state drew in skilled workers and professionals. This extension of welfare accelerated after World War II, reflecting a new consensus that broad, national social planning was part of the modern state’s responsibility to advance citizen well-being.

In Western and Northern Europe, in particular, the welfare state rapidly matured. After 1945, previously ad hoc welfare arrangements were integrated into comprehensive welfare systems. Social services, in the European sense of the term—provisions for education, housing, health care—expanded. Social insurance broadened in terms of both the populations and the risks covered. And health insurance, family allowance, and full-employment policies were established. These combined developments, according to Tony Judt, cre- ated something quite new—a broad-scale, cradle-to-grave, and at least mildly

Capsule 2.1 In the Beginning

Social insurance first took hold in the 1880s in Germany. Germany was, like the United States, industrializing very rapidly, a generation after

England, but the historical context was different.

The German government was dominated by a landed

aristocracy, a proud ruling class, authoritarian but

paternalistic, pious and public-spirited. It wanted

modern industry, the basis of national wealth and

imperialist power. Its leaders were displeased by

the disorganization, exploitation, and misery of the

English proletariat, however, and contemptuous of

the English philosophy of liberalism and laissez-faire

economics that seemed to justify it. Prince Otto von

Bismarck, the prime minister, was sensitive to work-

ers’ grievances and in fact willing to pacify the work-

ers through constructive measures for their welfare.

In 1881 he introduced in the Reichstag a legisla-

tive program that ultimately created national health

insurance (1883), accident insurance (1884), and

disability and retirement insurance (1889).

James Leiby, A History of Social Welfare and Social Work in the U.S., 1978, pp. 197–98.

The Modern Welfare State 33

redistributive welfare state. Post–World War II Europeans, in his words, “ate more and (mostly) better, lived longer and healthier lives, were better housed and clothed than ever before and, above all, were more secure.”3

While the European concept of a benevolent “welfare state” never fit comfortably into America’s political lexicon—the term in the United States has always been used principally as one of derision—the World War II period brought about an expanded social sector on this side of the Atlantic as well. Not unlike Europe, the United States, with remarkably little controversy, expanded protections. Immediately prior to World War II, for example, survivors, spouses, and dependent children of covered workers were added as beneficiary categories under America’s social insurance system, Social Security. In 1956, disability insurance was added. And over the course of the post-War decade, social security protections were widened to include farmers, household workers, and the self-employed. By 1960, a full 90 percent of the labor force was covered.

In addition, the exigencies of World War II and the prohibition on salary increases for workers led to special tax code provisions in the United States that provided powerful incentives for businesses to sponsor pension and health insurance plans for their employees. At the same time, the progressive income tax broadened from a “class to a mass” tax, providing an expanded fis- cal base for social efforts.

Maturation

Measured in terms of real spending, the growth of welfare states in the 1960s and early 1970s was unprecedented. By 1975, the nations of Western Europe devoted, on average, about a quarter of their GDP to public social welfare; in the United States, the figure surpassed 18 percent. This increased spending partly reflected the continued expansion of the core social insurances (in significant measure, a consequence of the aging of the population in most all industrial na- tions) and partly reflected new initiatives aimed at improving the circumstances of the poor, minority groups, single-women household heads, and others in so- ciety who had only a weak attachment to the labor force. As economic growth and prosperity advanced throughout the West, liberalized social attitudes cre- ated not only a new sensitivity to social injustices but also a new readiness to support programs aimed at civil rights and economic opportunity. In Europe, for example, social policies broadened to aid the unemployed or underemployed through an assortment of job training, employment subsidy, and liberalized sickness and work initiatives. At the same time, many welfare states themselves became “virtual employment-machines,” promoting full-employment policies and often providing, within the public sector, a significant source of new jobs.4

The welfare state expanded markedly in the United States as well, despite the United States’ continuing reluctance to adopt the ideology of social wel- fare in any explicit fashion. Rising tax revenues in the early 1960s provided U.S. policymakers the opportunity to respond relatively painlessly (in a fiscal sense) to the heightened demands for social change created by the Civil Rights movement. The programs of the Great Society—job training, food stamps, Medicare and Medicaid, mental health, and social services— powerfully ad- vanced the U.S. welfare state, creating, in particular, policies directed toward improving the circumstances of black Americans, a group at that time still largely excluded from mainstream society. Their political exclusion was ad- dressed by a variety of civil and voting rights enactments that, for the first

Measured in terms of real spending, the growth of welfare states in the 1960s and 1970s was unprecendented.

Chapter 234

time, enfranchised African-Americans in the southern states. Housing and public accommodation laws significantly reduced long-standing patterns of segregation in schools, residences, offices, and public buildings. And, most germane to the welfare endeavor, new social legislation provided a range of services and benefits focused on the urban ghettos in which a large portion of African-Americans lived.

Transformation

In 1973, the Organization of Petroleum Exporting Countries (OPEC), the oil producers’ cartel, more than doubled the world price of crude oil, precipitating the “oil shock” that signaled the end of the economic golden age of the post–World War II era and the beginning of the “modern” period of slow growth, uncertain social progress, and increased questioning of the usefulness and affordability of social policy. In the fifteen years prior to 1975, social expenditures in Europe and the United States grew at an average of 6.5 percent per year. In the decade after, they grew at just 3.4 percent annually.5 Since the early 1990s, public social spending has been increasing a bit in most countries, as indicated in Table 2.3 (see page 43). Throughout the rich world, however, even in the most advanced welfare states, social spending has come under increased scrutiny as sluggish economies combined with increased demands for benefits—many of them driven by aging populations—have produced high levels of unemployment and economic insecurity, growing inequality in income and wealth, and increasing class resentments. These social and economic strains, described in some detail in Chapter 9, have produced different political results in different countries. But in all countries, welfare has been under critical scrutiny.

In England and America, the reaction against social welfare—especially during the 1980s—was particularly virulent. The victory of Margaret Thatcher’s conservatives in Great Britain in 1979 and the election of Ronald Reagan in the United States in 1980 advanced explicit crusades against the welfare state. For Reagan and Thatcher and their New Right laissez-faire-ist

Capsule 2.2 The Golden Age

In the Golden Age, all the problems which had haunted capitalism in its era of catastrophe appeared to dissolve and to disappear. The ter-

rible and inevitable cycle of boom and slump, so

murderous between the wars, became a succession

of mild fluctuations, thanks to—or so the Keynes-

ian economists who now advised governments were

convinced—their intelligent macro-economic man-

agement. Mass unemployment? Where was it to be

found in the developed world in the 1960s, when

Europe averaged 1.5 percent of its labor force out of

work and Japan 1.3 percent? Only in North America

was it not yet eliminated. Poverty? Of course most of

humanity remained poor, but in the old heartlands

of industrial labor what meaning could the Interna-

tionale’s “Arise, ye starvelings from your slumbers”

have for workers who now expected to have their car

and spend their annual paid vacation on the beaches

of Spain? And, if they fell upon hard times, would

not an increasingly universal and generous Welfare

State provide them with protection, undreamed of

before, against the hazards of ill-health, misfortune,

even the dreaded old age of the poor? Their incomes

rose year by year, almost automatically. Would they

not go on rising forever? The range of goods and

services offered by the productive system, and avail-

able to them, made former luxuries part of everyday

consumption.

Eric Hobsbawm, The Age of Extremes, 1994, p. 267.

The Modern Welfare State 35

allies, the decades of post–World War II welfare growth were themselves viewed as a primary cause not only of economic decline but of community and family decay as well.

In the United States, cutbacks occurred in several program areas. Cash wel- fare payments were cut substantially after the enactment of welfare reform in 1996, federal housing benefits were reduced, and public aid for noncitizens and drug and alcohol abusers were restricted. Social Security benefits in the United States (and several European nations) were trimmed by increasing the age for full eligibility.

We label this stage “transformation” because it is clear that the changes that occurred, while modest in monetary terms, represented a significant phil- osophical challenge to the progressive ideology of welfare entitlement. In the 1990s, for example, the welfare reaction in the United States came not only from conservatives but also from moderates and liberals. Bill Clinton cam- paigned for the presidency in 1996 with a promise to “end welfare as we know it” by placing a time limit on welfare receipt. And the Progressive Policy In- stitute (PPI), a policy think tank representing middle-of-the-road Democrats, advanced measures to transform the very essence of social policy. The PPI’s blueprint in the 1990s, for example, called for a “third way” between laissez- faire and traditional welfare statism:

[We] must replace the welfare system with a new strategy for enabling America’s poor. While the welfare state is organized around the goal of income maintenance, the enabling state should be organized around the goals of work and individual empowerment. Above all it should help poor Americans develop the capacity they need to liberate themselves from poverty and dependency. And it should do so directly, by-passing whenever possible public bureaucracies and service providers, and plac- ing responsibility and resources directly into the hands of the people we are trying to help.6

These ideas resonated with the position taken by the Organization for Economic Cooperation and Development (OECD)—the influential alliance of 34, mainly European, welfare states—calling for a shift from a “passive” to an “active” society under which “the welfare system should be refocused and made less generous in terms of eligibility and benefits” and passive income supports should be replaced by measures designed to put people to work.7 Even in progressive Sweden, “the idea of welfare according to need has at least partly been replaced by incentive-oriented policies.”8

The era of transformation that began in the 1970s did not signal a significant decline in welfare activity. While reforms tightened eligibility in some areas, reduced benefits in others, and shifted some activities to the private sector, the fundamental core of the welfare state—universal retirement and disability programs, healthcare guarantees, unemployment insurance—continued to expand while “residual” means-tested programs for the poor were largely maintained. Overall social expenditures, as seen in Table 2.3, continued to rise. And the few major attacks on welfare state fundamentals that were made—such as President George Bush’s attempt in 2003 to privatize Social Security—were soundly rejected. Pretty much everywhere, big government remained as big as ever.

Practice Contexts

Practice Behavior Example: Social workers

continuously discover, appraise, and attend to

changing locales, populations, scientific and

technological developments, and emerging so-

cietal trends to provide relevant services.

Critical Thinking Question: How has the trans- formation of welfare services affected the

roles of social workers in your field of interest?

Chapter 236

Duress

While the era of transformation substantially altered the nature of the worldwide debate about the welfare state, and put welfare advocates increasingly on the defensive, it wasn’t until the global economic crisis of 2008 that the fundamental character of national welfare policies were meaningfully challenged. There had been an awareness among experts throughout the political spectrum that the social benefits, particularly for health care and social security, that had been promised to future generations were underfunded; but only since the deep recession of 2008 has the recognition of the costliness—some would say unaffordability—of welfare commitments become, front and center, a key issue of domestic politics. Once an area of debate principally among policy analysts, particularly economists, the issues of welfare today, issues of cutbacks and taxes and economic security, have become the constant material of front-burner public and political debate. And along with the great deal of hyperbole that such debates engender, there has also been a great deal of important thinking, ideas, and questions about the very nature of the welfare state itself. While some commentators and politicians speak of the “death spiral of the welfare state,” raising dire predictions about its future, a more serious discussion is emerging concerning the costs and benefits of welfare, a discussion inextricably linked to the deficit and debt problems throughout the West.

The initial response to the 2008 recession, both in the United States and many European countries, was to increase public spending, both to meet the needs of the newly unemployed and create jobs, and to provide a fiscal stim- ulus to get the economy back on track. The victory of Barack Obama in the 2008 election brought the enactment of several measures to buffer the impact of the recession, to extend vital services, and to stoke the economy. Fifteen months after the 2008 election, a nearly universal insurance-based healthcare system was enacted. Shortly later, in traditional Keynesian fashion, the U.S. Congress passed stimulus spending for safety net programs such as unemploy- ment insurance and food stamps while also providing over $500 billion for new projects ranging from health care to infrastructure to relief for state and local governments.

The initial reliance on economic stimulus, however, was short lived. Political pressure based on fears of continuing budget deficits soon resulted in a profound political shift to the right. In the United States the unwillingness to take on more public debt was most dramatically expressed in the rise, and political success, of the Tea Party movement, an alliance of conservative and libertarian interests opposed to taxes, social spending, and the welfare state in general. The political success of the Tea Party has hugely impacted domes- tic politics in the United States, moved the Republican Party to staunch anti- government anti-tax positions, and stymied the U.S. budget process.

In Europe, governments of all political persuasions have similarly been re- luctant to maintain welfare state business as usual. Austerity measures ranging from benefit reductions, eligibility restrictions, cuts to the pay of public em- ployees, and labor market reforms have been imposed in almost every country. Since 2009, for example:

• Denmark reduced its unemployment benefits to two years from four, • France increased patient co-payments in its national health system, • Germany increased its retirement age from 65 to 67, and imposed tu-

ition in its national university system,

The Modern Welfare State 37

• Great Britain cut family allowances and imposed work requirements on welfare recipients,

• Spain reduced disability benefits and eliminated government payments to the parents of newborns,

• Sweden substantially privatized health care, and • Italy reduced government ownership of many local social programs, in-

creased its retirement age, sold off state assets, and liberalized its labor market laws.

While the discourse of austerity in Europe doesn’t approach the sharp-toned anti-government, anti-taxation rhetoric found in the United States, a politi- cal agenda recognizing the need to better balance resources and obligations has found widespread political favor. The welfare state continues to be val- ued across most of the European political spectrum as a mechanism to provide some degree of economic security and social fairness. Nevertheless it is com- monly acknowledged to be in need of reforms that place behavioral conditions on the receipt of many social benefits, emphasize the responsibility to work wherever possible, promote the involvement of the private sector, and target benefits more narrowly on those most in need.

THEORIES OF WELFARE GROWTH

Assuring significant economic protections to the mass of citizens was one of the key achievements of the economically advanced nations in the twentieth century. The progress in approximately 100 years from the tentative, haphaz- ard, and partial “welfare” of family, church, and volunteer-based charity to the systematic universal welfare of the modern state, of course, didn’t emerge in a historic vacuum. State welfare was not simply an idea that suddenly won over the hearts and minds of the leaders of the West. The welfare state, although it was established on an intellectual foundation of considerable cogency and appeal, won out over alternative views of public responsibility because of two indispensable phenomena: democracy and prosperity. Without universal suffrage, the dominant political modus operandi never would have become hospitable to the idea that the primary purpose of government was to serve the needs of people. Without material prosperity, the costly social insurances, health, housing, and social service programs of the modern era would simply not have been affordable.

In its political dimension, the welfare state developed hand in hand with electoral democracy. The expansion of voting rights to workers and to women—a process largely complete in Europe and the United States by 1918— increased demands for social protection and economic fair play. The universal adult franchise created a new electoral politics powerfully influenced by so- cialist ideology, working-class interest groups, and policy agendas promoting the responsibility of the state for collective well-being. According to “power resources” theorists, the expansion of social welfare paralleled the growing power of unions and parties on the left.9

In much of Europe, and to a degree in the United States, this broadened electoral participation shifted politics leftward. Social legislation that prior to World War I had seemed radical became the norm (first in Europe, then in the United States), with the atmosphere of progressivism most tangibly expressed in social services, workplace regulation (particularly the eight-hour

Chapter 238

workday), and Social Security. New labor-oriented parties strengthened in all the European countries, and the older liberal parties abandoned their traditional laissez-faire orientation. By the time the Great Depression of the 1930s arrived, the response, almost everywhere, was to expand the welfare state, with governments seeking to rescue their economies and assist their citizens through regulation, planning, and economic assistance.

For the standard-bearers of the welfare state—social democrats (in Europe) and New Deal/Great Society liberals and progressives (in the United States)— the major business of government became personal dignity and material well- being. Voters demanded welfare, whether or not they called it that, and modern political regimes aggressively advanced its instruments—income transfers, so- cial services, minimum standards, and fair shares for all. From this perspec- tive, the contemporary welfare state represents the hard-won political victory of ordinary working people over traditional economic and social elites.

One of the best-known explanations of the political dimension of the wel- fare state is that of T. H. Marshall, who interpreted the growth of welfare in terms of the historic evolution of the meaning of citizenship.10 As industrial society developed, according to Marshall, the bonds tying people to their communities changed. In traditional preindustrial societies, human relation- ships were based on ascribed statuses; the individual’s place in society was determined at birth and usually did not change. The social mobility and rapid change of modern societies, however, required a different form of social sol- idarity, and citizenship provided a “direct sense of community membership based on loyalty of free men endowed with rights and protected by common law.” Civil, political, and social rights, according to Marshall, constituted the elements of citizenship, and these rights were perceived as developing through an evolutionary process. Civil rights (e.g., the right to trial by jury) developed first, political rights (the right to vote) next. These, in turn, lay the groundwork for social rights (the right to education and welfare).

Interestingly, Marshall did not believe that citizenship rights necessar- ily eliminated inequality; in fact, he argued that these rights often developed to ensure the stability of their social systems. The classic illustration is Bis- marck’s concession of social rights to German workers in the 1870s and 1880s. Bismarckian social legislation was quite explicitly intended to reduce the force of socialist demands for full civil and political rights.

Largely independent of politics is the economic dimension—the emergence and development of the welfare state as a corollary of modern industrialization. There is no question but that the phenomenal expansion of economic produc- tivity that came with the Industrial Revolution created the means and the ex- pectations for a welfare-oriented society. It was industrialization, of course, that created the need for a new welfare system. Although politically oriented theo- ries view the welfare state as a response to increasing demands from emerging political forces, economically oriented theories see welfare resulting from the es- sential character of modern industrial economies and their needs for labor, effi- ciency, and markets. One influential body of theory interprets welfare expansion in terms of “technological determinism,” a theory that sees government action responding to the imperatives of economic modernization.11 Industry’s “need” for a highly educated, well-trained, reliable workforce, for example, is seen as leading to health, welfare, and educational legislation to ensure the develop- ment and protection of that workforce. This view posits that modern societies, whatever the exact nature of their political ideology, are converging in their essential features, increasingly mixing individual freedom and state controls.

The Modern Welfare State 39

A final explanation of the welfare state interprets the emergence of social programs as a facet of capitalist self-protection. Far from viewing the welfare state as a working-class victory, those in the Marxist tradition see social wel- fare as a strategic antidote to the instabilities of capitalism, a procedure for moderating class conflict and protecting the interests of commanding elites. In this sense, the welfare state is a “handmaiden” to capitalism, a way to reg- ulate and control the conditions under which work is organized and wealth is distributed, a mechanism to pacify the working class and keep it subser- vient. Regulating the Poor, by Richard Cloward and Frances Piven, provides one powerful analysis of the U.S. system of social welfare from this perspec- tive; James O’Connor’s The Fiscal Crisis of the State is another.12 Marxism, of course, like technological determinism, is “grand” theory, useful for analyzing entire systems, but less helpful for looking at parts. And because Marxism is primarily focused on economics and class interest, it tends to ignore the inde- pendent influence of values, ideologies, and political institutions in the devel- opment of social welfare programs.

IS AMERICA EXCEPTIONAL?

Although all welfare states share a variety of common attributes, they are markedly distinct in many of their essential aspects. They differ in size, in their relative emphasis on program fields, in their structure and financing, and in their underlying philosophical orientations. Some of the most dramatic of these differences separate the welfare states on both sides of the Atlantic, with the United States generally characterized as a welfare laggard. The thesis of American exceptionalism, introduced in Chapter 1, has been widely advanced as a way of explaining the significant differences between the United States and Europe.

Although both U.S. and European welfare states have sponsored large and complex systems of social insurance since World War II, the two traditions diverge sharply in their underlying ideology and their protective breadth. European welfare states have been importantly motivated by a social ethos valuing equality and social solidarity, whereas the United States, with its lack of class consciousness and its reluctance to raise taxes, has developed its programs cautiously, emphasizing means-testing and private (philanthropic, as well as corporate) welfare provision.

These different orientations color the spirit, the scope, and the magnitude of social welfare in their respective societies. Europe, with powerful labor or- ganizations and social-democratic political parties, early on adopted a range of collectivist welfare policies, policies guaranteeing income security not only to employees unable to continue in the labor market, but also to ordinary, em- ployed working-age families. And while these policies have been transformed in recent years (see Chapter 9), Europe remains at the high end of the social spending scale. The United States, more individualistic in its political cul- ture, developed its social programs relatively late in the century, and never ad- opted many of the state-sponsored programs popular in other countries. Child allowances, broad labor market protections for workers, and public housing and housing subsidies—all common features in Europe—have been either unknown or of modest significance in the United States. Furthermore, in the United States, national welfare authority has remained rudimentary, with great areas of responsibility left in the hands of state and local officials, officials

The thesis of American exceptionalism has been widely advanced as a way of explaining the significant differences between the United States and Europe.

Chapter 240

often tending toward highly restrictive orientations, and the business sector. In the United States, for example, most workers have traditionally gained access to health care via employer-sponsored health insurance rather than state-run programs—although these private health insurance benefits are partially subsi- dized by government via preferential tax treatment.

WELFARE GOALS

One of the great triumphs of the twentieth century has been the accommo- dation of capitalism and social justice—the development of productive stable market economies supported and advanced by the mass of ordinary citizens enjoying middle-class standards of living.

The world of developed market economies—the world of contemporary welfare states—posits the obligation of government to act when society’s pri- vate institutions do not properly function. Organized public welfare is at the very core of Western societies, improving the daily lives of major segments of the population and adding to the stability and humaneness of the economic order. Welfare states across the globe have not only substantially increased the level of economic protection but also provided access to critical health and ed- ucation services. Welfare safety nets generally ensure basic levels of well-being to the poor; economic supports reduce the hardship of recession; and social insurance, for the first time in history, has largely severed the traditional link- age between old age and poverty. Although the nature of these achievements varies from country to country, all welfare states have succeeded in institu- tionalizing extensive structures of provision that have remarkably improved the well-being of society’s most at-risk groups.

But what, exactly, is the welfare state? How is it to be defined? Although many definitions have been offered, perhaps the most substantive, in a pro- grammatic sense, is that of Asa Briggs, who saw the essence of the welfare state in those governmental activities that were intended to “modify the play

Capsule 2.3 American Exceptionalism

Although above average in educational expen-ditures, the United States, unlike Canada and most European welfare states, lacks national health

insurance and family allowances, and both public

assistance and unemployment insurance in America

remain ungenerous by international standards and

uneven in their coverage across the states and

across population groups at risk. Only in the area of

old-age, disability, and medical coverage for retired

workers who have been stably employed does the

United States compare well to other industrial de-

mocracies, and benefits in these areas are channeled

not only through the public sector but also (with

encouragement from tax breaks) through privately

negotiated fringe benefit schemes.

Thus, the United States has one of the “least

developed” welfare states and yet is experiencing a

period of unusually intense political attacks against

that incomplete and ungenerous welfare state—

attacks not only directed against rising levels of so-

cial spending, but also questioning the fundamental

legitimacy of existing and potential public efforts to

cope with evident, growing problems of poverty and

social insecurity.

From Theda Skocpol, “America’s Incomplete Welfare State: The Limits of New Deal Reforms and the Origins of the Present Crisis” in

Stagnation and Renewal in Social Policy, ed. by Gosta Esping-Andersen, Martin Rein, and Lee Rainwater (Armonk, NY: M.E. Sharpe, 1987).

Copyright © 1987 by M.E. Sharpe, Inc. Reproduced with permission.

The Modern Welfare State 41

of market forces” to improve the well-being of citizens not able to manage on their own.13

Briggs specified three social protection goals for the welfare state (see Table 2.2) and three corresponding forms of policy. The first goal is helping people main- tain their economic security when various “social contingencies,” such as un- employment, divorce, or old age, make normal self-support impossible. One thing welfare state policy does well, and with considerable efficiency, is to buffer people from large drops in their standard of living when their income is interrupted. The largest welfare state programs—indeed, the first pillar of all welfare states—are the social insurance policies that prevent economic insecu- rity by offsetting lost income.

The basis of eligibility for these policies, it must be noted, is not chiefly poverty. These policies are not limited to those who are made poor by events beyond their control. The basis for governmental intervention, rather, is the loss of income from employment. Unemployed workers, for example, may not be impoverished, but they are generally entitled to unemployment insurance benefits; retiring workers may have reasonable earnings, yet they are entitled to retirement benefits. Social insurance programs like Social Security protect against the range of conditions that result in a loss of job income. Because they are universal—because they cover everyone, regard- less of income—these Social Security programs are the costliest element in the budgets of all welfare states.

Briggs’s second goal, “guaranteeing individuals and families a minimum income irrespective of the market value of their property,” makes sure that people achieve at least a minimum level of material sufficiency. This is the antipoverty goal of the welfare state, and it is expressed in public assistance programs aimed at the poor. Some of these policies provide services, typically aimed at building skills and independence and helping the disadvantaged move into mainstream society, and some provide cash.

Poverty relief, of course, has always been implicit in poor law and public assistance legislation. In the United States, indeed, it was a principal domestic priority by President Lyndon Johnson in 1964 when he declared “uncondi- tional war on poverty in America.” Antipoverty policies, in contrast to Social Security, are targeted on those who fall below a recognized minimum income. They are not meant to assist the broad spectrum of the population, but rather aid special groups with special needs. One of the most common ways of de- termining eligibility for these programs is by a means test, an administrative

Table 2.2 The Three Pillars of the Welfare State

Goals Policies Beneficiaries

Economic security: protects

citizens from common life risks

by replacing lost income

Social security: social insurance

against illness, unemployment,

disability, retirement, death of a

spouse

The working population, retirees,

and their families and dependents

Material sufficiency: provides a

basic floor of social protection

Public assistance: cash relief and

social services

The poor and disadvantaged

Basic services: ensures access to

critical goods and services

Education, health care, housing,

nutrition

All citizens

Chapter 242

procedure that limits benefits to those whose incomes and assets fall below a certain, usually very modest, level. Because these programs are focused on the relatively small proportion of citizens who are poor, they are considerably smaller in magnitude than universal social insurance policies.

The third welfare state goal identified by Briggs, “ensuring that all citizens without distinction of status or class are offered the best standards available in relation to a certain agreed range of social services,” means helping people secure those fundamental goods and services that society considers essential. The leading example of such a basic service, of course, is public education. Free public schooling at elementary and secondary levels is provided as a basic right of citizenship in all welfare states; parents are compelled to send children of specific ages to school. Higher education is typically not free, but governments often subsidize tuition and otherwise help students and their families meet college costs. Such help may or may not bear any relationship to financial need in the narrow sense, but it is given in recognition of the difficulties most families have in planning for—or borrowing for—the costs of college, and also in the faith that society as a whole benefits from encouraging more people to seek higher education. In addition to education, contemporary welfare states generally promote nutrition programs, day care, and housing. In most welfare states (but not the United States), free, comprehensive, universal health care is a right of citizenship. In the United States, this has never been a goal of public policy although a considerable amount is spent on health, especially for the elderly and the poor.

Although these three objectives serve to define a core public policy agenda in all advanced industrial economies, it is not entirely accurate to say that the institutional model has won the day. Despite its significance in contemporary life, the welfare state remains an ambiguous, vulnerable enterprise, retaining important elements of residualism. Eligibility requirements, for example, often reflect the concept of public intervention as a last resort, available only when personal resources have been exhausted. Although it is an essential political and economic institution in Western Europe, the United States, Canada, New Zealand, Australia, and Japan, the welfare state is nevertheless subject, as we have seen, to sustained political criticism.

A final word is important on the issue of redistribution, which is tradition- ally a basic concern of the social democratic, progressive left. Briggs’s model says little about the role of the welfare state in achieving redistribution in soci- ety, in promoting policies that seek some significant measure of socioeconomic equality. Little has been said about redistribution simply because, although not uncommon, it is hardly an essential feature of welfare states. Although a prom- inent theme among the early socialist theorists of “womb to tomb” social wel- fare—the British Fabians in particular—and still a guiding principle among the

nations of Europe with powerful social democratic move- ments, particularly the countries of Scandinavia, it is not, nor has it been, universally characteristic. The organiza- tion of social welfare in the United States, Japan, Austria, New Zealand, France, and most welfare states, indeed, has largely followed the model pioneered by Germany, systems largely built on social insurance, with eligibility for benefits related to prior employment and benefit lev- els related to prior salary or wages. Although egalitarian, redistributive principles have made some headway in all welfare countries (most, for example, have universal child

Human Rights and Justice

Practice Behavior Example: Social workers

engage in practices that advance social and

economic justice.

Critical Thinking Question: What do you think should be the rights of citizenship with regard

to social welfare?

The Modern Welfare State 43

allowances and universal access to health care), the ideal of comprehensive, generous benefits for all, based on citizenship (à la Marshall) rather than a con- nection to work, is hardly dominant.

WELFARE SCOPE

The enormous scope of the welfare state in all the rich nations of the world attests to its fundamental role in contemporary society. Perhaps the most con- ventional way of indicating this scope is by examining government social spending, the public outlays devoted to addressing basic human needs, as a portion of a nation’s overall economy. Although this approach understates the size of the welfare institution because it omits nongovernmental expenditures, it nonetheless yields an impressive picture. (An alternative way of calculating welfare spending is described at the end of this chapter.)

The OECD statistics in Table 2.3 show that government social spending relative to GDP has increased rather steadily in most of the major welfare states since 1980, although there is significant variation among nations, with public spending in 2007 ranging from around 16 percent of GDP in Ireland and Australian to over 26 percent in Austria, Denmark, France, and Sweden. Welfare states continue to invest substantially in essential programs to fight poverty, combat insecurity, and guarantee essential services.

The United States, as Tables 2.3 and 2.4 indicate, follows the general pat- tern. While remaining on the lower end of the expenditure scale, public social spending increased in real terms from 13.2 percent in 1980, to 14.5 percent in 2000, to 16.2 percent in 2007. As indicated in Table 2.4, the major elements

Table 2.3 Public Social Welfare Spending, Selected Counties, as Percent of GDP in 1980, 1990, 2000, and 2007

1980 1990 2000 2007

Australia 10.3 13.1 17.3 16.0

Austria 22.4 23.8 26.7 26.4

Canada 13.7 18.1 16.5 16.9

Denmark 24.8 25.1 25.7 26.1

France 20.8 24.9 27.7 28.4

Germany 22.1 21.7 26.6 25.2

Ireland 16.7 14.9 13.3 16.3

Italy 18.0 20.0 23.3 24.9

Japan 10.4 11.3 16.5 18.7

Norway 16.9 22.3 21.3 20.8

Spain 15.5 19.9 20.4 21.8

Sweden 27.2 30.2 28.4 27.3

United Kingdom 16.5 16.8 18.6 20.5

United States 13.2 13.5 14.5 16.2

OECD Average (34 Countries) 15.6 17.8 18.9 19.2

Source: OECD, StatExtracts, July 2011. Excludes education.

Chapter 244

in the American social welfare budget continue to be Social Security, Medicare, and Medicaid. Social Security spending, relative to GDP, has been relatively stable since 1980, although it will sharply rise in the future as the baby-boom generation retires.

Medicare and Medicaid, health programs that didn’t exist until the mid- 1960s, also continue their relentless expansion and now comprise over 5 percent of GDP. The public assistance programs SSI, TANF, and Food Stamps—the an- tipoverty programs commonly identified as “welfare”—continue as far smaller programs, comprising in the aggregate less than 1 percent of GDP but holding their own as a portion of the economy. And several new programs in education (No Child Left Behind), prescription drugs (Medicare Part D), work support, and child health have substantially expanded the social budget since 2000.14

While indicating the strength of the American welfare state, in terms of its size, Table 2.4 gives only an indirect indication of who benefits from social spending. In the United States, clearly the greatest portion of welfare growth reflects spending on the elderly, spending not only in the form of pension pay- ments under Social Security and similar social insurance programs, but also in the form of medical (Medicare and Medicaid) and public assistance (SSI)

Table 2.4 U.S. Public Social Welfare Spending, Selected Programs, 1980–2010 (in $ Billions and % GDP)

1980 1990 2000 2010

Social Security (Old

Age, Survivors, and

Disability Insurance,

OASDI)

$(B)

%GDP

118.5

4.2%

248.6

4.3%

409.4

4.2%

695.0

4.7%

Medicare $(B)

%GDP

32.1

1.1%

98.1

1.7%

197.1

2.0%

525.0

3.6%

Medicaid $(B)

%GDP

27.4

1.0%

78.1

1.3%

207.5

2.1%

400.7

2.7%

Supplemental

Security Income (SSI)

$(B)

%GDP

6.4

0.2%

16.1

0.3%

30.7

0.3%

47.2

0.3%

AFDC/Temporary

Assistance for Needy

Families (TANF)

$(B)

%GDP

12.4

0.4%

19.0

0.3%

24.8

0.3%

30.6

0.2%

Food Stamps $(B)

%GDP

9.1

0.3%

15.9

0.3%

18.3

0.2%

73.0

0.5%

EITC $(B)

%GDP

1.2

<0.1%

4.4

<0.1%

26.1

0.3%

49.5

0.3%

Veterans’ Benefits

and Services

$(B)

%GDP

21.2

0.4%

29.1

0.4%

47.1

0.5%

124.7

0.8%

Unemployment

Compensation

$(B)

%GDP

18.1

0.6%

18.9

0.3%

23.0

0.2%

157.2

1.1%

Source: Budget of the United States Government, Fiscal Year 2012, Historical Tables; U.S. Census Bureau, The Statistical Abstract of

the United States, 2011; Centers for Medicare and Medicaid Services; Wall Street Journal, October 19, 2011. All figures in current

dollars. TANF figures are for 2009. Excludes education.

The Modern Welfare State 45

programs focused on older people. Of all the factors accounting for the transfor- mation of modern public budgets, none matches the increased size, and effective demands, of the elderly. At the U.S. federal level, indeed, almost all spending growth since 1960 can be explained by expanded benefits for seniors.15

The figures in Table 2.4 also indicate the very considerable degree to which the U.S. welfare state has become an instrument of middle-class well- being. Social Security, most notably, comprises a network of medical and in- come entitlements aimed at providing economic security over the life cycle for ordinary families, a network that absorbs more than half of all dollars spent on social welfare. Though the public at large often views the welfare state as “welfare”—public assistance and food stamps and the rest of the safety net— these programs, in the aggregate, are modest in size.

Another way of expressing this middle-class tilt is to note the limited em- phasis on redistributive spending. In the United States, social policy—very much in the Bismarckian tradition of work-based social insurance—is closely linked to employment. Social Security is the largest single program, and benefits under Social Security are strongly tied to previous earnings. Relatively affluent workers, in other words, become relatively affluent retirees. Programs that focus on the poor (public assistance) are small, and programs that aim to distribute basic so- cial welfare services to all, regardless of income level, have generally been absent.

Social, Occupational, and Fiscal Welfare

The realms of welfare state policy may be seen from another perspective, one that goes beyond direct spending and beyond a focus on the public sector. This approach, first designated by Richard Titmuss, sees not one but three comple- mentary systems of welfare: social, occupational, and fiscal.16

Capsule 2.4 “The Revolution No One Noticed”

While Americans were preoccupied with the turmoil of the 1960s—the Civil Rights move- ment and the war in Vietnam—a revolution no one

noticed was taking place. For many years, the argu-

ment for increased attention to social welfare in

America had followed clear lines: The United States

was spending the largest portion of its budget for

defense; programs for people who were poor, sick,

aged, or minorities were underfinanced. Social wel-

fare proponents contended that in order to be more

responsive to the needs of its citizens, the nation

should “change its priorities” and spend more for

social programs to reduce poverty and less on wars

like that in Vietnam. The argument ended with a call

for a change in national priorities.

In a single decade America’s national pri-

orities were reversed. In 1965, national defense

expenditures accounted for 43 percent of the federal

government’s budget; social welfare expenditures

(social insurance, health, and public assistance)

accounted for 24 percent. While the mass media

focused on the war in Vietnam and Watergate, a

revolution in national policy from “guns to butter”

was occurring. By 1975, defense accounted for only

26 percent of the federal budget and social welfare

expenditures had grown to 42 percent of the budget.

Twenty years later, in 1995, social welfare expen-

ditures account for about 55 percent of the federal

budget. Health programs alone (primarily Medicaid

and Medicare) comprise about 18 percent of the

total budget. Only 18 percent of the 1995 budget is

devoted to national defense. Social welfare is clearly

the major function and major expenditure of the fed-

eral government.

DINITTO, DIANA M., SOCIAL WELFARE: POLITICS AND PUBLIC POLICY, 5th Ed., (c) 2000. Reprinted and electronically reproduced with

permission of Pearson Education, Inc., Upper Saddle River, New Jersey.

Chapter 246

The social component discerned by Titmuss corresponds to the “direct expenditure” approach utilized by OECD and U.S. government agencies to organize the spending data in Tables 2.3 and 2.4. As has been noted, they equate social welfare with the provision of a range of publicly sponsored goods and services—income support, health, social services, and the like. The occupational system, on the other hand, comprises the system of nongovernmental welfare associated with employment, chiefly the workplace benefit arrangements identified in Chapter 1. Fiscal welfare, finally, involves what is often described as the “hidden” portion of the welfare state. Specifically, it identifies those features of the tax system—deductions, exemptions, credits, and the like—that advance explicit social objectives.

According to Titmuss, all three welfare systems share a fundamental so- cial character and goal. That is, each constitutes an arena of collective inter- vention that aims at meeting individual and societal needs. Although many question the appropriateness of defining the welfare system in such extensive terms, today there is broad recognition among scholars and analysts, as well as among policymakers themselves, not only of the important role played by each of these separate arrangements in affecting citizens’ well-being but also of the varying ways in which each of the systems affect one another. There is also considerable evidence that until quite recently the scope of fiscal and oc- cupational welfare grew at least as rapidly as traditional social expenditures.

The Titmuss model illuminates the broad range of organized welfare and the artificiality of narrowly equating welfare with direct government outlays. For Titmuss, analyses of welfare that limit themselves to public outlays pres- ent distorted, and overly sanguine, views of the true character of the welfare state. One of the most obvious distortions can be seen in how the beneficia- ries of organized welfare activities are identified. Because workplace welfare generally mirrors employment status, its benefits are distributed in much the same ways as wages and salaries. That is, health, pension, and other perqui- sites of employment are first and foremost a function of job status. One must be employed, or related to someone who is employed, to receive them. And because their value generally increases with income, managerial and profes- sional workers are eligible for broader and more lucrative benefits than blue- collar or intermittently employed workers.

While occupational welfare is inversely related to need, it is nevertheless extremely important to a broad segment of the population. In the United States, where these benefits are particularly salient, job benefits make up 30 percent of the compensation for workers in manufacturing.17 In 2008, for example, 125 million workers and family members were covered by private, chiefly work- place, pension plans that provided $431 billion in benefits.18 Private firms also offer medical insurance for current workers and, often, their dependents, and also retirees. Many provide life insurance to employees’ dependents, wellness programs, adoption services, legal assistance, child and elder dependent care, and drug and alcohol counseling and treatment.

For Titmuss, occupational welfare constitutes a form of “collective interven- tion” because its scope and character reflect public policy. In other words, de- spite their nominal “private” character, job benefits are significantly influenced by government. Public policy in the form of special tax arrangements—notably the deductibility of employee benefit costs as a regular business expense—has been a powerful inducement for private employers to sponsor health and wel- fare programs. From the employees’ point of view, fringe benefits are also espe- cially advantageous, because benefits such as health insurance are not taxed,

The Modern Welfare State 47

whereas an equivalent cash payment—provided as salary—would be. Other employer-provided fringe benefits, such as pension contributions, are tax de- ferred until retirement, at which time they are subject to several tax advantages. Thus, although these benefits have a cash value that is the equivalent of wages in the employment contract, this cash value is substantially tax exempt. To the extent that these benefits escape taxation, they constitute government subsidies (“welfare,” it might be argued), in the same manner as other social provisions.

The chief idea of Titmuss’s third classification—fiscal welfare—is that the tax system itself serves as an important instrument of social policy, above and beyond its role as a source of revenue. Acting through a number of special tax measures, fiscal welfare advances welfare objectives in much the same fashion as direct spending. Federally financed public housing and housing allowances for the poor, clearly within the realm of direct social welfare, are akin to ben- efits derived from such fiscal measures as the income tax deduction for interest payments on home mortgages. Similarly, deductions and credits for charitable contributions, occupation-based health and pension plans, and childcare are substantially equivalent to direct subsidies. As Titmuss stated, the “tax saving that accrues to the individual is, in effect, a transfer payment. In their primary objectives and their effects on individual purchasing power, there are no dif- ferences. Both are manifestations of social policies in favor of identified groups in the population.”19

In an effort to quantify the value of such fiscal measures and increase pub- lic awareness of their importance, Stanley Surrey, a one-time U.S. Treasury Department official, invented the concept of “tax expenditure.” According to Surrey, these are “deviations” from the normal tax code that serve to affect the private economy in ways that normally are achieved by spending. Surrey estimated the value of these deviations, which were not counted in ordinary budget tabulations, to be about one-quarter of the regular federal budget.20 As a result of Surrey’s work, Congress in 1974 ordered an annual accounting of tax expenditures to accompany the regular federal budget.

The large number of people that benefit from tax expenditures, and the view that these provisions amount to a form of public subsidy, has led some analysts to claim that “everyone is on welfare.”21 For others, however, there are important differences between a system of fiscal measures such as tax expen- ditures and traditional social welfare. Irving Kristol, for example, challenges the view that these benefits are similar to direct social welfare provisions. To think of tax deductions as subsidies, he states, “implicitly asserts that all in- come covered by the general provisions of the tax law belongs of right to the gov- ernment, and what government decides, by exemption or qualification, not to collect in taxes constitutes a subsidy.”22 In other words, allowing citizens to keep money they earned that is spent or invested in ways that benefit the individual or society is not the moral or functional equivalent of taking money from those who can afford to pay taxes and distributing it as cash benefits to those in need.

Tax expenditures—loopholes, to their detractors—are, of course, different in many ways from direct spending. For one thing, like occupational welfare, they disproportionately benefit the better-off the most. Often described as up- side-down subsidies, they generally provide the greatest dollar value to those in the highest tax brackets. The deductibility of charitable contributions, for example, clearly helps voluntary hospitals, universities, and social services agencies, but it just as clearly reduces the tax liability of the rich far more than of ordinary taxpayers. Because the poor usually pay no federal income taxes at all, of course, they get no immediate benefit.

Chapter 248

Whereas tax expenditures can be portrayed as returning funds to the pri- vate sector, lessening public intrusion, and forgoing public income to promote private action—all conservative preferences—Titmuss is clearly correct in his contention that tax policies constitute critical elements in social policy. Although the overall distribution of these indirect outlays does not help the neediest, taxation remains a key instrument for implementing public aims. Fis- cal welfare and occupational welfare are analogous to regular spending, and all three systems must be assessed if one is to understand, or to affect, the nature of contemporary social welfare. Occupational, fiscal, and social welfare can each be assessed as a distinct phenomenon, but their interactions have a major bearing on the nature of the overall welfare system.

The occupational system, for example, frequently supplements public provisions, as with retirement pen- sions. In areas such as health insurance, it often pro- vides support where government action is absent. Of course, meeting social needs through the occupational system can discourage the development of public pol- icy to meet needs. Broadly available job-related health insurance, for example, has undoubtedly lessened pres- sures for government-provided universal health care. For Titmuss and others on the traditional left, occu- pational welfare—welfare principally for the middle classes and well-to-do—often undermines support for the mainline welfare state. Public provision is already a dubious public objective; an expanded occupational system, it is recognized, reduces the constituency for government efforts on behalf of the disadvantaged.

The provision of social welfare transfers through indi- rect tax expenditures, such as deductions for mortgage interest and exclusions on employee benefits, has grown dramatically in recent decades. Since 1970, for example, the number of tax expenditure items in the federal code increased by almost one-third, providing over one trillion dollars in tax breaks in 2010.23 In the area of income maintenance alone, the value of benefits funded through indirect outlays grew at a far faster rate than benefits financed through direct expenditures.

Regulatory Welfare

There is, as mentioned, a significant limitation in defining social welfare en- tirely in terms of concrete benefits—be they occupational or public; income, goods, or services; or funded through outlays or through tax arrangements. All such benefits ignore the importance of other, less tangible, forms of interven- tion. At all levels of government, public activities that enhance community well-being involve more than simply the allocation, directly or indirectly, of income or services.

Social welfare objectives, most immediately, are also advanced by the reg- ulatory powers of government. Regulatory powers, of course, have long been used to pursue health and safety goals in employment, day care, and housing and the licensing and certifying of residential facilities and hospitals. Today’s social regulation, far broader in scope, advances a variety of explicit social ob- jectives, many of which couldn’t otherwise be pursued because of budgetary restrictions.

Policy Practice

Practice Behavior Example: Social workers

analyze, formulate, and advocate for policies

that advance social well-being.

Critical Thinking Question: What are the advantages and disadvantages to including

occupational and fiscal welfare in measures of

a country’s welfare expenditures?

The Modern Welfare State 49

One such area of regulation imposes obligations on the private sector to help needy groups such as children and the handicapped, therefore reducing the need for direct public programs. Thus, for example, many state and local governments have enacted childcare ordinances affecting developers of com- mercial properties. In San Francisco, a typical instance, major developers must either provide on-site care for employees’ children or pay into a special fund to support centers throughout the city.24 At the state level, Massachusetts extended access to health care throughout the commonwealth by requiring private busi- nesses to provide medical insurance to all their employees. Other states require private insurance plans to cover a variety of populations and procedures. For example, employers may be obligated to extend insurance coverage to family dependents, such as newborns, as well as to disabled workers, those needing alcohol treatment, and those requiring home health care. California and other states prohibit insurance companies from denying coverage for the services of social workers, dentists, podiatrists, speech and hearing therapists, and profes- sional counselors and psychologists. In recent years, several states and munici- palities have required large employers (Walmart is often the specific target) to spend a portion of their personnel costs on health care.

Such mandated benefits—benefits by regulation—permit government to address social and health problems without having to spend money or raise taxes. Regulation, of course, is not without costs. The private sector pays in one fashion or another, either through higher insurance rates or higher con- sumer prices. Some regulations may even result in firms withdrawing benefits. It was often argued, for example, that state-mandated programs caused many small employers to drop employee health coverage altogether. In a similar vein, many contend that stringent rent control ordinances lead to a decreasing number of available rental units.

Social regulation also affects the realm of private life and families. In the 1980s, for example, a broad political consensus emerged in support of federal regulations to ensure fair child-support payments from absent parents. To increase payment levels and to enforce compliance with court-ordered child-support rulings, federal law strengthened the influence of government over family behavior. The 1984 Child Support Enforcement Amendments required states to establish procedures for withholding support payments from the wages of delinquent (i.e., nonpaying) parents. Later enactments required paternity determinations at birth and compelled states to establish and utilize uniform standards for child-support payments. Perhaps most important, the 1988 Family Support Act required states to withhold wages in cases in which court child-support orders were violated. Despite the rather elaborate structure of regulatory inducements and penalties, however, absent parents continue to shirk their obligations—at present only 30 percent of moms who are owed support actually receive it.25

One of the most interesting developments in public social regulation is represented by the “Living Wage” movement. Since 1994, when Baltimore en- acted the country’s first ordinance requiring private organizations contracting with the city to pay a “living wage,” nearly 150 municipalities and one state, Maryland, generally prompted by local grassroots alliances of labor, religious, and civic organizations, have similarly obligated businesses receiving public money to pay their workers decently. These laws often stipulate a wage level equivalent notably higher than the poverty line.

Such regulatory interventions can advance welfare state goals. Although someone winds up paying for each measure—be it employers, employees, or separated parents—such approaches substantially broaden the range of ways

Chapter 250

in which government can address problems. Regulatory substitutes for spend- ing programs, especially attractive in an era of fiscal constraint and tax and spending limits, are likely to expand in importance in the years ahead.

The Welfare State Today—Attack and Defense

The U.S. welfare state, from its inception in the 1930s, has always been a fiercely contested arena of American politics. This is not surprising, given the fact that judgments about what government should and shouldn’t do reflect deep-seated differences about what constitutes a good society. Conservatives, committed to the belief that society’s well-being is best advanced by private action and private institutions, have been resistant to the notion of substantial governmental responsibility for welfare. Progressives, as noted in Chapter 1, see government as a necessary instrument of social justice, a device to counter the selfishness and inequalities inherent in a free market economy.

The conservative resistance to the welfare state has both cultural and eco- nomic roots. Valuing individualism, the philosophy that prizes the pursuit of individual over collective interests, conservatives believe that opportunity and success are available to all. This is the traditional Horatio Alger rendition of “the American dream” where any child can grow up to be president, where those who work hard and play by the rules—whatever their class or race or gender—can advance and find personal and material success. Those who fail in life, it follows, fail largely because of irresponsibility, self-defeating behav- iors and attitudes, and a lack of proper morals.

The economic parallel to the ideology of individualism, laissez-faire capitalism, posits that society works best when people freely pursue their own economic self-interest. According to Adam Smith, and his conservative followers to this day, a system of private ownership and unregulated economic activity offers the financial incentives that are necessary for the hard work and risk taking that produces innovation and economic progress. A free and competitive economy, where government keeps out of the picture (i.e., laissez- faire), will produce more and better and cheaper products than any alternative economic system, will enlarge individual as well as community prosperity, and will ensure the greatest amount of choice and satisfaction for the greatest num- ber of people. The conservative columnist George Will, indeed, once called American free market capitalism “the most efficient anti-poverty machine the world has ever seen,” arguing that the entrepreneurial spirit most successfully creates new and improved technologies, high wages, and, ultimately, the eco- nomic growth and tax revenue necessary to support social welfare.26

Given these beliefs, it is not surprising that American conservatives are suspicious of the welfare state. When it comes to social policy, conservatives typically resist going beyond the minimum “safety net” necessary to prevent destitution and protect the social order. Some level of help for the “deserving poor” is viewed as legitimate, but not a welfare state, an approach that is seen as detrimental to society and the economy. For conservatives, the welfare state undermines personal responsibility, rewards dependency, impedes the market, and imposes excessive burdens of taxation and regulation. This was the ratio- nal in 1935 for opposing Social Security—people presumably wouldn’t plan for their own future if they were assured a retirement income—and it’s the rationale today for opposing health care, social services, and unemployment insurance extensions.

Government action, for example, is often seen as harmful to individual and family well-being. Former President Reagan, following the arguments

The Modern Welfare State 51

popularized by Charles Murray in his famous conservative manifesto, Losing Ground, argued that the social initiatives of the 1960s increased rather than decreased poverty rates. Government interventions are said to corrupt people by encouraging them to rely on public aid rather than fending for themselves.

This phenomenon is often described in terms of the concept of “moral hazard.” Social benefit programs, it’s argued, have unanticipated behavioral consequences. They help people in the short run, yes, but they also promote dependency. Providing TANF, or food stamps, or unemployment insurance makes it easier for people to get by, and presumably, easier to put off taking those actions that would raise them out of dependency. The point is clear: Welfare undermines self-reliance by subsidizing people to stay at home, to stay unemployed, and to stay unmarried.

The conservative critique of welfare has become all the more potent in re- cent years as economic and demographic trends increase welfare costs while restraining welfare resources. Most notably, society is aging (i.e., average age is increasing) and a larger and larger portion of the population is collecting retire- ment benefits just as a smaller and smaller portion are in the workforce paying taxes. The global recession that began in 2008, in addition, has dramatized the growing gap between what is affordable and what has been promised. Given the statutory commitments that have been made to the elderly via Social Security and Medicaid and to the poor through Medicare, the price tag of the welfare state is appearing to more and more people as a dire threat to the overall economy.

The welfare state, despite these many elements in the American experi- ence that seemingly work against it, has become over the past seventy-five years a vital component in the social and economic fabric of America. And this is largely because a good portion of American citizens continue to believe in a vision —described as the progressive perspective in Chapter 2—that values public actions that advance economic security and arrangements that protect the most vulnerable members of the community. This orientation sees social action, not individual action, as the key component of a society’s well-being, and the necessary counterweight to the divisiveness and selfishness and inse- curity that is inherent in unchecked self-advancement.

For progressives, the ideal of the American Dream has always been an insufficient philosophy for public policy. They note that while many find opportunities to succeed in life, others are disadvantaged from the start: born in the wrong ZIP code, raised neglected and impoverished, attending failing schools, unable to secure a reasonable livelihood. Life frequently isn’t fair in the sense that many of the fundamental material and cultural givens in society aren’t equally distributed. These advantages and disadvantages, for the most part unearned advantages and disadvantages, shape the chances of most people from the very beginning of life affecting their health, their education, and their economic possibilities. From this perspective, the poor are poor, for example, not because they have the wrong values, but because they have the

Capsule 2.5 Bathtub Politics

I’m not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub. Grover Norquist, Founder and President, Americans for Tax Reform, 2004, quoted in his Wikipedia biography.

Chapter 252

misfortune of experiencing an inadequate educational system, mental illness, disorganized family life, and other hardships.

Thus, the rationale for the welfare state. While acknowledging the ability of capitalism to create material wealth and economic growth, unfettered markets can sacrifice fairness. The goal of social and economic justice, then, requires government to serve as a counterbalance to the marketplace, to regulate capi- talism, and to ensure minimum standards of health and well-being. Whereas conservatives try to limit the boundaries of the welfare state, progressives have historically advanced government interventions. While the right calls for per- sonal responsibility, work, and moral obligations, the left calls for basic social guarantees. While the right advocates small government and residual services, the left argues for an institutional model of the welfare state: high quality and universal services, generous benefit levels, and the elimination of the stigma attached to public programs.

This clash of perspectives between conservatives and progressives provides the context of today’s welfare state. The American welfare state over seventy- five years has evolved as a pragmatic compromise between individualism and free markets valued by the right and the egalitarianism valued by progressives. And it is this compromise that is very much under attack today. For contrary to past eras of economic turmoil, most people today are not calling on government for new protections and programs. And the recession of 2008 certainly hasn’t re- sulted in any effective political counterweight to capitalist excesses. Despite the Occupy Movement, the only populist movement that has developed true politi- cal clout has been the virulently anti-government anti-debt Tea Party movement. In a recent Gallup poll, 55 percent of Americans said it was big government that was the biggest threat to the country. Just 32 percent said it was big business.27

EMERGING ISSUES: THE NEW SOCIAL ACCOUNTING AND ITS IMPLICATIONS

Social welfare is pluralistic and multifaceted, involving major institutional sec- tors, governmental levels, and societal realms organizing help to people through a complex enterprise of formal and informal, profit-making and altruistic, and private and public endeavors. It is only recently, however, that efforts have been made to quantify the total welfare contributions of all these sectors of society. While government social welfare spending (as shown in Tables 2.3 and 2.4) is still widely employed by policy analysts, researchers, and journalists as the con- ventional measure of the generosity of welfare states, the limitations and distor- tions of this approach to social accounting are increasingly being recognized.

The most fundamental limitation is the equation of welfare and government spending. Quantifying a nation’s welfare effort as total public social welfare spending as a percent of GDP—while a convenient and commonly employed measure of the “welfare effort,” the generosity, of welfare states—is not the only measure that can be used. Over the last decade, indeed, it has become increas- ingly evident that this standard of social accounting provides a deeply flawed, deeply distorted view of a country’s actual efforts to provide social welfare.

As we have explained, in addition to the checks written directly by gov- ernment, a comprehensive measure of a nation’s “welfare generosity” should include other sources of spending that promote individual and family wel- fare. Consider, for example, the hypothetical case of Edith and Alva, citizens of Americana and Nordica, respectively. At the end of the year, they both owe

Quantifying a nation’s welfare effort as total public social welfare spending as a percent of GDP provides a distorted view of actual efforts to provide social welfare.

The Modern Welfare State 53

their governments $9000 in income taxes. Alva pays her taxes and then re- ceives a childcare grant in the form of a $1000 check from the government. Edith’s government gives her a $1000 childcare tax credit, which reduces the taxes she pays by this amount. Which country is more generous in providing social benefits? Which is making the greater “welfare effort?”

By the conventional measure of direct expenditures, Nordica is $1000 higher on the generosity scale than Americana, which gives the equivalent childcare subsidy through a special tax deduction. But tax expenditures like these are not the only measures that need to be weighed into a comprehensive calculation of welfare effort. Taxes also count. What if Alva’s $1000 government subsidy was included as part of her annual income and taxed at a rate of 30 percent, while Edith’s subsidy was tax free? On the scale of direct expenditures, Nordica still rates $1000 higher on generosity and welfare effort, although at the end of the day, Edith ends up with more money in her pocket to pay for child- care. In addition to income taxes, there are considerations of sales and value- added taxes, which also reduce the amount of cash subsidies that beneficiaries actually consume on goods and services. In this way, many governments “claw back” significant portions of the social benefits they offer by taxing them.

Beyond spending and taxing, as already noted, governments can also create and manage social expenditures through their powers of regulation. Thus, for example, if Edith received neither a cash grant nor a tax credit for childcare, but her employer was legislatively mandated to provide employ- ees $1500 worth of childcare services annually, she would receive subsidized childcare valued at more than twice the amount of Alva’s childcare grant after direct taxes. Yet Nordica would still appear to offer a more generous child- care benefit, since the value of mandatory private benefits does not show up on the conventional ledger of direct public expenditures. Mandatory private social benefits, in fact, have been enacted in many countries such as Belgium, Denmark, the Netherlands, Germany, Sweden, Norway, the United Kingdom, and the United States. These off-the-ledger arrangements for social protection usually include employer payments for absence from work due to sickness and maternity leave as well as required pension contributions to employer-based or individual pension plans.

Finally, a full accounting of social expenditures should include social trans- fers from private sources. Thus, voluntary private social benefits form another component in the comprehensive measure of welfare effort. From an individ- ual recipient’s point of view, it does not much matter whether, for example, in Edith’s case, her employer is required by law to provide childcare or whether this benefit is granted voluntarily. Voluntary provisions, of course, are fre- quently allocated by private nonprofit organizations (whose philanthropy is stimulated by government tax concessions, as we will discuss in Chapter 7).

By the mid-1990s, as data on the various sources of social spending became available, researchers at the OECD developed a comprehensive new ledger for social accounting.28 As illustrated in Table 2.5, this ledger allows us to compare how countries measure up both on the conventional scale (public social spending as a percent of GDP) and on the new measure, “net total social expenditure,” which incorporates the cumulative value of benefits distributed through direct public expenditures, tax expenditures, publicly mandated private expenditures, and voluntary private expenditures.

This comparison shows how introducing a new method of social account- ing significantly changes the national ranking on social expenditures. Mea- sured by total public spending as a percent of GDP, Denmark stands second in

Chapter 254

welfare effort, Germany is fourth, and the United States, at twentieth, comes in close to the bottom of the list. But ranked on the most comprehensive measure of social spending—net social spending—Germany jumps to number one, the United States moves up to sixth place, and Denmark moves down to seventh. Calculating by the new social accounting, European countries and the United States allocate roughly equivalent proportions of their resources to social wel- fare transfers, but in different ways.

Ranking countries on their social expenditure in relation to the percent of their GDP is only one type of measurement for comparing how states seek to provide for social welfare. It comes from a perspective that ignores population size and wealth, which makes the meaning of comparative state efforts difficult to interpret. Consider, for example, country X, which has the same size popula- tion but three times the GDP of country Y. If country X spends twice as much on social welfare as country Y, each of its citizens is on average receiving twice the amount of social benefits as in country Y; yet country X will be ranked lower in social expenditures as a percent of GDP. What does this mean? Is country X

Table 2.5 Two Ways of Measuring Social Expenditures in 23 OECD Countries, 2001

Country

The Conventional

Accounting—Public Social

Spending as Percentage

of GDP

Rank

Order

The New Social

Accounting—Net Social

Spending as Percentage

of GDP

Rank

Order

Sweden 29.8 1 26.0 3

Denmark 29.2 2 22.5 7

France 28.5 3 27.0 2

Germany 27.4 4 27.6 1

Austria 26.0 5 21.8 10

Finland 24.8 6 20.0 15

Belgium 24.7 7 23.2 5

Italy 24.4 8 21.9 9

Norway 23.9 9 20.9 12

United Kingdom 21.8 10 23.3 4

Netherlands 21.4 11 22.1 8

Czech Republic 20.1 12 18.5 16

Iceland 19.8 13 18.4 17

Spain 19.6 14 17.0 18

New Zealand 18.5 15 15.9 20

Australia 18.0 16 21.1 11

Slovak Republic 17.9 17 16.7 19

Canada 17.8 18 20.3 13

Japan 16.9 19 20.2 14

United States 14.7 20 23.1 6 Ireland 13.8 21 12.5 21

Korea 6.1 22 10.0 22

Mexico 5.1 23 6.2 23

Source: Data on social expenditure as percent of GDP are from Willem Adema and Maxime Ladaique, Net Social Expenditure, 2005

edition, OECD Social, Employment and Migration Working Papers # 29 (Paris: OECD) annex 3.

The Modern Welfare State 55

making less of a social welfare effort than country Y? Is it less active in promot- ing social expenditure than country Y? That interpretation can be made only if one assumes that state action in the realm of social welfare should be pro- portionately equivalent regardless of population size and wealth. It is unlikely that citizens in country X seeking to maximize their social benefits will flock to country Y because it has a higher social welfare expenditure ranking.

This suggests yet another way of comparing social expenditure—in terms of per capita spending. For an accurate comparison, the per capita spending is controlled for purchasing power of different currencies. When social expen- diture is calculated on the scale of per capita spending, as seen in Table 2.6, some of the countries’ ranks are quite different from where they stand based on expenditures as a percent of GDP. While Sweden remains ranked third in both net social expenditure and per capita spending, the United States climbs from sixth to first when the metric shifts to per capita spending.

But even if there were agreement on which metric of social accounting provides the most meaningful measure for comparing welfare state spending,

Table 2.6 Rank of 23 OECD Countries on Net Social Expenditure per Capita, Adjusted for Purchasing Power Parity (PPP), 2001

Country

Net Social Spending per

Capita in PPP Order

Norway 2

Denmark 8

Sweden 3

Austria 10

France 4

Belgium 7

Germany 5

Finland 13

Netherlands 9

United Kingdom 6

Italy 15

United States 1

Canada 11

Australia 12

Ireland 16

Spain 17

Japan 14

New Zealand 18

Czech Republic 19

Slovak Republic 20

Korea 21

Mexico 22

Iceland N.A.

Source: Neil Gilbert, “Comparative Analysis of Stateness and State Action: What Can We Learn From Alternative Measures?” Paper

presented at the Conference on the Occasion of the German EU Presidency, jointly organized by the Social Science Research Center,

Berlin and the European Foundation for the Improvement of Living and Working Conditions, Dublin, May 7–8, 2007, Berlin, Germany.

Chapter 256

what do these positions in ranking and monetary sums really tell us? Citing the conventional OECD measure, for example, an editorial in the New York Times claims the data show that where social spending is concerned the United States is “almost the stingiest among industrial nations.”29 The edito- rial goes on to suggest that “long a moral outrage, this tightfisted approach to public needs is becoming an economic hardship.”

However, despite frequent claims such as these, it is difficult, if not impossible, to draw logical implications about the level of generosity or “welfare effort” of different countries based on either the conventional measure of spending as a percent of GDP or the alternative measure of per capita spending. Interpretations of these comparative measures that claim they reflect levels of generosity or welfare effort are based on a normative assumption regarding welfare expenditures, which is “the more the better.” This assumption bears closer examination. It is indifferent to the varying degrees of social and material need in different countries.

Thus, for example, in 2005, the U.S. unemployment rate was about 30 per- cent lower than the six country average rate for France, Italy, Norway, Sweden, Finland, and Germany.30 The higher level of social expenditure as a percent of GDP in these six countries a sign of more generosity and greater welfare effort or just a function of the costs required to compensate for significantly higher rates of unemployment? Similarly, 20 percent of the Dutch labor force was out on disability or sick leave in the early 1990s, a rate considerably higher than other OECD countries. Did the high level of social expenditure in the Neth- erlands at that time signify an authentically higher incidence of disability, a more permissive climate, or, as an OECD study found, a disincentive to work created by a high replacement rate (up to 70 percent of the last gross wage)?31

Thus, although the new social accounting has refined the analytic lens for measuring expenditures and sharpened our understanding how much of a country’s resources are devoted to social welfare—as either a percent of GDP or per capita—interpretations of what such spending represents in a compara- tive perspective remain dubious. Advancing the scientific interpretation of comparative welfare state spending requires enlarging the accounting frame- work to incorporate variables that adjust spending for social needs.32

SUMMARY

This chapter provides an overview of the modern welfare state as the embodi- ment of government social protection. It describes the evolution of the welfare state in stages: inception, growth, maturation, transformation, and duress. The growth of the modern welfare state has been theorized from conservative and progressive perspectives. Some view it as a benign response to social need, oth- ers as a safety valve against social unrest, still others as a major threat to contin- ued economic prosperity in the rich countries of the world. Differences between European and U.S. welfare states have given rise to theories of American exceptionalism. The goals of the welfare state are economic security, material sufficiency, and basic services, though the scope of how these goals are car- ried out is complex. While welfare state generosity can be measured by direct governmental social spending relative to GDP, this can understate the actual degree of welfare generosity since it excludes tax expenditures, occupational benefits, and the effects of social regulation.

57

1. Where the welfare state was born:

a. Germany

b. France

c. United States

d. Sweden

2. According to Asa Briggs, the essence of the welfare state is:

a. A mix of government and private activities that in- crease social well-being.

b. High rates of taxation.

c. Charitable and religious activities to help those who cannot manage on their own.

d. Governmental activities that modify the play of the market to help those who cannot manage on their

own.

3. Declared a “War on Poverty”:

a. President John Kennedy

b. President Lyndon Johnson

c. President Bill Clinton

d. President Barack Obama

4. Why is Social Security considered an instrument of mid- dle-class well-being?

a. It comprises a small amount of government spending compared with public assistance and food stamps.

b. It is a program that provides income only for people earning above the median income.

c. It is a network of medical and income entitlements for middle-class families over their lifetime.

d. It is a program that supports the medical and prescrip- tion drug costs of upper-income single mothers.

5. Which program would be considered residual, according to Richard Titmuss’s typology?

a. Individual Retirement Accounts (IRAs)

b. Individual tax ependitures

c. Social Security Disability Insurance (SSDI)

d. It ignores the impact of tax expenditures.

6. One major limitation of using government social welfare spending alone to measure welfare state generosity:

a. It ignores the impact of tax expenditures.

b. It ignores income earned through social assistance programs.

c. It disregards interested earned on savings and other accounts.

d. It fails to consider military spending as a function of social welfare.

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

C H A P T E R 2 R E V I E W

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Succeed with

7. How much responsibility should government have providing social welfare vis-à-vis the family and market, and why?

58

Watch and Review

Watch These Videos

Rev. Martin Luther King Jr.’s Speech

Great Contradictions of the Twentieth Century

Working Mothers

Responding to the Great Depression: Whose New Deal?

Read and Review

Read These Cases/Documents

Frances Perkins and the Social Security Act (1935, 1960)

Lyndon B. Johnson, The War on Poverty (1964)

Meridel Le Sueur, Women on the Breadlines (1932)

Franklin Roosevelt’s Radio Address Unveiling the Second Half of the New Deal (1936)

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Interactive Case Study: Evaluating Federal Spending and Economic Policy

Interactive Case Study: Comparing Social Welfare Systems

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59

Competencies in This Chapter (with Practice Behaviors) Professional

Identity Ethical

Practice Critical

Thinking Diversity in

Practice Human Rights

& Justice

Research-Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

A Framework for Social Welfare Policy Analysis

3

x

x

x

x

C H A P T E R O U T L I N E

Benefit Allocations in the Social Market and the Mixed Economy of Welfare 61

Elements of an Analytic Framework: Dimensions of Choice 65 Choices Regarding Allocations and Provisions Choices Regarding Delivery and Finance

An Example: The Transformation of the Social Services 68

Application of the Framework 72

Social Justice in Public Assistance 73 Equality Equity Adequacy

Conservative and Progressive Values in Public Assistance 80

Theories, Assumptions, and Social Choice 82

Emerging Issues: The Search for Equity 85

Summary 88

Practice Test 89

MySearchLab Connections 90

Chapter 360

Even when armed with this much greater scientific knowledge, contemporary

societies will, of course, face difficult choices between simultaneously held

but competing values or objectives. . . . The precise balance between ade-

quacy and equity in the determination of social insurance benefits, between

equal access to minimum security and retention of the principle of local au-

tonomy, between the interests of different social classes in allocating the costs

of social security measures, or between the claims of family obligation and

responsibilities to the wider community illustrate the nature of these ultimate

and difficult value choices. Yet while there is no guarantee that democracies

will act rationally in formulating their social policies, it is also abundantly clear

that they cannot even be expected to do so unless they are made aware of the

full implications of the choices available to them.

Eveline M. Burns

Social Security and Public Policy, NY: McGraw-Hill, 1956.

Traditionally, courses in social welfare policy have emphasized the study of process and performance. In courses organized around process, stu- dents have learned about social, political, and technical processes in policy formulation, and in courses organized around performance they have learned about the details of social welfare programs in operation. A major advantage of the study of performance is its focus on factual and substantive material: it describes and evaluates programs. Here, too, lies its major shortcoming: The substance of social welfare programs is continually changing. Moreover, these programs are so numerous that one or two courses can cover only a segment of the field. Under the Title XX Amendments to the Social Security Act alone, for example, states offer more than 20 different categories of service (see Table 3.1).

As indicated in Chapter 1, a third approach to the study of this field is to focus on the set of fundamental social policy choices that have to be ad- dressed in planning the welfare state. From this perspective the analytic task is to distinguish among and to dissect the essential components of policy de- sign rather than to examine the sociopolitical processes through which policy

Table 3.1 Title XX Social Service Categories

Adoption Services Housing Services

Case Management Independent/Transitional Living Services

Congregate Meals Information and Referral

Counseling Services Legal Services

Day Care (Adults) Pregnancy and Parenting

Day Care (Children) Prevention/Intervention (At-Risk Families)

Education and Training Services Protective Services (Adult)

Employment Services Protective Services (Child)

Family Planning Services Recreational Services

Foster Care Services (Adults) Residential Treatment

Foster Care Services (Children) Special Services (Disabled)

Health-Related Services Special Services (Youth)

Home-Based Services Substance Abuse Services

Home-Delivered Meals Transportation

A Framework for Social Welfare Policy Analysis 61

is developed or to evaluate policy outcomes. The basic components of policy design to which this task is addressed may be seen as dimensions of choice. In this chapter, we present a framework for analyzing basic choices in the design of social welfare policy.

With this analytic approach, we will use program descriptions as examples to formulate and substantiate general concepts of policy design. Because we are mainly interested in illustrating the concepts that are useful in the analysis of social welfare policy, rather than in understanding the details of specific programs, there will be a certain eclecticism in the selection of these examples; we include large and small programs, pieces of programs, existing programs, and proposed programs, some of which may never leave the drawing boards and others that have not yet arrived on the public agenda.

As Eveline Burns has suggested, the major advantage of this approach is that it equips students with a convenient set of concepts that can usefully explain and illuminate a wide range of policies.1 The broad application of our analytic framework is conveyed through the use of historical examples, such as the War on Poverty and Model Cities Programs of the 1960s, the Older Americans Act, and the Seattle and Denver Income Maintenance Ex- periments of the 1970s, along with the more recent developments in welfare reform under the Personal Responsibility and Work Opportunity Reconcilia- tion Act of 1996.

An analytic framework is an intellectual tool that helps to order reality by culling and distilling the essential elements of complex phenomena. Before elaborating the analytic framework around which this book is organized, let us say a few words about the general character of social welfare policy—our conceptual foundation on which the framework is constructed.

BENEFIT ALLOCATIONS IN THE SOCIAL MARKET AND THE MIXED ECONOMY OF WELFARE

In trying to construct an analytic framework that will help us understand the vast array of social welfare measures ranging from the Social Security Act of 1935 to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, we must grapple with the question: What are the common elements in social welfare policies? There is no single answer to this question with which everyone engaged in policy analysis will agree. Obviously, the appar- ent commonalities in the design of social welfare policy vary according to the level of abstraction on which the analysis is conducted. In this respect, an analytic framework is somewhat like a microscope; it provides a conceptual lens through which the phenomena under investigation may be studied. Like a microscope, most analytic frameworks do not have a wide depth of focus. Rather, they tend to lock on some level of abstraction that magnifies and draws our attention to a distinct set of concepts. The analytic framework we use in this book places social welfare policy in the context of a benefit- allocation mechanism functioning outside the economic marketplace. As Marshall has observed,

In contrast to the economic process, it is a fundamental principle of the Welfare State that the market value of an individual cannot be the mea- sure of his right to welfare. The central function of welfare, in fact, is to

Chapter 362

supersede the market by taking goods and services out of it, or in some way to control and modify its operations so as to produce a result which it would not have produced itself.2

To say that social welfare allocations are made outside the economic mar- ketplace offers a rather nebulous picture of the conceptual domain within which social welfare policy operates. To clarify this domain we must draw a distinction between social and economic markets. This distinction rests on the principles and motives that guide the allocation of provisions. The social market of the welfare state allocates goods and services primarily in response to financial need, dependency, altruistic sentiments, social obligations, chari- table motives, and the wish for communal security. In contrast, benefits in a capitalist society are distributed through the economic market, ideally on the basis of individual initiative, ability, productivity, and a desire for profit.3 As illustrated in Figure 3.1, the social market contains both a public and a private sector. The public sector encompasses federal, state, and local govern- ments and accounts for the largest portion of goods and services distributed in the welfare state. Provisions allocated through the private sector of the so- cial market include the informal efforts of family and friends, the services provided by voluntary agencies and, occasionally, by profit-oriented agencies. The last overlap with the activities of the economic market, which to some extent blurs the boundary between the private social welfare sector and the economic market.

The allocation of provisions in the social market involves both the fi- nancing and the delivery of benefits, and these roles are not always per- formed by the same unit. A public agency, for example, can hire its own staff to provide daycare services for low-income mothers, or, through purchase- of-service arrangements, it may pay to have the service provided by a vol- untary agency, by a profit-making enterprise, or by members of the client’s family. In this manner the roles of public, voluntary, profit-oriented, and informal units are variously combined. The resulting variety in the modes of benefit allocations constitutes what is commonly referred to as the mixed economy of welfare.

Although profit-oriented agencies and organizations still constitute only a small segment of the social market, their numbers have been growing since the mid-1960s. In the 1980s and 1990s, proposals for the expansion of profit- oriented enterprises in the social market gained serious consideration. Even a voice from the left such as Robert Reich advanced a scheme for government

Figure 3.1 Social and Economic Markets of Welfare.

A Framework for Social Welfare Policy Analysis 63

and business partnerships aimed at integrating social welfare and economic development. Under this arrangement, Reich says, “We can expect that a sig- nificant part of the present welfare system will be replaced by government grants to businesses that agree to hire the chronically unemployed.”4 Public funds for social services such as day care, healthcare, and disability benefits would be allocated to businesses, eliminating the need for government admin- istration. Joined in this way to business institutions, social welfare provisions serve an important purpose by contributing to the formation of human capital. Herein lies what is certainly the strongest attraction of such alliances—they confer on welfare activities the legitimacy and value of a productive force promoting growth in the market economy. In 1998 Anthony Giddens coined the phrase “social investment state” to describe this development.5 By 2012, there was general agreement that the welfare states which emerged after World War II were undergoing a paradigm shift, converging on a social investment agenda. As Adalbert Evers and Anne- Marie Guillemard conclude, “regardless of the phrases used—the “social investment state (Jenson), the enabling state (Gilbert), or the active welfare state (Lister)—the welfare state is being remolded and the founding princi- ples of the post-war arrangement are being transformed”.6 Inserting profit-oriented agencies into the welfare state and emphasizing the formation of human capital and pro- ductivity imbues the social market with the spirit of capi- talism and inclines the modus operandi of social welfare allocations toward that of the market economy.

At present, proprietary agencies and institutions are prominently represented in many health and social service areas, including home support services such as attendant care, transportation, meals-on-wheels, childcare, and job training.7 One conspicuous area of growth has been in nurs- ing home care. Whereas about one-half of nursing home costs are paid with public (mainly Medicaid) funds, over three-quarters of all nursing homes are operated on a for-profit basis.8 As noted, this service area is typically referred to as the nursing home “industry.”

For many, of course, mixing welfare services with the market economy runs counter to the communal and charitable ethos that typifies the human- istic character of social welfare. The merger of welfare programs and private enterprise assumes a harmony among social and economic purposes that is far from self-evident. Reward for merit and productivity is hardly consonant with support for benefits based on need and dependency. A system that encourages risk taking for financial gain is unlikely to invest serious effort in the pursuit of equality and security. The fundamental issue is how a capitalist society deals with conflicting objectives such as meeting need versus rewarding merit, pro- moting freedom versus providing security, and providing equality of opportu- nity versus ensuring equality of outcome.

The functioning of the social and economic markets in industrialized capi- talist societies is based on a complex relationship between individual ambi- tions and collective responsibilities, a relationship that is filled with tensions and contradictions. Marshall suggests that these tensions help maintain a con- structive balance between charitable and profit-making impulses (or need and merit) and so contribute to a healthy society.9 It is difficult to imagine that such a balance might be improved by an influx of profit-oriented agencies to com- mercialize the social market.

Critical Thinking

Practice Behavior Example: Social workers

distinguish, appraise, and integrate multiple

sources of knowledge, including research-

based knowledge, and practice wisdom.

Critical Thinking Question: What are the costs and benefits of for-profit agencies delivering

social welfare services?

The fundamental issue is how a capitalist society deals with conflicting objectives such as meeting need versus rewarding merit, promoting freedom versus providing security, and providing equality of opportunity versus ensuring equality of outcome.

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Some analysts argue that because social welfare policies entail benefit al- locations outside the market, they provide for unilateral exchange or “social transfers” (from society to the individual) rather than reciprocal or “market exchange” (from buyer to seller).10 Although we will analyze social policies as unilateral designs for allocating benefits that are usually free or well sub- sidized, it should be recognized that those on the receiving end often incur stringent obligations. As Zald points out, “Although many welfare recipients may not pay money for the service that they receive, they may pay much more: gratitude, political acquiescence, and the like. Thus the lack of reciprocity de- pends on specification of coin.”11

Indeed, since the 1990s, a new emphasis has emerged focusing on the responsibilities associated with citizen claims to social benefits. In public discourse on social policy, a central question has been, If social benefits consti- tute the rights of citizenship, what responsibilities accompany these rights?12 Lawrence Mead’s analysis of the social obligations of citizenship opened the debate about how to weigh citizens’ rights to public aid against the obliga- tions to perform as dependable members of the community.13 According to Mead, the entitlement to benefits should be conditioned on the performance of appropriate behaviors, such as working in available jobs, contributing to the support of their families, learning enough in school to be employable, and respecting the law.

Capsule 3.1 Rights, Responsibilities, and the Communitarian Perspective

American men, women, and children are mem-bers of many communities—families; neighbor- hoods; innumerable social, religious, ethnic, work

place, and professional associations; and the body

politic itself. Neither human existence nor individual

liberty can be sustained for long outside the interde-

pendent and overlapping communities to which all

of us belong. Nor can any community long survive

unless its members dedicate some of their attention,

energy, and resources to shared projects. The exclu-

sive pursuit of private interest erodes the network of

social environments on which we all depend, and is

destructive to our shared experiment in democratic

self-government. For these reasons, we hold that the

rights of individuals cannot long be preserved with-

out a communitarian perspective.

A communitarian perspective recognizes both

individual human dignity and the social dimension

of human existence.

A communitarian perspective recognizes that the

preservation of individual liberty depends on the ac-

tive maintenance of the institutions of civil society

where citizens learn respect for others as well as

self-respect; where we acquire a lively sense of our

personal and civic responsibilities, along with an ap-

preciation of our own rights and the rights of others;

where we develop the skills of self-government as

well as the habit of governing ourselves, and learn to

serve others—not just self.

A communitarian perspective recognizes that

communities and polities, too, have obligations—

including the duty to be responsive to their members

and to foster participation and deliberation in social

and political life.

A communitarian perspective does not dictate

particular policies; rather it mandates attention

to what is often ignored in contemporary policy

debates: the social side of human nature; the

responsibilities that must be borne by citizens,

individually and collectively, in a regime of rights;

the fragile ecology of families and their support-

ing communities; the ripple effects and long-term

consequences of present decisions. The political

views of the signers of this statement differ widely.

We are united, however, in our conviction that a

communitarian perspective must be brought to

bear on the great moral, legal, and social issues of

our time.

“Preamble” from Communitarian Platform. Used by permission of the Institute for Communitarian Policy Studies.

The overall rise in federal expenditures can be seen as a quantitative backdrop to a significant qualitative transformation.

A Framework for Social Welfare Policy Analysis 65

ELEMENTS OF AN ANALYTIC FRAMEWORK: DIMENSIONS OF CHOICE

Although entitlements to welfare are increasingly being joined to individual responsibilities, benefits remain social transfers allocated outside the economic marketplace. Within the benefit-allocation framework, social welfare policies can be interpreted as choices among principles determining what benefits are offered, to whom they are offered, how they are delivered, and how they are financed. The elements of this framework, of course, are not physical structures of the sort a microscope might reveal. Rather, they are social constructs that are used in the intellectual processes of making choices. The major dimensions of choice in this framework may be expressed in the form of four questions:

1. What are the bases of social allocations?

2. What are the types of social provisions to be allocated?

3. What are the strategies for the delivery of these provisions?

4. What are the ways to finance these provisions?

A few words are in order about the genesis of this approach. Eveline Burns utilized this general framework in her seminal study, Social Security and Pub- lic Policy, focusing on four types of decisions that informed program design in the realm of social security: (1) those related to the nature and amount of ben- efits; (2) those concerned with eligibility and the types of risks to be covered; (3) those regarding the means of finance; and (4) those relevant to the structure and character of administration. Our analytic approach in this book seeks to extend the pathways of policy anal- ysis charted by Burns and others.14 These dimensions of choice cut across the entire field of social welfare policy rather than simply delineating choices specific to a single program sector.

We treat the bases of social allocations, types of social provisions, strategies of delivery, and modes of finance as “dimensions” of choice because each will be examined along three axes: (1) the range of alternatives within each dimension, (2) the social values that support them, and (3) the theories or assumptions that underlie them. This framework is illustrated in Figure 3.2.

Figure 3.2 Dimensions of Choice.

Engage, Assess, Intervene, Evaluate

Practice Behavior Example: Social work-

ers substantively and effectively prepare for

action with individuals, families, groups,

organizations, and communities.

Critical Thinking Question: How do social, political, or economic forces influence the

policy choices that comprise the analytic

framework?

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Choices Regarding Allocations and Provisions

The first two dimensions of choice are expressed in the question, Who gets what? The bases of social allocations address the “who” of social welfare policy.

Social welfare policies always include some designation of beneficia- ries, those whose welfare is to be enhanced through policy implementation. Although these policies are supposed to serve the abstract interests of soci- ety as a whole (the elusive “public interest”) direct and immediate benefits are usually distributed differentially among segments of the population. So- cial welfare policies, of course, cannot help everybody equally. Choices are required, and they are continually made as trade-offs among what policy plan- ners think is desirable, what circumstances necessitate, and what the public will countenance.

Numerous criteria are used to determine who is eligible for social provi- sions. These criteria include marital status, employment status, residence, family size, health, age, education, military service, ethnicity, gender, reli- gion, and income. Our concern in examining the bases of social allocations, however, is not to catalog the many possibilities that may be employed to define eligibility. Rather, the issues of choice we address focus on a set of general principles that inform the design of eligibility criteria. The bases of social allocations refer to the choices among the various principles upon which social provisions are made accessible to particular people and groups in society.

The bases of social allocations are the guidelines for the operational defi- nition of eligibility criteria. What benefits people become eligible to receive involves policy choices about the nature of the social provision. In policy analysis the traditional choice has been whether benefits are offered in cash (money) or in-kind (goods or services). There are, however, other types of ben- efits that are commonly distributed through social policy, such as vouchers, power, and opportunities that permit different degrees of consumer sover- eignty than the in-cash/in-kind dichotomy. In Chapter 5, we analyze the range of alternatives in this dimension of choice. Our objective is to distinguish the various forms of social provision and their implications for consumers of so- cial welfare benefits. Thus questions about the nature of social provisions refer to the kinds of benefits that are delivered.

Choices Regarding Delivery and Finance

The third dimension of choice addresses alternative strategies for delivering social provisions. Here the choices are not about “who” and “what,” but rather about “how.” That is, after decisions about the “who” and “what” of policy are resolved, arrangements must be made for getting the provisions selected to the eligible consumers. The ways delivery systems are designed to achieve this objective are of crucial significance to the first two dimensions of choice because it is through the delivery mechanism that policy guidelines regarding eligibility and the nature of provision are operationally expressed. Broadly speaking, benefit delivery strategies refer to the alternative organizational ar- rangements among providers and consumers of social welfare benefits in the context of local community systems (i.e., neighborhood, city, and county), the level at which the overwhelming majority of providers and consumers come together.

A Framework for Social Welfare Policy Analysis 67

Consider, for example, a proposal for new job counseling services. Should they be centrally located in a downtown facility or dispersed in small neigh- borhood units? Should counselors be trained professionals or local residents? Should the services be offered if they duplicate similar services that already exist? Should they be incorporated under a unified administrative umbrella that includes related education and transportation services? Should the ser- vices be provided by a government agency, a nonprofit organization, or a profit- making organization? These choices all influence who gets served and the type of benefits they receive, policies about the nature of provisions and bases of allocations notwithstanding.

In examining the design of delivery systems, one usually discusses strate- gies to enhance the flow of services from providers to consumers, a point to which much of the literature in this area is addressed. Since the federal social service reductions of the 1980s, however, increasing attention has been given to strategies for rationing services and for contracting publicly funded activities to private agencies. When we examine this dimension of choice in Chapter 6, we will analyze strategies for facilitating service delivery, as well as consider- ations of public versus private auspices.

If social welfare policies are viewed as benefit-allocation mechanisms functioning outside the marketplace, choices must also be made concerning the sources and types of financing. It is important to recognize the distinction between funding benefits and delivering them. To clarify where funding ends and delivery begins, it is helpful to think in terms of a simple flow chart. Fund- ing choices involve questions concerning the source of funds and the fashion in which funds flow from the point of origin to the point of provision. Delivery choices involve the organizational arrangements that move social provisions, either in cash or other forms, from providers to consumers.

Some of the major financing alternatives concern whether money is de- rived from public, private, or mixed sources; the level of government involved; and the types of taxes levied. Financing also involves the administrative con- ditions that govern funding arrangements, such as grant-in-aid formulas, and the “strings” attached to aid. This dimension of choice will be examined in Chapters 7 and 8.

Although the dimensions of allocation, provision, delivery, and finance will be analyzed separately in the following chapters, each with its own range of alternatives, it should be emphasized that most decisions are in- terdependent in the design of social welfare policies. For instance, a de- centralized delivery system results when the social provision is in the form of power, as in policies for greater parental control of local education that aim to transfer decision-making authority from professional bureaucracies to service consumers. Similarly, the bases of social allocations, methods of finance, and delivery of service are closely interwoven when eligibility for benefits involves some form of conditionality such as work-related require- ments and payments, as in subsidized user charges and contributory social insurance.

These four dimensions of choice encompass fundamental issues in the design of social welfare policies. The process through which these issues are resolved raises a different set of choices, choices that concern the design of de- cision-making arrangements and the extent to which they emphasize the roles of political leadership, citizen participation, and professional expertise, issues that will be discussed in Chapter 6.

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AN EXAMPLE: THE TRANSFORMATION OF THE SOCIAL SERVICES

At this point, we will tie the dimensions of choice to a concrete case so the reader can see how the framework is applied. The selected case involves the evolution of social services since the early 1960s.15 The focus is on social ser- vice provisions originally established under several titles of the Social Security Act: Titles I (Old Age Assistance [OAA]), IV-A (Aid to Families With Depen- dent Children [AFDC]), X (Aid to the Blind [AB]), and XIV (Aid to the Perma- nently and Totally Disabled [APTD]). Incorporated into Title XX of the Social Security Act in 1974, these provisions were refashioned into their current form in 1981 as the Social Services Block Grant (SSBG). There are, of course, other sources from which social services emanate, such as the Adoption Assistance and Child Welfare Act of 1980; the Older Americans Act, first legislated in 1965; and the Anti-Drug Abuse Act of 1988. The reason that the SSBG has been selected as the focal point of analysis is that it provides a considerable source of funds and it delegates the fundamental choices determining their use to state and local governments.

Any discussion of developments in the social services over the last forty years must consider the evolution of federal spending in this area. The 1962 Social Security Act amendments were the first to give specific emphasis to the role of the social services in public assistance. Between 1962 and 1972, federal grants to states for social services grew from approximately $194 million to $1.7 billion annually, a rather significant, and largely unanticipated, increase. When state estimates for 1973 indicated a potential increase to $4.7 billion, Congress, which until then had largely ignored the program, took action, en- acting a $2.5 billion ceiling on federal expenditures.16 This ceiling on social service funding rose for a while but was reduced to $2.4 billion in 1981 when social services funding was reconsidered and redesigned as the SSBG, also known as Title XX of the Social Security Act. Since then, federal spending has gradually eroded to its current level of $1.7 billion a year.

Although it is important to appreciate the growth of federal Title XX fund- ing as a force in the general development of social services, the focus of this case study is on the substantive program changes that have accompanied the changing levels of federal support. In this analysis, the overall rise in federal expenditures can be seen as a quantitative backdrop to a significant qualitative transformation.

Numerous changes in the nature of the social services have occurred since they first gained solid financial support in 1962. There has been a consistent broadening of eligibility standards and an enlargement of the population receiving services. In 1962, eligibility was limited to public assistance re- cipients, former recipients, and others who, in light of their precarious life cir- cumstances, were potential candidates for public assistance. The government defined “potential recipients” as those who might reasonably be expected to require financial aid within one year of their application for services. Whereas these standards offered the possibility of extending services beyond the imme- diate public assistance population, it was not realized in practice. At that early stage, both program funds and trained social service workers were in relatively short supply. Because political support for the 1962 amendments was predi- cated on the idea that intensive social work services would reduce the size of public assistance rolls, the recipient population clearly held first priority on

A Framework for Social Welfare Policy Analysis 69

service allocations. Despite those immediate limitations, the possibility of ex- tending service eligibility was established in principle.

This principle was applied in the Social Security Act amendments of 1967. Under these amendments, individuals became eligible for social services if it was determined that they might become welfare recipients within the next five years. Even more significant was the introduction of the concept of “group eligibility,” whereby residents of low-income neighborhoods and other groups (such as those in institutional settings) could become eligible for service.

By 1972, people who were not receiving welfare were well represented among the social service clientele, and their number was growing. One rea- son for this was that the 1967 amendments had provided a loophole through which states could squeeze many locally funded services into the federal pro- gram, where they became eligible for 75 percent cost reimbursement.

The Title XX Amendments of 1974 ushered in a new set of eligibility cri- teria that further extended entitlements. Under the enactment, the federal gov- ernment designated three categories of people who were eligible for services: (1) income maintenance recipients, (2) income eligibles, and (3) universal eli- gibles. Income maintenance recipients were those receiving public assistance, including Supplementary Security Income (SSI) and Medicaid; these recipi- ents are poor according to already-existing means-tested standards. Title XX regulations required each state to target at least 50 percent of its federal funds for people in this category. Income-eligible recipients included those who earned up to 115 percent of their state’s median income. States could offer services free of charge to those whose income did not exceed 80 percent of the state median. For those earning between 80 and 115 percent of the median, services could be offered on a subsidized basis for reasonable income-related fees. The universal category referred to services that were available free of charge to all without regard to income: information and referral services, pro- tective services for children and adults, and family planning. In 1978, a fourth category, group eligibility, was added. This category allowed states to desig- nate groups of people with similar characteristics—for example, the elderly and the institutionalized mentally ill—as service eligible if it could be shown that 75 percent of the group’s members had incomes less than 90 percent of the state’s median income.

When Ronald Reagan’s 1981 Omnibus Budget Reconciliation Act super- seded Title XX with the SSBG, federal eligibility requirements were eliminated altogether, leaving states free to exercise whatever standards of eligibility they desired. Despite the discretion afforded them, however, most states continue to employ much the same eligibility standards as before.17

As eligibility restrictions were eliminated, the scope and content of social provisions changed. Social services were originally advanced in 1962 as a way to prevent and reduce dependency; intensive social casework services would presumably rehabilitate the poor, changing their behavior in ways that would help them become economically independent.18 Social services also included other basic forms of provision such as homemakers and foster-home care; how- ever, the essential feature was the provision of social casework. Although this was not specified in the law, “welfare professionals in the Bureau of Family Services knew more or less what they meant by ‘services.’ At a minimum, it meant casework by a trained social worker.”19

There is an intangible quality about casework service that makes the exact nature of the provision difficult to specify. This vagueness has led to the cynical observation that such service “is anything done for, with, or about the client by

Chapter 370

the social worker. If a social worker discusses a child’s progress in school with an AFDC mother, a check is made under ‘services related to education. . . .’ When the discussion turns to the absent father and possible reconciliation, a check is made under ‘maintaining family and improving family function- ing.’”20 In a similar vein, Handler and Hollingsworth characterized public as- sistance services as “little more than a relatively infrequent, pleasant chat.”21

At its best, social casework is certainly a more skillful and nurturing en- terprise than these comments suggest. But large caseloads, the demands of el- igibility certification (while trying to establish a casework relationship), the diversity of clientele (many of whom did not need or want casework services but were forced to accept them), and the omnipresent bureaucratic regulations of public assistance were hardly conducive to effective practice.

In any event, whatever its powers and benefits, social casework was not a cure for poverty. The addition of almost one million recipients to the public assistance rolls between 1962 and 1966 dramatically proved this point.

The failure to reduce economic dependency combined with social case- work’s intangible quality made these services a prime target of congressional disillusion, a disillusion that was reflected in the 1967 Social Security Act amendments, under which casework was deemphasized. The 1967 amend- ments opened the way for a broader conception of social services. Before, fed- eral grants for services mainly paid the salaries of social caseworkers.22 In contrast, the 1967 amendments “created such a comprehensive array of spe- cific services that literally almost any service was federally reimbursable.”23

At the same time, greater emphasis was placed on the delivery of services far more tangible than social casework. According to Derthick, “a distinction soon began to develop between ‘soft’ and ‘hard’ services. Advice and coun- seling from a caseworker were ‘soft’ . . . and presumably less valuable than day-care centers, or drug treatment centers, or work training, which were ‘hard,’ ” and which soon became much more widely available. She continues, “the changed conception and changed social context helped lay the basis for granting funds for a much wider range of activity than the daily routines of caseworkers.”24

With the passage of the 1974 social service amendments, the movement to- ward services diversification reached new heights. Under Title XX, each state was free to support whatever social services it deemed appropriate for its com- munities. The only requirement was that these services be directed to one of five federally specified goals, goals that were so broadly stated as to encompass almost anything the imagination of social service planners could devise. In the first year of implementation, Title XX plans for the 50 states and the District of Columbia specified a total of 1313 distinct services.25

The substantive range of services is illustrated in Table 3.1, which shows services grouped into 28 categories devised by the federal government for pur- poses of tabulation and analysis. Whereas many federal reporting requirements and regulations were eliminated in the 1981 conversion from the “old” Title XX to the “new” SSBG, there have recently been new requirements mandating annual reports, uniform definitions of services, and specific information on the number of people receiving services, the amount of SSBG funds going for each service, methods of service delivery, and criteria for eligibility. Today, some states offer the full range of services, whereas a few use all of their funds to support just one or two services. Some states have also attempted to mesh Title XX funds with other federal, state, and local social service dollars in order to consolidate their services and budgetary planning.26

A Framework for Social Welfare Policy Analysis 71

Along with the increasing emphasis on tangible services and the diver- sification of social service content, a profound change in the purpose of the social services was taking place. The 1962 services were almost exclusively aimed at reducing poverty; under Title XX there developed a service network of broad scope largely concerned with maintenance and care, directed more at enhancing human development and the general quality of life than at reduc- ing economic dependency.27 The first major step in this direction was the 1967 divorce of income-maintenance functions from social service functions in the public assistance program.28 In 1977, this administrative separation was rein- forced at the federal level by placing income-maintenance programs under the Social Security Administration and joining social service and human develop- ment programs under the Office of Human Development Services. This trend is reflected in Title XX’s current emphasis on services that are not associated with notions of personal deficiency or inadequate character, such as transpor- tation and meals-on-wheels for the elderly, homemaker services for the dis- abled, and day care for children of all backgrounds.

Along with the separation of financial aid from the provision of social services, responsibility for the delivery of services became more dispersed through the increasing use of purchase-of-service arrangements between pub- lic agencies and social service providers in the private sector. Under the 1962 amendments, state public assistance agencies were enjoined from using fed- eral funds to purchase services directly from voluntary agencies. It was pos- sible, however, to purchase these services indirectly, with grants to other public agencies, which could then “contract out.” Opportunities for purchase of services from private sources were significantly broadened when the 1967 Social Security amendments authorized purchase arrangements for a wide ar- ray of activities. Although the amendments allowed state agencies to purchase services directly from private agencies, private-agency donations could not be used as the states’ 25 percent matching share if those contributions reverted to the donor’s facility.29 This restriction was lifted in 1974. The growing reliance of voluntary agencies on government funding was seen by some as a trend that robbed the voluntary sector of its traditional independence.

Over the last three decades, Title XX’s flexible service delivery provisos generated an enormous expansion in the systematic use of public funds to purchase private/voluntary services. Given the virtual elimination of federal reporting requirements in the 1981 SSBG, it is difficult to calculate the pre- cise magnitude of purchase arrangements. It is estimated, however, that federal funds provide about 50 percent of all financial support for services provided by nonprofit agencies.30

These changes in the scope and delivery of provisions were accompa- nied by basic reforms in federal financing. Under the 1962 laws, federal fi- nancing was open ended, with the states reimbursed for 75 percent of social service costs to recipients in the four public assistance categories: the aged, the blind, the disabled, and families with dependent children. The 1967 amendments expanded the range of services and clientele that might qualify for federal funds. With this expansion the definitions of “social services” and client-eligibility standards were loosely drawn. Whether a particular service for certain clients qualified for federal reimbursement was depen- dent in large part on local interpretation rather than on a clearly defined statutory formula. The most enterprising states made the boldest interpreta- tions, claimed the greatest need, and received the largest proportional share of federal grants for social services. In the states’ scuffle for federal funds,

Chapter 372

grantsmanship was the name of the game. Three states—New York, Illinois, and California—were the biggest winners, together receiving 58 percent of federal grants in 1972.31

This open-ended approach to financing underwent fundamental re- visions with the 1974 Title XX amendments. The new legislation incor- porated the social service provisions originally financed under the four public assistance categories (Titles I, IV-A, X, and XIV of the Social Secu- rity Act) into a single grant (Title XX) program. With the $2.5 billion ceil- ing that Congress placed on social services, financing was no longer open ended. This limitation ushered in a change in allocative procedures that tied federal allotments to a formula based strictly on state population. Each state was thereby entitled to a proportional share of Title XX funds, but the receipt of these funds was contingent on meeting certain regulations and supplying a local matching share. When the SSBG was enacted in 1981, the local share requirement was dropped along with most other federal regulations. SSBG allocations continue on a population basis, spreading funds in a way that yields a rough form of interstate equalization. How- ever, this mode of finance is not especially sensitive to the greater needs of poorer states.

APPLICATION OF THE FRAMEWORK

Now let us superimpose the dimensions of choice on the complex social ser- vice program changes that have occurred since 1962. Our approach to policy analysis provides a way of thinking about this program that extracts and organizes its major elements, making the whole more readily comprehen- sible. Using the framework we have outlined, the substance of social service policy may be divided into our four choice categories, which are summa- rized as follows:

1. The bases of social allocations: Selective to universal.

In 1962, eligibility for social services was means-tested, effectively lim- ited to recipients of the four categorical aid programs—AFDC, AB, OAA, and APTD. By 1974, eligibility criteria were broadened by the Title XX amend- ments to include many middle-income beneficiaries. The SSBG, which revised Title XX in 1981, gave the states latitude to impose any eligibility criteria they wished. Because most states continue to employ the limited re- quirements of earlier years, it would be an exaggeration to say that there is universal access to social services. Nevertheless, there has been a pronounced trend from selective toward universal access.

2. The nature of social provision: Intangible and limited to concrete and diversified.

In 1962, social services consisted primarily of social casework to help families improve their functioning and gain economic independence. What these services entailed, beyond some form of psychotherapeutic counseling, was only vaguely defined. More tangible forms of service were established in 1967, emphasizing employment training, day care, and family planning. Under the 1981 conversion to the SSBG, states may offer any kind of social service imaginable. By 1990, diversification of social services had grown to include 25 categories of provision.

A Framework for Social Welfare Policy Analysis 73

3. The delivery system: Public and linked to income maintenance, to public, private, and commercial.

Up to 1967, social service and income-maintenance functions were com- bined and delivered by the same administrative unit. Caseworkers distributed financial aid and also provided social services. After 1967 these functions were administratively divorced and performed by different workers, with an emphasis placed on hiring AFDC recipients to perform certain service roles related to day care and eligibility determination. Also, since 1975, an increased reliance on purchase-of-service arrangements by state and local governments has drawn an increasing number of private nonprofits into what was originally a delivery system of public agencies.

4. Finance: Open-ended categorical grant to fixed-amount block grant.

In 1962 the federal government reimbursed states for 75 percent of all social service costs for recipients in the public assistance categories. When these services were incorporated into Title XX, a $2.5 billion expenditure ceiling (which slowly rose to $2.8 billion by 1995, declined to $2.4 billion in 1996, and is currently at $1.7 billion) was established with grants allocated to states according to a formula based strictly on population size. To qualify for grants, states were required to supply a 25 percent local match. For all practi- cal purposes, Title XX amounted to a block grant. In 1981, the SSBG provided states almost complete discretion in use of these grants and no longer required matching funds or reporting or planning requirements.

In specifying the dimensions of choice—the first step of a two-step pro- cess in social welfare policy analysis—we ask these questions: What benefits are to be allocated, and to whom? How are these benefits to be delivered and financed? These questions may be answered without reference to purpose. So now we turn to the second step in the analytic process: the “why” question, addressing the values, theories, and assumptions that inform social choices.

SOCIAL JUSTICE IN PUBLIC ASSISTANCE

Some answers to the “why” of social choice can be found in the explication of underlying values. Alva Myrdal explains the importance of illuminating the values embedded in policy designs:

An established tendency to drive values underground, to make analysis appear scientific by omitting certain basic assumptions from the discus- sion, has too often emasculated the social sciences as agencies for ratio- nality in social and political life. To be truly rational, it is necessary to accept the obvious principle that a social program, like a practical judg- ment, is a conclusion based upon premises of values as well as upon facts.32

The analysis of values and social welfare policy may be approached from at least two levels. At the broader level the analytic focus is on policy in the generic sense. Rather than examining specific dimensions of choice and their accompanying values, this level of analysis addresses broad purposes. Specifi- cally, to what extent does the policy achieve social justice? To what extent is the distribution of social resources a fair one? At this level of generality, three core values shape the design of policy: equality, equity, and adequacy. As we

Chapter 374

will see by examining the changing arrangements for financial aid under pub- lic assistance, these values are not always in harmony.

The main function of America’s public assistance programs has been to provide financial assistance to the needy. When these programs were estab- lished under the Social Security Act of 1935, three categories of needy people were eligible for cash aid: the elderly under Title I, OAA; dependent children under Title IV, Aid to Dependent Children (ADC); and the blind, under Title X, AB. A fourth category was added in 1950 under Title XIV, APTD. In 1961, ADC was changed to AFDC, reflecting an emphasis on maintaining the family unit. Legislation in 1988 required the states to provide financial aid to children of unemployed parents (AFDC-UP).

These four categorical programs were financed by the federal government and administered by the states, with each state contributing a matching share. A fifth public aid option, General Assistance (GA), often called General Relief, is available for individuals who do not qualify for support under the federally financed programs. Funded entirely by states and localities, GA is more parsi- monious than the federal categories with regard to the duration and amount of assistance.

In 1965, a broad program of medical assistance for the poor was enacted, unifying the various arrangements for meeting medical costs that existed un- der the four categorical programs. Known as Medicaid, this program also al- lows the states to support the “medically indigent,” people whose economic resources are insufficient to pay their medical costs but who do not otherwise qualify as needy for cash assistance.

Through the early 1970s, Medicaid and the five categorical programs (OAA, APTD, AFDC, AB, and GA), along with food stamps, formed the general core of public assistance in this country. Within the framework established by federal legislation, the states had considerable latitude to design programs ac- cording to their own local norms and preferences. One reflection on this policy was the 20 odd different agency names used by the 50 states to designate the bureaucracies administering their public assistance programs. These included Public Welfare, Social Services, Family and Children Services, Institutions and Agencies, Human Resources, and Economic Security. More profound varia- tions existed with regard to standards of eligibility and levels of assistance. For example, under AFDC, monthly aid payments varied enormously from state to state. At the time AFDC was abolished in the mid-1990s, for example, aid for an average family ranged from $115 in Alabama to $748 in Alaska. In more than half the states, AFDC payments equaled less than the minimum required to meet basic needs according to cost standards that these states themselves had set. Many of these differentials continue today, under the welfare reform legislation enacted in 1996.

The structure of categorical public assistance was dramatically altered by the Social Security Act amendments of 1972 under which OAA, AB, and APTD were replaced by the consolidated SSI program (implemented in 1974). In contrast to the incorporation of the categorical social services under Title XX, which increased state administrative authority, the replacement of the fi- nancial aid categories by SSI brought these programs entirely under federal control. Administered by the Social Security Administration and supported to- tally by federal funds (although states occasionally supplement the payments), SSI provides uniform cash assistance to the needy, blind, aged, and disabled throughout the country. Current (2012) federal payments to SSI recipients are $698 monthly for an individual and $1048 monthly for a couple.

Three core values shape the design of social welfare policy to achieve social justice: equality, equity, and adequacy.

A Framework for Social Welfare Policy Analysis 75

AFDC, as indicated in Figure 3.3, was not included in the federalization of the 1970s. Until 1996, it continued to be administered by the states under federal regulations and to be jointly financed through open-ended federal matching grants. With the passage of welfare reform, the Personal Responsibil- ity and Work Opportunity Reconciliation Act of 1996, AFDC was replaced by the Temporary Assistance for Needy Families (TANF) program. This unprece- dented reform, substituting TANF block funding grant for AFDC’s open-ended arrangement, effectively eliminated a national entitlement to public assistance and fulfilled President Clinton’s campaign promise to “end welfare as we know it,” if not exactly along the lines he envisioned.

Under TANF, states receive a fixed level of federal funds to provide income support to poor families with children based on the amount spent on AFDC in 1994.33 It should be noted that because AFDC caseloads had been declining in most states, the initial post-TANF allocations were higher than the amount states would have received under AFDC.34 Future prospects, however, are un- certain. During periods of recession, for example, if caseloads rose and states ran out of block grant funds, eligible applicants for public aid might have to be denied assistance unless a state had the political will to commit its own funds to the program. To date, this has not occurred during the economic downturn from 2008 to 2012.

Beyond capping the level of federal support that states might draw on to aid needy families, TANF introduced sweeping changes in the essential char- acter of public assistance—among which time-limited welfare was the most radical measure. Under TANF, states are barred from providing federal cash benefits to families for more than a total of five years during their lifetime, al- though up to 20 percent of recipients may be exempted from the limit due to

Public Assistance Categories, 1962

AFDCAPTDABOAA

Social Services

Financial Assistance

Financial Assistance

Social Services

Financial Assistance

Social Services

Financial Assistance

Social Services

Title XX 1974

State Administered, Federally Financed

Social Services Block Grant

1981

Federally Financed and Administered

SSI 1972

Implemented 1974

State Administered, Financed by Federal Block

Grant Funds and State Payments

TANF 1996

Figure 3.3 Reorganization of Public Assistance: Social Services and Financial Aid.

Chapter 376

hardship. States must also develop plans describing how TANF recipients will engage in work activities after being on the welfare rolls for two years.

In allocating financial aid outside of economic markets, public assistance programs like TANF and SSI represent an effort to alter the distribution of re- sources in society. In this effort one aim of public assistance is to further social justice—an undertaking that must come to grips with the values of equality, equity, and adequacy.

Equality

Although it is one of the foundation stones of social justice, equality is a value open to interpretation. At least two salient notions were differentiated by Aris- totle: numerical equality and proportional equality.35 These concepts represent the egalitarian and meritarian elements of distributive justice. Numerical equal- ity implies the same treatment of everyone: to all an equal share. Proportional equality implies the same treatment of similar persons: to each according to his or her merit or virtue. These interpretations of equality offer conflicting pre- scriptions for the treatment of dissimilar persons. With the concept of propor- tional equality, Vlastos points out, “the meritarian view of justice paid reluctant homage to the egalitarian one by using the vocabulary of equality to assert the justice of inequality.”36 To clarify this distinction and to reduce the definitional awkwardness, we will use the term equality in its numerical sense and will subsume the meaning of proportional equality under the value of equity.

Social welfare policy is influenced by the value of equality with regard to the outcome of benefit allocations. Specifically, the value prescribes that ben- efits should be allocated so as to equalize the distribution of resources and opportunities. In some policies, this value is predominant, as, for instance, in the development of quota hiring plans for the equal allocation of work roles among different groups of people. In a modified version, there are opportunity- oriented policies whereby the equal shares objective is recast in terms of equal opportunity. Fair housing legislation, for example, demands that people, what- ever their racial and ethnic characteristics, receive the same treatment in their quest for shelter. It does not, however, ensure equal results for everyone.

In public assistance, the introduction of uniform federal grants under SSI was, in part, a measure to promote greater equality in financial aid across the country. The influence of the equality goal in shaping the design of public as- sistance is also evident in the extent to which money is shifted from wealthy states and individuals toward those that are poor. Although such redistribu- tion takes place through public assistance, it falls considerably short of creat- ing even a roughly equal share for all because social justice is also responsive to other values.

Equity

Equity denotes a conventional sense of fair treatment. There is a proportional quality to notions of fair treatment: If you do half the work, you deserve half the reward. People’s deservedness should be based on their contributions to society, modified only by special considerations for those whose inability to contribute is clearly not of their own making. Accordingly, there are many “eq- uitable inequalities” that are normatively sanctioned, as in policies that offer preferential treatment for veterans and in unemployment benefits that vary ac- cording to prior earnings.

A Framework for Social Welfare Policy Analysis 77

In public assistance, equity is stressed through the doctrine of “less eligi- bility,” first formulated by the English Poor Law Commissioners in 1834. In the Commissioners’ words,

It may be assumed that in the administration of relief, the public is warranted in imposing such conditions on the individual relieved, as are conducive to the benefit either of the individual himself, or of the country at large, at whose expense he is to be relieved. The first and most essential of all conditions, a principle which we find universally admitted, even by those whose practice is at variance with it, is that his situation on the whole shall not be made really or apparently so eligible as the situation of the independent laborer of the lowest class. [Emphasis added.]37

One reason for the extremely low level of public assistance in most states is the ingrained belief that aid should not elevate the income of recipients above those of the poorest workers. Here, the emphasis on equity supports the main- tenance of incentives to work. It is interesting to note the historic shift that has taken place in the relation between incentives to work and public assistance as increasing numbers of women have entered the labor force.

In the 1960s and 1970s, policymakers began a serious debate about the right of welfare mothers to collect public aid and remain at home with their children. The issue was not simply whether welfare benefits should be lower than the income one might earn in the paid labor force, but whether active measures should be employed to encourage welfare mothers to work. Reflect- ing the view that various incentives should be offered to encourage welfare recipients to seek employment, the 1967 amendments to the Social Security Act established the WIN program to provide training and employment to “all appropriate individuals,” which included welfare mothers with young chil- dren. Previously, work programs had been available on a much smaller scale mainly to fathers of families receiving aid. In addition, the provision of day- care services was authorized so that mothers would be free to work and, for an incentive, the first $30 of monthly earnings plus one-third of the remainder were exempted from determination of continued eligibility for assistance. (In 1981, the “30 plus one-third” earnings disregard was limited to only the first four months of employment, and in 1988, WIN was replaced altogether with the workfare provisions of the Family Support Act.)

Around the same time that the 1967 amendments were being implemented, other proponents argued for increasing the level of AFDC benefits for women who stayed at home. Casting this claim in the name of equity, they did not ask that dissimilar people, those who work and those who do not work, be treated equally and awarded similar standards of living. Rather, the argument was made that motherhood itself should be considered an occupation—one, in- deed, more trying than most. This view was expressed by a ten-member panel (nine of whom were men) commissioned by the federal government to study the problem of U.S. workers. The panel recommended, among other things, that welfare mothers be subsidized to stay home and care for their children.38 The case for this policy gains momentum when we calculate the substantial per capita costs of daycare services necessary to allow AFDC mothers the free- dom to work.39

Recently policy analysts in the United States have considered pro- viding Social Security credits for people who spend time out of the la- bor force caring for dependent children. Such credits are well-established

Chapter 378

components of public pension schemes in many countries including France, Germany, and Sweden.40 In 1984 Finland was the first country in Europe to provide cash-for-childcare benefits for children who were not enrolled in public daycare centers. Sweden and Norway introduced cash- for-childcare schemes in the 1990s.41 Through 2011, German policymakers have been debating about the introduction of a cash-for-childcare policy, dubbed the “stove” premium by opponents who see it as a scheme to rein- force traditional gender roles.42

By 1996, in the United States, the question of whether the interests of equity were best served by providing public assistance to subsidize the home care of children or by expecting welfare mothers to seek paid employ- ment in the labor market was resolved clearly in favor of the labor market option—welfare became “workfare.” Indeed, as noted, the TANF program not only expects welfare recipients to seek employment, but also sharply limits the number of years that families can receive public aid during their lifetime. The political consensus that motivated the shift from welfare to workfare was influenced in part by the more general movement of women from the household into the market economy. Steadily on the rise, the la- bor force participation rate of married women with children under eighteen more than doubled after 1960. Today, nearly three in four married moms with children have jobs. As the vast majority of mothers entered the paid workforce, it became awkward for even the most sympathetic welfare advo- cates to hold public assistance recipients exempt from the obligation to seek employment.

Adequacy

Adequacy refers to the desirability of providing a decent standard of material well-being, quite apart from concerns for whether benefit allocations are equal or differentiated according to merit. Thus, as Frankena explains, the quest for social justice involves:

a somewhat vaguely defined but still limited concern for the goodness of people’s lives, as well as for their equality. The double concern is of- ten referred to as respect for the intrinsic dignity or value of the human individual. This is not the position of the extreme egalitarian but it is essentially egalitarian in spirit; in any case it is not the position of the meritarian, although it does seek to accommodate his principles.43

Standards of adequacy vary according to time and circumstances. In medieval times, serfs were usually provided with the necessities to keep them healthy and productive. At the turn of the twentieth century, $624 a year was estimated as a “living wage” for a family of five in New York City.44 Today, the most common statistic for defining adequacy is the poverty line, which is calculated annually by the U.S. Department of Labor and adjusted to family size. In 2011, for example, a family of four with an income under the $22,350 poverty threshold was considered poor (i.e., to have a less than minimally adequate income) (see Table 3.2). But this official standard of adequacy, while in widespread use, is considered by many to be seriously inaccurate. We examine this issue in greater detail in Chapter 4. One ap- proach to a more generous standard of adequacy, a “basic needs budget,” calculates just how much the various basics of life (food, rent, health care, etc.) cost in different locales. According to calculations by the Economic

A Framework for Social Welfare Policy Analysis 79

Policy Institute, these figures ranged considerably by location, chiefly due to variations in the cost of housing and childcare. In San Francisco, a typi- cal high cost urban area, the basic needs figure was $56,124 for a single parent family with two children. In a rural area like Curry County, NM, the figure was $30,170.45

The value of adequacy is expressed rather faintly in public assistance pol- icy honored more in the breach than in reality. Nevertheless, its presence is re- flected in the fact that grant levels are not set arbitrarily, but are based on state estimates of the costs of basic needs (even though the grants rarely approach the levels of these estimates).

Overall, as a benefit-allocation mechanism, public assistance is more re- sponsive to concerns for equity than for adequacy and equality. This emphasis stems, at least in part, from the broader societal context in which the program operates. In a capitalist society, the value of equity is generally accentuated: those who work hard deserve to be rewarded by reaping the just fruits of their labor. Social democratic societies theoretically place greater stress on the value of equality. As Marx wrote, “The secret of the expression of value, namely that all kinds of labor are equal and equivalent, because, and so far as they are hu- man, labor in general cannot be deciphered, until the notion of human equal- ity has already acquired the fixity of a popular prejudice.”46 Once the notion of human equality has achieved the status of a “popular prejudice,” differential treatment of dissimilar people is significantly reduced if not completely abolished because, judged by the most important of characteristics—their humanness— everybody is the same.

From this somewhat lofty perspective, the “why” of policy design may be analyzed in terms of the quest for social justice as it is manifest in the differential re- alization of adequacy, equity, and equality.47 Although a policy may emphasize any one of these values, the em- phasis is often tempered by the demands of the other two values as efforts are made to approximate social justice.

Table 3.2 2011–2012 Department of Health and Human Services (HHS) Poverty Guidelines

Persons in Family

or Household

Forty-Eight Contiguous States

and D.C. ($)

Alaska

($)

Hawaii

($)

1 10,890 13,600 12,540

2 14,710 18,380 16,930

3 18,530 23,160 21,320

4 22,350 27,940 25,710

5 26,170 32,720 30,100

6 29,990 37,500 34,490

7 33,810 42,280 38,880

8 37,630 47,060 43,270

Source: U.S. Department of Health and Human Services, 2011.

Human Rights and Justice

Practice Behavior Example: Social workers

engage in practices that advance social and

economic justice.

Critical Thinking Question: Which reflects your conception of social justice to a greater

extent, the value of equality, equity, or

adequacy? Why?

Chapter 380

CONSERVATIVE AND PROGRESSIVE VALUES IN PUBLIC ASSISTANCE

Moving down a rung, a much larger range of social values enters into the consideration of choice. For instance, the values of privacy, dignity, work, and independence may influence the criteria of eligibility, the forms of social provision, and the design of delivery and finance arrangements. To illustrate, Table 3.3 lists the four dimensions of choice and some of the competing val- ues that influence them. These four value dichotomies are suggestive and hardly exhaust the range of possibilities. They were selected because the range of values represents variations on central issues of policy choice dif- ferentiating conservatives from progressives. These issues concern the ways and extent to which expressions of individual interests are given free rein or are harnessed in the service of the common good. As Marshall explains,

The claim of the individual to welfare is sacred and irrefutable and par- takes of the character of a natural right . . . but the citizen of the Welfare State does not merely have the right to pursue welfare; he has the right to receive it, even if the pursuit has not been particularly hot. . . . But if we put individualism first, we must put collectivism second. The Wel- fare State is the responsible promoter and guardian of the welfare of the whole community, which is something more complex than the sum total of the welfare of its individual members, arrived at by simple addition. The claims of the individual must always be defined and limited so as to fit into the complex and balanced pattern of the welfare of the commu- nity, and that is why the right to welfare can never have the full stature of a natural right. The harmonizing of individual rights with the com- mon good is a problem which faces all human societies.48

Cost effectiveness may be applied to each dimension of choice. When ap- plied to the basis of social allocations, it is measured by the extent to which each dollar of benefit is allocated to those most in need—that is, those least able to purchase what they need in the open marketplace. The guiding thought is that there be no waste of resources. With the cost-effectiveness criterion, indi- vidual treatment varies according to individual circumstances. Implementing this value requires a high degree of selectivity, of means testing, in determin- ing those eligible for benefits. Applied in the extreme, this value can produce invidious distinctions among people, dividing the community into groups of the dependent and the independent, the incompetent and the self-sufficient.

Social effectiveness may take different forms. One way it is measured in al- locative decisions is by the extent to which all individuals are treated as equal members of the social body. Here, the notion of effectiveness is related to the

Table 3.3 Dimensions of Choice and Competing Value Perspectives

Conservative Perspective Dimensions of Choice Progressive Perspective

Cost effectiveness Allocation Social effectiveness

Freedom of choice Provision Social control

Freedom of dissent Delivery Efficiency

Local autonomy Finance Centralization

A Framework for Social Welfare Policy Analysis 81

fact that nobody who is potentially eligible will feel inhibited about applying for benefits because of shame, stigma, or the organizational rigamarole that is of- ten required to implement selective procedures. Allocations are universal: An individual’s special need or defect need not be exposed for scrutiny in order to become eligible for benefits. The “badge of citizenship” is sufficient basis for en- titlement. In what was once AFDC and is now TANF, for example, the basis of so- cial allocations—a thorough and probing means test of every applicant—is clearly influenced more by concerns for cost effectiveness than social effectiveness.49

Titmuss has observed that the apparent strain between cost effectiveness and social effectiveness may be a function of the short-range perspective of using cost-effectiveness calculations, especially for medical benefits, where policy objectives include prevention as well as treatment. For example, if ac- cess to medical care entails a means-test investigation that is demeaning, time- consuming, or otherwise inconvenient, clients may procrastinate about seeking aid until the symptoms are so advanced that they can no longer be ignored. At this stage, the cost of treatment is usually more expensive. In the long run, cost effectiveness and social effectiveness can be brought into harmony when the universal allocation of medical care saves more through prevention than selec- tive allocations save by limiting treatment only to those in dire need.50

Freedom of choice is reflected in provisions that offer recipients consider- able latitude to exercise their individual preferences. Thus, for example, when social provisions are in the form of cash, a high degree of consumer sovereignty is preserved. Social control, on the other hand, is reflected in provisions that limit individual choice. With in-kind provisions, recipients are restricted to the specific benefits (housing, medical care, counseling, therapy, advice, informa- tion, etc.) offered. Of course, they have the freedom to take it or leave it, but that is where the choice ends. In some social welfare programs, social provisions are linked so that freedom of choice in one area of provision is bought at the price of social control in another. This is the case in public assistance. In the original AFDC program, recipients were given cash grants so they could exercise a degree of choice in meeting their daily requirements. Under the Family Support Act of 1988, AFDC benefits were linked to participation in work training programs, and, in some states, to educational programs as well.51 By 1996, when AFDC was supplanted by the TANF, cash benefits were tied to a variety of behavioral and labor market expectations such as going to school, living at home (for un- wed teenage mothers), identifying the child’s father, and, of course, getting a job. These behavioral incentives were strongly advocated and supported by conser- vatives, despite their traditional disavowal of the collectivists’ conviction that government might improve the human condition through social engineering.

Freedom of dissent and efficiency are values that influence whether the delivery system is designed primarily along democratic or bureaucratic lines. Blau states the choice succinctly:

Bureaucratic and democratic structures can be distinguished . . . on the basis of the dominant organizing principle: efficiency or freedom of dissent. Each of these principles is suited for one purpose and not for another. When people set themselves the task of determining the so- cial objectives that represent the interests of most of them, the crucial problem is to provide an opportunity for all conflicting viewpoints to be heard. In contrast, when the task is the achievement of given social objectives, the essential problem to be solved is to discover the efficient, not the popular, means for doing so.52

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In TANF, the delivery system is organized primarily along bureaucratic lines. Clients do not vote to establish the level of their grants or eligibility cri- teria. In other social welfare programs, however, social provision is so loosely formulated that the local delivery system is charged with the dual purpose of deciding on specific objectives and then carrying out those decisions. For instance, the War on Poverty and Model Cities programs of the 1960s required substantial citizen participation in program planning and implementation. These systems thus incorporated democratic as well as bureaucratic elements in their structure. The problem in these systems, it often turned out, is that nei- ther value was served very well.53

Local autonomy and centralization are values that find expression in the financing and administration of programs. Strains between these values are most likely to emerge when program costs are shared intergovernmentally or, in the private sector, between nationwide and local voluntary organizations. Cost- sharing arrangements are implemented through federal grants-in-aid that vary along a continuum from broad purpose block grants to special-purpose categor- ical grants. The block grant is a lump-sum national contribution for local pro- grams. It carries few specifications or requirements on how the money should be spent beyond requirements that it be applied to a general program realm such as health, community development, or education. This ensures a high de- gree of local autonomy. At the other end of the continuum is the special-pur- pose grant with detailed standards. Here, local discretion regarding the use of funds is restricted according to precise federal criteria. In most cost-sharing ar- rangements, the methods of finance fall somewhere midway on the continuum, reflecting the mutual desirability of local autonomy and national planning.

For example, although based on categorical principles, the AFDC program contained elements of both values. The federal funders attached various condi- tions to these categorical grants concerning citizenship, “statewideness,” and the provision of services. Yet local autonomy prevailed in at least two crucial aspects of the program. States were free to exercise broad discretion in defining the criteria of need and the amount of financial assistance that is provided to recipients. The centralist thrust of the program was mitigated in part because, as Burns explains, “to prescribe in the federal act both the standards of need which determine eligibility and the minimum level of living to be assured all eligible applicants raises major issues regarding federal interference in an area which traditionally has been thought of as peculiarly a matter for local de- termination.”54 When AFDC was supplanted by TANF in 1996, the funding arrangement changed from a categorical to a block grant, giving states much greater latitude to determine how funds are spent. Various conditions, never- theless, were attached to the block grants concerning citizenship, time limits, and work requirements (see Chapter 8).

THEORIES, ASSUMPTIONS, AND SOCIAL CHOICE

The subtle and complex relationships between value preferences and social welfare policies offer one level of insight into the “why” of social choice. An- other dimension of analysis that has a bearing on this question involves the- ories and assumptions about how clients, service delivery systems, methods of finance, and types of social provisions function, both independently and in concert. Much of this kind of theory-derived knowledge is fragmented and

A Framework for Social Welfare Policy Analysis 83

only partially verified. This is not to deny the effect of social science knowl- edge on choice, but rather than overestimate what is known, we use the term theory to cover the influence and support that social science insights render to policy choices. We classify as assumptions those suppositions for which there has been little systematic effort to obtain and codify evidence. In the general sense, the term assumptions is used to designate theories “writ small.”

To illustrate, let us continue to examine public assistance. At least three assumptions underpinning major policy choices in the program were seriously challenged by subsequent evidence. First, the 1962 “service” amendments were supported by the belief that the clinical model of casework service would reduce economic dependency. Implicit is the theory that poverty is mainly a function of individual deficiencies, deficiencies that can be transformed and alleviated through the casework process. This theory was relatively new at the time. Until the 1950s, assistance recipients were generally considered “victims of external circumstances, such as unemployment, disability, or the death of the family’s breadwinner,” who “needed to be ‘relieved’—not treated or changed.”55

In 1971, after reviewing studies of casework efforts to treat and rehabilitate those on public assistance, Carter concluded,

It becomes clear that it is time to reassess the purposes of casework ser- vices offered welfare recipients and other low income groups for whom problems identified for alleviation are complex and interrelated with other personal, family, and community or societal problems . . . there are serious questions as to what behavioral changes can be set in motion without provision first being made for a decent level of living and access being provided to a range of social resources within the agency and the community.56

Second, the separation of income maintenance from the administration of social services in the late 1960s was predicated on the assumption that ser- vices would be improved because the caseworker–client relationship would no longer be tinged by the coercive undertones emanating from the worker’s discretionary authority over the client’s budget. Clients, presumably, would be free to accept or reject services as needed, and caseworkers, released from the task of administering grants, would have more time to engage in a voluntary service enterprise. This is a plausible line of reasoning, but one open to criti- cal examination. Neither the strength of the caseworker’s coercive powers, and their effects on relationships with clients, nor the extent of client initiative to seek services when routine caseworker visits were terminated was clearly discernible. It is quite possible, as Handler and Hollingsworth suggest, that the coercion argument was exaggerated and, more important, that in the absence of routine home visits welfare clients would be reluctant to seek help from an unknown official. Thus, “requiring welfare clients to take the initiative may have the effect of cutting off a reasonably valuable service that most clients, in their own words, seem to like.”57 Indeed, research findings on this issue reveal that AFDC recipients made higher demands for services and expressed greater satisfaction when service and income maintenance were combined.58

As a final example, we turn to the work-incentive program established under the 1967 social security amendments. The perversely accurate acronym for the Work Incentive Program, WIP, conveys the image of an instrument used to drive beasts of burden. Through some creative bureaucratese it was quickly transformed to WIN (Work INcentive). An objective of the 1967 amendments was to swing AFDC services away from traditional social casework toward more practical and concrete work-oriented provisions. This shift in emphasis from welfare to workfare

At least three assump- tions underpinning major policy choices in public assistance have been seriously challenged by subsequent evidence.

Chapter 384

then reflected, and continues to reflect, two assumptions: (1) jobs are available for anyone who really wants to work and (2) we know how to change deleterious pat- terns of behavior with voluntary incentives. The problem is primarily seen again as individual deficiency—the lack of skills and adverse attitudes toward work— although of a different nature than those amenable to psychiatric casework. The solution is to equip people for jobs and motivate them to seek employment.

Although facts about WIN are not decisive, what is known suggests that its as- sumptions were flawed. Levitan and Taggart indicated that of the 167,000 people who first enrolled in WIN, more than one-third dropped out of the program and, all told, only 25,000 got jobs. Those who moved on to work were “creamed” from the pool of applicants. Those moving into jobs, in other words, were those best prepared for jobs. This group included a high percentage of unemployed fathers receiving AFDC who probably would have found employment sooner or later without social assistance. In light of the program’s “conspicuously unspectacular performance,” the study observed, “the wisdom of expanding WIN is question- able, and the theoretical arguments for such a move are even more dubious.”59

A subsequent analysis of the WIN experience suggests that the program’s shortcomings endured to the end. In 1982, only 3 percent of the AFDC clients registered for the WIN program in New York State were placed in a job; an ad- ditional 5 percent found employment through their own efforts. In a distinct echo of Levitan and Taggart’s findings, the 1982 study observed that “those who eventually are served generally represent the easiest to employ—those most likely to get jobs without the help of special services.”60 Although find- ings on work programs in the five states that formed a model for the Family Support of 1988 were somewhat more encouraging, a substantial proportion (from 40 to 80 percent) of participants remained unemployed after six to fif- teen months. The extent to which this type of voluntary program can amelio- rate the circumstances of welfare recipients, therefore, remains uncertain.61

The two assumptions that have girded workfare policies since the mid- 1960s continue to brace the TANF initiatives—a line of reforms aptly char- acterized by Gilbert Steiner as “tireless tinkering with dependent families.”62 Between 1993 and 2008, this “tinkering” produced unprecedented and signifi- cant results, as welfare caseloads declined by more than 50 percent. TANF’s demanding work-oriented reforms, facilitated by other factors, contributed powerfully to this reduction. Since the 2008 recession, however, many of the jobs secured by welfare moms during the prosperous years have evaporated.

In addition, as those recipients most willing and able to leave welfare were drawn out of the client pool, those remaining presented a tremendous challenge to the second workfare assumption—that we know how to address the variety of debilitating individual problems involving a lack of skill, ability, and motivation, to say nothing of substance abuse and domestic violence. For example, an analysis of the National Adult Literacy Survey, which tests the ability to apply math and reading skills to everyday situations, indicates that a quarter of all public assis- tance recipients score in the lowest of five levels of literacy—a level where people are unable to perform tasks such as locating an intersection on a street map, filling out a government benefits application, or totaling the costs on an order form.63

Can public policy successfully address these problems? Increasing evi- dence suggests that various measures can effectively address the employment prospects of the difficult-to-serve if the economy is expanding. Public employ- ment in protected settings for recipients who cannot function competitively in the normal labor market can be provided. Intense efforts at education and re- habilitation can prepare even the most difficult-to-employ for regular work. In

A Framework for Social Welfare Policy Analysis 85

the end, nevertheless, as we shall see in Chapter 8, there is likely to remain a group for whom work-oriented policies are simply not an adequate answer—a group composed of the most vulnerable and least competent, for whom Gilbert Steiner’s alternative of “honorable dependency” may be the best arrangement the community has to offer.64

EMERGING ISSUES: THE SEARCH FOR EQUITY

In this chapter, we have outlined an analytic approach to the study of social welfare policy. The essence of this approach may be summarized as follows:

1. Viewing social welfare policy as a benefit-allocation mechanism re- quires four types of choices: those pertaining to allocations, provisions, delivery, and finance.

2. Understanding these four dimensions of choice requires knowing the basic alternatives associated with each.

3. Understanding why given alternatives may be preferred over others requires explicating the values, theories, and assumptions implicit in policy design.

The implication here is not that certain choices are inherently preferable to others. Different preferences will be registered by different planners, depending on the values, theories, and assumptions given the most worth and credence. Our objective in Chapters 4 through 8 is to take each dimension of choice, delin- eate the basic policy alternatives, and examine the interplay of values, theories, and assumptions. But first, let us briefly explore one important development in the realm of social values that is currently shaping social policy. While con- cerns for equity have always been a central value in the design of welfare pro- grams, these concerns have gained increasing momentum as policymakers have sought to balance rights and responsibilities in allocating benefits. Since the late 1980s, the enhanced regard for equity has been particularly reflected in the frequent pronouncement that citizens who “work hard and play by the rules” should be able to support their families above the poverty level.

Now, almost twenty-five years later, concerns for equity provide a moral compass from which social polices take their bearings. But, as noted, everyone does not always agree on what is fair. Take the case, for example, of an African- American high school senior from a high-income family who, on an affirmative action basis, is admitted to a university over an equally qualified low-income white student. Here, minority status is the criterion that defines the disadvantage

Capsule 3.2 Tireless Tinkering with the Poor

Unfortunately, the sorry history and limitations of day care and work training as “solutions” to the welfare problem could not be faced by the

administration’s welfare specialists. . . . But after a

few years it will inevitably be discovered that work

training and day care have had little effect on the

number of welfare dependents and no depressing

effect on public relief costs. Some new solution will

then be proposed, but the more realistic approach

would be to accept the need for more welfare and

to reject continued fantasizing about day care and

“workfare” as miracle cures.

Gilbert Steiner, The State of Welfare, Brookings Institute, 1971.

Chapter 386

being redressed by policy. Some might believe, however, that family income is a more appropriate criterion of deservedness. Questions of this sort gain saliency as the number of minority families in affluent circumstances increases.

In recent years, the substantial increase in the number of working wives has also complicated the search for equity, particularly in regard to depen- dents’ benefits in the Social Security program. Since Social Security benefits account for more than half of all direct federal expenditures for social welfare, this is a matter that touches vast numbers of citizens. When the Social Security Act of 1935 was first amended in 1939, the insurance principle of “individual equity”—that retired workers should receive benefits roughly equal to their contributions—was compromised by concerns that benefits should provide an adequate standard of family living.65 The extension of Social Security benefits to dependents—spouses and children—was thus enacted to ensure a reason- able standard of adequacy for entire families, rather than simply individuals.

Dependents’ benefits, however, create many inequities among married couples with different patterns of work and income, and with the increasing proportion of wives joining the labor force, these patterns of social inequity have been magnified.66 Although weighted in favor of low-income workers, So- cial Security pension benefits rise with wage levels. Thus, in the mid-1990s, a nonworking wife whose husband had earned a $60,600 income was entitled to an annual dependent’s benefit of $7470—about $1000 more than an employed wife making $11,400 would be entitled to on her own as a primary beneficiary in a two-earner family with a husband earning $25,000 a year. And it was more than twice the dependent’s benefit of $3245, which would be granted to a non- working wife whose husband earned $11,400. Even though the husband with the higher income paid more Social Security taxes over the years, the pension benefits for his family (as well as all other families) are partially subsidized by transfers from the next generation of contributors. Estimates by Martha Ozawa suggest similar patterns, with the dependent wife in higher-income families receiving higher benefits than either dependent or employed wives in lower- income families. One might ask whether this arrangement is fair. Why should social policy provide subsidies enabling richer groups to maintain their differ- ential economic advantages in old age?67

The status of immigrants in American society poses another challenge in the quest for equity. Since the early 1990s, as the number of foreign-born resi- dents rose to historic highs—with nearly two-thirds not yet citizens—critics have been complaining that immigration had become excessive, and damag- ing to the country. Much of the criticism focused on the newest arrivals with the fewest skills—immigrants, in particular, from developing countries such as Mexico, the Dominican Republic, the Philippines, Vietnam, and China. Un- documented immigrants have been a particular focus of concern. Some argue that immigrants, legal or not, take jobs away from Americans. Others feel that they impose heavy social welfare costs on government—especially on states and localities that have the responsibility for providing services. It has been ar- gued further that many immigrants are taking advantage of the welfare system, even coming to the United States explicitly to get welfare benefits.

It is true, of course, that immigration, as in generations past, has had a major impact on the size and growth of America’s poverty population. At pres- ent, more than one in five living in poverty reside in immigrant households, compared with less than 10 percent in 1979. Immigration, indeed, is one of the primary explanations for why the overall poverty rate has remained high in recent decades, despite significant economic growth and reasonably low unemployment. Some immigrant groups, moreover, are especially likely to be

A Framework for Social Welfare Policy Analysis 87

impoverished. Immigrants from Mexico, the Caribbean, and Central America have relatively high poverty rates, while those from Europe and Asia have low rates. And, as might be expected, immigrants who are newly arrived tend to be poorer as a group than those who are more established.68 And while it is hazardous to generalize about welfare use, we do know that some groups of immigrants (e.g., refugees and the elderly) have been heavy service users.

But focusing on welfare illustrates only a sliver of the immigrant experi- ence. To the degree that broad statements can be made, most studies find that immigration has been more an economic blessing for the nation than a burden. Enthusiastic, hard-working, and enterprising newcomers bring powerful long- term economic benefits to the United States. They pay taxes, buy homes, serve in the military, and provide valuable resources for U.S. employers and local communities. While about 30 percent of all immigrants come to the United States with few skills or education, many more are technically trained and possess a wide array of advanced skills.69

Nevertheless, the question of what constitutes the fair treatment of immi- grants—legal and undocumented—continues to be a volatile public policy is- sue, and substantial political pressures to restrict immigrant access to welfare continue. One of the earliest, and most dramatic, manifestations of the pub- lic’s discontent was the passage of California’s Proposition 187 in 1994, which barred undocumented individuals from most public services. Another was the provisions limiting assistance for legal immigrants incorporated into the 1996 welfare reform bill.

Welfare reform significantly reduced immigrant benefits while making state policymakers key players in determining the rules for eligibility and ben- efits. As Peter Schuck stated, “Congress sought to ‘revalue’ U.S. citizenship by adopting a firm national policy favoring discrimination against [immigrants] in the distribution of public benefits and by conscripting the states in the imple- mentation of that new policy.”70 Immigrant policy, for the first time, distin- guished non-refugee immigrants into separate eligibility categories, “qualified” and “unqualified,” based on when they entered the United States. The “qual- ifieds,” those who entered before welfare reform, were subject to one set of rules; post-enactment immigrants, the “unqualifieds,” were subject to another. Only the pre-enactment immigrants, for example, retained their federal eli- gibility for Supplemental Security Income (SSI), and only pre-enactment im- migrant children, elderly, and the disabled (but not working-age adults) were able to maintain their eligibility for food stamps. Eligibility for other programs, chiefly Medicaid and TANF, became a matter for state determination.

For post-enactment immigrants, eligibility for most federally supported programs was prohibited for five years. After that period, SSI and food stamps, as well as TANF and Medicaid (at state option), could be received. Here, once again, Congress ceded considerable authority to the states. States, if they wish, could bar noncitizens from their programs, or they could create their own pro- grams for immigrants to substitute for the loss of federal support.

One salient consequence of welfare reform has been a substantial reduc- tion in the benefits available to noncitizens—a reduction greater than among the native born. A second outcome has been a dramatic variation in benefits among immigrant groups. Some, Cuban immigrants, for example, have been relatively unscathed while others, typically the most recent immigrants, have suffered considerably. A third result has been divided eligibility within fami- lies—children born in the United States (and who therefore are citizens), for example, are often eligible for benefits while their parents or older siblings may not be. A fourth outcome has been a dramatic increase in the number of

Chapter 388

immigrants seeking citizenship. Since welfare reform put social welfare ben- efits in jeopardy, the number of immigrants annually securing citizenship has jumped from 400,000 to over 1 million.71

Even though states must bear the costs, many have elected to provide assis- tance, and a few have undertaken new initiatives in areas of special importance such as job training, english-language instruction, and other programs designed to foster assimilation. California, despite its anti-immigration rhetoric and the passage of Proposition 187, has devoted more resources than any other state to advancing the well-being of low-income legal immigrants, both the pre- and the post-welfare reform groups, generally replacing lost federal benefits and providing food stamps, health insurance, TANF cash support, and SSI pay- ments. Indeed, many states, including California and New York, have strongly defended the rights of immigrants to benefits. Welfare use among immigrants in need is by no means a thing of the past. It is true that very few immigrant house- holds today receive TANF assistance, but when we examine the range of public assistance programs—cash aid and food assistance and Medicaid— immigrants remain significantly more likely to receive help than the native born. Consid- ering all these programs, a full third of all immigrant households receive aid, compared with just 19 percent of U.S.-born households.72

Finally the search for equity ultimately involves “getting the numbers right” in relation to social needs and allocations. An implicit equation of equity is that welfare transfers ought to result in a fair distribution of public resources among competing needs and problems. On one side of this equation, we must calcu- late the full range of transfers and how they are distributed. On the other side, we must fathom the needs and problems to which transfers are addressed, and how well they help to address them. Efforts to achieve equity aim to produce a reasonable allocation of resources within the limits of knowledge. Fairness here reflects a certain proportionality between needs and the resources necessary to meet them. To make informed decisions in allocating social transfers, poli- cymakers should have data on the scope of problems, what is being spent on them, and the extent to which the problem is being resolved by these measures.

Getting the numbers right on the expenditure side of social transfers re- quires going beyond the conventional account of welfare spending. As sug- gested in Chapter 2, an accurate ledger for social accounting would require taking the full measure of welfare transfers, including indirect tax expendi- tures (e.g., benefiting homeowners, students, employees, veterans, farmers) as well as conventional direct social welfare expenditures, be they public or private. Much of the data are available and need only to be drawn together in an inclusive annual report on social welfare expenditures in order to consider- ably reframe the discussion of welfare spending.

SUMMARY

This chapter identifies basic choices in the design of social welfare policy. The framework posits four questions: (1) What are the bases of social allocations? (2) What are the types of social provisions to be allocated? (3) What are the strategies for the delivery of these provisions? and (4) What are the ways to finance these provisions? The context for this framework is a benefit-allocating mechanism that functions outside the economic marketplace. Using the analytic framework to ex- amine the evolution of social services, specifically services provided under the Social Security Act, various trends become apparent. Three social justice–related values that drive choices in policy formation are equity, equality, and adequacy.

89

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

1. Not a key component of the analytic framework sug- gested in this chapter:

a. Social allocation

b. Service delivery

c. Social Security

d. Social provision

2. The Temporary Assistance for Needy Families legislation of 1996:

a. Forged a new national entitlement to public assistance.

b. Eliminated the national annual cost of living increase for needy families.

c. Emphasized work over welfare.

d. Made child protective services part of the Department of Housing and Urban Development.

3. The conservative perspective on public assistance values:

a. Local autonomy

b. National uniformity

c. Redistribution of income

d. Regulation of the business sector

4. The official poverty line provides a standard for:

a. Opportunity

b. Equality

c. Equity

d. Adequacy

5. SSI, created in 1972, consolidated earlier public assis- tance programs, including:

a. TANF

b. Social Security

c. OAA

d. AFDC

6. How are “social transfers” best described?

a. A unilaterial exchange from buyer to seller.

b. A unilateral exchange from the individual to society.

c. A multilateral exchange from society to the individual.

d. A unilateral exchange from society to the individual.

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C H A P T E R 3 R E V I E W

7. Choose a social welfare policy in your field of interest and analyze it using the Terrell-Gilbert framework. What patterns, if any, do you notice?

90

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* Social and Economic Justice: Understanding Forms of Oppression and Discrimination

Republicans and Democrats Divide on Tax Cut (2008)

Who Is The Middle Class? (2008)

* Applying Critical Thinking

Read and Review

Read These Cases/Documents

John Kennedy’s Inaugural Address (1961)

Jane Addams, The Subjective Necessity of Social Settlements (1892)

* Critical Thinking

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M Y S E A R C H L A B C O N N E C T I O N S

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Interactive Case Study: Comparing Civil Rights

Interactive Case Study: Evolution of Political Parties in the U.S.

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* � CSWE Core Competency Asset ^ � Case Study

91

x

x

x

x

Professional Identity

Ethical Practice

Critical Thinking

Diversity in Practice

Human Rights & Justice

Research- Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

Competencies in This Chapter (with Practice Behaviors)

Who Shall Benefit? 92

Universality and Selectivity in Income Maintenance 95 Seattle and Denver Income Maintenance

Experiments Children’s Allowance

A Negative Income Tax for Workers: The Earned Income Tax Credit 98

Child Support and Asset Building 100

Social Effectiveness and Cost Effectiveness 101 Work Incentives Childbearing Family Stability Stigma and Social Integration

Another Perspective on Allocation: A Continuum of Choice 107 Attributed Need Compensation Diagnostic Differentiation Means-Tested Need

Allocative Principles and Institutional– Residual Conceptions of Social Welfare 111

Operationalizing the Allocative Principles 113

Eligibility versus Access 117

Emerging Issues: Defining and Measuring Poverty 121

Summary 124

Practice Test 125

MySearchLab Connections 126

The Basis of Social Allocations

4

C H A P T E R O U T L I N E

Chapter 492

“I suppose you mean that you have no money to pay wages in,” said I. “But

the credit given the worker at the government storehouse answers to his wages

with us. How is the amount of the credit given respectively to the workers in

different lines determined? By what title does the individual claim his particu-

lar share? What is the basis of allotment?”

“His title,” replied Doctor Leete, “is his humanity. The basis of his claim

is the fact that he is a man.”

Edward Bellamy

Looking Backward, 1888

From each according to his abilities, to each according to his needs.

Karl Marx

Critique of the Gotha Programme, 1874

In his classic utopian novel, Looking Backward, Edward Bellamy views the “good society” as a place where every individual can claim an equal share of the goods and services produced by the nation. Citizens are guaranteed a comfortable standard of living from, as Bellamy put it, “cradle to grave.” En- titlement does not depend on being rich or poor, single or married, brilliant or dull, healthy or ill; instead, a person’s entitlement is his or her humanity.1 In Bellamy’s vision, social allocations are arranged according to the principle that everyone deserves an equal share, with one exception. That is, Doctor Leete explains, “A man able to do duty [i.e., work] and persistently refusing is sentenced to solitary imprisonment on bread and water ’til he consents.”2 Although this may seem harsh, in Bellamy’s society work roles are structured to dignify every task and to allow a choice of occupations broad enough to suit in- dividual preferences. Nevertheless, as an introduction to the allocative dimen- sion of choice in social welfare policy, there is perhaps some small comfort in noting that, even in a Utopia of rationality, harmony, and consensus, problems of social allocation are not entirely amenable to neat, unqualified solutions.

WHO SHALL BENEFIT?

In the real world, few social welfare policy issues engender more vigorous debate than who shall benefit and the manner in which entitlement is defined. The rules used to determine who benefits from any social welfare policy may be predicated on a wide and diverse range of criteria ranging from the unusual (Native American blood quantum) to the mundane (amount of money earned). We refer to the gen- eral principles that underlie these criteria as the bases of social allocations.

Attempts to develop principles of eligibility traditionally begin with the distinction between universalism and selectivity. Universalism denotes bene- fits made available to an entire population as a basic right. Examples are Social Security retirees and public education. Selectivity denotes benefits made avail- able on the basis of individual need, usually determined by a test of income. Examples include public assistance and public housing.

The social policy literature contains an ongoing debate between proponents of universal and selective principles.3 Universalists view social policy as soci- ety’s proper response to those ordinary life problems faced by all members of the community—not just the poor, the disabled, or those facing special hardships. For universalists, all citizens are “at risk,” in the sense that all of us, at one time or another, face a variety of common social needs. The proper aim of the welfare

Universalism denotes benefits made available to an entire population as a basic right. Selectivity denotes benefits made available on the basis of individual need.

The Basis of Social Allocations 93

state, accordingly, is to organize broad programs of response, without differenti- ating among rich or poor, men or women, or other citizen categories.

Young people, for example, need care and education. Those who are ill need health care. The elderly, disabled, and unemployed need income support. Univer- salists favor public arrangements that address these needs on the basis of a general entitlement, as a social right comparable to the political rights we take for granted. Social insurance, public education, health care for the aged—programs available without regard to income—stand as the models for a proper welfare society.

Universalists also emphasize the value of social effectiveness, the need, noted earlier, to preserve the dignity of the individual and the cohesion of society. Pro- grams designed for everyone create an equality that is undermined by restricting eligibility to particular groups. Programs based on economic determinations are especially divisive, accentuating differences in society that frequently take on moral as well as economic meanings. Those who receive benefits often feel demeaned, even when their rights to benefits are clear. Receiving food stamps, for example, or being assigned to a special class for the educationally impaired, is for many a sign of failure, an embarrassing, stigmatizing experience. “Invidious rationing for the poor,” as Alvin Schorr puts it, “does not seem a sound principle for a welfare state.4”

Universalists, finally, argue the political advantages of social programs based on inclusiveness, citing the strength throughout the world of policies aiding broad populations. Universal programs, admittedly, cost more, but they are far more popular than means-tested programs that focus on marginal social groups. The history of social provision in the United States—Aid to Families with Dependent Children/Temporary Assistance for Needy Families (AFDC/ TANF) being the most notable example—vividly demonstrates the political vulnerability of programs exclusively for the poor.

Selectivists see the world very differently. They view the appropriate scope of social policy in terms of carefully targeted beneficiaries. Families or individu- als demonstrating need, they believe, should have priority for assistance. Rather than sponsoring universally available entitlements, selectivists favor benefits that are restricted. Underlying this perspective is the view that a proper social policy, especially in an era of fiscal constraint, must be a limited social policy; that people who can afford to meet their own needs should not receive govern- ment handouts; and that taxpayers should focus their help on that margin of the population, the “deserving poor,” legitimately unable to fend for themselves.

Capsule 4.1 Targeting within Universalism

We can draw two conclusions from the history of social provision in the United States. First, targeted antipoverty efforts have generally been

inadequately funded, demeaning to the poor, and

politically unsustainable. Second, some kinds of

(relatively) universal social policy have succeeded

politically. And within the framework of universal

programs, less privileged people have received extra

benefits without stigma. I call this pattern “targeting

within universalism” and suggest it could become

the basis for a revitalized strategy against poverty.

Those who want to help the poor should not try to

devise new programs finely targeted to low-income

people or the “underclass.” They should forget about

reforming means-tested public assistance programs.

Rather, they should aim at bypassing and ultimately

displacing “welfare” with new policies that address

the needs of the less privileged in the context of

programs that also serve middle-class and stable

working-class citizens.

Reprinted with permission from Theda Skocpol, “Sustainable Social Policy: Fighting Poverty Without Poverty Programs,” The American Pros-

pect: Summer 1990. Volume 1, Issue 2. http://www. prospect.org. The American Prospect, 1710 Rhode Island Avenue, NW, 12th Floor, Wash-

ington, DC 20036. All rights reserved.

Chapter 494

Means-testing, obviously, is a direct way of confining social benefits. Cir- cumscribing eligibility according to need, selectivists argue, reduces overall spending, overcomes the tendency for welfare to benefit the politically power- ful middle class, and ensures that available funds focus on those in the most dire straits. The argument certainly is a reasonable one. If we wish to attack poverty, we must focus on the poor—job training to counter poor employment skills, Head Start to provide educational enrichment, and day care to enable TANF moms to enter the job market. If we are concerned with effective anti- poverty policies, why should money be wasted on people not in great need, or in no need at all?

But neither side is quite satisfied to let the debate rest here. Each lays claim to at least a share of the values claimed by the opposition. Universal- ists, for example, claim cost effectiveness because broad prevention programs such as comprehensive prenatal healthcare or broad scope preschool programs have the potential to avoid or reduce future problems—and their associated costs—in a way that case-by-case eligibility determination cannot. In the long run, it is argued, “an ounce of prevention” creates economic savings for the larger community. As a bonus, universal allocations are said to be less expen- sive to administer than selective allocations because they do not require con- stant screening, checkups, and benefit adjustments to ensure the proper level of assistance.

Universalists also argue that comprehensive policies, properly constituted, can be redistributive, concentrating assistance on those with the greatest needs. This is Theda Skocpol’s argument in Capsule 4.1. For example, “tax backs” can be employed to shift the burden of universal benefits to the economically bet- ter off. That is, by including the value of universal benefits in taxable income, richer individuals and families wind up supporting a disproportionate part of the costs involved.5 Many countries, for example, including the United States, include at least a portion of the value of Social Security benefits in taxable in- come. And increasing numbers are beginning to tax children’s allowances. In this fashion, programs for everyone are substantially financed by those most able to pay.

Universal programs, indeed, especially in the health field, have been forced by financial pressures in recent years to forsake their long-standing “equal charge” principle. Medicare, for example, from its inception, imposed the same premium fee on all participants, whatever their income level. Since 2003, however, Medicare has moved from “treat everybody the same” toward means-testing. Medicare benefits for drug prescriptions and outpatient care, in particular, now require middle-class and affluent recipients to pay substan- tially higher program premiums than low-income beneficiaries. For example, when it comes to the premium for Medicare Part B—which pays doctor’s bills—the standard charge in 2011 was $115 monthly, but beneficiaries with annual incomes over $85,000 were required to pay an additional monthly charge ranging from $46 to $254.

Universal services, on the outlay side, can also be adjusted to provide a basic level of assistance to all while concentrating additional help on those in greatest need. In this way, programs for the poor, as Nicholas Lemann states, can “be contained (to some extent camouflaged) within programs to help the middle class.”6 Many countries follow this approach, modifying programs of universal scope to address the needs of the poor. In the United States, for ex- ample, recent alterations in the Medicare health insurance program have taken this direction. European welfare states have moved similarly. In Great Britain,

The Basis of Social Allocations 95

public health home visits for new mothers are universal, but additional visits are focused on those mothers, and children, at greater risk. In France, lone parents, low-income families, and disabled children receive, in addition to the standard family allowance, a special targeted supplement.

Selectivists claim their own version of social effectiveness. If society seeks to move toward greater equality, they argue, offering benefits to the poor alone is bound to be more effective than allocations for everyone. Provisions targeted on the needy—whether through education, health care, childcare, or housing— clearly reduce the social and economic discrepancies that produce tension and hostility in our society. Given vast unmet needs, equity would seem to demand that the poor receive first call on scarce public resources.

These are some of the general issues that provide a framework for the uni- versal–selective debate. To place this debate in a substantive context, let us illustrate how the choice between universal and selective principles translates into specific policy proposals. And let us also examine the values and assump- tions that underlie these principles when they are applied.

UNIVERSALITY AND SELECTIVITY IN INCOME MAINTENANCE

In the decades-long dialogue concerning income maintenance programs, nu- merous reform measures have been put forth by academicians and politicians.7 These proposals can be analyzed from different perspectives. For example, they can be placed along a continuum of generosity, depending on where they define the poverty level and the proposed amount of financial aid they offer.

Capsule 4.2 The Fine-Feathered (Gallic) Nest

Scarcely three days old, Thomas Meilleroux slept softly in Paris’s Hôspital Saint-Vincent-de-Paul, a pink shell of tiny fist tucked under his head. He

had every right to wear an air of blissful unconcern.

The moment Christine, his mother, announced her

pregnancy, social security mailed a thick folder, the

carnet de maternité.

It brought medications, exams, childbirth classes,

and—from the sixth month—a monthly pregnancy

allowance. Afterward: ten visits to a physical

therapist to tone the stretch-marked tummy. “They

make it so easy, you don’t even have to think,” says

Christine. “I never paid a cent.”

Now our little bundle of joie is three months old.

Young Thomas happens to be a firstborn. If he were

a second child, Christine would collect a hundred-

dollar-a-month family allowance until his 18th year.

Were he the third, she’d pocket $200. For a fourth,

$330. Single parents, low-income families, and

handicapped children get more.

The goal is to raise the birthrate and ensure a

decent living standard. But the biggest benefit of

the free care lavished on expectant mothers (and a

legally enforced maternity leave of at least 16 weeks

at 80 percent pay) is an infant-mortality rate of 7.6

per thousand, among the world’s lowest—well below

the United States’ 10.4.

The basic family allowance is not tied to income.

Even the matron who shops for her precious heirs

in Christian Dior Bébé collects. After all, c’est son

droit—it’s her right.

In France social welfare is not a charity but a

right of citizenship inviolable as the August

vacation.

From “The Fine Feathered Nest” by Cathy Newman, National Geographic, July 1989. Reprinted by permission of National Geographic Image

Collection.

Chapter 496

Alternatively, they can be viewed according to their decision-making struc- ture, varying by the degree to which policy is centralized or localized. Most recently, debate has centered on issues of moral values and reciprocity, with conservatives promoting systems of public aid focusing on jobs, time-limited assistance, and the reduction of teen pregnancy.

In the years of debate over the “proper” basis for allocating cash benefits, a va- riety of program reforms have been advocated. In the 1960s and 1970s, the choice between universality and selectivity was debated in terms of two broad program options: guaranteed-income programs (frequently referred to as negative income taxes) and children’s allowances (sometimes called family allowances). Since the 1980s, the nature of the debate has changed as efforts have been made to find com- promises between universalism and selectivity, and variant programs such as the Earned Income Tax Credit (EITC) have achieved considerable success.

Guaranteed-income programs are defined by two characteristics: the provi- sion of a defined minimum subsidy for families with little or no income and the utilization of a formula to determine how much this subsidy decreases as earnings increase. This formula represents what economists call a negative tax. Most proposals suggest administering the guarantee through the Internal Revenue Service, using the same procedures by which personal income taxes are collected and refunds distributed. Simply stated, the income tax struc- ture would become a two-way operation, with money flowing to the govern- ment from people with incomes above a certain level and money flowing from the government to people with incomes below that level. In either case, the amount paid in or out would be graduated according to income. An essential feature of the plan is that the allocation of benefits is tied directly to an income test and is thereby based on the principle of selectivity.

Schemes for a children’s allowance, on the other hand, usually involve the provision of a demogrant, “a uniform payment to certain categories of persons identified only by demographic (usually age) characteristics.”8 More than 80 nations throughout the world, including most of the industrial West (but not the United States), offer some form of children’s allowance as an integral part of their welfare system. (The United States, however, provides a dependent exemption within its federal income tax, which achieves some of the same purposes.) The development of children’s allowances has achieved wide- spread support for various reasons, among them the fact that children repre- sent a substantial proportion of the poor and, wherever one places the blame and however one perceives the causes of poverty, children are clearly innocent victims. An essential characteristic of the demogrant is that benefits are allo- cated to all families, regardless of economic circumstances, thereby reflecting the principle of universality.9 Table 4.1 shows four child-allowance variations.

To illustrate the issues that arise in applying the universal–selective framework, the basic features of two classic income maintenance proposals will be described. The first is the negative tax program tested experimentally in the mid-1970s in Seattle and Denver.10 The second is the children’s allowance proposal developed in 1974 by Martha Ozawa, one of the foremost advocates of this type of program in the United States.11

Seattle and Denver Income Maintenance Experiments

The Seattle and Denver Income Maintenance Experiments (SIME/DIME) were the largest and most carefully controlled income maintenance experiments in history. The sample enrollment in the experiment included 4706 families,

The Basis of Social Allocations 97

Table 4.1 Child Allowance Standards and Monthly Benefits in France, Japan, Sweden, and the United Kingdom, 2010.

France Age: Under 18 (20 for students, apprentices, vocational trainees, or disabled). Coverage: Payable monthly to families with two or more children. Monthly benefit: $173 for two children; $223 for each subsequent child; plus a $49 increase for each child aged 11 to 15, and $86 for each child beyond age 15.

Japan Age: First child under 4 and second and subsequent child under 3. Coverage: Payable monthly to residents with one or more children. Monthly benefit: $147 per child. Sweden Age: Under 16 (20 for students). Coverage: Payable monthly to all residents with one or more children. Monthly benefit: $147 per child. United Kingdom Age: Under 16 (19 for full-time highschool students). Coverage: Payable to residents with one or more children. Monthly benefit: $134 for the first child; $88 for each additional child.

Source: Social Security Administration, Social Security Programs Throughout the World, 2010.

44 percent assigned to the control group and the remainder divided among 11 experimental groups. Each experimental group received one of three guaranteed levels of annual income—$3800, $4800, and $5600—and was taxed at varying rates. Four negative tax rates were used: two constant tax rates (one of 50 percent and the other of 70 percent) and two varying tax rates that started at 70 percent and 80 percent and declined as income increased. Using the 50 percent constant tax rate and the $5600 subsidy as an example, a recipient family with no earned income would be paid $5600 a year. For each dollar earned, their grant would be reduced by 50 cents. With this negative tax rate, an income of $11,200 is the “break-even level,” the point at which the grant drops to zero.

Children’s Allowance

The Ozawa proposal, formulated in 1974, involved an allotment of $60 a month for each child, with payments independent of family income or other eligibility conditions. Under the proposal, the allowance itself constituted taxable income. When translated into dollars and cents, this meant that families of equal size received exactly the same benefits. Depending on their income, however, these families ended up returning different amounts of the allowance to the government through their income taxes. A family with income low enough to fall below the federal tax threshold, for example, would not have its allowance taxed at all, whereas a family in the 15 percent bracket would have a portion of the allowance “taxed back.” Households with higher incomes, in higher tax brackets, would find their allowance reduced by greater amounts.

Chapter 498

In this fashion, the net gain received by the allowance varies by income. The significance of this arrangement is that it makes the children’s allowance a benefit that is uni- versal at the point of distribution, but selective at the point of consumption. This is not an attribute only of children’s allowance. When we consider how benefits are financed, some form of selectivity creeps into virtually all universal schemes. As Reddin has demonstrated, universal benefits are “those in which the universal gene is dominant but where there are also variant forms of ‘recessive’ selective genes incorporated in the structure.”12

More recent proposals have suggested repealing the existing federal income tax exemption for children

and replacing it with a children’s allowance.13 This would have a decided redistributive impact because the exemption—$3800 per child in 2012— benefits upper-income parents far more than lower-income parents. Parents in the 35 percent income tax bracket in 2012, for example, received tax relief worth $1330 (35 percent of $3800) per child, whereas parents in the 15 percent bracket received just $570. And poor parents, those earning so little that they pay no taxes, got no benefit. Eliminating the exemption would save a sum that, transformed into a universal allowance, could provide all parents over a thousand dollars per child per year.

A NEGATIVE INCOME TAX FOR WORKERS: THE EARNED INCOME TAX CREDIT

The pros and cons of negative income and child allowance proposals have been strongly argued for some time. Neither plan, however, proved politically popular. Rather than making sweeping comprehensive changes in our system of social welfare, citizens and elected officials have generally been content to live with a variety of separate programs geared to specific needs and segments of the population, and reflecting different principles and values. Although our political system generally avoids grand schemes of comprehensive reform, both the negative income tax and the children’s allowance have been incorpo- rated, in modest and camouflaged forms, into our ongoing social policies.

The case of the personal exemption has been noted. Tax-paying families have long received exemptions for each of their dependents, providing a significant form of income support that varies with family obligations. The Internal Revenue Code also incorporates a negative income tax in the form of the EITC. The credit, first enacted in 1974, contains many of the key characteristics of guaranteed-income schemes. It provides a basic income subsidy to low-income families, it utilizes a formula to determine how subsidies decrease as earned income increases, and it is administered through the tax code. The EITC is different from a guaranteed-income plan, however, in that it covers only part of the population (i.e., low-income wage-earning families). People who don’t work are not covered.

Under EITC provisions for 2012, as Figure 4.1 indicates, families earn- ing up to $50,270 are eligible for credits. The credit is greatest—the maxi- mum being $5891—for poor families with three or more children. As incomes rise, the credit is reduced. What makes the arrangement a negative tax is its

Research Based Practice

Practice Behavior Example: Social workers

use research evidence to inform practice.

Critical Thinking Question: What would be the benefits and drawbacks of a universal child

allowance? How would you design a proposal

that tests the feasibility of such a policy?

The Basis of Social Allocations 99

refundability. That is, when the value of the credit exceeds the amount of income taxes owed, the worker receives a cash rebate.14 In 2011, nearly seven million people were moved out of poverty by the EITC.

The EITC covers only workers, so, unlike the SIME/DIME demonstration, it has a salutary impact on employment. In this sense, it is akin to a wage sub- sidy, concentrating its benefits on those who are poor even though they work. Up to a point at least, the more people work, the more they get, which is quite the opposite of other negative tax and guaranteed-income plans. According to David Ellwood, the EITC avoids the “conundrums” of welfare:

The rewards of work are increased, not diminished. Benefits go only to those with an earned income. People are helped without any need of a stigmatizing, invasive, and often degrading welfare system, and their autonomy is increased, not decreased. Since it truly would be part of the tax system, people would not be isolated. The negative impact on the work effort of the poor is likely to be small if it exists at all, but the benefits to the working poor may be large. And employers would have no reason to change their hiring practices. Their cost of doing business would essentially be unchanged except for slight additional administra- tive costs for employers who provided negative withholding.15

Since it is restricted to working families, the EITC is hardly the broad-brush measure proposed in the 1960s and 1970s by negative tax advocates. Moreover, EITC benefits are more modest than the most proposed negative income tax guarantees. Nevertheless, the EITC exists and the negative income tax doesn’t. For all practical purposes, indeed, the negative income tax idea has faded to near oblivion, and is not likely to be revived as part of any income strategy in the near future. Refundable credits on the EITC model, on the other hand, constitute an antipoverty measure with substantial promise. Combined with the income tax exemption, refundable credits offer a mechanism for significant income support, especially for low-wage earners. In 2008, approximately 25 million taxpayers received nearly $50 billion in EITC benefits, a sum considerably larger than the total spent on TANF. Were the EITC further liberalized and tied more firmly to family size, it could go even farther in reducing poverty in this country.

$3000

$4000

$5000

$2000

$1000

$0 $0 $5K $10K

C re

d it

A m

o u n t

$15K $20K $25K $30K $35K $40K

Maximum benefit $457

Maximum benefit $5028

Maximum benefit $3043

No Children One child Two or more children

Figure 4.1 The Earned Income Credit, 2009.

Note: Married couples with income in the phaseout range qualify for a higher credit than single parents, shown by the dashed lines.

Chapter 4100

CHILD SUPPORT AND ASSET BUILDING

Several other income support ideas have also received considerable attention over the past decade, although none with significant legislative outcomes. Scholars like Irwin Garfinkel and John Ellwood, for example, have been articulate proponents of Child Support Assurance, an antipoverty approach aimed at assuring a reasonable level of income to children in single-parent families. Given the difficulty in collecting child support from absent parents, Child Support Assurance would make it the responsibility of government to guarantee such children $2000 to $2500 per year. The U.S. Treasury would distribute these checks automatically, month by month, while at the same time working with the states to make absent parents pay their share. This arrangement would relieve poor moms, in particular, of the difficult, time-consuming, and often futile legal and personal effort to secure child support.16

A second proposal, advanced by Bruce Ackerman and Anne Alstott in their 1999 book The Stakeholder Society, would provide every young adult a public contribution of $80,000 when they start college, or turn 21.17 Ackerman and Alstott see such a universal cash grant confronting basic in- equalities in America by enabling young people just starting out in life to invest in their futures. The grant—they call it a “stake”—would particularly benefit individuals from poor families, helping them to pay for college, estab- lish a household, and start out successfully on the road to an adult life.

A similar proposal by Michael Sherraden calls for the establishment of children’s savings accounts. The accounts approach is one element in a “social investment strategy” to build the long-term assets of the poor.18 Sherraden’s idea is for the federal government to fund bank accounts for poor children, enabling them to accumulate a nest egg that would ultimately be available for purposes such as college or buying a home.

Investment strategies such as stakeholding and children’s accounts focus on the accumulation of resources rather than simple income maintenance. Asset building is viewed as a particularly valuable approach to reducing child poverty. Child savings accounts (CSAs), for example, would be universal in scope, with every child under 18 receiving annual “deposits” from Uncle Sam and, perhaps, supplemental tax-favored contributions from family members. For Sherraden,

CSAs [child savings accounts] are consistent with our political values and the imperative to develop the human and social capital of our nation’s children. Just as another asset-based policy, the GI Bill, promoted human and social capital in the middle of the twentieth century—with enormous payoffs in educational attainment, increased productivity, and widespread home ownership—a CSA policy would democratize educational opportunity, spread the distribution of wealth, build strong households and communities, and promote economic growth.19

To some degree, all three of these proposals have been developed in an effort to stimulate fresh thinking and fresh action about child poverty, given the failure of the child allowance movement of the 1960s and 1970s. But whereas Child Support Assurance seeks to provide direct cash aid for immediate needs, asset-building strategies are targeted on long-term goals. And while nei- ther CSAs nor asset approaches have engendered much political excitement,

The Basis of Social Allocations 101

wealth-building programs, especially those operating in a fashion to bolster retirement income and the Social Security system, have recently appeared on the legislative radar screen.

SOCIAL EFFECTIVENESS AND COST EFFECTIVENESS

When the abstract principles of the universal–selective debate are applied to choices among concrete alternatives, such as the income maintenance schemes just described, or to existing programs such as Social Security or public aid, the discussion generally centers on considerations of social effectiveness and cost effectiveness, the definition of these values, and assumptions regarding policy elements that facilitate and impede their realization.

Measures of cost effectiveness in income maintenance are usually deter- mined by comparing the total costs of the alternative schemes, the extent to which the allocated funds fill the poverty gap, and the amount of “seepage” to the nonpoor. Implicit in this is a definition of income maintenance that seeks to improve the lot of the statistically defined poor (those people with annual incomes below the federal poverty line).

On the basis of these criteria, the negative income tax is clearly superior to child allowances or asset programs. That is, benefits such as the EITC provide higher levels of assistance to poor families, with only modest seepage to better- off income groups. The same is true of today’s public assistance programs. While universal benefits, available to citizens of all income classes, certainly help alleviate poverty, they are relatively inefficient in doing so because only a small portion of their overall value assists the poor. This is especially true for chil- dren and families. Irwin Garfinkel, for example, found that in the 1990s single- parent families—a group particularly vulnerable to poverty—received a share of universal benefits about equal to their percentage of the overall population. In stark contrast, they received a full 74 percent of targeted, means-tested transfers.20

Selecting the poor for benefits, not unexpectedly, is an efficient antipov- erty strategy. However, this advantage is hardly impressive if the goal of public policy is to improve the lot of children in general, an important objective given the fact that working and middle-class families, as well as the poor, frequently need help to ensure the welfare of their members. From this viewpoint, cost effectiveness is defined quite differently and universal schemes may be prefer- able. As Cutt points out,

Universal schemes may be considered to be redistributive in a horizontal sense—from the childless to those with children—and therefore may be seen as having a broader objective than a selective scheme, specifically the alleviation of need among children in any income group, rather than the more tightly focused alleviation of need in families defined as poor in a statistical sense.21

On the other side of the ledger, social effectiveness tends to be identified with the universal approach, although here, too, a definitive case is lacking. Estimates concerning the social effectiveness of income maintenance schemes are based on certain assumptions about the harmful consequences of targeted antipoverty approaches. These consequences, briefly touched upon in Chapter 2, include welfare’s effects on work, childbearing, family stability, stigmatiza- tion, and social integration. Let us review some relevant research findings.

While cost effectiveness is associated with the universal approach and social effectiveness is associated with the selective approach, definitive cases to prove either point are lacking.

Chapter 4102

Work Incentives

All social welfare benefits, to some extent, provide an incentive for the very circumstances they are established to ameliorate. This is the principle of “moral hazard.” Unemployment insurance makes it easier to be unemployed. Public assistance makes it easier to support a child without working. In this sense there is a germ of truth in the traditional contention of conservatives that welfare “causes” dependency.22 To the extent that they eliminate some degree of economic stress, therefore, both SIME/DIME and children’s allowances have some negative effect on the incentive to work.

The engineers of welfare reform in the 1960s and 1970s were sensitive to these “perverse incentives” and sought to arrange payments in ways that would minimize them. Since the disincentive to work in a guaranteed-income arrangement such as SIME/DIME was great because the basic payment in a zero-work/zero-income situation was high, these programs sought to build in countervailing inducements. As we have seen, this was accomplished by try- ing to make work attractive by permitting wage earners to keep a significant portion of their income. Rather than reducing their benefits dollar for dollar against their work income, the “tax” on work implicit in the benefit formula was kept low so as not to discourage recipients from getting and keeping jobs.

One of the most perplexing issues in the design of negative income tax schemes is the impact of different tax rates on work incentives. Simply put, how does a 30-, 60-, or 90-cent reduction in grant payments for each dollar of income earned affect a beneficiary’s motivation to work? And how do these effects differ for grants offering low and high levels of support? The issue is complex because the lines of influence may flow in both directions. That is, high tax rates may be an inducement as well as a deterrent to greater work ef- fort. The popular belief is that the person who gets to keep only 50 cents on a dollar is less inclined to work than the person who keeps 90 cents. However, assuming the desire for a certain standard of living, an individual who keeps only 50 cents may work harder and longer just to maintain his or her position, whereas the person who keeps 90 cents initially has more money to spend and may opt to enjoy more leisure time rather than supplement his or her income by additional work. That is to say, except for extreme cases where the tax rate approaches 100 percent, the point at which a worker may decide that the ad- ditional income is not worth the effort is indeterminate.

Regarding the ordinary federal income tax, for example, there is little evidence to support the belief that high tax rates necessarily have a deleterious influence on work. After reviewing a number of studies, economist George Break concluded that:

neither in Great Britain nor in the United States is there any convincing evidence that high levels of taxation seriously interfere with work incen- tives. There are, in fact . . . a number of good reasons for believing that considerably higher taxes could be sustained without injury to worker motivation.23

In the SIME/DIME experiments, however, the evidence was not quite so encouraging. In the first edition of this book, we reported that the initial find- ings of one experimental negative tax program showed that “families receiving assistance worked just as hard as ever—and there were even some indications that they had been stimulated to work harder.” The early findings also sug- gested that psychological barriers or disincentives to work were not evident

The Basis of Social Allocations 103

even for those families whose earnings increased to the point where they were no longer eligible for assistance.24 However, further research revealed that these conclusions were somewhat premature. The preliminary findings reported in the early 1970s were sharply contradicted after a longer period of study of a much larger sample in the SIME/DIME programs.

Findings indicate that, compared to the control group, families receiving the guaranteed-income grant worked significantly fewer hours per year. Although changes in work effort varied with the amount of the grants and the negative tax rates, an estimate of the nationwide effects of a SIME/DIME program sug- gested that a guaranteed income at 75 percent of the poverty line and a negative tax rate of 50 percent would reduce work effort for about 6 percent for hus- bands, 23 percent for wives, and 7 percent for female heads of families.25

There are a number of reasons to believe that these findings underestimate the work reduction that would actually take place. One cannot discount the possibility that simply knowing they were part of an important social experi- ment may have influenced the participants’ behavior. The Hawthorne effect, a well-known phenomenon in social research, suggests that, in the process of becoming actively engaged in an experiment, participants develop a commit- ment to its success and an inclination to behave in ways that do not disap- point the investigators.26 Moreover, the limited scale of SIME/DIME could not simulate the effects of a nationwide program with millions of participants who might well organize to lobby for higher benefits. The relatively brief duration of the experiment no doubt inhibited tendencies to reduce work effort and risk losing a job that the participant would need when SIME/DIME grants ended. There is also a reasonable possibility that a guaranteed minimum income would invite early retirements. Compensating for these and other factors that might have biased the SIME/DIME measurements, Martin Anderson estimated that any such scheme, nationally implemented, would result in a minimum 29 percent reduction in the work effort of low-income workers.27 This means that a guaranteed income for everyone would result in public money replacing a considerable amount of income that recipients would otherwise have earned themselves. This not only makes for a costly program, it makes for a morally questionable one. A society that prizes independent effort and initiative is not likely to value public policy that appears to undermine the work ethic.

Yet questions of the extent to which income guarantees affect work cannot be put to rest on the basis of the findings of a few studies. The economic variables involved in the SIME/DIME experiment must be checked against studies of other programmatic arrangements, different population groups, and varying economic and cultural conditions. Several careful studies have reviewed both the combined and the separate effects on work behavior of welfare benefits, most concluding that significant financial disincentives undermine the work behavior of welfare-eligible adults. Although work may be important to poor families for any number of good reasons—self-esteem and setting a good example for the children, chief among them—it rarely provides a financial advantage (at least in the short run) over welfare. In the 1990s, for example, Kathryn Edin estimated that a working mother would have to earn about $17.00 an hour (in today’s terms) just to maintain the living standards of a welfare-reliant counterpart.28 This hardly provides women with limited skills and earnings much encouragement to work. On the contrary, the consensus opinion of social scientists who studied the work–welfare dilemma empirically in the mid-1990s was that the availability of AFDC resulted in women working less.29 The disincentive effect of welfare, indeed, was one of the primary

Chapter 4104

reasons AFDC was abolished in 1996 in favor of TANF, a program, as we shall see in Chapter 8, that compels work rather than simply encouraging it.

Childbearing

Whereas a guaranteed income can be faulted for sapping the work effort, children’s allowances have their own unique set of advantages and disad- vantages. At one time, for example, allowances were viewed as having a sig- nificant bearing on population size, with critics objecting to allowances on the grounds that they served as “baby bonuses,” resulting in excessive pro- creation, while proponents lauded their effect for increasing the birthrate. More recently, however, the concern has been far more with underpopulation than with overpopulation. Simply put, the demographic crisis in Europe to- day is one of too few babies. Despite sponsoring a powerful arsenal of family- friendly social policies, far more generous than policies in the United States, most European countries have far lower annual rates of childbearing (and marriage) than rates in the United States. The United States, which is widely castigated for lagging far behind the welfare states of Europe in the develop- ment of family-friendly social policies, had a fertility rate of 2.1 children per mother in 2011 compared to the 1.5 average across Europe.30 Despite incen- tives, for example, Italy, which offers families a one-time payment of $1500 for having a child, has a 1.3 fertility rate. Spain, where parents get $4000 per new baby, has a 1.4 rate.31

In light of the evidence, then, assumptions about the effects of children’s allowances on family size must be viewed with a healthy skepticism. Even those countries with the most generous family support policies, such as guar- anteed cash allowances plus tax incentives for children plus day care and job leaves and flexible work scheduling for parents, are facing dwindling birth- rates. Japan, despite increasingly liberalized family subsidies, is struggling to increase its low fertility rate. While public support based on family size un- doubtedly provides an incentive to some people, generalizing from the few to the many underestimates the complexity of human motivation. Decisions concerning family size reflect fundamental conditions of human existence. In these matters, the influence of aid benefits must be weighed in the larger con- text of desires for self-betterment and a variety of other social psychological factors (not the least of which is the need to be well thought of by others) that come to bear on people’s decisions to have children.

Capsule 4.3 The Welfare Disincentive

As with most cash assistance programs, a woman receives maximum AFDC benefits for her family when she doesn’t work and has no other

income. As she goes to work, her benefits fall as her

earnings rise. This process creates a work disincen-

tive. In fact, under the federal mandates that existed

through 1995, a woman who had been on AFDC and

working for more than four months faced a dollar

loss in benefits for every dollar increase in earnings.

This is the equivalent of a 100 percent tax rate. . . .

A substantial body of research has tried to measure

the disincentive effects of AFDC. The results are

quite consistent across studies: higher welfare

payments discourage work.

BLANK, REBECCA M.: IT TAKES A NATION. (C) 1997 Russell Sage Foundation, published by Princeton University Press. Reprinted by

permission of Princeton University Press.

The Basis of Social Allocations 105

Given the continuing population shortfall throughout Europe and the proven difficulty of influencing birthrates via social policy, be it family al- lowances or day care or paid family leave, the debate in many countries has shifted to immigration. That is, the European population deficit, the significant imbalance between the (relatively small) number of workers paying taxes to support social security systems and the (relatively large) number of retirees re- ceiving benefits, has led many to advocate substantial liberalization of the laws regarding the entry of foreign workers. The demographer Wolfgang Lutz has estimated, for example, that allowing one million immigrants per year into Eu- rope would be the equivalent of every European woman having on average one additional child. While this may make good sense for firming up the funding of the social insurances, and for advancing more humane entry policies, it also creates considerable controversy in all those countries, and there are many, where anti-immigration parties have been gaining appeal and where there is a growing sensitivity to “cultural dilution.”32

The impact of selectivist income maintenance on childbearing, while hotly debated, also remains uncertain. One of the primary critiques of AFDC was that it provided a substantial baby incentive since eligibility was linked to the existence of a dependent child, and the level of benefit was linked to the num- ber of children. Critics like George Gilder—who long has argued that public aid fuels illegitimacy—succeeded in incorporating a “family cap” into welfare reform, disassociating the level of welfare aid from the number of children in the household. Nevertheless, social science research has produced little sup- port for the baby incentive hypothesis. While out-of-wedlock rates have esca- lated dramatically since the mid-1960s, the availability of welfare payments seems to have had, at most, a negligible effect.

Family Stability

Although children’s allowances do not appear to constitute a potent stimulus to procreation, levels of financial support associated with guaranteed-income schemes can have other effects on family life. There are competing hypotheses about the exact nature of these effects. Because financial stress is one of the major factors increasing the risk of divorce, access to reliable financial aid is likely to help stabilize family life.33 On the other hand, it has been suggested that providing mothers an assured source of support outside of marriage reduces the material incentives to get or stay married.34

These hypotheses were examined in the SIME/DIME, with results that lend credence to the proposition that a guaranteed income decreases marital stability. Overall, the rate of marital dissolution for experimental families was approximately twice that of control group families.35

Amid these startling figures, however, there were some anomalies. The marital dissolution rates at the highest support level, for example, were less than those at the lower levels of support. According to theory, the opposite should have occurred. That is, if the degree of economic independence available outside marriage contributes to the risk of divorce, then these risks should increase at higher levels of financial support.36 Also, although the SIME/DIME findings reflect the short-term consequences of guaranteed incomes, the program’s long-term effects on marital stability remain unknown. It is conceivable, for instance, that after the initial round of divorces the remaining pool of married couples and those who remarry would experience lower divorce rates than the current level.37

Chapter 4106

Stigma and Social Integration

One of the most forceful claims for universal schemes is that they avoid stig- matizing recipients. And there is no doubt but that stigma is a significant prob- lem in many situations. High school students, for example, often fail to take advantage of free lunch programs because of the embarrassment involved— it’s simply not “cool.” Since the assumption of the stigmatizing effects of the means test is held firmly by so many, indeed, some have proposed eliminat- ing it altogether. To achieve “selectivity without stigma,” for example, Titmuss suggested eliminating the means test and its “assault on human dignity” by employing, instead, a needs test applicable to specific categories, groups, and geographical areas.38 To this suggestion, Kahn responded,

It has yet to be demonstrated . . . that a needs test to open special ser- vices to disadvantaged and perhaps socially unpopular groups will not carry some of the consequences of the means test. Nor, apparently, have even the most egalitarian of societies found it financially or politically possible to completely drop means test selectivity.39

What is it about the means test that, presumably, results in an assault on “human dignity”? Perhaps this is inferred because means tests are frequently applied to socially unpopular groups such as the poor who may feel stigmatized even before they make an application for benefits. Certainly, college students, a privileged group, appear to carry the means-test burden lightly in applying for financial aid. In some cases, they have been known to express a strong preference for means-tested selection over other bases of allocation. Moreover, average citizens experience a form of means test every year when their taxes are due, without apparent damage to their sense of self-worth. Indeed, the social–psychological effects of the means test may be less inherently painful than is commonly assumed, even for the poor. Several studies have found that

Capsule 4.4 A Not-So-Irresistible Offer

Seventy-nine prominent researchers in the areas of poverty, the labor market, and family structure said today that research does not support recent sug-

gestions by Charles Murray and others that welfare

is the main cause of rising out-of-wedlock births. At

the same time, the researchers said, there is “strong

evidence” that living in poverty harms children and

that eliminating welfare for poor children would “do

far more harm than good.”

According to the researchers, most studies have

found that welfare benefits have either no significant

effect, or only a small effect, on whether women have

children outside of marriage. When inflation is taken

into account, they noted, the value of cash welfare

benefits such as Aid to Families with Dependent

Children has fallen over the past 20 years. At

the same time, out-of-wedlock childbearing has

increased. If welfare benefits were the main cause

of out-of-wedlock births, they said, the decline in

benefits should have prompted a decrease or a

slower increase in out-of-wedlock births.

The researchers cited several plausible explana-

tions for rising rates of births outside of marriage.

Among them are changed sexual mores, decreased

economic opportunity for low-skilled workers, more

women in the labor market, and deteriorating neigh-

borhood conditions. Rather than denying welfare

benefits to poor children, the researchers called for

a variety of improvements in programs assisting poor

families.

From “Researchers Dispute Contention That Welfare Is Major Cause of Out-of-Wedlock Births,” Press Release by Sheldon Danziger, July 23, 1994.

The Basis of Social Allocations 107

the means test per se is not a significant source of irritation to public assistance recipients.40

If this evidence is at all persuasive, and we think it is, then why the dogged persistence of this assumption? Why is the means test so often the bugaboo of allocative choices? The answer is twofold. First, discussions of the means test tend to confuse the principle with the practice. Distinctions between the means test as an allocative principle and the actual administration of the means test are important considerations. As we have suggested, the principle may be quite innocuous where worth and self-esteem of individuals are concerned. It is in the application of this principle that the potential for denigration exists. For example, the methods of determining eligibility for AFDC at one time in- cluded unscheduled home visits at all hours of the day and night. The message conveyed to the recipient here clearly is that she was untrustworthy and no longer entitled to a private life. Such procedures clearly damaged a person’s sense of competence and self-respect.41

Practices of this nature supported the belief in the stigmatizing effects of the means test and created much of the disapproval. However, what is actually at issue in these cases is not the principle but its application. There is no reason why the principle could not be operationally defined according to a simple and dignified procedure whereby applicants declare their needs and resources without fuss and prying. The means test need not be mean-spirited; it need not be administered by hostile bureaucrats; it need not be intimidating.42 A distinction, for example, can be drawn between the typically probing means test, which demands a complete disclosure of income and assets, and the narrower, more dignified income test, which is concerned only with the applicants’ current income, usually verified through their tax returns.43 Income-tested programs, such as the EITC, apply selectivity without stigma.

The second reason that means-tested schemes frequently are maligned relates to their broader societal effects. By their very nature, means-tested programs divide society into distinct groups of givers and receivers. Although the argument against selectivity usually blends this divisive outcome with the notion that receivers are stigmatized, these effects can be weighed independently. That is, even if stigma did not attach to recipient status, the case remains that selective programs have a divisive influence on the social fabric, fracturing society along sharp lines according to income. The poor become a distinct recipient class, whereas the near-poor, working class, and middle class fall together on the donor side of the transaction. This is an arrangement ill suited to the creation of social harmony. In contrast, universal schemes such as the children’s allowance facilitate social integration by emphasizing the common needs families face in a variety of economic circumstances. Of the various issues we have discussed, this integrative function poses one of the most frequently voiced arguments for the social effectiveness of the universal approach to social allocations.

ANOTHER PERSPECTIVE ON ALLOCATION: A CONTINUUM OF CHOICE

At the beginning of this chapter, we suggested that the universal–selective dichotomy represents a preliminary effort to analyze the choices related to social allocations. For the remainder of this chapter, we examine social

Chapter 4108

allocations from other perspectives. Our purpose is to expand and refine the analytic concepts that may be brought to bear on this dimension of choice.

Although the universal–selective dichotomy serves as a useful starting point in conceptualizing eligibility, the bases of social allocations are more intricate than these ideas imply. In reality, abstract dichotomies are usually less useful than continua of choice. Thus, there are many policies where benefits are made accessible to people in selected categories, groups, or geographic regions without recourse to an individual means test. Up until now, we have used selectivity in the narrow sense to designate means-tested allocations. Yet, as Titmuss points out, selectivity may be based on differential needs without the requirement of a means test.44 The dilemma, however, is that once the concept of selectivity is pried loose from strictly economic means-tested

considerations, its definition may be expanded to cover innumerable conditions, even some generally interpreted as universalistic, in which case the term’s meaning is dissolved. For example, some veterans’ benefits, housing- relocation allowances, special education classes, and employment and college admission preferences involve eligibility standards based on other than means-related criteria. In fact, once we yield to the broader definition of selectivity, even children’s allowances may be included because they are limited to families with at least one child. To conceive of these as examples of “selectivity,” however, adds little to our understanding.

The problem, then, is to identify a broader range of eligibility alternates than are provided by “universalism” and “selectivity” (in the narrow means- tested sense) while still maintaining a degree of abstraction that permits generalizations that tell us something meaningful. Undoubtedly, there are many ways to conceptualize allocative principles. Our view is to consider the different conditions under which social provisions are made accessible to individuals and groups in society. From this perspective, the criteria for social allocations may be classified according to four allocative principles: attributed need, compensation, diagnostic differentiation, and means-tested need.

Attributed Need

Eligibility based on attributed need is conditional on membership in a group having common needs that are not met by existing social or economic arrange- ments. Under this principle, need is defined according to normative standards. Need may be attributed to as large a category as an entire population, such as in the case of health care in England, or to a delimited group such as working parents, or residents of low-income neighborhoods, or school children with limited English proficiency. The two conditions that govern this principle are (1) group-oriented allocations that are (2) based on normative criteria of need.

Table 4.2 identifies several federal policies with eligibility premised on at- tributed need. The Family and Medical Leave Act of 1992, for example, en- sures workers the opportunity to attend to the care of a newborn baby or a dependent parent or spouse without the fear of losing their jobs. The unique nature of HIV/AIDS, and the distinctive circumstances facing its victims, has also resulted in special programs. Federal laws such as the Ryan White Act, for example, premised on the identity of AIDS as an “exceptional” disease, pro- vide over a billion dollars yearly for an elaborate network of specialized local

Ethical Practice

Practice Behavior Example: Social workers

apply strategies of ethical reasoning to arrive

at principled decisions.

Critical Thinking Question: What is your perception of the most ethical balance

between universal and selective social

allocations?

The Basis of Social Allocations 109

agencies (nearly 2500 at last count) that offer an array of support services from medical treatment and in-home care to tenant counseling and health informa- tion lending libraries.

Critics of disease-targeted legislation assert that needy non-covered groups (e.g., cancer patients, people with Parkinson’s disease) are shortchanged by these arrangements. For many years, indeed, the American Heart Association has argued for funding parity, given that heart disease victims receive fewer research and services dollars per patient than do individuals with AIDS.

Compensation

Eligibility based on compensation is conditional on membership in groups who have made special social and economic contributions, such as veterans or social insurance contributors, or who have unfairly suffered harm at the “hands of society,” such as victims of racism or sexism. The two conditions that govern this principle are (1) group-oriented allocations that are (2) based on normative criteria for equity.

The most controversial compensation-based program—Affirmative Action—which originally was advanced by federal executive action during the 1970s in an effort to compensate for the past exclusion of African-Americans from the normal channels of access and opportunity has evolved into a broad array of race and gender preferences for advancing access to higher education,

Table 4.2 Allocative Principles in Selected Federal Policies

Conditions of Eligibility Federal Policy Eligible Groups

Attributed Need The Family and Medical Leave Act

of 1992

Workers caring for dependents

Ryan White Care Act People in metropolitan areas with high

AIDS/HIV risk

Older Americans Act The elderly

Head Start, Legal Aid Residents of low-income neighborhoods

Compensation Social Security (Old Age, Survivors,

Disability Insurance [OASDI])

Enrolees, with benefits reflecting

contributions, with adjustments for

low-income status

Affirmative Action Minority populations, women

Diagnostic Differentiation Individuals with Disabilities

Education Act (IDEA)

Special-needs children (i.e., children

with severe disabilities)

Medicare Nursing Home Care The functional disabled as measured by

impairments in Activities of Daily Living

(along with means test)

Means-Tested Need Supplemental Security Income (SSI) Elderly and disabled poor

Special Supplemental Nutrition

Program for Women, Infants, and

Children (WIC)

Low-income pregnant, nursing, or

postpartum women and children

nutritionally at risk

Section 8 Housing Families with incomes below 80% of the

area’s mean income

Chapter 4110

jobs, and public contracts. While gender or ethnic or racial preferences in the allocation of public services is one of the most divisive issues in American politics, eligibility in many spheres continues to be based on efforts to counter past discrimination. College admissions in many states, for example, utilize affirmative action criteria. Employment and contract opportunities similarly are often “group sensitive,” advantaging targeted beneficiary classes. And federal benefits have long been conditioned on race, such as membership in a federally recognized Indian tribe, or possession of a certain “blood quantum.”

Affirmative action, preferences, serves a variety of objectives. As a correc- tive to past racism and sexism, it compensates minorities and women for the legacy of the oppression suffered by their forebears. Affirmative action also seeks to promote diversity in our society and a fair representation of all groups in good jobs and good schools. Opponents of affirmative action not only see preferences as discriminatory against whites and men, they note that its ben- eficiaries are often middle-class minority students and women, rather than those suffering severe socioeconomic hardships.

Other kinds of hardship also qualify for special treatment in public pro- grams. Government housing programs, for example, let domestic violence victims “jump the queue,” putting them at the front of the line for Section 8 subsidized apartments, so long as they are income eligible. In New York City, in addition, the Housing Authority gives preference to people who are deemed “intimidated witnesses” in criminal cases, as well as certain families referred by Child Protective Services.45

The United States isn’t the only country with special compensation programs for communities that have faced discrimination. India, for example, provides preferential treatment to those at the bottom of the country’s traditional caste system. Half of all new public sector employees must be from the lower castes, and government policy sets college admission quotas favoring those formerly considered untouchables.46

Diagnostic Differentiation

Eligibility based on diagnostic differentiation is conditional on professional judgments of individual cases where special goods or services may be needed, as in the situation of the physically or mentally impaired. The two conditions that govern the principle are (1) individual allocations that are (2) based on technical diagnostic criteria of need. Special education services in the public schools, for example, focus on 13 federally specified disability categories, including mental retardation, autism, visual and hearing impairments, serious emotional disability, and specific learning disabilities. Eligibility for special education is determined solely by authorized professional personnel. In similar fashion, eligibility for mental health services typically requires a determination by an approved mental health professional of the character and severity of a client’s disorder.

Other forms of disability also receive special treatment. The developmen- tally disabled—people with autism, Down syndrome, mental retardation, and other conditions—frequently are eligible to reside in institutional and group care facilities specially established to meet their special needs. Similarly, hear- ing-impaired children have long been able to attend schools set up expressly for them. While there is considerable debate whether these stand-alone pub- licly funded facilities are preferable to “mainstreaming”—integrating children with disabilities into regular schools—federal legislation does obligate states

The Basis of Social Allocations 111

to provide a “continuum of alternative placements” to meet the needs of all children with disabilities.

At the international level, humanitarian aid workers providing relief in famine situations similarly rely on a technical diagnosis of nutritional need to set priorities for food distributions. The typical approach, anthropometric measurement, utilizes criteria such as a person’s weight, skinfolds, and body mass to help identify those in greatest need of immediate nourishment.

Means-Tested Need

Eligibility based on means-tested need is conditional on evidence regarding an individual’s inability to purchase goods and/or services. The individual’s access to social provisions is limited primarily by his or her economic circum- stances. The primary conditions that govern this principle are (1) individual allocations that are (2) based on economic criteria of need. While we often think of means-tested programs as a way of providing a safety net for the poor, many public benefits are distributed rather significantly up the income lad- der. Low-income public housing, for example, after several decades of focus on the most severely economically distressed—welfare recipients, the homeless, the mentally ill, multiproblem families—broadened its eligibility standards to bring in stable working-class families. Called “deconcentration,” this liberal- ization of the rules was intended to create a mix of economic groups, and with it a mix of “models of behavior,” in order to “ward off the social instability that has ruined so many projects.”47

Similarly, federal health and nutrition programs establish varied income criteria for eligibility, typically related to some proportion of the federal pov- erty line. The Special Supplemental Nutrition Program for Women, Infants, and Children, better known as WIC, provides food assistance to pregnant women and mothers with young children with incomes up to 185 percent of the poverty threshold. Federal school meals programs are free for children from families under 130 percent of the line and are available at reduced cost for children from families between 130 and 180 percent. Medicaid eligibility is 133 percent for pregnant women, 42 percent for parents, and 74 percent for the elderly and individuals with disabilities. A related program, the State Child Health Insurance Program (SCHIP), was enacted specifically to provide sup- port for children whose parents earn too much for Medicaid eligibility. The 50 states differ in setting SCHIP criteria, some limiting eligibility to families un- der 185 percent of the poverty line, others setting the standard at 350 percent, thus incorporating many middle-class children into the health safety net.48 The federal government in 2007 reduced state flexibility by imposing a maxi- mum eligibility limit at 250 percent of the poverty line.

ALLOCATIVE PRINCIPLES AND INSTITUTIONAL–RESIDUAL CONCEPTIONS OF SOCIAL WELFARE

Before examining these allocative principles further, let us return briefly to an issue raised in Chapter 1 concerning alternative conceptions of the insti- tutional status of social welfare. We reintroduce this issue because the bases of social allocations are closely associated with the institutional and residual

Chapter 4112

conceptions introduced at the same time. The purpose of this discussion is to help clarify how these conceptions are linked with policy design.

As noted, the institutional conception posits social welfare as a normal ongoing first-line function of society, whereas the residual view sees welfare as a temporary necessity when the normal channels for meeting needs fail to perform adequately. The fundamental distinctions concern the causes and incidence of unmet needs and problems in society. To what extent do these unmet needs represent a failure of “the system” and to what extent do they represent a failure of those afflicted? To what extent are problems characterized as deviant or special cases rather than as normal occurrences? Answers to these questions are reflected in choices regarding the bases of social allocations as suggested in Figure 4.2. Here, the allocative principles are arranged along a continuum in terms of the degree to which they may be identified with institutional or residual conceptions of social welfare.

Allocations made on the basis of attributed need assume that needs are normal occurrences in society that are attributable to system inadequacies. Under these conditions, eligibility is determined according to an organic status such as citizen, child, working mother, resident, rather than on the basis of an individual’s attributes derived by a detailed examination of physical and psychological disabilities or evidence of special circumstances. Policies designed along these lines exemplify the institutional conception of social welfare in seeking to create stable, ongoing arrangements for meeting normal needs.

At the other end of the continuum, where means-tested need is the alloca- tive principle, the problem addressed is usually considered a special circum- stance arising out of individual deficiency. To be poor is not an organic status defined in terms of an inherent set of rights and obligations, such as those for working mothers, but rather as a relative condition that is determined by calculating all of the income and resources available to an individual against an arbitrary level of economic well-being. Resulting policies exemplify a re- sidual safety-net conception of social welfare that affords temporary support until the individual is “rehabilitated,” educated, retrained, or otherwise made self-sufficient.

The principles of compensation and diagnostic differentiation fall midway between the institutional and residual conceptions. The principle of compen- sation is closer to the institutional view because it implies a systemic failure or “debt.” Here, eligibility is determined according to organic status. Diagnostic differentiation is closer to the residual view because it is associated with in- dividual disabilities and requires a more or less mechanical assessment of the applicant’s special characteristics for eligibility.

This paradigm suggests that the residual conception of social welfare will persist as long as diagnostic differentiation and means-tested need (i.e., alloca- tive principles that seek to differentiate among individuals) are incorporated

The allocative principles of attributed need, compensation, diagnostic differentiation, and means-tested need are closely associated with competing institutional and residual conceptions of social welfare policy.

ALLOCATIVE PRINCIPLES

Residual Conception of Social Welfare

Attributed Need

Compensation Diagnostic Differentiation

Means-Tested Need

Institutional Conception of Social Welfare

Figure 4.2 Allocative Principles and Conceptions of Social Welfare.

The Basis of Social Allocations 113

in the design of social welfare policies. Under these principles, no matter how benign the operational mechanism for eligibility determination, unmet needs will be attributed more to chance or individual disability than to institutional strains or failures.

There will always be cases, of course, in which it is both necessary and desirable to differentiate among individuals in allocating social welfare ben- efits. Although the balance, over time, has shifted toward a larger institutional role for social welfare, it is unlikely that the residual functions will ever dis- appear. However, this does not mean that the negative aspects of the residual functions must endure. If attributed need and compensation are expanded as bases of social allocation, an adequate institutional core of social welfare may emerge. Then, as Shlakman suggests, the residual function becomes smaller and more manageable, and “it has a potential for emerging as the most flexible, most professionally oriented service, providing for the peculiarity of need and exceptional circumstances that cannot be met effectively by programs based on presumed average need.”49

OPERATIONALIZING THE ALLOCATIVE PRINCIPLES

This fourfold classification of allocative principles simplifies the structure of choice in the interest of order. Compensating for the distortions that oc- cur whenever complex reality is compressed into theory requires at least a brief glimpse at some of the problematic facets of these principles. Differences among the conditions that govern the principles are not always self-evident. For instance, distinctions between normative definitions and technical assess- ments of need are often clouded. Is the allocation of special education ser- vices for learning-impaired students based on valid technical measurements of academic potential, or on middle-class cultural norms? The technical as- sessment of psychological needs is a sensitive business in which science, art, and prevailing norms intermingle. Operationalizing psychological disorders is particularly uncertain, given the ambiguity of diagnostic categories. Special di- agnostic handbooks like the Diagnostic and Statistical Manual of Mental Dis- orders (DSM) are widely employed in the mental health field in an effort to make psychiatric diagnoses more objective. And the DSM, widely adopted by psychiatrists, psychologists, and social workers, has helped clarify the char- acter of mental disorders resulting in far greater reliability in the diagnostic process.

Yet specifying disability remains an inexact science, and very much sub- ject to professional discretion. Because the diagnosis often determines eligi- bility for mental health services, what should be a disinterested professional judgment is frequently influenced by factors having only an indirect relation- ship to the actual symptoms of the client. According to Kirk and Kutchins, for example, the diagnostic process is often determined “not by the clinical needs of the client or the treatment planning activities of the therapist, but by the mental health organizations’ need to manage service delivery.”50

A disability diagnosis, for example, may be the result of an agency’s need to regulate the number and type of clients it serves. DSM categories, in some cases, are interpreted to give the agency desirable, treatable, or reimbursable clients.51 A client with a problem that fails to meet the threshold of severity necessary for Medicaid reimbursement, for example, may be “overdiagnosed”

Chapter 4114

to ensure eligibility. In other circumstances, a problem may be deliberately concealed if this is necessary to obtain services for a client. Kirk and Kutchins relate the situation of a mental health clinic that refuses to diagnose substance abuse among clients since this would deny them eligibility for subsidized housing.52

The principle of compensation is invoked to redress inequities imposed by historical injustices and to reward contributions to society made by indi- viduals and groups. But the restoration of equity to “victims of society” may be deferred because these cases are controversial or simply not recognized by the public. Are inner-city residents entitled to a special travel subsidy if public transportation is not available to their areas of employment because middle- class residents drive to work on publicly subsidized highways? To what extent are the hardships visited on past generations a legitimate debt to present gen- erations? Is it equitable to compensate past inequities through the creation of new inequities? These questions suggest some of the complex interplay among values and social choice that attach to the principle of compensation.

Even the relatively straightforward principle of means-tested need becomes entangled in a web of value-laden choices at the point of application. First, of course, a standard of need must be operationally defined. Here, it is interesting to note how the “iron law of specificity” operates in matters of social policy. The “iron law” holds that policymakers (1) experience discomfort with the uncertainties that attach to broad problems, such as racism, unemployment, and poverty; (2) ease the discomfort by employing arbitrary but plausible surrogates of such problems; (3) treat these surrogates as substitutes for the problem in subsequent policy decisions; and (4) reinforce the surrogates through continued use, ignoring alternative problem definitions.53

Consider the notion of poverty and how closely it has become associated with the federal poverty index. The federal government has been publishing poverty statistics since 1964, using a poverty index developed at that time by labor economist Molly Orshansky. Orshansky constructed her poverty “line” by taking the minimum amount of money necessary to sustain a nutritious

Capsule 4.5 A Diagnosis for Profit

In addition to their scientific and clinical uses, diagnoses also have fiscal implications. A formal clinical label is frequently required for reimbursement

by third-party insurance companies and government

programs. Diagnosis in mental health, more than

ever before, is a business act, as well as a clinical

one, providing a mechanism for clinicians to be

reimbursed and for clients who cannot afford

treatment to get the service they need.

But not all personal troubles are equally reim-

bursable. Reimbursement directly to the client or the

agency is tied to particular psychiatric diagnoses,

often the more serious ones. Personality disorders,

family problems, or routine adjustment difficulties

may not be reimbursable. Thus, the acquisition of

fiscal resources depends directly on the clinician’s

decision about the nature of the client’s medical

disorder.

Mental health practitioners and their agencies are

very aware of this connection. More importantly, they

admit that it affects their use of diagnosis. There

is evidence of widespread overdiagnosis, in which

clinicians use more serious diagnosis than warranted

in order to qualify the client or the agency for reim-

bursement. One staff member quipped that a client’s

DSM diagnosis was an “insurance claim.”

Stuart Kirk and Herb Kutchins, “The Selling of DSM.” New Brunswick, N.J. : Aldine Transaction,1992, pp. 233–34.

The Basis of Social Allocations 115

diet and multiplying that by three, based on the assumption that poor families required one-third of their income for food. The statistic that resulted, adjusted for family size, is increased annually to account for inflation. This provides a social indicator that is concrete, plausible, and convenient to use, but one that overlooks the existential quality of poverty as a condition of life.54 Compare the poverty index to Robert Hunter’s observation, “To live in misery we know not why, to have the dread of hunger, to work more and yet gain nothing—this is the essence of poverty.”55

Here, we need a major caveat lest the “iron law of specificity” be taken too literally. That is, specificity operates only if the issue of choice is one on which it is possible to achieve fundamental agreement among the parties in- volved. (It might be the U.S. Congress, a presidential commission, a citizen’s organization, or a local social agency board of directors.) More precisely, it must be a question of choice where there is substantial uncertainty. (Such a situation is more likely to involve the definition of a problem such as poverty, crime, or unemployment than the character of its solution.) If the situation is marked not so much by uncertainty as by strongly opposing views, then speci- fication is likely to have the reverse effect, making agreement more difficult to achieve. In these cases, particularly when controversial solutions are being offered, there is a certain expedience to abstraction, which we will discuss in Chapter 5.

Once the standard of need has been settled in means-tested allocations, there still remains the problem of determining how individuals measure up to this level. The scope of economic resources that are weighed in eligibil- ity formulas is open to question. Should it include the value of assets as well as income? Should it include items of sentimental as well as economic value (e.g., wedding rings)? What about children’s college accounts, or the value of the tools of one’s trade, or the income of relatives (distant or close)? When eligibility determination does include relatives’ income as a resource, and the relatives are held liable for support, then in effect they too must be subjected to a means test. Under Medicaid, for example, nursing home eligibility often requires that the value of certain assets be under a certain level. If the assets of the applicant, or the applicant’s spouse, exceed this limit, then they must be “spent down” to the qualifying level. (Certain property, such as a home, household possessions, and a car, may be exempt from the valuation.) While a spouse’s resources may enter the calculation, those of adult children are, for the most part, excluded. However, 30 states have laws that make adult chil- dren responsible for their indigent parents’ care. While these laws rarely have been enforced, there are concerns that some states may start to use them to recoup payments for elder care.56

The question of what resources should be included in a determination of income is an essential issue in measuring poverty. Specifically, should the dol- lar value of in-kind social welfare benefits (such as food stamps and public housing) be counted as income? This issue, discussed further at the end of this chapter, is important since the proportion of in-kind benefits in the federal budget has more than tripled since the early 1980s. Critics have argued that excluding the value of these benefits in calculating the income of the poor in- flates the poverty statistics.

Having reviewed some of the problems associated with operationalizing the principles that underlie social allocations, there is one final qualification concerning this dimension of choice. That is, in practice these allocative prin- ciples are not mutually exclusive even though their underlying premises may

Chapter 4116

seem incompatible as, for example, in the joint employment of attributed and means-tested need. On the contrary, various combinations of allocative princi- ples are found in the design and application of social welfare policies, reflect- ing the tug, pull, and eventual compromise over competing values. We will illustrate this point with reference to two rather different types of social wel- fare programs: Social Security—the Old Age, Survivors, Disability, and Health Insurance program (OASDHI)—created under the Social Security Act, and the Community Action Program (CAP), legislated under the Economic Opportu- nity Act.

In social insurance, eligibility for benefits is predicated on the dual prin- ciples of attributed need and compensation. Here, a persistent issue is the bal- ance between adequacy and equity in the benefit-allocation formula.57 The benefit to which a retiree is entitled under old-age insurance is designed, in part, to replace previous earnings as reflected in the contributions made to the social insurance system. To the extent that benefits reflect past contributions, a degree of equity is introduced into this system: Workers who paid in more over the years of their employment are entitled to larger benefits in the years of their retirement. However, eligibility is also based on the principle of attrib- uted need. As Hohaus explains, social insurance “aims primarily at providing society with some protection against one or more major hazards which are suf- ficiently widespread throughout the population and far-reaching in effect to become ‘social’ in scope and complexion.”58 In the case of old-age insurance, the attributed need of the retired elderly is for an adequate standard of living.

Thus, although Social Security seeks to compensate retirees in proportion to their contributions, it also seeks to provide a level of adequacy for low-in- come workers whose contributions were minimal. For this group, strictly ap- plying the principle of compensation would result in benefit levels far below even the meager standards to which the individual was accustomed prior to retirement. In most social insurance programs, the dual allocative principles of attributed need and compensation result in a system in which the relationship between benefits and contributions exists in an ordinal sense, but is limited in a proportional sense, as efforts to express equity are modified by concerns for adequacy.

In the development of the CAP during the 1960s, the principle of attributed need was widely employed as the basis for social allocations. Initially, people became eligible for a variety of CAP-funded goods and services by virtue of their residence in designated low-income neighborhoods.59 Once the program began operating, however, these normative assessments of need were often modified. Levitan documents how CAP-funded neighborhood health centers that intended to provide free healthcare services to all target-area residents eventually incorporated a means test into allocation procedures, as did CAP- funded Neighborhood Legal Aid, Head Start, and employment opportunities programs.60 In certain instances, neighborhood residents supported means tests as an additional basis for allocations, especially in cases where the services were relatively inelastic. A limited number of slots for Head Start students in a summer program is a good example. Neighborhood applicants included large numbers of both poor and nonpoor residents. The poor were not convinced that attributed need was the most suitable allocative principle under such circumstances. For the CAP, then, attributed need became a preliminary screening device, a necessary but not sufficient condition for determining eligibility.

The Basis of Social Allocations 117

Despite some of their untidy features, the four allocative principles— attributed need, compensation, diagnostic differentiation, and means-tested need—provide a useful framework for conceptualizing policy alternatives. Consider, for example, the provision of preschool daycare services, a program increasingly demanded by students, lower-wage parents, and women transitioning from welfare to work. To whom and on what basis should these services be available? The four allocative principles offer an orderly framework for conceptualizing alternatives. As indicated in Table 4.3, eligibility at one extreme might incorporate all families with young children, based on a community-felt need for an institutional arrangement to allow fathers and mothers greater freedom during the early years of child-rearing. However, such a diminution of childrearing responsibilities is unlikely to receive normative sanction in a child- and achievement-oriented society. A more plausible condition of eligibility might require casting attributed need, not into the mold of “untrammeled freedom,” but rather in the image of freedom to achieve commonly valued objectives such as a career or an education. In this case, eligibility would be limited to working parents and/or students. Other options might involve daycare entitlements on compensatory and diagnostic bases. Finally, there is the means test, which could be used independently or in combination with any of the other principles to restrict subsidies to low- income families.

ELIGIBILITY VERSUS ACCESS

So far, we have focused on a question that receives much attention in the design of social welfare policies: Who is to be eligible for benefits? But there is another side to this issue that is often ignored or misinterpreted by social welfare policymakers: Who actually benefits?

In selecting the basis of social allocations, there is a strong tendency to proceed on the assumption that being eligible means being served. But this equation is far from assured. The “participation rate” among those eligible for services, for example, is often quite low. Figure 4.3, for example, shows that fewer than half of those eligible for TANF are currently enrolled in the

Table 4.3 Alternative Criteria for Allocating Daycare Services

Conditions of Eligibility Alternative Criteria for Allocations

Attributed Need All families

Single-parent families

Families with student parents

Compensation Underrepresented minority families

Military families

Families of workers in specified occupational groups

Diagnostic Differentiation Families with special-needs children

Families in short-term crisis situations

Means-Tested Need Families whose earnings and resources fall beneath

a low-income standard

Chapter 4118

program. It is estimated that just 20 percent of the low-income elderly are signed up for food stamps. And only a third of eligible high school students regularly take advantage of subsidized lunches.61

Why the gap between eligibility and use? There are several explanations. First, those qualifying for services may be unaware of their eligibility. Second, those qualify- ing for services may be unable to benefit. Third, potential beneficiaries may be deterred from seeking benefits. And finally, those qualifying for services may be uninterested in benefiting.

The first issue, the gap between eligibility and aware- ness, is often a result of inadequate publicity or ineffec- tive communications. Service bureaucracies, for example, may be unwilling or unable to reach out to eligible popu- lations, especially those who may be “hard to reach” due

to cultural or linguistic characteristics. (These service delivery barriers, and others, are discussed in Chapter 6.) It is estimated, for example, that a signifi- cant portion of homeless youth with children have no knowledge of or access to public services. While these young parents are among the most vulnerable members of society, often in desperate need of assistance, they are frequently left out of public programs. According to a recent survey, for example, fewer than 40 percent of homeless parenting youth are receiving TANF benefits, with fully half of those who had never applied being unaware of the program.62

Many potential recipients may be aware of services but may be unable to participate successfully. Individuals with severe emotional problems, addic- tive behaviors, or antisocial attitudes, whatever their desires or needs, may be “bad” candidates for assistance because they are not likely to make good use of whatever help is offered. Counseling programs offered in a mental health agency, for example, may simply not be able to meet the intense needs of the severely mentally disabled. Similarly, job training may not work for disturbed or hostile teenagers. Indeed, those with the greatest needs may have the least chance of success, even when significant resources are invested. Considerable

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

86%

1992

82%

1993

82%

1994

84%

1995

79%

1996

69%

1997

56%

1998

52%

1999

52%

2000

48%

2001

48%

2002

46%

2003

42%

2004

40%

2005

Figure 4.3 Participation in AFDC/TANF by Families that Meet Eligibility Requirements, 1992–2005.

U.S. Department of Health and Human Services, Indicators of Welfare Dependency, 2008.

Policy Practice

Practice Behavior Example: Social workers

analyze, formulate, and advocate for policies

that advance social well-being.

Critical Thinking Question: Think of several policies in your field of interest. Who is eli-

gible for benefits and who actually benefits

from the policy?

The Basis of Social Allocations 119

evidence has accumulated over the years, for example, that employment pro- grams often have only a minimal impact on the most poorly educated, least job-ready welfare clients.

Those who qualify for services and those whose successful participation is not impaired are typically expected to desire and readily accept the assistance offered. Eligible clients or consumers who don’t are often labeled “resistant,” and attention may then be directed to developing specially responsive service struc- tures that take account of the “barriers” that impede program participation.63

But this assumption of receptivity bears close scrutiny. For a variety of reasons, those eligible for benefits may be uninterested in becoming recipients. They may be hard to reach because they do not want to be reached. The costs of program participation may be perceived as outweighing the benefits. People may be aware of their eligibility but may avoid services they view as demean- ing or stigmatizing. They may not wish to reveal information; religious, po- litical, or cultural convictions may inhibit their involvement. People may be uninterested in programs, viewing them as burdensome, complex, threatening, or (whatever the precise measure of eligibility) only for “poor people.” The elderly, for example, may refuse services out of pride, seeing safety net pro- grams as demeaning. Immigrant parents may be reluctant to sign up for assis- tance for themselves or their children for fear (justified or not) that enrolling in programs may categorize them as a “public charge” (i.e., likely to become de- pendent on government), thus jeopardizing their immigration status and their chances for citizenship. Others may simply be intimidated, unwilling to apply due to hostile bureaucrats, overly long and complex application forms, or a discouraging, unfriendly atmosphere.

These factors help explain the steep drop in public welfare participation since the enactment of welfare reform in 1996. As Figure 4.4 indicates, in the

P e rc

e n t

0

5

10

15

20

25

30

35

40

45

50

20102005200019951990198519801975197019651959

Recession

13.7%

9.0%

22.0%

18 to 64 years

Under 18 years

65 years and older

Figure 4.4 Poverty Rates by Age: 1959 to 2010.

Notes: The data points are placed at the midpoints of the respective years. Data for people aged 18 to 64 and 65 and older are not available from 1960 to 1965.

U.S. Census Bureau, Current Population Survey, 1960 to 2011 Annual Social and Economic Supplements.

Chapter 4120

years immediately prior to the abolition of AFDC and the creation of TANF, over 80 percent of all welfare-eligible families participated in the program. Since 1997, participation has declined precipitously, dropping to less than half by 2001. While a variety of theories help explain why so many eligible families no longer seek benefits, one salient factor is the marked change in program atmosphere. Today’s message in welfare offices around the country is that TANF is a temporary program, something to help on the way to a job, not a right, not an entitlement. According to the Urban Institute, this new “culture” of welfare, imposed through a variety of formal and informal means, has pow- erfully diverted thousands of needy families from applying for aid.64

Finally, it should be noted that eligibility often fails to ensure service be- cause of exclusionary practices on the part of agencies seeking to make the most efficient use of limited budgets. Needing to ration scarce resources, or- ganizations frequently avoid clients who they consider less likely to benefit from their programs. This avoidance of the hard-to-serve is a widespread phe- nomenon in the social services. For many years, for example, critics charged vocational rehabilitation and job-training organizations with “creaming” their prospective clientele: focusing their efforts on those most likely to succeed while ignoring the least skilled, the least able. The Job Training Partnership Act, for example, legislated in 1982 to assist the economic have-nots, is gen- erally agreed to have mainly served those who were very close to being “job ready,” rather than the “hard-core” poor.65

Not everyone needing help can be served, of course, and human service organizations must make determinations of how to best employ their limited resources. If an agency’s primary mission is to move the homeless to self-suf- ficiency, it makes little sense to assign one of a very few units of transitional housing to individuals who have little potential for independent living. In fact, providers of transitional housing generally screen for candidates who are likely ultimately to make it on their own: motivated people who will meet with social workers, attend training classes, save money, and seek out jobs and permanent accommodations. Homeless individuals with severe drug, alcohol, and mental health problems are not likely to be selected even when they pos- sess the interest and motivation to apply for transitional housing. This creates a discouraging irony. Creaming often means focusing on those most likely to

Capsule 4.6 Participation versus Poverty

If all eligible families with children participated fully in key federal safely net programs, 3.8 million people could escape poverty. According to a

new analysis by the Urban Institute’s Assessing the

New Federalism project, “if policymakers improved

participation in Food Stamps, Supplemental

Security Income, Temporary Assistance for Needy

Families, and the Earned Income Tax Credit, poverty

could fall by 20 percent—extreme poverty by 70

percent.”

According to the researchers, the chance to reduce

economic hardship for so many provides a strong ra-

tionale for improving access to safety net programs by

streamlining eligibility, application, and recertification

processes. This could be done by implementing such

practices as standardizing income eligibility, work rules,

asset tests, and client treatment across programs; shar-

ing information across agencies; improving outreach

and education; and developing family-friendly offices

that accommodate the schedules of working parents.

Sheila Zedlewski et al., “Extreme Poverty Rising, Existing Government Programs Could Do More,” reported on in the Urban Institute’s New

Federalism—Policy Research and Resources, Issue 14, The Urban Institute, June 2002.

The Basis of Social Allocations 121

benefit, individuals who might very well be able to make it on their own, with- out help, and ignoring those with the greatest objective needs but the least likelihood of succeeding on their own.

The motivation for targeting the “best” clients may also be based on pecu- niary motives. Profit-seeking health and welfare organizations have frequently been charged with “cherry picking” the most potentially lucrative clients. Crit- ics of commercial health maintenance organizations (HMOs), for example, charge that they often focus their membership recruitment on the healthy, studiously discouraging enrollments by the sick and disabled. A 1999 federal report concluded that HMOs frequently target healthier beneficiaries, market- ing their plans in health clubs, resorts, and sports venues while avoiding sites easily accessible by the sick and feeble. One HMO went so far as to locate its offices on the upper floors of elevator-less buildings.66

The “take-up” problem, nevertheless, is an important social justice issue, one that is taken seriously by many who are committed to bringing appropriate services to the needy. And over the years, a variety of strategies have evolved to make people aware of the services that are available in order to facilitate cit- izen involvement. These strategies include mass-media campaigns, publicity through the public schools and libraries, and door-to-door outreach. A “Walk- ers/Talkers” program in New Orleans, for example, has been quite successful sending teams of trained local residents into needy areas to engage their neigh- bors in discussions about Medicaid and food stamps, and signing up those who are interested and eligible.67 In addition to “marketing” underutilized benefits, many jurisdictions have undertaken modifications in their applica- tion processes to reduce red tape and encourage services use. The Food Stamp Program has been particularly aggressive in its outreach efforts, simplifying forms, enabling e-applications, and lengthening eligibility duration.

EMERGING ISSUES: DEFINING AND MEASURING POVERTY

As noted earlier, the Census Bureau’s official poverty line, which was drawn at a pre-tax cash income of $22,350 for a family of four in 2011, rests on a formula devised by labor economist Mollie Orshansky, adjusted over time for inflation.68 However, across the political spectrum the overwhelming majority of policy an- alysts doubt that this measure accurately captures the number of people who are poor and the essential condition of poverty as it is understood throughout much of the world. In 2010 Congress passed legislation to recognize a more refined computation, referred to as the Supplemental Poverty Measure. The Supple- mental Poverty Measure differs from the Official Poverty Measure in a number of important features: Income is calculated using a more comprehensive range of resources, adjustments are made for taxes and certain costs of living, the threshold is based on expenditures for basic necessities updated periodically and adjusted for different geographic areas (as shown in Tables 4.4 and 4.5).

When the results of the Supplemental Poverty Measure are compared with those of the Official Poverty Measure for 2010 a number of important differ- ences emerge.

There was only a small difference between the two measures in the over- all percent of people living in poverty. The official measure placed the rate at 15.2 percent compared to 16 percent for the supplemental measure. More

Across the political spectrum the overwhelming majority of policy analysts doubt that the official poverty measure accurately captures the number of people who are poor and the essential condition of poverty.

Chapter 4122

striking was the difference in the composition of those designated as poor under the different definitions. The supplemental measure, which is thought to offer a more refined calculation, showed a significant increase in the per- centage of poor elderly along with a relatively large decline in the percent of poor children. Also, under the supplemental measure, the percent of white, Asian, and Hispanic people in poverty increased while the percent of black people declined. These differences have stirred some controversy about the validity of the supplemental measure, particularly the increase in the percent

Table 4.4 Poverty Measure Concepts: Official and Supplemental

Official Poverty Measure Supplemental Poverty Measure

Measurement Units Families and unrelated individuals

All related individuals who live at the same

address, including any coresident unrelated

children who are cared for by the family (such

as foster children) and any cohabitors and their

children.

Poverty threshold Three times the cost of minimum food diet in 1963.

The 33rd percentile of expenditures on

food, clothing, shelter, and utilities (FCSU)

of consumer units with exactly two children

multiplied by 1.2

Threshold adjustments Vary by family size, composition, and age of householder.

Geographic adjustments for differences in

housing costs and a three-parameter equivalence

scale for family size and composition.

Updating thresholds Consumer Price Index: all items Five-year moving average of expenditures on FCSU

Resource measure Gross before-tax cash income Sum of cash income plus in-kind benefits that families can use to meet their FCSU needs,

minus taxes (or plus tax credits), minus work

expenses, minus out-of-pocket medical expenses.

Resource Estimates

SPM Resources = Money Income from All Sources

Plus: Supplemental Nutritional Assistance

(SNAP)

National School Lunch Program

Supplementary Nutrition Program for

Women, Infants, and Children (WIC)

Housing subsidies

Low-Income Home Energy Assistance

(LIHEAP)

Minus: Taxes (plus credits such as the Earned

Income Tax Credit [EITC])

Expenses Related to Work

Child Care Expenses*

Medical Out-of-Pocket Expenses (MOOP)*

Child Support Paid*

*Items for which data from new CPS ASEC questions are used in the SPM estimates.

Table 4.5

The Basis of Social Allocations 123

of elderly poor. According to a Pew Research Center analysis, for example, during the past quarter of a century older adults have made unprecedented gains in wealth relative to younger adults. The age-based wealth gap of 10:1 in 1984 climbed to 47:1 by 2009. In a similar vein, the median wealth of white households rose from 7.5 times that of black households in 2005 to 20 times that of black households in 2009.69 The question of what constitutes “true” poverty, of course, will never be answered, since perspectives and values on its nature vary so markedly across the political spectrum. How, for example, should wealth (what people own) enter the equation? How should we treat the value of leisure time for those voluntarily out of work? How should in-kind benefits such as health care be counted? Beyond broad questions such as these, however, there are several specific reasons for uncertainty about what the al- ternative measures of poverty really measure. The 2010 Bureau of Labor Sta- tistics Consumer Expenditure Survey reports that the poorest fifth of American households made purchases that were more than twice (212 percent) as high as their reported incomes before taxes.70 This excess of spending over reported income has grown dramatically since the early 1970s, when it amounted to 139 percent of income.71 Moreover, the actual consumption of goods and ser- vices may be higher than the out-of-pocket spending suggests, since these fig- ures exclude many public benefits available to low-income households such as school breakfast and lunch programs, nutrition programs for the elderly, hous- ing vouchers, legal services, home energy assistance, and day care.72

What accounts for this vast discrepancy between income and expenditures? Some of it no doubt reflects increasing debt. Although having limited access to credit markets, low-income people would encounter difficulties sustaining such high levels of expenditure over income. However, at any point in time, low-income households include a high proportion of families experiencing a temporary reduction in income. These families typically seek to maintain their standard of living by borrowing or spending down assets—smoothing out consumption to match their wealth and expected earnings over time.73 In addition, there is a marked tendency for people to underreport income. It is well documented, for example, that a significant proportion of welfare recipients regularly worked for pay that was not reported.74

As with the household expenditure data, other U.S. government surveys that have examined the range of material possessions held by people living be- low the poverty line also reflect higher-than-expected levels of consumption. Thus, for example, in 2009, at the height of the recession, 40 percent of the families officially designated as poor owned their own homes, mainly single- family units with a median value of $100,000.75 Most of these were three or more bedroom homes, with a porch or patio and a garage, and a median size of 1470 square feet. Although smaller than the homes of Americans with in- comes above the poverty line, they are equal to the average size of new homes in Denmark and larger than the average newly built homes in France, Spain and the United Kingdom.76 Moreover, 92 percent of poor households had mi- crowaves, 76 percent air conditioning, 50 percent computers, 64 percent a clothes washer, 99 percent a refrigerator (23 percent an additional freezer), 98 percent color TVs, 70 percent had more than one TV. Seventy-seven percent owned a car, truck, or van and 22 percent owned two or more vehicles.77 These facts should stimulate critical thinking about the meaning of poverty in United

Diversity in Practice

Practice Behavior Example: Recognize the ex-

tent to which a culture’s structures and values

may oppress, marginalize, alienate, or create

or enhance privilege and power.

Critical Thinking Question: What does being poor signify in the United States today?

Chapter 4124

States today and the extent of actual material deprivation among the 15 to 16 percent of the population counted as living under the poverty line by the mea- sures currently employed.

SUMMARY

This chapter addresses the first element in the dimensions analytic framework of social welfare policy, namely, what is the basis of social allocations? Who is entitled to social provisions? Traditionally, eligibility has been discussed in terms of universal benefits versus targeted benefits. A fuller perspective on eligibility, however, indicates that the basis of social allocations lies along a continuum of choices that encompasses attributed need, compensation, diagnostic differentiation, and means-tested need. Despite the array of eligibility arrangements, those eligible for services often do not receive them.

125

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

1. A way to limit benefits to those with the greatest need:

a. Promote universalism.

b. Privatize services.

c. Employ means-testing.

d. Expand the tax base.

2. Doesn’t provide child allowances:

a. United States

b. France

c. Japan

d. United Kingdom

3. The Earned Income Tax Credit (EITC) is an example of a:

a. Universal tax credit

b. Voucher

c. Entitlement

d. Negative income tax

4. On the continuum of allocative principles, attributed need is the furthest away from:

a. Compensation

b. Means-tested need

c. Universal need

d. Diagnostic differentiation

5. An example of eligibility based on diagnostic differentiation:

a. Universal child allowances

b. Affirmative Action

c. Low-income public housing

d. Behavioral therapy for autistic children

6. Which assumption is incorrect regarding the relationship between eligibility and actual service use?

a. Being eligible means being served.

b. Not everyone who needs help can be served.

c. People may be unaware of their eligibility.

d. Eligible people may be uninterested in benefits.

C H A P T E R 4 R E V I E W

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7. How do considerations of social effectiveness and cost effectiveness relate to the principles of universalism and selectivity?

126

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Single Mothers Supreme Court: No Race-Based Admissions

(2007)

* Assessment Victimizers and Victims Indians

Read and Review

Read These Cases/Documents

* Policy Practice � Decisions, Decisions, Decisions Donald Wheeldin, “The Situation in Watts

Today” (1967)

Helen Hunt Jackson, from “A Century of Dis- honor” (1881)

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Interactive Case Study: You Are the Mayor and Need to Make Civil Rights Decisions

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127

x

x

x

The Nature of Social Provision

5

Basic Forms: Cash versus In-Kind 128

Alternative Forms: An Extension of Choice 134

Vouchers: Balancing Social Control and Consumer Choice 136

The Substance of the Social Provision 140 Expediency of Abstraction

Social Provisions as Reflections of Policy Values 143

Cash, Kind, and the Cycles of Public Assistance 146

Emerging Issue: Shifting Provisions for Child Welfare 148

Summary 150

Practice Test 151

MySearchLab Connections 152

C H A P T E R O U T L I N E

Competencies in This Chapter (with Practice Behaviors) Professional

Identity Ethical

Practice Critical

Thinking Diversity in

Practice Human Rights

& Justice

Research-Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

Chapter 5128

The only crucial question becomes one of waste or economy. The two alter-

natives for redistributional reforms, in-cash or in-kind, therefore have to be

compared as to their effectiveness in relation to financial outlays. Just because

both systems are costly, they must be scrutinized as choices. It would be an

illusion to pretend that both lines could be followed. No budget could expand

widely in two different directions.

Alva Myrdal

Nation and Family, 1941

The strain between conservative and progressive tendencies in the welfare state is nowhere more apparent than in choices concerning the forms of social provision. Two forms of provision mark the traditional line of debate in this policy dimension: benefits in-cash versus benefits in-kind. Should needy fami- lies be provided a monthly income to cover their basic needs or should help be given as food and fuel, clothing, and shelter? Should children be guaranteed education in the basic public schools or should their families receive cash, or an equivalent voucher, providing them options in the educational market- place? The choice posed in these questions, although fairly simple to compre- hend, is quite another matter to resolve.

BASIC FORMS: CASH VERSUS IN-KIND

One of the earliest arguments in favor of in-kind benefits was advanced in the 1930s by Swedish economist Alva Myrdal in the context of that country’s de- bate over the nature of child welfare provisions. For Myrdal, benefits in-kind were superior to cash children’s allowances because of economies of scale. That is, public enterprise, presumably efficient in the manufacture and distri- bution of mass-produced goods and services, would provide shoes or clothing or similar products at low cost. The alternative—cash grants that could be used to purchase privately produced goods—was viewed as far more expensive. In the state planning perspective of the period, a uniform benefit, mass produced and centrally distributed, was seen as eliminating many of the wasteful, dupli- cative aspects of competition in the open marketplace.1

Myrdal also suggested that assistance in-kind was more effective than cash subsidies because benefits landed squarely on their targets. If the policy goal, for example, was to enhance child welfare, the question of effectiveness be- comes, How much of the benefit directly serves this objective?2 Using this cri- terion, the drawback of cash is clear: Money subsidies cannot be controlled at the point of consumption. There is no way to guarantee that a children’s allowance (or any cash subsidy) will not be incorporated into the general fam- ily budget and used to purchase a variety of items, only a portion of which may apply directly to the intended purpose.

The argument advanced by the classic theorists of welfare economics, on the other hand, posits that cash provisions are optimal because cash gives its users maximum choice, therefore “maximizing their utility” (i.e., their happi- ness). Theoretically at least, it can be demonstrated that, given $50 to spend freely, an individual will invariably achieve a higher level of satisfaction (“wel- fare”) than one given $50 worth of goods and services specified by someone else. This position, of course, assumes a consumer who is rational and capable of judging precisely what is in his or her best interest. It further assumes that maximizing the preferences of individuals also serves the good of the broader

The Nature of Social Provision 129

community—that the choices made by consumers for their own welfare aggre- gate to advance the common welfare.3

The case for the superior effectiveness of in-kind benefits, on the other hand, hinges on their ability to advance specific community concerns. With public con- trol, food, medical care, school lunches, and other common objectives can be dis- tributed directly. Given free choice, recipients of welfare benefits can purchase booze, plasma TVs, or iPhones; benefits in-kind, restricting such bad choices, ensure that public judgments about appropriate consumption are advanced.

Some of the hazards of cash benefits are apparent from the results of the Experimental Housing Allowance Program (EHAP) conducted by the U.S. Department of Housing and Urban Development during the 1970s and 1980s. An elaborate social experiment executed over an eleven-year period, EHAP involved 30,000 households in 12 sites across the country. The impact of un- restricted housing allowances on patterns of housing consumption was one of several questions analyzed. In Pittsburgh and Phoenix, the sites chosen to explore the issue, 1800 low-income households, received housing allowance grants over the course of three years. Findings revealed that only very small portions of the allowances were actually spent on housing, just 10 percent in Pittsburgh and 25 percent in Phoenix.4 For most recipients, the allowances served principally as a general income supplement.

To make sure that social provisions further the purposes for which they are designated, Myrdal called for “increasing control from the consumption side” (i.e., stipulating the forms of public benefits). She posited this kind of “social engineering” as a manifestation of benign social policy based on cooperation and group loyalty. For Myrdal, the in-kind approach rested on “social solidar- ity and the pooling of resources for common aims” rather than just the “insur- ance of individual interests.”5

Hence, the core of the argument—the imposition of social controls to harness individual interests to the collective good. As Holden puts it, “only through in-kind assistance is society able to exercise a measure of control over the final utilization of the tax dollar.”6

The term social control, of course, has a distinctly negative connotation. Critics have always charged that the welfare state is nothing but a device for regulating the conduct of the poor and underprivileged, a repressive mecha- nism that “keeps people in their place,” maintaining conformity to an unjust order. The frequency with which this indictment is made does not constitute proof of guilt. Yet, to be sure, the charge is not without substance, neither to- day nor 120 years ago. As Briggs notes,

Many of Bismarck’s critics accused him, not without justification, of seeking through his legislation to make German workers “depend” upon the state. The same charges have been made against the initiators of all “welfare” (and earlier, of poor law) policy. Yet it was Bismarck himself who drew a revealing distinction between the degrees of obedience (or subservience) of private servants and servants at court. The latter would “put up with much more” than the former because they had pensions to look forward to. “Welfare” soothed the spirit, or perhaps tamed it.7

In general, social welfare professionals find social control a disagreeable element of policy. We mention this because the objectionable functions associ- ated with, and the resistive feelings aroused by, the term should not restrict our faculty to weigh the case for provisions in-kind. Social controls are required to regulate a complex and highly interdependent society. Regulation that replaces

Chapter 5130

the power of the individual with the power of the community, Freud observed, “constitutes the decisive step of civilization.”8 The issue is not whether we will have controls but whether they will be designed to realize our ideals of human dignity and justice or to serve pernicious ends—to soothe or to tame the spirit.

Clearly, Alva Myrdal proposed social controls for estimable purposes. Yet the dilemma of social control exercised through in-kind benefits is that, al- though such control may facilitate the realization of collective aims, it also restricts the freedom of the consumer, rich or poor. Myrdal recognized these objections. However, she suggested that at least in regard to provisions for chil- dren, in-kind benefits posed no constraints on consumer sovereignty because “children rarely have much voice in decisions about the use of the family in- come.”9 This defense is hardly persuasive, however, especially in the contem- porary cash–kind debate. As Nobel economist Milton Friedman pointed out,

The belief in freedom is for “responsible” units, among whom we in- clude neither children nor insane people. In general, this problem is avoided by regarding the family unit as the basic unit and therefore par- ents as responsible for their children.10

While advocating benefits in-kind, nevertheless, Myrdal’s position was less than doctrinaire. And even she was not completely persuaded by her own argument that such benefits didn’t limit freedom of choice, hence her counsel to exercise caution when applying the in-kind principle, especially for inex- pensive items that often are imbued with personal meaning:

Clothing falls in that category and it thus seems to be difficult to subsidize in-kind. Here personal taste is delicate and social prestige has become involved. Even if some class equalization in clothing, especially for chil- dren, is judged desirable, it would probably be extremely unwise to force any uniformity on families …. It would be cheaper, perhaps extremely rational but still a bit inhuman, to provide layettes, bedding, and baby carriages for all newborn children. All these cost items, invested with so much tender care, are certainly not appropriate for communalization.11

Capsule 5.1 Cash and Chaos

Researchers have discovered that government benefit checks to poor minorities are generat- ing accidents, homicides, and substance abuse

leading to deaths. The evidence lies in the fact that

the federal government mails out the checks at the

start of every month and deaths from these causes

are higher in the first week of each month, compared

with the last seven days of the prior month:

• Deaths from substance abuse jump 14 percent

during the first week

• Homicides go up 6.2 percent and suicides rise

5.3 percent

• Motor vehicle accidents increase

2.8 percent

According to the study director, David Phillips,

“our data raise the possibility that when you try

to help by giving money to an addict, you feed

the habit instead of the person.” Public cash

programs can easily be spent on illegal drugs and

alcohol.

Phillips suggested that the federal government

should consider acting more like a private charity,

to keep addicts from binging in the first few days of

each month.

From “Study Links Deaths to Timing of Aid Checks” by Laura R. Vanderkam, The Washington Times, July 8, 1999. Copyright © 1999 The Washington

Times, LLC. This reprint does not constitute or imply any endorsement or sponsorship of any product, service, company or organization.

The Nature of Social Provision 131

As a final qualification, Myrdal advised that a serious preference for ben- efits in-kind should be entertained only after an adequate family income was established. In circumstances where it wasn’t, she considered cash assistance an “appropriate deviation” from the in-kind principle.

In today’s context, many of Myrdal’s assertions seem naively quaint. First, the alleged cost savings of publicly produced benefits has been universally challenged. Time and again, state monopolies have been shown to be rela- tively costly providers of goods and services, be they steel, garbage collection, education, or day care. And although economies of scale may apply to cer- tain forms of technology, they are certainly questionable in the case of social services such as casework and vocational counseling.12 This is because social services tend to draw on what Thompson describes as “intensive technology,” techniques employed to change and aid the client, with the precise treatment based on constant feedback.13 This type of technology, tailored to individual cases, substantially hinders standardization.

With social provisions more amenable to standardization, such as clothing, the sacrifice of freedom of choice in favor of a regimented universal product is bound to be discomforting. Moreover, although these benefits in-kind may theoretically eliminate some of the “wasteful” attributes of multiple providers, the market competition associated with cash benefits can generate innovations that result in significant cost reductions over the long haul.

Where economies of scale are not clearly operative, the issue turns on the question of whether cash subsidies and private competition are preferable to provisions in-kind and publicly run bureaucracy. Examining this choice in the context of education, Milton Friedman opted for cash over in-kind provisions because,

[grants] would bring a healthy increase in the variety of educational in- stitutions available and in competition among them. Private initiative and enterprise would quicken the pace of progress in this area as it has in so many others. Government would serve its proper function of im- proving the operation of the invisible hand without substituting the dead hand of bureaucracy.14

The primary appeal of the argument for cash benefits, then, is in its reli- ance on consumer sovereignty. There is a compelling quality to the argument for an individual’s freedom of choice. In essence, it posits the right to self- determination, the right to use one’s resources for whatever the psychologi- cal or material benefits derived, and, conversely, the right to command one’s resources toward whatever future is desired. It is the right of individuals to exercise self-indulgence as well as self-denial.

This viewpoint relies heavily on the faith that the market is responsive to consumer demands. On this point, those favoring collective interventions are not convinced. John Kenneth Galbraith, for example, argued that the consumer “is subject to forces of advertising and emulation by which production cre- ates its own demand.” According to this proposition, which he labels the “de- pendence effect,” consumer wants are not determined independently. Rather, the producers of goods and services also manufacture consumer desires.15 The counterargument is that producers cannot determine consumer wants; they merely provide information about what is available and endeavor to convince the consumer of its worth and value.16 Whether or not the “dependence effect” is as consequential as Galbraith would have, his proposition discloses one of the hidden perils of unqualified acceptance of the market mechanism, namely,

The issue is whether cash subsidies and private competition are preferrable to provisions in-kind and publicly run bureaucracy.

Chapter 5132

consumer awareness and skills must be taken into account when considering voluntary exchanges in pursuit of rational self-interest. Rational choices re- quire objective information about the items to be consumed. Such knowledge is often expensive and difficult to obtain. The predicament is more intense for the poor and ill educated. As Rivlin explains,

Unless he knows what he is buying, a consumer cannot chose rationally. Yet, in the social [welfare] area, it is very difficult for him to find out any- thing about the quality of service before he uses it. Moreover, the costs of shopping around or sampling the merchandise of a hospital or a school may be prohibitive.17

A multitude of studies examining Medicaid, for example, have demon- strated that no-strings cash transfers can hardly optimize the health of socially disadvantaged children. An open-market approach to health services is clearly an insufficient means, by itself, to improved health care, because per- sonal factors ranging from a lack of knowledge about health care and language problems to an inability to obtain childcare, transportation, or time off from work to keep medical appointments potently deter the full and effective use of healthcare resources.18

Other arguments are advanced in favor of cash. Cash, clearly, is convenient to use. Providing cash rather than in-kind benefits saves substantially on ad- ministration because it involves little in the way of processing or regulatory costs. Cash is said to remove the stigma attached to in-kind provision, allowing the poor the dignity of managing their own lives. Finally, cash provides the most efficient means of reducing income poverty. Converting all public assis- tance to the poor to cash would eradicate poverty, at least in terms of its offi- cial measure. This is so because in-kind programs, like Food Stamps and social services, don’t directly raise the income level of their recipients; their value never directly enters the budget of the poor.

This “efficiency” argument, of course, is somewhat misleading because one’s “welfare” demands more than simply an income above the poverty line. If all antipoverty programs were “cashed out” (i.e., converted to their dollar equivalents) and then distributed on the basis of need, we would eliminate “official poverty,” but we would certainly aggravate the problems that in-kind

Capsule 5.2 The Case for Cash

Is the problem that people don’t have enough services? Or is the problem that they don’t have enough cash? Do poor people need services? Do

they need case management? A lot of people say

they do. In my own city we have several people that

have many case managers. They have a welfare case

manager, they have a mental health case manager,

they have a foster care case manager, they’ve got

a parole case manager. And so case management,

like planning, is one of those ideas that, if you just

got enough of it, everything would work out. At least

that’s what case managers think, and I’m not going

to make any comments on case managers because

they have needs too.

But if people have a lot of money, they don’t

need a case manager and they don’t need any of

your damned services because they just buy them.

They buy whatever they want. And that’s my first

principle—more money is better than less money.

What people need is money, and don’t call it re-

sources, just call it cash, because you can’t beat

cash with a stick. Cash is what is required.

Adapted from informal comments by Jerry Brown, when he was Mayor of Oakland, California, to a Brookings Institution National Issues Forum,

June 14, 2000.

The Nature of Social Provision 133

benefits address—poor health, malnutrition, and inadequate housing. This is because cash means consumer choice, which means people spending their dol- lars in their own fashion, which means that targeted public interest priorities may not be advanced. It also reflects the fact that cash assistance, even when it brings recipients to income levels near the poverty line, does not provide cov- erage anywhere near to in-kind programs, especially medical programs, cur- rently provide. Elderly people in nursing homes, for example, often receive Medicaid benefits at levels many times the poverty line. The acutely ill often receive healthcare benefits worth even more.

Benefits in-kind, then, promote what many view as a more genuine con- cept of “welfare” than cash alone. Food stamps may not efficiently reduce income poverty, but they may increase a household’s food consumption. At the very least, the social control of consumption ensured by the in-kind ap- proach offers a degree of protection to the unwary and the ignorant. From this perspective, it might be said that it is not so much freedom to choose that is reduced by in-kind help as freedom to err or to choose poorly on the basis of limited knowledge. The response to this might be that, without freedom to err, self-determination is a hollow construct. What the collectivist sees as the desirability for social protection, the individualist views as a paternalistic in- fringement on individual responsibility.

The advocates of the cash option, particularly influential in the 1970s, al- most succeeded in getting a negative income tax enacted as a replacement for welfare. While moribund for the most part in recent years, the cash argument was recently resurrected, not so much as an antipoverty device, but as a way to overhaul the entire apparatus of social welfare—both in its means tested and its universal aspects. The “just cash” banner, hoisted afresh in 2006 with the publication of Charles Murray’s In Our Hands—A Plan to Replace the Welfare State, which presents the argument for cash in its purest form, as a replacement for the full array of contemporary health, social service, and income support programs.19 Murray’s plan provides an automatic annual grant of $10,000 to every American adult over 21, an amount that would, he calculates, cost considerably less in the years ahead than the price of the status quo. The bulk of Murray’s volume is an argument for the be- nign effects of “The Plan.” It would, he states, eliminate poverty, ensure health and retirement security, and create better citizens by giving people full responsibility for their own lives. At $10,000 per capita, all two-parent families would be guaranteed at least $20,000 a year, an amount that, when supplemented by even modest earnings, would in almost all cases exceed the poverty threshold.

The cash-versus-in-kind issue, whether couched in terms of a “plan,” a neg- ative income tax, a guaranteed annual income, or a universal demogrant, pitches the discussion of social provisions at a fairly high level of generality, a level from which we can observe contending arguments more from a theoretical than from a practical perspective. In the everyday world of policy debate and choice, theoretical justifications often give way to the tug and flow of partisan politics.

Much of our consideration of the cash–kind debate, of course, depends on the degree to which individual freedom and consumer choice are valued in comparison to social justice and community good. Nevertheless, even the most ardent supporters of consumer choice typically bow to the necessity of

Ethical Practice

Practice Behavior Example: Social workers

make ethical decisions by applying standards

of the NASW Code of Ethics, and, as appli-

cable, of the International Federation of Social

Workers/International Association of Schools of

Social Work Ethics in Social Work, Statement

of Principles.

Critical Thinking Question: Which reflects the standards of the NASW Code of Ethics to a

greater extent, in-kind or cash social provi-

sions? Why?

Chapter 5134

Capsule 5.3 Care Not Cash

San Francisco adopted its Care Not Cash Program in 2004, replacing cash welfare for single adults with shelter beds, subsidized apartments, and social

services. Since then the program has had consider-

able success in getting people off the streets and

into stable accommodations. From 2004 through

2011, nearly 3600 homeless clients were moved

into permanent housing, the general assistance

caseload was cut by 85%, the number of homeless

was reduced, and drug and alcohol services enabled

many adults to get on track to a better life.

collective interventions under certain circumstances, such as providing for the mentally incompetent.20 When it becomes a voting issue, indeed, as it has in the case of the homeless, voters of all ideological persuasions tend to support policies that replace general cash assistance with concrete food and housing and counseling programs.

And, for the most part, those who advance benefits in-kind are sensitive both to the need for adequate cash support and to the social and psychologi- cal benefits of self-expression and autonomy inherent in consumer choice. For them, as Mencher suggests, “the problem is not the potential conflict between individual rights and social controls but the maintenance of maximum oppor- tunity for individual choice as an integral part of the system of government responsibility.”21 To achieve this balance, a mixture of different forms of social provision that offer varying degrees of consumer sovereignty and social con- trol is optimal.

ALTERNATIVE FORMS: AN EXTENSION OF CHOICE

We have discussed the nature of social provisions in terms of two basic benefit forms: cash and kind. The forensic utility of this classification affords reason- ably firm lines for debate. Yet to think of social provisions in such dichoto- mous terms oversimplifies the practical realties that policymakers face. Finer distinctions are possible and desirable for analytic precision.

Social benefits may come in a variety of forms, from those that serve to enhance individual power to provisions in the form of concrete goods. Embed- ded in these varied forms is a dimension of transferability: the extent to which the provision allows for consumer choice. For example, public housing units, cash supplements for housing, and rent vouchers offer varying degrees of free- dom of choice to the consumer. Conversely, they ensure to varying degrees that public support will not be used for anything other than its intended purposes. In terms of form and transferability, social provisions may be broadly classified into six categories: opportunities, services, goods, vouchers and tax credits, cash, and power.

Opportunities are incentives and sanctions employed to achieve desired ends. Although this is the vaguest type of direct provision, it is not unim- portant; much social policy is concerned with the creation and distribution of opportunities. Unlike goods and services, opportunity benefits involve the provision of civil rights or an “extra chance.” Sometimes the extra chance is built into the basis of social allocations, as in the additional points afforded veterans on civil service exams and the special efforts of schools to recruit

The form of social provisions may be broadly classified into six categories: opportunities, services, goods, vouchers and tax credits, cash, and power.

The Nature of Social Provision 135

underrepresented students. In these cases, the nature of the provision consid- erably overlaps the basis of social allocations. Opportunities ultimately lead to the acquisition of other benefits. However, opportunities have no immediate transfer value inasmuch as they must be utilized within the context that they are offered. A recipient of opportunity X cannot trade it for opportunity Y, or for goods, services, or other social provisions.

Services are activities performed on the client’s behalf, such as in-home care, individual counseling, case management, and job training. These pro- visions are nontransferable in terms of their immediate market value to recipients.

Goods are concrete commodities such as food, clothing, and housing. These benefits have limited transfer value, generally confined to marginal channels of exchange such as pawnshops, flea markets, and informal barter.

Vouchers and tax credits are benefits that have a structured exchange value and may be transferred for resources within a delineated sector. Tax credits, for example, can be used to offset daycare expenses; food stamps can be ex- changed for a variety of food products. Such provisions offer greater degrees of freedom of choice than goods or services. As a form of social provision, vouchers have special appeal because they preserve a modicum of consumer sovereignty (within a sector) while allowing for the exercise of social control (between sectors). Thus, they attract a range of proponents with both commu- nity and individualist predilections.22

Cash benefits, programs such as public assistance, children’s allowances, and social insurance, provide unrestricted purchasing power. Any tax arrange- ments that let individuals and families keep more of their own income also qualify, serving as indirect cash benefits. These provisions, of course, all have universal exchange value, offering the most latitude for consumer choice.

Power involves the redistribution of influence over the control of goods and resources. It can be achieved through policies that transfer policy-making au- thority to a particular group of people. In the 1960s and 1970s, for example, federal policy often required representation of the poor, service consumers, and other disadvantaged people on the boards of agencies that dispensed social wel- fare benefits, such as the Community Action Agencies established during the War on Poverty. Here, social provisions were incorporated into policy decisions about the structure of the delivery system (which we will examine in Chapter 6). Although such power cannot be “spent” in the same way as cash or credits, it offers a significant degree of latitude to command social and economic choices.

In addition to these forms of provisions, there are social interventions that indirectly assist individuals and groups. A good deal of important social wel- fare policy, rather than providing tangible benefits to specific individuals in need, establishes institutions that are instrumental in developing and imple- menting benefit programs. Instrumental provisions are those that encourage more efficient and effective arrangements among agencies that supply direct social welfare benefits.

To illustrate, let us consider Title III of the 1973 amendments to the Older Americans Act, which established more than 600 Area Agencies on Aging (AAAs) throughout the United States. These agencies, which are ongoing, have responsibilities for planning, pooling, and coordinating local resources to produce comprehensive service systems for the elderly. The AAAs also are expected to function as advocates for the elderly, monitoring and evaluating relevant policies and programs. In this fashion, AAAs furnish indirect forms of aid in their jurisdictions.

Chapter 5136

Although instrumental provisions influence the distribution of social benefits through planning and coordination, there appears to be a tendency among indirect service agencies, such as AAAs, to move into the provision of direct services. There are several reasons for this sort of functional drift, not the least of which is that it strengthens the agencies’ ties to the elderly constituents who receive immediate and concrete benefits from the direct ser- vices offered.23

VOUCHERS: BALANCING SOCIAL CONTROL AND CONSUMER CHOICE

Compared to cash or in-kind provisions, social benefits in the form of vouchers possess a special attraction: They preserve consumer choice while allowing a degree of social control. This ensures that benefits serve a vital public purpose, be it the provision of food, shelter, education, or health care.

The food stamp program is the largest and best-known voucher arrange- ment in the United States. In its original form, public assistance recipients and other low-income persons were eligible for paper food coupons with a desig- nated cash value that could be used to purchase food products at supermarkets. Since 2004, benefits have largely been provided as electronic benefit transfers (EBTs), a debit card system that allows recipients to transfer their government food stamp benefits directly to the food retailer (see Figure 5.1). In addition to reducing the stigma of coupons, electronic benefits are far more administra- tively efficient for markets, banks, and the federal government. Starting as a

Figure 5.1

R o

b in

N e

ls o

n /Z

U M

A P

re ss

/N e

w sc

o m

The Nature of Social Provision 137

pilot project in 1961, the number of participants soared from 2 million in the 1960s to 47 million in 2011. From 2000 to 2011, program costs rose from 18 to 74 billion dollars.

Perhaps the first educational voucher scheme was advanced by Milton Friedman in 1955.24 Instead of directly financing and operating public schools, he proposed that government should distribute vouchers to par- ents which could be used to purchase education at the schools of their choice. By introducing the competition of the economic market, school programs would presumably become more innovative and the overall qual- ity of education would improve. It was also possible, of course, that some schools might effectively deny access to the poor by charging more than the cash value of vouchers, by employing admissions tests that reject weak students, or by misleading the unsophisticated consumer about the qual- ity of their programs. Thus, as a safeguard, later voucher plans, such as those developed by Christopher Jencks and his associates in the 1970s, included a series of protective regulations guarding against discriminatory admissions policies and required that precise information on educational programs be made available to aid parents in the intelligent exercise of choice.25

The first voucher experiment, conducted in the mid-1970s at the Alum Rock Union Elementary School District in northern California, sought to test the advantages of competition and consumer choice in education. When the Alum Rock demonstration was launched, its design was closer to Jencks’s reg- ulated plan than Friedman’s laissez-faire approach. The Alum Rock voucher concept, moreover, was restricted in a number of ways: Choice was limited to the 13 of the district’s 24 public schools; enrollment ceilings were used to maintain a degree of balance between demand and supply; and teachers were assured they would not lose their jobs if their school did not attract enough pupils. Despite these modifications, the Alum Rock demonstration enhanced parental choice and promoted a significant degree of competition among schools.26

The findings from Alum Rock revealed that although the range of educa- tional alternatives increased, geography was the predominant consideration for most parents—more than 80 percent selected the schools nearest their homes. And choices made among different miniprograms within schools fa- vored traditional over new, experimental modes of education.27 On the matter

Capsule 5.4 Voucher Pro

Government could require a minimum level of schooling financed by giving parents vouchers redeemable for a specified maximum sum per child

per year if spent on “approved” educational services.

Parents would then be free to spend this sum and

any additional sum they themselves provided on

purchasing educational services from an “approved”

institution of their choice. The educational services

could be rendered by private enterprises operated

for profit or nonprofit institutions. The role of govern-

ment would be limited to ensuring that the schools

met certain minimum standards, such as the inclu-

sion of a minimum common content in their pro-

grams, much as it now inspects restaurants to see

that they maintain minimum sanitary standards.

Milton Friedman, Capitalism and Freedom, 1962, p. 89.

Chapter 5138

Capsule 5.5 Voucher Con

Though voucher advocates argue that competi-tion would inevitably lead to the triumph of good schools over bad because of the “magic of the

marketplace,” this seems far from obvious. The suc-

cess or failure of a given public school program is

very difficult to quantify objectively, and most work-

ing parents cannot devote endless time to research-

ing the matter.

In fact, it is easy to imagine that the schools that

would win the competitive struggle for parental dol-

lars would be those that invested most heavily in

advertising and public relations and least heavily in

academic content. The actual physical content of

most colas or sneakers is almost indistinguishable,

but Coke and Nike reign supreme because of mas-

sive spending on public image-making and celebrity

endorsements. Although fine for the soft drink in-

dustry, this is not a desirable model for our public

education system.

The gravest danger for widespread school choice

is rarely explicitly raised by either side of the debate.

Unlike most other nations around the world, which

are relatively homogenous in culture and race, we

have just a few social institutions that bind our di-

versity together, and one of the most important has

been a unified public school system. Under vouch-

ers, there is a very real possibility that substantial

portions of our most vulnerable populations will be

drawn into Nation of Islam schools or a variety of

ethnic-nationalist ideologies, which could have a

lethal effect upon our already fraying social cohesion.

From “Voucher Veto” by Ron K. Unz. Reprinted with permission from the May 3, 1989 issue The Nation. For subscription information, call

1-800-333-8536. Portions of each week’s Nation magazine can be accessed at http://www.thenation.com. .

of educational quality, data from several studies found no significant differ- ences among the academic test scores of students from voucher and nonvoucher schools.28

In 1990, Milwaukee, Wisconsin, adopted the nation’s first district-wide school voucher program, providing tax-free tuition vouchers enabling low- income children—almost entirely African-American and Hispanic—to select either public or private (secular) schools. In 1995, vouchers worth $3600 were provided and over 1000 low-income students, 1 percent of the district student body, were participating. “Low income” was defined as households with in- comes below 1.75 times the federal poverty index.

Despite considerable evaluative attention, the results of the Milwaukee experiment are ambiguous. John Witte, a researcher at the University of Wis- consin, has generally given the voucher plan poor grades, concluding that par- ticipating students scored about the same as other students in math and reading performance. Voucher advocates, however, argue that the Milwaukee experi- ment proved that school choice results in higher parental satisfaction, better retention rates, and higher test scores.29

The most recent voucher findings, drawn from massive experimental stud- ies conducted in New York City, Dayton, Ohio, and Washington, D.C., appear to show a pattern of academic benefit to African-American participants, reveal- ing that after two to three years, African-American students in the voucher programs scored significantly higher than their public school peers; the scores of non–African-American students, however, did not differ significantly from those of their peers.30

While the voucher idea originated on the laissez-faire right, the concept has gained support across the political spectrum. African-American advocates in several large cities have embraced vouchers as a way to improve ghetto ed- ucation by providing alternatives to what are perceived as inadequate, unre- sponsive public schools. Sectarian groups promote the idea as a way to assist

The Nature of Social Provision 139

parents who wish to send their kids to parochial schools. And many families, apolitical but education minded, see vouchers as a device to gain more influence over the sub- stance of the schooling their children receive.

Although public policy has become more amenable to vouchers—and to other kinds of educational options— the overwhelming majority of U.S. schoolchildren remain in their local public schools, partly because of the inertia of entrenched arrangements and partly out of a very real fear that vouchers would significantly undermine public schools, resulting in even worse education for many chil- dren. Against those who see school choice as the means for innovation, efficiency, and consumer empowerment, these critics fear the creation of fragmented, divisive educational systems segregated by income and ideology and the destruction of one of the few institutions in our society that brings together children from different backgrounds and promotes a mea- sure of social integration.

It is important to note that the appeal of educational vouchers isn’t lim- ited to the United States. School choice has been embraced in a number of welfare states, including some of those with the strongest social democratic traditions. In Sweden, for example, families are able to send their children to public schools or to receive vouchers amounting to 75 percent of public educa- tion costs, which can be used to send their children to independent schools. Since 1991, the number of independent schools has quintupled, most of which are run by nonprofits, many by churches.31 Today these independent schools include more than one quarter of a million people.32

In the housing field, conservatives have long argued for vouchers that would allow low-income people to find their own housing in the private mar- ket. The federal Section 8 program, enacted during the Nixon administration, was the first significant voucher program to this end. Operating through local housing authorities, Section 8 provides eligible low-income renters a certifi- cate that they can present to any landlord willing to take part in the program. Tenants then pay 30 percent of their monthly income toward the rent, with the federal government making up the rest. In return, landlords agree to federal guidelines that set limits on overall rental charges.

Programs such as Section 8 have many appealing features. They give renters a choice; vouchers can be used anywhere, enabling poor people to blend into ordinary communities. They expand opportunities for decent, appropriate housing. One commentator remarked that they turn “low- income renters into an army of deputies who monitor government spending. Their collective, self-interested discretion amounts to an invisible hand that decides whether the housing needs of the poor are most cheaply met through new construction, existing units, moderate rehabilitation,” or other alternatives.33

The idea of housing vouchers has a special appeal, given the disappointing record of federal housing policy over the past half century. Government public housing strategies, especially inner-city megaprojects, have often been fiascos, and HUD bureaucracy has been prone to inefficiency and scandal. Neverthe- less, housing vouchers, though they serve 3.5 million poor U.S. residents, remain limited in scope for one important reason: cost. A universal voucher system covering a major portion of the population currently in inadequate housing would be enormously expensive.

Policy Practice

Practice Behavior Example: Social workers

analyze, formulate, and advocate for policies

that advance social well-being.

Critical Thinking Question: What are the lessons learned from experiments with vouchers in

education?

Chapter 5140

THE SUBSTANCE OF THE SOCIAL PROVISION

Our categorization of benefit types in terms of form and transferability per- mits useful insights into the nature of social provisions, particularly for cash, vouchers, and goods that are fairly concrete. A broad variety of options are possible within each of these categories. For example, the provision of goods may include food commodities, clothing, and shelter; cash may be provided in modest or generous amounts; and vouchers may be designed to cover part or all of the costs of different goods and services. Despite the many alternatives, there is a palpable quality to these types of provisions that makes them read- ily comprehensible. The substance of these provisions is evident; most of the relevant qualities of the benefit become known as soon as the amount of cash, type of good, and credit or voucher sector are specified.

Consider, again, the school voucher. We can specify a cash value that can be exchanged only to pay for designated educational programs. Different programs might be housed in a single local public school, spread out among a few local public and private schools, or encompass all accredited schools in the country. The point is that once the value of the voucher and the sector in which it can be used are identified, the nature of the provision is substantially clear. It should be noted that with both cash and vouchers, our analysis of social provisions ends at the point that recipients obtain benefits. Subsequent choices concern- ing how these benefits are utilized involve individual transactions. What is ul- timately purchased becomes a matter of individual choice much like any other.

For the other benefit categories (i.e., opportunities, services, and power), the substance of the social provision is more ambiguous. Understanding what is provided requires some probing. Consider a proposal to provide family counseling services. The type of service has been designated—counseling—but the substance of the provision remains ambiguous. It may emphasize informa- tion giving, insight therapy, behavior modification, or the alteration of envi- ronmental contingencies. It may center on couples, parents and children, or groups. It may be short or long term. And it may be conducted by personnel with a variety of backgrounds and training who base their practice on alterna- tive theories of diagnosis, assessment, and change.

Likewise, day care may involve a range of services, from bare-bones custo- dial care to comprehensive child development, depending on staff–child ratios, staff qualifications, program content, and available equipment. Opportunity benefits in the area of employment may range from traditional systems of access to affirmative preferences to quotas. In college admission, there is considerable debate regarding the substance of affirmative action provisions. While the Su- preme Court, in 2006, approved the use of race as one element in the admis- sions process, affirmative action procedures vary widely in their weight and in their character, running the gamut from special recruitment efforts to the modi- fication of admission standards. The redistribution of power in various settings may cover a spectrum of influence, from that exercised by a citizens’ advisory committee to community control of local institutions. Without clarifying the substantive aspects of services, opportunities, and power, we are severely lim- ited in understanding precisely what it is that social programs provide.

Expediency of Abstraction

To prescribe that policy analysts should strive for precision in defining the nature of social provisions is not to deny the political function of abstraction.

Ambiguity in the design of social provisions can serve an important purpose.

The Nature of Social Provision 141

Although our major concern is with comprehending social welfare policy by dissecting the various dimensions of choice, we allow ourselves a momentary detour because, in the real world of policy choice, ambiguity in the design of social provisions serves an important purpose. This is critical to note, if for no other reason than to balance the analytic impulse to dissect social choices with the wisdom of practical experience.

There are advantages to leaving the nature of the social provision vague when strong contending views prevail concerning policy specifics. One is that doing so allows those who formulate policies to secure broader support. When social provisions are defined at a high level of abstraction, different par- ties may read into them what they please, making agreement easier to reach. Upon implementation, additionally, there is greater flexibility and potential for experimentation. Once vague provisions are operationally transformed, of course, former advocates may find themselves startled at the substance of their creation, and may even end up seeking its undoing. Hence, there is a frag- ile quality to the political expedience of abstraction; it can smooth the way for passage of legislation without necessarily developing the commitments re- quired to support a program over the long haul.

The classic example, the Community Action Program (CAP) of the Eco- nomic Opportunity Act of 1964, spearheaded the War on Poverty under Presi- dent Johnson. It took approximately six months for this program to move from the drawing board to enactment. John Donovan indicates that few single pieces of domestic welfare legislation of comparable importance had ever moved through Congress with such ease and rapidity. He also observes, “there were only a few people in Washington early in 1964 who had any very clear notion of what community action in fact was.”34

According to the bill presented to Congress, Community Action would

1. mobilize and utilize, in an attack on poverty, public and private resources of any urban or rural, or combined urban and rural geograph- ical area, … including but not limited to a state, metropolitan area, county, city, town, multicity unit, or multicounty unit;

2. provide services, assistance, and other activities of variety, scope, and size to give promise of progress toward elimination of poverty through developing employment opportunities, improving human performance, motivation, and productivity, and bettering the condition under which people live, learn, and work;

3. be developed, conducted, and administered with the maximum fea- sible participation of residents of the areas and members of the groups [served] …; and

4. be conducted, administered, or coordinated by a public or private nonprofit agency … broadly representative of the community.35

This statement is seemingly innocuous, in part because of the legal syntax, but also because its deft phrasing is general enough to allow different minds to draw different conclusions. The task force responsible for drafting the antipoverty bill viewed community action as a mechanism for increasing the participation and power of the poor in the political life of the community. Daniel Moynihan notes, “The observation that Community Action Programs are a federal effort to re-create the urban ethnic political machines that federal welfare legislation helped dismantle would not misrepresent the attitudes of the task force.”36

During the Congressional hearings, there was little explication of the idea that community action was intended to transfer power to the poor. One

Chapter 5142

notable exception was Attorney General Robert Kennedy, who pointed out that the poor were powerless to affect the institutions that served them, and that community action could change this pattern.37 New York City Mayor Robert F. Wagner opposed the provision giving decision-making power to the poor. He stated, “The sovereign government of each locality in which a Commu- nity Action Program is proposed should have the power of approval over the makeup of the planning group, the structure of the planning group, and over the plan.”38

What emerged from the hearings were a number of interpretations, many of which implied that community action would provide primarily instrumen- tal, opportunity, or service benefits.39 Stressing the instrumental provision, Marion Crank, Speaker of the Arkansas House of Representatives, told the sub- committee, “The important new feature of Title II is that it will encourage a coordinated effort toward solving some of the serious problems in our area.”40 Emphasizing service provision, Robert C. Weaver noted, “The Community Ac- tion Programs will focus upon the needs of low-income families and persons. They will provide expanded and improved services and facilities where nec- essary in such fields as education, job training and counseling, health, and housing and home improvement.”41 But the nebulous quality of the provision was typified by comments of one representative who referred to Title II as the “community facilities provision.”42 Under the circumstances, it is not surpris- ing that the requirement for “maximum feasible participation,” soon the bête noire of local politicians, slipped through the hearings virtually unquestioned.

Thus, depending on viewpoint and preference, it was assumed that com- munity action would be an instrument to coordinate the planning and delivery of local services, an expansion in the level of services for the poor, or an in- crease in the decision-making powers of the poor to formulate and administer their own local programs. Community action was defined broadly enough to encompass all these interpretations. But two things were left unclear. The first was the order of priority. The possibility that the provisions might be mutually inconsistent was largely overlooked. No one, for example, dealt with the pos- sibility that transferring power to the poor might mitigate against the increase of goods and services and impede efforts at coordination. No guidelines were offered for trade-offs among different objectives. More significantly, there was little probing of the substance of these various social provisions. What types of services did the poor need and want? How much power and influence did “maximum feasible participation” imply? Did “participation” mean that the poor were to be advisors or to have a controlling vote? Serious consideration of these choices would, no doubt, have delayed passage of the legislation. In- stead, it sailed through Congress in a haze of abstraction.

When it came to implementation, and efforts were made to specify and operationalize “maximum feasible participation,” the program encountered heavy resistance. By 1965, when the first guidelines for involvement of the poor were issued, local mayors were already expressing considerable displea- sure with the program and were demanding that local governments be given greater control.43 The Bureau of the Budget also reacted by suggesting that the poor should be involved less as policymakers and more as community action personnel.

In 1966, Congress imposed its own restrictions on the use of community action funds, and by 1967 the Economic Opportunity Act was amended to clarify the substance of “maximum feasible participation.” These amendments gave states, counties, and cities the power to incorporate local Community

The Nature of Social Provision 143

Action Agencies within their own governmental structures, or to designate other groups to fill this role. Although very few local governments chose to ex- ercise this option, the amendments symbolized and reaffirmed the fundamen- tal authority and control of local governments. In addition, these amendments limited the composition of Community Action Agency boards to no more than one-third poor people, with the remaining membership divided equally be- tween public officials and representatives from the private sector. When the dust had settled, the definition of “maximum feasible participation” as power allocated to the poor had been carefully limited.

In 1974, the scale tipped even farther in a conservative direction. The Office of Economic Opportunity (OEO), which financed and coordinated the Commu- nity Action Agencies, was dismantled. With its removal, control of the CAP was transferred to a new Community Services Administration, and its financial base experienced a precipitous decline.

SOCIAL PROVISIONS AS REFLECTIONS OF POLICY VALUES

As noted, choices concerning the form of social provision can largely be un- derstood in terms of conservative and progressive values, with conservatives disposed to consumer sovereignty and progressives disposed to social control. Although this perspective affords a general level of explanation, particular so- cial provision choices often get rather complicated.

Social provisions, for example, often directly reflect policy objectives. To fully comprehend why a policy design contains specific provisions requires insight into the assumptions that underlie policy objectives. Such insight re- quires that we understand policy objectives not simply as ends, but as means– ends relationships. That is, objectives articulate how the cause-and-effect relationships of social problems are perceived. They reflect, in essence, the theoretical outlooks of those involved in policy formulation.

In practice, of course, policy objectives are rarely stated in theoretical terms because that would tend to make decision makers appear unsure. The notion that “objectives are only theories” does find its way into many research and demonstration programs. But on the whole, program objectives are put forth with emphatic assurances that they provide valid solutions to clearly un- derstood problems. To do otherwise—to candidly and skeptically advance pro- grams as hypotheses—is to invite the wrath of advocates and to undermine the confidence of potential allies. If policymakers are tentative about a program, the public is not likely to be supportive. On the other hand, if their confidence is misplaced, and results are disappointing, they can lose credibility.

Although planners, administrators, and policy analysts may sympathize with the plight of elected officials, it is not their own. To be effective in what they do, they need a clear grasp of the theoretical quality of policy objectives. Dan- iel Moynihan’s charge that the failure of professionals in developing the War on Poverty “lay in not accepting—not insisting upon—the theoretical nature of their propositions” may be inflated, but it underscores the point.44 That is, profes- sional obligation entails the critical examination of the theories and assumptions that support the choice of different social provisions. As Suchman explains,

[T]he process of seeking to understand the underlying assumptions of an objective is akin to that of questioning the validity of one’s hypothesis.

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Involved is a concern with the theoretical basis of one’s belief that “activity A will produce effect B.” Such concerns are the earmark of professional growth. So long as one proceeds on faith in accepted procedures with- out questioning the basis for this faith, one is functioning as a technician rather than a professional. The future development of the various fields of public service as science as well as art will depend to a large extent upon their willingness to challenge the underlying assumptions of their program objectives.45

With this in mind, let us take a final look at the CAP. We have noted that its major thrust was posited in the form of instrumental, service, and power provi- sions, depending on the different perspectives involved. These different view- points did not derive from whim; in most cases, they reflected certain theories and assumptions about the causes of and remedies for poverty.

There are many intricate theories of poverty, but the purpose of this dis- cussion is to illustrate how theory applies to the analysis of social provisions. Rather than present the details of these theories, we will consider three in- dependent variables around which many are organized: resource deficiency, individual deficiency, and institutional deficiency.46

From the viewpoint of resource deficiency, the lack of basic material resources such as health care, housing, and income is the primary charac- teristic of poverty and a major factor contributing to its development and perpetuation.47 Simply put, this is a formal expression of the conventional assumption that “to get, you must first have.” To the extent that CAP provi- sions were concentrated on special kinds of services, such as neighborhood health centers and day care, program objectives were based on the propo- sition that poverty could be reduced by changing the circumstances under which people live.

The theory of individual deficiency, in its most primi- tive form, reflects the Social Darwinist view that poverty results from personal defects: Some are simply less fit and less adaptable than others. A less invidious version of the theme focuses on the “culture of poverty”; poverty is ex- plained in terms of a debilitating cultural and environ- mental milieu that incapacitates the poor. The defect is not biological; rather the values, norms, and behaviors of the poor are at fault. In either case, this perspective leads to the conclusion that poor people themselves must be changed.48 To the extent that CAP provisions were concentrated on counseling, job training, and educational services, program objectives were based on the proposition that reducing pov- erty required changing skills, values, and behaviors.

Alternatively, poverty may be explained in terms of institutional deficiency. The basic assumption here is that social welfare in- stitutions not only fail to function properly, they operate in ways that sustain poverty.49 This perspective finds expression in two provisions of the CAP. The objective of the instrumental provision, with the CAP serving a coordinating and planning function, was to improve institutional performance by increas- ing the rationality, efficiency, and comprehensiveness of service provision. The institutional deficiency, here interpreted as a technical problem, is addressed through administrative channels. The provision of power, on the other hand, views institutional deficiency as a political problem. The objective, then, is

Diversity in Practice

Practice Behavior Example: Social workers

recognize the extent to which a culture’s

structures and values may oppress, marginal-

ize, alienate, or create or enhance privilege

and power.

Critical Thinking Question: How have American values affected the nature of our anti-poverty

policies?

The Nature of Social Provision 145

to make social welfare institutions more responsive to the poor, not through technical rationality, but by increasing the political capacity of those in pov- erty to influence these institutions. To the extent that the CAP was interpreted in these terms, program objectives were based on the proposition that reduc- ing poverty required change in the institutional structures that contribute to poverty’s maintenance.

Which are the best or the preferred interpretations of the CAP? On this question, the analysis sheds little light. An explication of the theories and assumptions that underlie the choice of different social provisions does not create the rules for choosing. However, it does help to clarify what we are choosing. First, it offers a basis for making judgments about the coherence of policy design in terms of the complementarities of social provisions. Many so- cial welfare policies have multiple objectives, requiring the delivery of more than one type of provision. In some cases, these objectives are incompatible because of their underlying assumptions. For instance, it has been suggested that the service and power objectives of the CAP were contradictory. This can be explained by the different assumptions underlying each objective. To put it bluntly, if the poor suffer mainly from individual deficiencies (e.g., their need for services), then increasing their power vis-à-vis service-giving agencies is tantamount to placing the healer in the arms of the lame. However, if institu- tional deficiency is seen as the major problem, then offering increased services only buffers and protects the status quo.

The second function of this analysis is to specify the major independent variables on which we are putting our money, so to speak. Clarification of this point provides guidelines to assemble empirical data that bear on the validity of the assumptions and also furnishes referents for future policy evaluation. Social welfare policy is rarely based on evidence that is so clear and over- whelming as to be determinate. Nevertheless, it is pertinent to inquire about evidence that clearly ties a given provision to a specified outcome. Faith may be a potent sedative for uncertainty, but it is insufficient for the thoughtful de- sign of social provisions.

Yet the influence of sheer faith in underlying theories and assumptions cannot be ignored; although we emphasize empirical grounding, choices re- garding social provisions are, often as not, light on evidence. A prominent example is cited by Connery and others in discussing the major assumptions supporting the development of federal community mental health programs:

In 1963, when the basic legislation was being considered, it was noted that there were no American studies demonstrating that, when the qual- ity of care was held constant, community-based treatment facilities func- tioned any better than those located in large hospitals. If this is valid, it would appear that the nature of mental health services and the in- vestment of hundreds of millions of dollars throughout the country was substantially shaped on the basis of firmly held and persuasively argued beliefs that lacked a substantial empirical base.50

We introduced this section by suggesting that understanding specific choices concerning social provisions required a grasp of the theories and as- sumptions underlying policy objectives. At this point we advise that a dis- tinction be drawn between theories and assumptions (along the lines noted in Chapter 3), with theories deriving largely from empirical insights and assump- tions being based on faith and ideology. Obviously, this distinction is often dif- ficult to make and is always relative. Yet heightened sensitivity to the “why”

Chapter 5146

of social choice is enhanced by considering not only the cause-and-effect re- lationships that underlie policy objectives but also the degree to which these relationships are informed by theory or assumption—by the tenets of evidence or faith.

CASH, KIND, AND THE CYCLES OF PUBLIC ASSISTANCE

The tension between cash and kind in all its practical and philosophical di- mensions has been persistently illustrated in the evolution of U.S. public assistance. Should government provide direct cash aid to needy families, or should cash be accompanied (or replaced) by programs and regulations ad- vancing community values? Should poverty be addressed by giving poor fami- lies money sufficient to ensure the satisfaction of their basic material needs, or should cash benefits be conditioned by a variety of obligations, making as- sistance a “social contract” with “personal responsibility” for jobs, education, and moral conduct the quid pro quo for aid?

What is interesting is that the responsibility theme, at various times, has been embraced by both the left and the right. In the early 1960s, for example, welfare reform was staunchly tied to the provision of social services. Social workers and their allies argued that providing Aid to Families with Dependent Children (AFDC) without supportive counseling and other social services was a shortsighted, unrealistic way to attack poverty. Social work leaders, led by the National Association of Social Workers, believed that welfare recipients faced human problems that required more than just cash assistance; the forces undermining self-sufficiency could not be addressed by the simple expedient of supplying money. Money was important, but it took face-to-face counseling and attention to individual client circumstances to produce long-term positive results.

In 1962, as we have discussed, Congress endorsed this theory, and social services for the first time were legislated as a major strategy for welfare reform. Rehabilitation was the key word, and social services were funded to strengthen welfare families, reduce dependency, and help the poor gain the knowledge and skills necessary to adapt to the mainstream.

With the demise of the services approach of the Great Society, welfare reform in the late 1960s and early 1970s turned toward cash strategies. Nega- tive income approaches, first promoted by Milton Friedman in his conserva- tive manifesto Capitalism and Freedom, in 1962, were endorsed by both the left and the right, and Richard Nixon nearly succeeded in having his Fam- ily Assistance Plan (guaranteed annual income) enacted in 1970. Although social services were scarcely defunded, their value as an instrument for re- lieving poverty was deemphasized. In the legal theory of the decade, cash assistance increasingly was seen as a right, akin to a property right or a civil right, and any insistence on social work services, jobs, or counseling was per- ceived as demeaning, even exploitative. And although the left viewed cash as a basic right of citizenship, the right saw it as a way to disentangle AFDC from the welfare bureaucrats. As Richard Nixon stated, “People should have the responsibility for spending carefully and taking care of themselves. Pa- tronizing surveillance by social workers makes children and adults feel stig- matized and separate. What the poor need to help them rise out of poverty is money.”51

The theme of responsibility has been embraced by both the left and the right at various times.

The Nature of Social Provision 147

With the election of Ronald Reagan in 1980, the pendulum once again swung toward services, but services of a very specific type. With the increasing expectation that able-bodied recipients of aid should be required to work, or at least trained for work, the AFDC amendments of 1988—the Family Support Act—created the Job Opportunities and Basic Skills Training (JOBS) program to transform welfare into a transitional program geared toward jobs. Although JOBS funded a broad range of job-related services and created minimum requirements for caseload participation, its achievements have been unimpressive. By 1994, for example, only 13 percent of all AFDC adults were involved in JOBS programs, and most of these involve- ments were related to education, without a strong employment focus.52

By the mid-1990s, skepticism about cash welfare had become a paramount theme of the right. Abandoning the consumer-choice pro-cash orientation of their conservative forebears, Congressional Republicans crafted new welfare measures that harkened back to a Victorian paternalism in their emphasis on work and responsibility. The enactment of welfare reform in 1996 set into mo- tion a significant shift away from the cash approach to helping the poor. Given the substantial emphasis in the new welfare legislation on moving recipients into the workforce, most states adopted “work-first” approaches in the late 1990s, requiring participation in short-term work search and job readiness and skill-building activities, and then supporting employment with childcare ser- vices and medical assistance. As time went on, particularly after the onset of the 2008 recession, policymakers increasingly realized that “hard to employ” clients faced exceptional difficulties in getting or keeping jobs. Greater empha- sis was therefore given in many states to intensive and longer-term supportive services as a means of ensuring progress from welfare to a steady job.

Transportation assistance, for example, has been provided in many com- munities. According to William Julius Wilson, the “spatial mismatch” between city residents and suburban jobs has been a particular barrier for African- Americans “because they have less access to private automobiles and do not have a network system that supports organized car pools. Accordingly, they

Capsule 5.6 “Where Have You Gone, Florence Crittenton?”

Before the government offered cash payments to unmarried mothers, hundreds of private ma- ternity homes provided vital services in every major

city. These important institutions cared for tens of

thousands of endangered women and children by

building confidence, inculcating healthy new habits,

actively discouraging illegitimacy, and working to

integrate endangered families back into mainstream

society.

Within two years of AFDC’s enactment, the

number of individuals receiving government public

assistance had more than doubled, including lots

of unmarried mothers. Maternity homes went into

eclipse. Institutions that expected behavioral reform

could not compete with no-strings checks.

It is time we fixed [this] error. Unwed motherhood

should no longer generate entitlement to public cash

aid or be perceived by teenage girls as the road to

economic independence.

Young unwed mothers as a class should be viewed

as persons peculiarly in need of supervision, educa-

tion, discipline, and reform, and not as appropriate

beneficiaries of unconditional cash payments. Group

homes can play an extremely useful role in this area.

They are a way for communities to provide care in

the critical months before and after birth, and to

instruct new mothers in childcare and the responsi-

bilities of parenting. They can assist placements for

adoption. And they can be the means by which the

community discourages further out-of-wedlock births.

From “Back to the Maternity Home” by George Liebmann, American Enterprise, January/February, Vol. 6, No. 1, 1995. Used by permission of

The American Enterprise Institute for Public Policy Research, Washington, D.C.

Chapter 5148

depend heavily on public transportation and therefore have difficulty getting to the suburbs, where jobs are more plentiful.”53

In addition, Temporary Assistance for Needy Families (TANF) programs invested in postemployment services and social work–oriented approaches such as drug and alcohol treatment and services for the victims of domestic violence. A related necessity, of course, has been for helpful, knowledgeable welfare staff able to effectively connect clients to available resources. The first years of welfare reform made evident the great need for caseworkers who could address the multiple needs of the least employable, most troubled families by following up on clients, providing encouragement and advice, and assisting with the all-too-common problems of domestic violence, ill health, and sub- stance abuse.

Federal data dramatically portray the shift from cash to services. While cash assistance made up more than three-quarters of all TANF spending in 1997, it composed just over 28 percent in 2009.54 Many of those receiving TANF support today are not even on the welfare rolls, since the official tally of those “on welfare” counts only individuals who are receiving monthly cash aid. So while fewer and fewer people are getting monthly welfare checks (as we shall see in Chapter 8), more and more are getting childcare and vocational training and other help designed to promote work.

When we examine the overall public assistance caseload, furthermore, the proportion of recipients relying on cash aid is also far lower than in the past. At the same time that the number receiving cash aid through TANF and other cash programs has been plummeting, noncash benefits through Medicaid, so- cial services, and food stamps have grown. In 2011, for example, the Medicaid rolls exceeded 67 million beneficiaries, while 47 million received food stamps. Just 14 million, by comparison, were on cash welfare.

EMERGING ISSUE: SHIFTING PROVISIONS FOR CHILD WELFARE

A comparative study of nine countries in the mid-1990s identified two general approaches to social provisions for child welfare: child protection and fam- ily service.55 These orientations distinguished how the problem of abuse was framed, the nature of the interventions, and the relationships between par- ents and the state. Most of the countries examined operated from the family- service orientation, which defined the problem in terms of family stress and dysfunction amenable to therapeutic interventions. In contrast, the U.S. child welfare system was characterized by the child-protective approach, which viewed child abuse as the harmful behavior of malevolent parents and called for legal investigation and public measures to control this destructive behavior. Although both of these approaches resulted in large numbers of children end- ing up in out-of-home placements, these outcomes were much more likely to involve voluntary arrangements in family service–oriented systems than in child-protective systems, where the majority of placements were compelled, usually by court order.

Over the next decade, these orientations to child welfare shifted as many countries initiated policies to achieve a constructive balance between serving families and protecting children. Among ten countries studied in 2010, it was no longer possible to sharply differentiate systems in terms of the child pro- tection/family service framework.56 The United States adopted features of the

The Nature of Social Provision 149

family-service orientation, with an increasing emphasis on preventive family services, along with “differential response” programs which offered early sup- port to families in need. Between 1997 and 2007, indeed, the number of chil- dren in the United States receiving preventive services multiplied five-fold.57 During the same period, the United States registered a decline in placement rates, amounting to about 50,000 fewer children in out-of-home care.

This decline had more to do with changing policies and practices than a decrease in the number of child abuse allegations or the seriousness of re- ported cases. With regard to most serious cases, the rate of fatalities related to maltreatment increased from 1.7 per 100,000 in 1997 to 2.35 per 100,000 in 2007 while the overall rate of reports, rose from 42 children per 1000 in 1997 to 47.2 per 1000 in 2007—though the victimization rate (reports of abuse that were substantiated or indicated) declined from 13.9 per 1000 in 1997 to 10.6 per 1000 in 2007. Although the lower rate of victimization in 2007 might par- tially account for the difference in out-of-home placements, in 2007 a higher percentage of victims (20.7) were placed in care than in 1997 (16 percent of victims placed in care).58

Two significant changes in policy and practice in the U.S. system that oc- curred between 1997 and 2007 accounted in part for these changes. The 1997 Adoption and Safe Family Act (P.L. 105-89) encouraged states to increase the adoption rates of children in care who were unable to realize timely reunifica- tion with their birth parents. The number of children adopted from the public foster care system subsequently increased by almost 50 percent from 36,000 in 1998 to 53,000 in 2007, which alone accounts for about one-third of the differ- ence in the out-of-home placements.59

The other significant development during this period was the emphasis on the involvement of relatives in providing out-of-home care. The increasing efforts to identify kin as caregivers evolved along two avenues—their formal participation as foster parents within the child welfare system, in which kin- ship care is counted among the out-of-home placements, and “voluntary” or informal kinship care, under which kinship caretakers are solicited by child welfare staff but do not participate in the formal system of foster care. In the latter arrangements informal kinship care serves as a diversion from the child welfare system, which reduces the official out-of-home placement count along with the cost of foster care payments.60 While it is difficult to form a com- plete up-to-date accounting of voluntary kinship placements, one national survey suggests that in 1997 approximately 285,000 children were living with relatives as a result of child welfare involvement but were not under public custody.61

The diversion of children in need of protective care into informal kinship arrangements results in reducing both the foster care caseload and public ex- penditure for out-of-home care. However, these benefits come at a price. The informal kinship arrangements often leave children at risk in unsupervised households with extended family members (usually grandmothers) who are themselves struggling in economically and socially disadvantaged circum- stances. As Berrick suggests, the trend toward informal kinship arrangements is producing a two-tiered system, “one that is formalized funded, supervised, and supported largely serving Caucasian children, and one that is informal, poorly funded, loosely supported, and unsupervised, largely serving Afri- can-American and Native American children.62 As social provisions in child welfare increasingly turn to different types of kinship care—formal kinship foster care, voluntary/informal kinship placements and kinship guardianship

Chapter 5150

arrangements—it adds a new complication to the long-standing issue of how to effectively calibrate public and private responsibilities for the well-being of children at risk.

SUMMARY

This chapter addresses the nature of social provision—the substance of social benefits. The debate between two basic forms of benefits, in-kind and cash ben- efits, is explored. A distinction is then made between six provision categories: opportunities, services, goods, vouchers and tax credits, cash, and power ben- efits. A discussion of research relating to the efficacy of vouchers is offered as well as examples of the philosophical and practical tensions between cash- based and in-kind social provisions. The chapter concludes with an analysis of shifting social provisions in child welfare.

151

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

1. Not a critique of in-kind services:

a. In-kind services permit public resources to be directed to high-priority areas.

b. In-kind services restrict freedom of choice.

c. In-kind services are a form of social control.

d. In-kind services are a less efficient anti-poverty strategy measure than cash transfers.

2. The costliest U.S. voucher program:

a. Housing vouchers (Section 8)

b. Food stamps

c. Veterans benefits

d. Title XX social services

3. The Community Action Program of the War on Poverty:

a. Emphasized the participation of the poor.

b. Was initiated by conservatives.

c. Paved the way for increased voucher use.

d. Emphasized cash relief.

4. Cash benefits:

a. Promote equal educational opportunity.

b. Advance social control.

c. Ensure consumer choice.

d. Enable behavioral interventions.

5. An example of a voucher:

a. The Earned Income Tax Credit

b. The Section 8 Housing Program

c. TANF

d. Unemployment Insurance

6. Select a social service that interests you; what are the arguments for and against the use of vouchers? What is your position?

C H A P T E R 5 R E V I E W

Log onto MySearchLab to access a wealth of case studies, videos, and chapter and EPAS assessment. (If you did not receive an access code to MySearchLab with this text and wish to purchase access online, please visit www.MySearchLab.com)

Succeed with

152

Watch and Review

Watch These Videos

* Engage, Assess, Intervene, Evaluate Community Organization

* Collaborate with Colleagues and Clients for Effective Policy Action in Community Organization

* Attending to Changes and Relevant Services * Engaging in Research Informed Practice

Read and Review

Read These Cases/Documents ^ Veterans of the Vietnam War

^ Incarcerated Women

^ Homeless People

Reinforce what you learned in this chapter by studying videos, cases, documents, and more available at www.MySearchLab.com

M Y S E A R C H L A B C O N N E C T I O N S

Explore and Assess

Explore These Assets

Interactive Case Study: Who Are Liberals and Conservatives?

Interactive Case Study: You Are a State Legislator

Timelines: Major Technological Innovations That Have Changed the Political Landscape

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* = CSWE Core Competency Asset ^ = Case Study

153

The Design of the Delivery System

6

Professional Identity

Ethical Practice

Critical Thinking

Diversity in Practice

Human Rights & Justice

Research-Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

x x

x x

Competencies in This Chapter (with Practice Behaviors)

Privatization and Commercialization in Service Delivery 155 Privatization and the Future of Public Social

Services Faith-Based Services Commercialization: Services for Profit

Promoting Coherence and Accessibility: Service Delivery Strategies 162 Strategies to Restructure Policy-Making Authority Strategies to Reorganize the Allocation of Tasks Strategies to Alter the Composition of the Delivery

System

Controlling Costs: Conditionality and Managed Care 175

Emerging Issues: Culturally Competent Service Delivery 179

Summary 182

Practice Test 183

MySearchLab Connections 184

C H A P T E R O U T L I N E

Chapter 6154

“You’re very strict,” said the Mayor, “but multiply your strictness a thousand

times and it would still be nothing compared with the strictness that the

Authority imposes on itself. Only a total stranger could ask a question like

yours. Is there a Control Authority? There are only Control Authorities. Frankly,

it isn’t their function to hunt out errors in the vulgar sense, for errors don’t

happen, and even when once in a while an error does happen, as in your case,

who can say finally that it’s an error?”

Franz Kafka

The Castle, 1930, New York: Knopf

When Kafka’s hero wanders through a bureaucratic maze, continually con- founded in his attempts to make sense of the system, his fictional world is not far removed from the real-life experiences encountered by many applicants for social welfare benefits. The system for delivering benefits is closed to cer- tain applicants; others enter it only to find themselves shuffled from agency to agency without ever receiving appropriate help. And many will ask in despair for a “control authority” through which to seek redress for their grievances. At times, the answer they receive closely approximates the quote from Kafka.

This situation does not necessarily arise out of authoritarian mentalities or bad intentions. Indeed, there is no way to avoid some measure of bureau- cracy in structuring services. Organization, to a considerable degree, requires bureaucracy. But there are important choices to consider in designing organi- zational forms, choices that provide policymakers and planners with opportu- nities to avoid some of the more Kafkaesque aspects of service delivery. In this chapter, we will examine some of the choices and uncertainties involved in the design of social services delivery systems.

The delivery system, as noted in Chapter 3, refers to the organizational ar- rangements that exist among service providers and between service providers and consumers, in the context of the local community. We focus on “the lo- cal community” because this is where providers and consumers usually come together.1 Service providers may be individual professionals, self-help associa- tions, professional groups, or public and private agencies acting separately or in concert to provide services in venues such as private homes and offices, community centers, residential facilities, emergency shelters, welfare or men- tal health departments, clinics, or hospitals.

The number of choices involved in designing delivery systems is large. Consider, for example, the following eight options (which by no means exhaust the possibilities). Providers may

Be administratively centralized or Be decentralized

Combine services (e.g., health, or Offer single services probation, income support)

Be located under one roof or Maintain separate facilities

Coordinate their efforts or Operate independently

Rely on professional employees or Employ consumers or paraprofessionals

Delegate authority to service users or Concentrate authority in the hands of “experts”

Control costs by inhibiting supply or Control costs by inhibiting demand

Be public administrators or Be private contractors

The Design of the Delivery System 155

Through the early 1980s, most of the literature on the design of social ser- vice delivery systems focused on the first six options, choices that concern structural arrangements to promote services’ coherence and accessibility. Since then, a new literature has emerged that is centered less on structural ar- rangements and more on questions related to cost control and service delivery under public or private auspices. In examining choices in the design of deliv- ery systems, we will begin with the selection of administrative auspice, one of the most pressing issues in the planning and politics of services organization.

PRIVATIZATION AND COMMERCIALIZATION IN SERVICE DELIVERY

Analyses of auspice tend to focus on two levels of choice: (1) the broad issue of privatization, which addresses the alternative of having a service delivered directly by a public agency or indirectly through contracting with a private provider (voluntary and for-profit agencies) and (2) the narrower issue of com- mercialization, which addresses the choice between for-profit and nonprofit providers.

Privatization and the Future of Public Social Services

Since the early 1980s, there has been considerable growth in mixed economy purchase-of-service arrangements, through which public funds are used to pay for services delivered by private agencies.2 This trend has expanded under welfare reform, with community organizations, often faith based, receiving pref- erence as Temporary Assistance for Needy Families (TANF) contract agencies.

Today’s degree of enthusiasm for privatization represents a level of commit- ment to community-based agencies that has not been seen since the community action movement of the mid-1960s. It is an enthusiasm inspired by the conver- gence of two popular assumptions—one suiting the free-market ideology of the right, the other satisfying the citizen participation/empowerment objectives of the left. Privatization is therefore linked both to the presumed advantages of the competitive marketplace and to the failings of public bureaucracies. Private agencies perform well, it is said, because they offer the most efficient approach to the production and delivery of social services.3 Public bureaucracies perform poorly, the argument continues, because they enjoy a monopoly in their areas of service; public consumers, a captive audience, must take what is offered.4

Although a competitive market does provide strong incentives to adopt cost-effective practices, the efficiency assumption nevertheless bears scrutiny. This is because the market metaphor does not exactly apply in the realm of social services contracting where the forces of competition responsive to con- sumer choice are undermined by purchase-of-service arrangements.5 Under purchase-of-service contracts, the entire transaction is perceived neither by the individual consumer, who does not pay for the service, nor by the pur- chasing public body, which does not receive the service. Moreover, social ser- vice consumers are often vulnerable—children, the elderly, and the poor—and less than well informed. In the absence of the market discipline imposed by knowledgeable consumers who pay for what they get, third-party contracting does not operate in the kind of environment that secures the cost and quality of services being delivered, a problem Hansmann describes as the “contract failure theory.”6

Privatization is linked both to the presumed advantages of the competitive marketplace and to the failings of public bureaucracies.

Chapter 6156

Competitive bidding for public–private contracts has been used in efforts to address the problem of contract failure, which stems from the absence of competition and consumer choice. Evaluations of the competitive bidding mechanism in several service areas, however, suggest that the results neither reduce costs nor enhance quality.7 “Proxy shopping,” another method recom- mended to introduce the discipline of market competition into purchase-of- service arrangements, involves contracting only with service providers who can attract paying customers (who serve as proxy-shoppers for public agen- cies). The reasoning here is that, if consumers who have shopped around with money in their pockets are willing to pay for the service, the cost and qual- ity should be competitive with that of other providers.8 Still, there must be enough suppliers to form a competitive market, which is often not the case when dealing with community-based agencies.

Even if competition can be introduced into purchase-of-service arrange- ments, the transaction costs of contracting can be quite high; these costs include complicated measurements to determine the price of units of ser- vice being purchased and the procedures to monitor the quality of what is delivered.9 One answer to this criticism is that the transaction costs of pur- chasing services from private agencies may be mitigated by contracting with community-based agencies. Why? The reasoning goes that community-based agencies will be accountable and responsive to their local consumer constitu- ency; these agencies are in essence local groups organized to serve their own communities. Thus, even though the consumers do not pay for the services they are receiving, they are nevertheless in a strong position to influence the quality of these services, often participating on the boards of local agencies. Under these circumstances, the transaction costs of contracting can be reduced because monitoring for quality would be conducted by the consumers who have the power to influence their local organizations.

Contracting, then, can be promoted not only as a method for efficient and effective delivery of services but also as a mechanism for advancing the de- mocratization of social services. Community-based agencies are “mediating” institutions. Local, private, and responsive to the people served, they provide a cushion of civil society between the individual and the state. Seen in this light, minimizing the role of government in the delivery of social services gives private institutions “the space to flower, reclaiming their rightful place at the

Capsule 6.1 The Privatization Nostrum

Today, government is beset with cynicism, conservatism, and libertarianism. “Privati- zation” is the magic nostrum to cure our public

ills and two administrations have been industri-

ously, if not always coherently, engaged in dis-

mantling the structure they were supposed to be

managing. “ Bureaucracy” and even “government”

have become pejoratives instead of descriptive

terms. . . .

The pendulum has swung before and it will swing

again. The attractions of libertarianism, which views

each human being as ensconced in a shell of isola-

tion, will fade in the face of the world’s great social

problems of population, of environment, of energy,

and the establishment of peace. We will learn again

that we must live together, all jostled up on this little

planet; and we will learn that government plays an

essential and honorable role in the endeavor.

From “Public Administration Revisited” by Herbert A. Simon and Victor A. Thompson, Society, 28(5), July/August 1991. Used with kind

permission from Springer Science+Business Media B.V.

The Design of the Delivery System 157

center of a revitalized civil society.”10 Since the mid-1990s, this “civil society” theme has engendered considerable discussion about ways to reinforce local community structures to build the “social capital” necessary to promote de- mocracy and responsive helping systems.

There is, however, another less sanguine view of the value and the potential of community-based agencies. Abstract discourse on civil society, local respon- siveness, social capital, and citizen empowerment tends to ignore the harsh fact that there is often a dense concentration of social problems in communities with the highest proportions of residents in need of social services. Fred Wulczyn, finding that one out of eight children born in some of New York’s poorest neigh- borhoods are admitted to foster care as infants, estimates that the cumulative rate of foster care placement in these communities may be approaching 20 per- cent.11 Plagued by high levels of child abuse, family disorganization, and crime, these communities not only have few natural “civic” resources, but they would be extremely difficult to organize for constructive local agency participation.

Effectiveness and local responsiveness aside, however, the plain fact is that community-based agencies often deliver social services for lower costs

Capsule 6.2 The New Parlance of Community

Civil Society

An intellectual revolution is underway concerning

the nature of our social crisis. It is no longer credible

to argue that rising illegitimacy, random violence,

and declining values are rooted in the lack either of

economic equality or of economic opportunity. These

positions are still current in our political debate, but

they have lost their plausibility.

America’s cultural decay can be traced directly

to the breakdown of certain institutions—families,

churches, neighborhoods, voluntary associations—

that act as an immune system against cultural dis-

ease. In nearly every community, these institutions

once created an atmosphere in which most prob-

lems—a teenage girl “in trouble,” the rowdy neigh-

borhood kids, the start of a drug problem at the local

high school—could be confronted before their repeti-

tion threatened the existence of the community itself.

When civil society is strong, it infuses a com-

munity with its warmth, trains its people to be good

citizens, and transmits values between generations.

When it is weak, no amount of police or politics can

provide a substitute. There is a growing consensus

that a declining civil society undermines both civility

and society.

—Senator Dan Coats

Social Capital

By analogy with notions of physical capital and

human capital—tools and training that enhance

individual productivity—“social capital” refers to

features of social organization, such as networks,

norms, and trust, that facilitate coordination and co-

operation for mutual benefit. Social capital enhances

the benefits of investment in physical and human

capital.

Our political parties, once intimately coupled to

the capillaries of community life, have become eva-

nescent confections of pollsters and media consul-

tants and independent political entrepreneurs—the

very antithesis of social capital. We have too easily

accepted a conception of democracy in which public

policy is not the outcome of a collective deliberation

about the public interest, but rather a residue of

campaign strategy. The social capital approach, fo-

cusing on the indirect effects of civic norms and net-

works, is a much-needed corrective to an exclusive

emphasis on the formal institutions of government

as an explanation for our collective discontents. If

we are to make our political system more responsive,

especially to those who lack connections at the top,

we must nourish grass-roots organization.

—Robert Putnam

Senator Dan Coats, “Can Congress Revive Civil Society?” Policy Review, no. 75 (January/February 1996): p. 25. Reprinted by permission of

The Heritage Foundation.Reprinted with permission from Robert D. Putnam, “The Prosperous Community: Social Capital and Public Life,”

The American Prospect: March 1993. Volume 4, Issue 13. http://www. prospect.org. The American Prospect, 1710 Rhode Island Avenue, NW,

12th Floor, Washington, DC 20036. All rights reserved.

Chapter 6158

than public bureaucracies. They deliver services for less because they pay their workers less. Public bureaucracies, after all, represent one of the last strongholds of the union movement in the United States. Community-based organizations can also often rely on volunteers, keeping their personnel costs down.12

Ironically, efforts to promote civil society through the financial support of local service programs often un- dermine functionally based communities like organized labor, which also constitute powerful mediating institu- tions of civil society. Indeed, in his classic analysis, Emile Durkheim noted, “A nation can be maintained only if, between the State and the individual, there is interca- lated a whole series of secondary groups near enough to the individuals to attract them strongly in their sphere of action.”13 With organizations based on territorial divisions (villages, districts) becoming less important, Durkheim envisioned occupational groups emerging to fill the void and re-create a sense of social solidarity.

Philosophical arguments about the place of geographic- and functional-community institutions in civil society will

not mitigate the increasing fiscal pressures on state public assistance agencies to contract out the delivery of services under TANF and other social service laws. As policy analysts consider the shift from public to community-based de- livery structures, the assumptions underlining privatization should be carefully examined and the trade-offs should be made explicit. Private services may be less costly, but whether community-based agencies are more effective in deliv- ering social services isn’t at all certain. To date, research findings on the effec- tiveness of social services delivered under public and private auspices haven’t yielded a definitive answer.14 As Kamerman and Kahn observe, the evidence runs both ways, “varying with field, time, context, and scale.”15 Although pri- vate community-based agencies reside close to the people being served, are less bureaucratic, and are more responsive to local influences than public bureau- cracies, this does not guarantee greater effectiveness in service delivery.16

Faith-Based Services

Religious institutions—nearly half a million churches, synagogues, and mosques in the United States today—constitute the largest component of the American voluntary sector, and a critical element in our civil society. Yet the role of religion in social welfare has always been an ambiguous one, and sub- ject to great controversy.

Practice Contexts

Practice Behavior Example: Social workers

continuously discover, appraise, and attend to

changing locales, populations, scientific and

technological developments, and emerging

societal trends to provide relevant services.

Critical Thinking Question: What societal trends contribute to the rise in privatization? What

do you think the future holds for privatization?

Capsule 6.3 Faith Societies

There is no country in which the people are so religious as in the United States. . . . The great number of religious societies existing . . . is truly

surprising: there are some of them for everything;

for instance, . . . to convert, to educate and

civilize; . . . to take care of widows and orphans;

to endow congregations and support seminaries; . . .

to prevent drunkenness.

Achille Murat, The Principles of Republican Government, 1832.

The Design of the Delivery System 159

In the early years of the American welfare system, religious institutions played dominant roles. Much of the urban antipoverty effort of the late nineteenth century, for example, was founded on religious conviction. While usually operat- ing informally, through personal charity and volunteer do-gooding, a number of formal organizations were vital to the social health of the cities. Urban missions such as the Salvation Army, for example, addressed slum conditions and alcohol- ism and destitution via the Bible and material relief. Catholic and Protestant hos- pitals and orphanages and old-age homes evolved to serve society’s dependents.

With the rise of the welfare state, the role of religion in social welfare de- clined. Early proponents of public welfare were aggressively secular, viewing religious helping as parochial, amateurish, and moralistic. And while religious agencies continued to provide valuable services, they increasingly operated much like any other kind of voluntary nonprofit—as formal 501(c)3 agencies with professional staffs and broad nondenominational missions. Catholic Char- ities USA, for example, became a billion-dollar enterprise serving the broad community and receiving most of its funding from government contracts.

Today’s faith-based organizations—the term developed in the mid-1990s— have been undergoing a significant renaissance since the enactment of welfare reform in 1996. A provision in that legislation authorizing “charitable choice” permitted states to contract with religious agencies to assist welfare clients. This was a significant break with previous practice that largely prohibited con- tracting with organizations that were overtly religious—organizations, for ex- ample, that displayed religious symbols or used religious criteria in selecting employees. Under TANF, not only would secularized agencies like Catholic Charities be eligible for support, but also more overtly faith-oriented groups.

President George W. Bush, recalling his own alcohol problems as a young man, frequently touted the importance of faith, of divine inspiration, in ad- dressing substance addiction and other social problems. One of Bush’s first initiatives as president was to embody his philosophy of “compassionate con- servatism” in new initiatives to promote the welfare efforts of religious and community organizations. Believing that the faith community had been im- properly inhibited by bureaucratic red tape and funding restrictions, new Centers for Faith-Based and Community Initiatives were established in seven federal cabinet agencies to make sure that local faith organizations could com- pete on an equal footing for federal dollars, receive federal technical advice and support, and face fewer bureaucratic barriers.

As a result, significant numbers of churches and associated bodies were recruited to provide job training, literacy development, abstinence promo- tion, prison-based reentry counseling, fatherhood programs, drug and alcohol treatment, and residential programs for unmarried mothers. So long as they do not actively evangelize or discriminate against nonbelievers, these agencies can receive state funding. While these limitations do not satisfy strict “sepa- rationists” who view “charitable choice” as a dangerous violation of the First Amendment boundary between church and state, a broad coalition has come to view faith organizations as valuable instruments for social welfare, either as partners with government (the view from the left) or as substitutes for govern- ment (the view from the right). While liberals and conservatives increasingly recognize the importance of adding a spiritual dimension to social service pro- grams, liberals see government and religious charities coexisting in the pro- motion of a welfare-sensitive civil society while conservatives see religious agencies based on morality, private charity, and direct compassion replacing bureaucratic, inefficient public programs.17

Chapter 6160

Commercialization: Services for Profit

Prior to the 1960s, social services were delivered almost exclusively by public and voluntary nonprofit organizations. When they were considered, questions of auspice addressed the relationship between public and volun- tary nonprofit providers.18 With today’s increasing involvement of commer- cial agencies in the delivery of social services, new questions have emerged concerning how well social welfare objectives can be served by providers motivated by profit.

Social welfare advocates view the emergence of profit-oriented agencies with a jaundiced eye.19 There is a strong suspicion that the profit motive is not morally compatible with the ethos of social provision. Yet moral objections would be difficult to sustain if it could be shown that profit-oriented agen- cies were the most effective and efficient means for delivering social services. If, on the other hand, profit-oriented agencies are less efficient and effective than nonprofit providers, moral objections would be unnecessary to deter the privatization of services. Assessing the efficiency and effectiveness of social services, however, is a complex business. Service objectives are often multiple and vague. They are no less important for these qualities, but they frequently defy precise measurement.20

Despite the difficulties of empirical measurements, there is a body of re- search comparing the relative effectiveness of profit versus nonprofit provid- ers.21 Some studies reveal that nonprofit providers are more sensitive to client needs; others show service areas in which profit-oriented agencies do the best job; still others find no significant differences between profit and nonprofit agencies. On the whole, findings on the relative merits of for-profit and non- profit service providers, like comparisons between public and private provid- ers, are indeterminate.

Capsule 6.4 Taking Faith Seriously

In recent years there has been an explosion in empirical research on faith-based social programs. Most studies, including the most scientifically rigorous,

find that faith moves social and civic mountains.

Consider the latest scientific literature on religion

and crime. A 1997 study by Byron Johnson, director

of the Center for Research on Religion and Urban

Civil Society, reports that New York State prisoners

who participated intensively in Bible studies were

less likely to be rearrested:

Participants were only a third as likely to be arrested

a year after release as otherwise comparable prison-

ers who did not participate.

On average, eight years after release, the

Bible studies participants remained arrest-free

over 50  percent longer than the parolees in the

comparison group.

Likewise, in a study of a faith-based program in a

Texas prison, Johnson reports:

Two years after release, participants were less likely

to be arrested than inmates paroled early from the

program and than otherwise comparable inmates

who did not participate in the program.

Only 8 percent of the Prison Fellowship program

graduates, versus 20 percent of the matched com-

parison group, were incarcerated within two years

after being released.

So, whether with respect to reducing recidivism

rates, improving public health outcomes, accelerat-

ing volunteer mobilization, or other objective mea-

sures, the empirical evidence has become weighty

enough for numerous top scientific organizations to

begin taking religion seriously.

From “Not a Leap of Faith” by John J. Dilulio, Jr., Weekly Standard, June 30, 2003. Reprinted by permission.

The Design of the Delivery System 161

In the absence of decisive empirical evidence, theoretical analyses of the distinguishing features of profit and nonprofit organizations offer a variety of guidelines for choice. Theoretically, nonprofit organizations have greater pub- lic accountability than profit-oriented organizations because their structure of governance requires boards of directors composed of people who are expected to promote the broad interests of the community. In contrast, the directors of profit-making agencies are expected to protect the financial interests of own- ers. In nonprofits, therefore, there is less temptation to exploit vulnerable ser- vice consumers for material gain. Finally, there is a charitable ethos associated with nonprofits that is at variance with the capitalist spirit of profit-making enterprises.22

These differences suggest several practical conclusions for choosing between profit-making and nonprofit providers:23

1. Standardization of service. Services that involve uniform procedures and standard products, such as public health vaccinations, readily lend themselves to the economic planning skills and business initia- tive of profit-making organizations. At the same time, the uniform character of these services allows the purchasers to monitor their delivery for potential abuses more easily than services that require a technology that is custom tailored to each case (such as therapy).

2. Client competence. Many social services deal with client groups that are highly vulnerable to exploitation. Children, the mentally retarded, and confused and emotionally upset people do not have the ability to hold service providers accountable for the quality of their services. To the extent that public accountability and the charitable ethos influ- ence the behavior of nonprofit agencies more than that of profit-making agencies, the nonprofit form is preferable for delivering services.

3. Coerciveness of service. Services invested with coercive powers, such as protective services for children and work with parolees, pose a significant threat to personal liberty. In these cases, the service pro- vider’s degree of public accountability is of foremost importance. With the clients’ freedom at stake, the lack of public accountability of profit- making organizations would not seem to offer the most adequate form of protection.24

4. Potency of the regulatory environment. Profit-oriented and nonprofit providers would seem equally preferable in delivering services that are under sufficient public regulation to ensure the maintenance of stan- dards and client protection. We should note, however, that the scope and potency of regulatory activity in the social services are limited.

Although these conditions tend to favor nonprofit agencies, there are clearly service areas where this general proposition does not hold, such as transportation for the handicapped and elderly. In choosing between profit and nonprofit providers, the essential issue is not to seek the universally superior form of organization, but to determine the particular conditions under which profit- or nonprofit-oriented agencies may best serve social wel- fare clients. In assessing these conditions, we must consider not only the points noted, but also the nature of the purchase-of-service arrangement, especially the extent to which funding agencies can design grant require- ments to ensure compliance with their objectives (an issue that will be addressed in Chapter 8).

Chapter 6162

PROMOTING COHERENCE AND ACCESSIBILITY: SERVICE DELIVERY STRATEGIES

Whether social services are provided under public or private auspices, is- sues remain about how to structure the delivery system in ways that foster coherence and accessibility. Broadly speaking, efforts to promote coherence and accessibility address three kinds of questions concerning the structural arrangements for service delivery: (1) Where shall authority and control for decision making be located? (2) Who will carry out the different service tasks to be performed? and (3) What will be the composition (the number and types of units) of the delivery system?

Attempts to answer these questions often stir controversy as they respond to the tug and pull of conflicting social values. In addressing questions about where authority should be vested, for example, the value of consumer partici- pation may be emphasized regardless of its impact on the efficiency of service delivery. Issues having to do with efficiency compete with other values that may be equally important to society, such as providing jobs for low-income people or ensuring equity in the geographic distribution of services.

In the heat of controversy, criticisms of service delivery intensify. Such criticism tends to focus on the characteristic failings of local service deliv- ery systems, particularly fragmentation, discontinuity, unaccountability, and inaccessibility. These problematic facets of service delivery have been amply documented and analyzed.25 Plans to reform the organization and the delivery of social services usually concern one or more of them.

For a description of these problems, consider the following hypothetical cir- cumstances: An unemployed single mother with a cocaine problem drops off her daughter at a daycare center and then goes to receive treatment at a substance abuse clinic, after which she spends her day in a TANF work-support program. If the daycare center, clinic, and work-support program are in different parts of town, operate on different schedules, and provide overlapping services, that’s fragmentation. If there is no convenient means of transportation among these three organizations, no referral between the clinic and the work-training pro- gram, and no TANF subsidies to help pay for the day care, that’s discontinuity. If the client is not admitted to the treatment or training program because of her place of residence, lack of medical insurance, or the like, that’s inaccessibility. When any or all of these circumstances exist and the client has no viable means of redressing her grievances, the delivery system suffers from unaccountability.

These problems have many facets, are interconnected at some points, and span a broader range of issues. Problems of fragmentation concern organiza- tional characteristics and relationships, especially coordination, location, spe- cialization, and duplication of services. (Are services available in one place? Do agencies mesh their activities? Are they aware on one another’s existence?) Problems of accessibility concern obstacles to a person’s entering the network of local social services. (Do eligibility standards based on income, age, suc- cess potential, or other characteristics exclude certain persons from service?) Problems of continuity concern obstacles to movement through the network of services and the gaps that appear as agencies try to match resources to needs. (Are there adequate channels of communication and referral?) Problems of ac- countability concern relationships among persons served and service decision makers. (Are those needing help able to influence decisions that affect their cir- cumstances? Are decision makers unresponsive to client needs and interests?)

Criticisms of service delivery tend to focus on the characteristic failings of local delivery systems, particularly fragmentation, discontinuity, unaccountability, and inaccessibility.

The Design of the Delivery System 163

Phrased as policy issues, these problems confront planners and administrators with choices that, although conceptually distinct, are confounded in practice. That is, an ideal system of services is one in which services are integrated, con- tinuous, accessible, and accountable. Taken separately, however, each of these elements strains against one or more of the others. We may summarize some of the service delivery choices as follows:

1. Reduce fragmentation and discontinuity by increasing coordination, opening new channels of communication and referral, and eliminating duplication of services (possibly increasing unaccountability and inaccessibility).

2. Reduce inaccessibility by creating new means of access to services and duplicating existing service efforts (possibly increasing fragmentation).

3. Reduce unaccountability by creating a means for clients and consum- ers to have input into, and increased decision-making authority over, the system (possibly increasing fragmentation and discontinuity).

Problems in service delivery do not exist because there is a shortage of ideas about how to improve the situation. On the contrary, the technical reper- toire of planners and managers includes a wide range of strategies for effecting the delivery of local services. Much of the problem is simply the piecemeal nature of our welfare state. Historically, policymakers have addressed needs one by one. Problems are identified and legislation is enacted. In this fashion, benefits and services evolve one program at a time, with their associated pro- fessionals, rules and regulations, and service delivery and funding patterns.

Capsule 6.5 The Services Tangle

Since making the leap from welfare to work two years ago, Tami Buddi has put a lot of miles on her aging family sedan. To collect child-support

payments from her former boyfriend, she drove to

the county courthouse in a nearby suburb of Min-

neapolis. To keep appointments with her job coun-

selor, she drove to a second county office. To apply

for subsidized health insurance, she drove to a third

site, clutching a thick application and a sheaf of

payroll stubs. No one told her about federal train-

ing grants, so she found a night school on her own,

which meant more time behind the wheel every

week. All this while working full time as a bill collec-

tor and raising a 10-year-old daughter by herself.

“It’s like they sat down and tried to make it com-

plicated,” she says with a cynical chuckle.

This fragmentation helps explain why millions

of poor Americans never receive the benefits that

Congress created for them, benefits that were sup-

posed to express society’s support for the ideal of

work. Economists estimate that about 80 percent of

eligible workers collect the Earned Income Tax Credit

(EITC), a refundable credit for the working poor. But

only 51 percent of eligible adults receive Medicaid,

and only 41 percent collect food stamps. An even

smaller fraction receives childcare subsidies. And,

maybe most troubling for its long-term implications,

only about 200,000 adults receive job training in a

typical year through the main federal workforce stat-

ute, even though perhaps 20 million low-wage workers

are struggling along with a high-school diploma or less.

In the past, a local welfare office was the main

portal to government benefits such as Medicaid

and food stamps. But, since 1996, when Congress

passed a landmark overhaul of public assistance and

made welfare contingent on work, the number of

families applying for cash support has plummeted.

The number of working poor has risen sharply, mean-

while, but these adults are mostly disconnected from

social services.

Reprinted with permission from David Hage, “Purgatory of the Working Poor,” The American Prospect Online, August 13, 2004. The American

Prospect, 1710 Rhode Island Ave., NW, 12th Floor, Washington, DC 20036. All rights reserved.

Chapter 6164

Each of these programs is necessary, of course, but so are arrangements to create the interconnections necessary to avoid the problems dramatized in the capsules.

To create integrated and responsive service arrange- ments, issues of choice and uncertainty need to be re- solved. We approach this task in the following sections by identifying choices among service delivery strategies, an- alyzing the types of systemic changes related to different strategies, and suggesting what needs to be known about the effects of these strategies.

Proposals for reform invariably accompany critical analyses of service delivery. Although specific proposals for service delivery reform contain considerable variation, most correspond to one or another of six general strategies, each of which addresses at least one of the service delivery

questions mentioned earlier:

1. Strategies to restructure policy-making authority and control:

a. Coordination

b. Citizen participation

2. Strategies to reorganize the allocation of tasks:

a. Role attachments

b. Professional disengagement

3. Strategies to alter the composition (i.e., number and types of units) of the delivery system:

a. Specialized access structures

b. Purposive duplication

Each of these strategies seeks to restructure local service systems to enhance service delivery. Coordination and citizen participation both impinge on the bureaucratic hierarchy of the system. Role attachments and profes- sional disengagement alter the roles and status characteristics of actors in the systems. Specialized access structures and purposive duplication change the substantive composition of the elements in the system.

Strategies to Restructure Policy-Making Authority

Coordination Social workers and social planners are quick to declare their faith in the ge- neric, the whole-person, and the comprehensive approach to service. They recognize the complexity of social causation and the interdependencies among the mental, physical, and environmental factors that influence clients’ func- tioning and life chances. At the same time, policy is a particular thing, with legislation generally focused on the specific, rather than the comprehensive. The thrust of agency practice, as a consequence, is directed toward special- ization, with agency professionals looking at problems in terms of their own training and technical expertise. In one sense, then, the function of services coordination is to mitigate the strains created by the juxtaposition of special- ization and the comprehensive approach in the professional value structure.

Coordination is a strategy aimed at developing an integrated and compre- hensive social service system. Whereas innumerable arrangements have been suggested and tested for bringing some coherence to the natural fragmentation

Engage, Assess, Intervene, Evaluate

Practice Behavior Example: Social workers

substantively and effectively prepare for

action with individuals, families, groups,

organizations, and communities.

Critical Thinking Question: Can the character- istic failings of local service delivery systems

(fragmentation, discontinuity, unaccountability,

and inaccessibility) be thought of as separate

problems or are they intrinsically integrated?

The Design of the Delivery System 165

of services, three approaches capture most of the possibilities: centralization, agency co-location, and case-level collaboration. These models are exempli- fied in different approaches to the organization of local social services in Eng- land and the United States.

The structure of the British system is rooted in the 1970 Local Authority and Social Services Act, which prescribed a major reorganization of local ser- vice agencies. The staffs and functions of children’s and welfare departments, community development services, home-help services, and other local agen- cies were centralized under the auspices of newly created Local Authority Social Services Departments (LASSD). In turning to the LASSD as a mecha- nism for centralization, the British utilized what Simon recommends as being among the most powerful of coordinative procedures.26

At the same time that increased coordination through administrative unification offers a remedy for service fragmentation, it also gives rise to poten- tially dysfunctional consequences. For instance, services centralization tends to increase the organizational distance between clients and decision-making authorities. Centralization may lead to an internalization and perhaps height- ening of what were previously interorganizational strains. The potential for intraorganizational conflict is especially sharpened when a variety of hereto- fore autonomous agencies with different aims, technologies, and perceptions are cast into a unitary organizational mold, as in LASSD.27

In addition, the consolidation of services under one administrative struc- ture can limit service accessibility. While administration may be centralized in a single authority, service delivery may in fact occur in a number of locations dispersed throughout a community. It is “centralization” only in the sense that it functions according to the rules and regulations of a unified administrative structure, with intake into the services network concentrated in the hands of a relatively few gatekeepers. Such a “single door” can serve as a mechanism to rationalize service delivery from the standpoint of case referral and continuity, or it can act as a barrier to service for those who, inadvertently or by design, do not fit the administrative criteria for eligibility.

Chapter 6166

The second major approach to the coordination of services is co-location, which typically involves the geographic centralization of different agency resources but not their administrative unification. Since the 1960s and 1970s, continuous efforts along these lines have been made under federal sponsorship through neighborhood service centers (developed by the Community Action Program of the War on Poverty), City Demonstration Agencies (organized by the Model Cities Program), focal-point agencies (authorized in the 1978 amendments to the Older Americans Act), and one-stop job centers (mandated under the Workforce Investment Act of 1998).28

Co-location structures encompass a variety of more or less formal and bind- ing arrangements. This variability is usually expressed by reference to the degree of resources, administrative integration, and decision-making authority invested by member organizations in the joint enterprise.29 Some involve agency collabo- ration with a degree of joint decision making; others are more ad hoc with no sharing or modifications of component agency decision-making authority.

Co-location arrangements may require organizations to pool to some de- gree their staff skills and knowledge, intake and record keeping, and decision making. In such circumstances, the costs to member agencies may in fact be less than the benefits of coordination.30 By and large the goals and policies of local service agencies are not like interlocking pieces of a big jigsaw puz- zle that, given time, patience, and a constructive mentality, can be neatly fit into the frame of a common cause. The fit, of course, can be accomplished but at the cost of autonomy that many organizations are disinclined to pay. Thus, co-location often results in agencies working in a common place but failing to integrate their efforts in any more meaningful fashion.

In comparing centralization and co-location strategies, the crucial distinc- tion resides in the different control mechanisms employed in each. Co- location involves voluntary collaboration of autonomous agencies: Cooperation is based primarily on reciprocity, and the units involved are not bound to a for- mal hierarchy of positions, as they are under a centralized administration such as Britain’s LASSD. Compared to bureaucratic authority, of course, reciprocity is a tenuous mechanism of control. It is operative, as Dahl and Lindblom note, “provided that the people have the same norms and conceptions of reality.”31

This is why co-location frequently occurs among agencies trying to achieve a common goal. In this era of welfare and work, for example, services in a num- ber of states and counties around the country have come together, co-located, to “make work pay.” One notable example is Dayton Ohio’s Montgomery County

Capsule 6.6 One-Stop Shop

Welcome to the San Diego Family Justice Center’s Web site. The center is the most comprehensive “one-stop shop” in the nation for

victims of family violence and their children. Victims

of domestic violence can now come to one location

to talk to an advocate, get a restraining order, plan

for their safety, talk to a police officer, meet with a

prosecutor, receive medical assistance, counsel with

a chaplain, get help with transportation, and obtain

nutrition or pregnancy services counseling.

Our center is a unique, special, safe place

where victims of domestic violence are our highest

priority. We are committed to providing victims and

their children with the help they need to break the

cycle of family violence that so often damages and

destroys families.

From San Diego Family Justice Center web site, www.nfjca.org, April, 2003.

The Design of the Delivery System 167

Job Center, a large warehouse “megamall,” where several dozen community nonprofits and public agencies provide cash welfare, food stamps, housing aid, employment counseling, health insurance, childcare subsidies, legal services, and mental health services.

Beyond simply providing single-door convenience, the center has helped reduce

the intimidation and stigma associated with traditional welfare offices. Clients enter through a pleasant, tiled lobby where a receptionist hands out color coded cards that guide them to the right department—yellow for child care, for example, of blue for housing. A client who simply wants to find work can step directly to a bank of computers retrofitted with the na- tion’s top-rated employment database. A really troubled family can see a team of job counselors, eligibility experts, and social workers. The center is on a major bus line and, because many of its clients already hold jobs, stays open until 6:30 p.m. on Tuesdays and Wednesdays.32

Case-level collaboration, the third coordinative model, involves decentral- ized interactions among service agencies and services personnel, rather than formal structured patterns of services unification or co-location. Lacking a sys- tem of coordination from above, it is often the ground-level services worker who is responsible for connecting the diverse components of the helping network. Such coordination from below is nothing new, of course. Service workers have traditionally had to ensure that clients with multiple problems receive the vari- ous services they need, but the complexity of today’s service delivery system increasingly demands caseworkers who have the sophistication and knowledge and the mandate to link clients to services in a timely and efficient manner.

Over the past several decades, for example, interagency agreements in the child and family field have frequently been created to ensure the coordination of services for multiproblem clients.33 Collaboration among child welfare and mental health agencies, in particular, has become increasingly important as growing numbers of troubled children and adolescents have been placed in foster care and other types of out-of-home arrangements. Working together, mental health and child welfare officials have established compacts identi- fying their joint responsibilities, creating wrap-around and cross-system pro- gram models, pooling funds for common clients, cross-training personnel, and obligating ground-level staff to collaborate in a variety of specific situations.34

Case management is the best-known method for planning and delivering services to people who require assistance from several different sources. The case manager, a designated agency representative with cross-organizational re- sponsibilities, works with clients in an ongoing relationship to develop a suit- able service plan, to facilitate access to services, to monitor service delivery, and to evaluate service outcomes and client progress. Although “linkage” is clearly the key component, case managers must often serve as advocates and resource developers as well in order to ensure appropriate services. The model is particularly suitable for vulnerable clients who, on their own, are unable to maneuver in the service network.35

Case management is a primary method employed under welfare re- form.36 It is also employed in complex agency systems such as child welfare where children are subject to fragmented services provided by schools, men- tal health services, juvenile courts, departments of social services, and other child- and youth-serving organizations. Such organizational fragmentation is

Case management is the best-known method for planning and delivering services to people who require assistance from several different sources.

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often aggravated by the differing orientations of service workers, health per- sonnel, and judges, each of whom may deal with problems such as abuse and neglect by using their own theories and solutions. Pediatricians, for example, are mainly interested in the physical health of the abused child, whereas the emphasis of the caseworker is on adjudicating the child’s dependency status. Similarly, the child welfare worker may find that the reluctance of some phy- sicians to report findings of abuse obtained during physical exams undercuts their ability to investigate and prosecute child abuse.

As a coordinating mechanism, case management facilitates access to ser- vices. Although it often raises costs, especially if the case manager is effective in lobbying on behalf of clients, this approach can be viewed as cost effective because it leads to early identification of problems when they are, presumably, easier to treat. Moreover, case management can ensure greater efficiency in the use of services by eliminating duplication. In several welfare reform demon- strations, case managers serve a gatekeeping function, helping to focus limited services, such as childcare, on those participants in greatest need.37

Citizen Participation Unlike coordination, in which new relationships are forged among agencies, citizen participation strategies are aimed at redistributing decision-making power between agencies and clients. The rationale for citizen participation is that clients will receive responsive and effective services only if they have gen- uine influence. Neither professional goodwill, nor bureaucratic rationality, nor professional ethics are considered sufficient to ensure that recipients’ needs are met since both professionals and organizations have multiple objectives, their own survival being foremost.

The redistribution of authority through citizen participation is distin- guished according to different levels and types of participation. For example, Arnstein identifies nine levels of participation ranging from manipulation to citizen control.38 Spiegel discusses types of citizen participation from the point of view of the level of government involved, the functional area in which decisions are made, and the degree of technicality involved in the decision.39 Kramer approaches the analysis of this strategy by focusing on the functions and purposes of different types of citizen participation, which he describes as ranging along a continuum from receiving information, to advising, to plan- ning jointly, to having complete control.40

Ignoring the various nuances, three modal types tend to emerge. First, there is nondistributive participation or pseudoparticipation. This, for example, may involve therapy or education; in any case, there is no perceptible change in the established pattern of authority. The second is normal participation (tokenism to some critics), in which citizen influence on decision-making authority is clear and present but to a degree that makes only modest differences in final outcomes. The third type is redistributive participation. Here, the shift in au- thority is such that citizen participants are able to exert substantive influence on service delivery decisions.

Citizen participation is a strategy where means represent a value in their own right, with that value being democracy. The basic assumption is that dem- ocratic services will be more responsive than a system in which decision mak- ing is solely the prerogative of professionals. It is possible, of course, that a democratized system, a client- or community-run system, can suffer deteriora- tion in the quality of service delivery. In such cases, the strategy might be valid for broader political reasons, but not for the objectives being considered here.

The Design of the Delivery System 169

Although participatory democracy connotes the idealized New England town meeting where everybody had a right to vote (except, of course, women, slaves, and those too poor to own land), in practice citizen participation in- variably requires the election or appointment of representatives. People sim- ply do not have the time or the inclination to participate in every decision that affects them. This strategy, then, must come to grips with the notion of representation and the concomitant issues of which citizens will participate, on whose behalf, and how they will be chosen.

Participation was a prominent service delivery theme during the 1960s when the involvement of poor people became an intrinsic element of var- ied radical movements to organize the disadvantaged for social change (i.e., “power to the people”). Its legislative equivalent—“maximum feasible partici- pation”—became not only a standard for the organization of Community Ac- tion Boards under the War on Poverty, but also the ethos for redistribution of bureaucratic and political power in the broader society. The participation ethos joined neighborhood activists, civil rights advocates, and cultural radi- cals in a short-lived movement for change that sought to bring the disenfran- chised into positions of genuine inclusion in society.

At the level of service delivery, maximum feasible participation sought to decentralize decision making by requiring elections in low-income neighbor- hoods to select the boards of directors of the War on Poverty’s Community Ac- tion Agencies. The resulting experiences, however, suggest some of the problems of the participation strategy. Neighborhood elections were conducted in several communities around the country, but turnouts were always disappointing, al- ways far below voter participation in municipal, state, and federal elections. In Pittsburgh, for example, less than 2 percent, and in Philadelphia less than 3 per- cent, of eligible residents participated in community board elections.41 Kramer reports that “the numerous neighborhood elections in San Francisco and Santa Clara can best be described as pseudo-political processes.”42

In the post–War on Poverty era, participation models took more conven- tional forms. Many of the block grants enacted since the 1970s promote civic mechanisms to encourage the involvement of the poor in service programs af- fecting their communities. The Community Development Bloc Grant, for ex- ample, provides for advertised public hearings, and many communities have established elaborate procedures involving advisory boards, need surveys, and service evaluations to ensure client participation.43 In addition, several pieces of major legislation have incorporated provisions to stimulate the involvement of service users. Federal child welfare legislation, for example, emphasizes oppor- tunities for the participation of natural parents in deliberations concerning the legal status of their children. More recently, federal housing policies have been reformulated to involve tenants more fully in the management of public hous- ing. Harking back to earlier community action models, Housing and Urban De- velopment (HUD) has established alliances with nonprofit tenant associations, bypassing the traditional power centers of municipal housing professionals.

Strategies to Reorganize the Allocation of Tasks

Role Attachments To a significant degree, social services are provided by middle-class profes- sionals. Although services are offered to the entire community, a dispropor- tionate segment of those in need come from lower-income groups. The class chasm between servers and the served, according to role-attachment strategy,

Chapter 6170

can interfere with a client’s movement into and through the service delivery systems. On the one hand, middle-class professionals may not understand, respect, or be sensitive to their clients’ outlook on life, behavior patterns, language or dialect, or cultural values. Perhaps inarticulate by middle-class standards, clients may be perceived as unengaged, recalcitrant, or even threat- ening. The norms of professional objectivity and impersonal treatment, on the other hand, prescribe behavior that may be perceived by clients as patronizing, unfriendly, or officious. Given these mixed perspectives, problems of access and discontinuity may reflect social stratification, rather than simply organiza- tional structure.44 The case is stated succinctly by Miller and Riessman:

Agencies must take upon themselves the responsibility for seeing that the individual patient gets to the service, or gets from one service to another. Without the assumption of this responsibility, the concept of continuity of care or services will become a meaningless programmatic shibboleth. Nor can these problems be resolved through administrative improvements alone. A human link is needed.45 [Emphasis added.]

Some argue that this linkage is performed best by paraprofessionals, who compose an ever-increasing portion of direct service workers in all welfare states. In the United States, there are currently between two and three million paraprofessionals in human service fields like education, juvenile probation, substance abuse services, and services for the disabled and the frail elderly. In long-term care, nursing home aides, home helpers, personal care attendants, and daytime chore workers provide 80 percent of all paid care. Most parapro- fessionals are women, a third are women of color, and nearly two-thirds are between 25 and 54 years old. Earnings are generally below $10 an hour.46

Paraprofessionals, peer counselors, attendants, and aides are an established part of today’s human services, and it is generally recognized that nonprofes- sionals, by virtue of their experience and special skills, have a significant po- tential to bridge the gap between bureaucratic, professionalized agencies and their clientele. Paraprofessionals seem particularly adept at establishing rap- port with clients, with providing information, with connecting clients to com- plimentary services, and with providing emotional support.

Not all are enamored with the paraprofessional paradigm, however. The em- ployment of nonprofessionals, it is argued, may result in clients receiving services that are amateurish or low quality. Teachers’ aides, for example, may be poorly educated, barely literate themselves, or unable to provide children the help they need in reading and math. And there are significant empirical questions concern- ing the assumption that paraprofessionals, as indigenous community members, are especially effective in engaging clients in the services endeavor.

Finally, even when nonprofessionals are effective in linkage roles and are in- tegrated into the service delivery structure, the latter may vitiate the former. The effectiveness of the nonprofessionals can wane under pressures to resolve the strains between bureaucratic conformity and what may be their more freewheel- ing style. Examining the integration of nonprofessionals into agency structures, Hardcastle concluded, “the diminution of the non-professional’s indigenous qualities—the emphasis on primary role skills, extemporaneousness, and lower- class behavior and communication patterns—appears inevitable because of the essentially bureaucratic nature of the organization.”47 In addition, it is not sur- prising to find that once on the job, many nonprofessionals bend their efforts toward becoming professionals. They seek the financial and status rewards accruing to those who achieve higher degrees of usable knowledge and skill.

The Design of the Delivery System 171

TANF case managers, for example, frequently former welfare recipients themselves, may be sympathetic to program participants and sensitive to the challenges they face in childcare, health care, transportation, and the like, but as agency employees they must carry out agency policy, policy that is often punitive and harsh. An analysis of Florida’s business-oriented TANF model illuminates the dilemmas faced by these case managers: “They believe that they’re hurting children with sanctions; many are deeply religious people who feel terribly guilty about that; a number of the women we interviewed broke down and cried.”48

While paraprofessionals naturally hope to rise along a career ladder, gain- ing skills, responsibilities, and pay, the opportunities for advancement are of- ten modest. Even when they exist, paraprofessionals are often too ensnared in their own personal dilemmas to take advantage of them. Paraprofessionals are themselves often safety net recipients, getting food stamps, day care, and EITCs, and subject to many of the same social and health problems that plague their low-income clients.

While the literature on cultural factors in service delivery emphasizes the need for services personnel to be ethnically and culturally sensitive, this does not necessarily require that they be the same race or class or culture of those they help. Peer counselors in the substance abuse field, for example, whatever their race or ethnicity, may be able to build constructive relationships with clients sim- ply on the basis of having “been there, done that” themselves. On a broader level, a review of the literature by Snowden and Derezotes points out that while the uti- lization of minority staff may be associated with an increased number of minority clients, cross-race pairings can be, and often are, effective. Indeed, in certain cases they may be preferable to same-race pairing. When they go wrong for reasons re- lated to race, this usually occurs in the early phases of the relationship.49 While the literature on service delivery, therefore, continues to emphasize the need for personnel to be ethnically and culturally sensitive, this is hardly a panacea.

Professional Disengagement Although the imperative of bureaucratic conformity may cramp the style of nonprofessionals, forcing them to adopt a professional or quasi-professional modus operandi, it has been observed that the same imperative operates to

Capsule 6.7 Leaving Blackness at the Door

Jennifer Powell is one of the 500 community devel-opment workers the English government pledged in 2003 to recruit as part of its five-year Delivering

Race Equality in Mental Health programme. Although

Powell and her colleagues work closely with local

communities on improving mental health, they avoid

using a medical approach with clients. “In south

Asian communities there is no word for depression so

we talk to people about their lives and their experi-

ences and how they are feeling.” This approach has

made it easier for Powell to make connections with

local communities, although it took time to gain their

trust and respect. “I love working with minority com-

munities because I’m working with my own communi-

ties. It is diversity in its truest sense because we work

cross-culturally with different sexualities and abili-

ties.” However, this wasn’t always the case during her

time in mainstream mental health services. Powell

says: “Sometimes black staff felt we couldn’t work

in our true manner because it [wasn’t] understood or

deemed appropriate; it’s like we [had] to leave our

blackness at the door when we came to work.”

From “A Late Delivery” by Anabel Unity Sale from Community Care, November 9, 2006, http://www.communitycare.co.uk. Used by

permission.

Chapter 6172

inhibit professional functioning. For example, Levy described a public wel- fare setting where the discrepancy between the needs of administration and those of clients posed an acute moral dilemma for many workers.50 He suggests that the high turnover rate in this setting was related to difficulties profession- als had in reconciling their inner feelings with the stringent logic of welfare administration. Piliavin states the case more generally, noting that the profes- sionalization of social work has created a situation in which workers find bu- reaucratic constraints and policies often in conflict with professional norms.51

To enhance service delivery, then, some may feel that they can only be ef- fective if they disengage from the bureaucracy, rather than try to reform it. That is, professionals may be tempted to undertake fee-for-service private practice in order to circumvent the constraints posed by agency policies. In so doing, of course, they change their role from bureaucrat to entrepreneur. Recognizing that many people who use social services can’t afford to pay for them, those favoring private practice options often propose that the financial base for im- plementing this strategy be furnished through government vouchers that give clients the opportunity to select the service provider of their choice.

Even assuming that government financing through such arrangements could somehow be accomplished, the private practice strategy has certain limi- tations. Private practitioners may have expertise in public welfare, corrections, relationship counseling, family services, school social work, services to the aged, and the like, but they cannot possibly be specialists in all of them. In this sense, the private practitioner is subject to the same professional myopia as the agency-based worker, except that agencies may be able to incorporate a variety of specialists. Just as in the bureaucratic delivery of services, there is little to prevent private practitioners from imposing their particular brand of service— insight therapy, behavior modification, or some other technology—rather than dealing with the recipient’s unique needs. And even for the least avaricious, the tendency to interpret client problems in terms of one’s own expertise is reinforced under a fee-for-service arrangement. As a means of increasing acces- sibility to and coherence of the delivery system, the entrepreneurial model is likely to be less effective than agency-based practice.

Capsule 6.8 Trust and the Paraprofessional

The types of benefits most often noted by para-professionals revolved around the close and trusting relationships formed between paraprofes-

sional and client. There was agreement among

two-thirds of the paraprofessionals interviewed

that spending time with the client was the primary

contributor to improved client trust. Peer workers

explained that they have more time than other

program staff to spend with clients, and therefore

are able to build a relationship before making sug-

gestions or taking actions. As one paraprofessional

commented, “It takes a long time, six or eight

weeks, just to know someone before you can start

to take action, and the case coordinator comes right

in and tells them what has to be done.” In order

to ensure that peer workers have sufficient time to

develop these critical relationships with clients, it

is suggested that small caseloads (4–13 clients) be

maintained.

Peer workers also stressed the importance of

soliciting clients’ self-identified needs and address-

ing those needs, in addition to the explicit program

objectives. . . . Paraprofessionals acknowledged that

social workers have a different role in the program

and often have many more cases and pressing objec-

tives to accomplish.

From “Perspectives of Paraprofessionals: A Survey of AIA Peer Workers” by Kathleen O’Brien, The Source, Vol. 4, No. 2, Fall, 1994. Used by

permission of National Abandoned Infants Assistance Resource Center, University of California.

The Design of the Delivery System 173

Although there is little empirical evidence to support the presumed vir- tues of the entrepreneurial model, private practice continues to be popular among professional social workers. According to a 2002 survey of National Association of Social Workers (NASW) members, about one in five reported working in either solo or group practice. (Many of these also held down an agency job.52) A survey in 2007 found 12 percent of the NASW members work- ing primarily as independent private practitioners.53

The major assumption underlying this strategy is open to question. Although some professionals may function poorly in organizational settings, it is not necessary to conclude that organizational demands inherently limit pro- fessional functioning. Reasoned arguments can be made that there is greater latitude for individual discretion to negotiate the constraints and opportuni- ties of organizational life than many professionals exercise, mainly because they lack the expertise required to be effective in their roles as bureaucrats. Most professionals prefer to identify themselves as helpers and service givers, and training is consciously sought to prepare for these roles. They tend to ig- nore or downplay the bureaucratic role that they must carry.54

Furthermore, it is possible to design agency-based practice in ways that tap the energies and resources associated with entrepreneurial activity. In the Kent Community Care Project, for example, British social workers were given a bud- get they could spend according to the needs and circumstances of each frail el- derly client. The objective was to create a local network of supportive services that would allow the frail elderly to remain living in the community rather than being institutionalized, and at a lower cost to the public than would re- sult from an institutional placement.55

Strategies to Alter the Composition of the Delivery System

Specialized Access Structure The objective of this strategy is neither to change the combination of roles in the service delivery system nor to change authority relationships through cen- tralization or co-location. Its advocates believe that specialized professional– bureaucratic services perform important functions despite their weaknesses as delivery mechanisms. Instead of changing roles and the like, they want to change the composition of the delivery system by adding a new element, one

Capsule 6.9 The Lure of Private Practice

Social workers enter private practice today for the same reasons that they have been attracted to the private practice of psychotherapy since the

1920s: to obtain more autonomy over their practice

and to earn more money. The findings of a recent

study of the goals of private practitioners in New

England upon entering private practice bring the

priorities of these social workers into stark relief.

The most important goals indicated by the survey

respondents, in decreasing order of importance, were

to “do direct counseling,” “maximize professional

autonomy,” “grow professionally,” “be my own

boss,” “set my own hours,” and “earn money.” The

least important goals indicated, in decreasing order

of importance, were “help solve society’s problem,”

“become more politically involved,” “help economi-

cally disadvantaged people,” and “work with ethnic

minorities.” It is important to note that these people

had been well socialized into the social work profes-

sion; they had an average of ten years of post–MSW

social work experience prior to entering private

practice.

Reprinted with the permission of Free Press, a division of Simon & Schuster, Inc., from UNFAITHFUL ANGELS: How Social Work Has Aban-

doned its Mission by Harry Specht and Mark E. Courtney. Copyright (c) 1994 by Harry Specht and Mark E. Courtney. All rights reserved.

Chapter 6174

that acts on other service agencies, prying open their entry points, and ensur- ing that proper connections are made by clients. In a word, access is to be pro- vided as a social service.

Traditionally, the provision of access was considered a marginal function carried out by agency staff rather than a separate function around which to organize a distinct set of services. As a marginal function, access is unduly restricted by the narrow perspectives of agency specializations, perspectives re- lating primarily to an agency’s core function instead of the particular problems brought by clients. This phenomenon is a by-product of neither incompetence nor malice. It is a normal structural reality of specialized service organizations.

To facilitate client access to services while maintaining a relatively high degree of specialization, it has been proposed that a “professionally unbiased doorway” be added to the service delivery system in the form of a special agency offering case-advocacy, advice, information, and referral services that help clients negotiate the bureaucratic maze.56

Although in some respects a persuasive idea, having special access agen- cies may be problematic. From the client’s perspective, one effect of this strat- egy may be increased service fragmentation and complexity. Further, whereas access services are increasingly important in urban societies, they are rather intangible. Thus, the access agency may be perceived by clients as merely an- other bureaucracy to negotiate, another base to be touched before the proper resources are matched to their needs.

The existence of access agencies, of course, may also result in other com- munity agencies diminishing their own access services. For instance, there is likely to be reduced pressures on these agencies to perform outreach or to make referrals to clients they are unable to serve. The extent to which the cre- ation of the access agency lessens traveling time, expense, or confusion in the client’s search for service is presently unclear. Moreover, the separation of as- sessment and diagnosis (access) from treatment (services) that occurs from this strategy may prove rather clumsy in practice.

A note must be added about online service provision, a relatively new method of service delivery that employs computer technologies to help indi- viduals secure assistance with a variety of problems and concerns. Pioneered in the health field, where the term telemedicine is commonly employed, e-mail, teleconferencing, and webcam techniques are equally useful in social work. According to McCarty and Clancy, “nearly anything a social worker does face- to-face could theoretically be done online.”57 While something may be lost in the absence of direct personal contact, there already exists a rather extensive online fee-based counseling and “teletherapy” industry. Informal online fo- rums also exist, often on a peer advice basis, with people helping others in circumstances similar to their own. And for individuals in remote locations, computer connections may often be the only convenient way to connect and communicate with social service and health providers.

Purposive Duplication Purposive duplication entails re-creating in a new agency any or all of the ser- vices available in the existing system. Purposive duplication is advanced in two forms that have a surface resemblance but are dissimilar enough to war- rant distinction: competition and separatism.

Competition involves the creation of duplicate agencies within the ex- isting delivery system to compete with established agencies for clients and resources. This strategy increases choice. More important, competition is

The Design of the Delivery System 175

expected to have an invigorating effect on agencies and professionals, sensitiz- ing them to client needs and producing greater enterprise and creativity. The consequences of this strategy, however, are not always compatible with its mo- tives. Instead of a healthy competition for clients and resources, internecine conflict may ensue between powerfully entrenched agencies and new agencies scraping for a foothold in the system. The outcome of such conflict is reason- ably predictable.

The duplication of services to stimulate competition may be achieved through direct or indirect methods. The direct approach involves the restructuring of the delivery system with the creation of new agencies. Community Ac- tion Agency funds, for example, were often provided dur- ing the War on Poverty era to develop new agencies that offered daycare, counseling, and community organization services to a community rather than to expand the service offerings of existing agencies. The indirect approach in- volves changing the form of social provision, such as by distributing social provisions to consumers in the form of vouchers. The experience with educational vouchers and charter schools, for example, has shown the significant impact such “choice” mechanisms have on increasing the supply and variation of providers.

Separatism differs from competition in both the systemic location of new structures and their purposes. In the separatist design, new agencies are cre- ated and organized outside the established delivery system, which they do not seek to enter. Competition is likely to be an inadvertent and unplanned by-product of separatism, more so for resources than for clients. The intention is to form an alternative network that will serve certain disadvantaged groups who, because of their race, ethnicity, gender, sexual orientation, or socioeco- nomic status, are served poorly or not at all by the existing system.

While offering direct aid to clients neglected by the existing network of ser- vices, alternative agencies also perform other functions. As Miller and Philipp point out, they engage in unorthodox activities that help clarify legal issues, offer a theoretical critique of conventional service paradigms, and provide a community of interest for new, often unpopular, client groups.58 In recent years, for example, independent community-based services networks have developed for battered women, the LGBT (Lesbian, Gay, Bisexual, and Transgender) com- munity, persons with AIDS, and newly arrived immigrant groups. Proponents of separatism emphasize that this strategy contains social and political values for disadvantaged groups that transcend the enhancement of service delivery.

Duplicate strategies, in either form, are expensive. The money may be well spent if the new agencies become a dynamic force for desired changes in the delivery system and reach those who are excluded from services. Weighing against these benefits are the risks of expending scarce resources to produce fruitless conflict and to create even greater program fragmentation.

CONTROLLING COSTS: CONDITIONALITY AND MANAGED CARE

Many of the service delivery strategies we have described were formulated in the 1960s and 1970s, an era of notable expansion in social services. The presumption of growth, as Glennerster puts it, was deeply imbedded in the

Professional Identity

Practice Behavior Example: Social workers

advocate for client access to the services of

social work.

Critical Thinking Question: Which strategy to restructure local service system to enhance

service delivery is most immediately needed

in your area?

Chapter 6176

intellects of social welfare planners.59 When social service expenditures were curtailed in the 1980s and political support arose for meeting service needs through the market economy, several new issues of choice surfaced. Along with the privatization/contracting option, already described, a variety of efforts to contain costs emerged, many of which involved designs for the rationing of ser- vices through managed care and conditionality, imposing strict conditions on the receipt of benefits.

When social service budgets are restricted through legislative cutbacks, the burden of implementation falls on the organizations and professionals respon- sible for service delivery. At the juncture where clients’ needs intersect with social service resources, a frequent challenge is making do with less.

To some extent, of course, agencies have always engaged in service ration- ing. Resources are always limited; social needs are always substantial. But dur- ing periods of economic expansion, there is less pressure for careful thought about and stringency in expenditures. It is in periods of fiscal difficulty that choices addressing rationing, cost controls, and cutbacks become pivotal. Since the rise of unemployment and the contraction of economic growth that began in 2008, the United States continues to struggle through such a period of fiscal strife as of this writing in 2012.

Services rationing may be accomplished through several processes. Ellie Scrivens, analyzing the dynamics of rationing, divided them into two broad categories: demand inhibitors and supply inhibitors. Strategies that act to reduce the demand for services erect physical, temporal, and social barriers to service. On the deterrence of physical barriers, Scrivens cites a report on the British social services in which it was observed that some of their facili- ties were “forbidding with reception arrangements not such as to encourage anyone, let alone anyone in distress, to approach them.”60 Temporal barri- ers can be raised in the form of waiting lists, time-consuming application procedures, remote service locations, and inconvenient office hours. Clients also may be put off by social barriers that involve embarrassing eligibility requirements. The failure to communicate relevant information to clients about available services is another way to limit demand. And applicants may be deterred when forceful behavioral conditions are required to qualify for benefits.

Since the 1990s public assistance, disability and unemployment policy reforms have introduced an array of work-oriented conditions, which attach stringent obligations to the receipt of benefits that, heretofore, were distributed without requirements. By the turn of the century, conditionality has shaped contemporary reforms in these core welfare programs more than was imag- inable at an earlier time when these programs were still thought of and re- ferred to as measures for “income maintenance.” In the United States, under the TANF program, rigorous work-related conditions have been imposed on welfare recipients (as discussed in Chapters 4 and 8). The trend toward in- creasing conditionality in the core welfare programs extends well beyond the United States. As shown in Chapter 9, this is a general pattern of reform that has spread throughout the advanced industrialized welfare states.

On the other side of the ledger, strategies that reduce the supply of services include restriction and dilution. With a restrictive strategy, eligibility criteria are tightened so that fewer clients needing services can actually qualify. This goal is accomplished by narrowing the rules governing eligibility and strin- gently applying professional discretion in interpreting the rules. Strategies for diluting services decrease the amount and quality of provisions by cutting time

The Design of the Delivery System 177

As long as demand exceeds supply, there will be some form of rationing in service delivery.

spent with clients, prematurely terminating cases, lowering the qualifications of professional staff, and substituting volunteers for professionals.61

As long as demand exceeds supply, there will be some form of rationing in service delivery. Thus, we must ask, “On what grounds might one choose among the various strategies outlined in this chapter?” Some of these strate- gies are objectionable because of their furtive character. They amount to what Lipsky calls “bureaucratic disentitlement,” where service delivery is curtailed not by transparent and formalized policy choices but rather by “low-level mar- ginal decisions or non-decisions of low visibility.”62 The problem, as Lipsky sees it, is that through obscure actions and inactions, social service agencies may devise allocative policies that are not open to public inspection. In choos- ing among rationing strategies, those based on explicit procedures open to public scrutiny, such as tightening formal eligibility requirements, offer greater protection to the public than veiled activities designed to discourage consump- tion and dilute services.

While rationing strategies generally evoke hostile and negative responses, they have been successfully implemented—in either explicit or furtive forms— in many human services fields. One rationing strategy that has received a significant amount of attention is managed care, and the common use of ar- rangements to “manage” the utilization of health and mental health, and other forms of service, has heightened sensitivity to costs and promoted a more con- sidered, a more conservative use of resources.

Managed care is basically a form of human services organization that is de- signed to improve the efficiency of care and treatment by increasing the atten- tion given to costs when making service decisions. It is a form of organization that has become institutionalized in the healthcare economy, where around two-thirds of all Americans are now enrolled in networks of healthcare pro- viders that contract with managed care organizations and abide by managed

Capsule 6.10 The Supreme Word on Managed Care

Traditionally, medical care in the United States has been provided on a “fee-for-service” basis. A physician charges so much for a general physi-

cal exam, a vaccination, a tonsillectomy, and so on.

The physician bills the patient for services provided

or, if there is insurance and the doctor is willing,

submits the bill for the patient’s care to the insurer,

for payment subject to the terms of the insurance

agreement. . . . In a fee-for-service system, a physi-

cian’s financial incentive is to provide more care, not

less, so long as payment is forthcoming. The check

on the incentive is the physician’s obligation to ex-

ercise reasonable judgment and medical skill in the

patient’s interest.

Like other risk-bearing organizations, health

maintenance organizations (HMOs) take steps

to control costs. At the least, HMOs will in some

fashion make coverage determinations, scrutinizing

requested services against these contractual

provisions to make sure that a request for care falls

within the scope of covered circumstances, or that

a given treatment falls within the scope of the care

promised. They customarily issue general guide-

lines for their physicians about appropriate levels

of care. . . .

These cost-controlling measures are commonly

complemented by specific financial incentives to

physicians, rewarding them for decreasing utilization

of healthcare services, and penalizing them for what

may be found to be excessive t reatment. . . . No HMO

could survive without some incentive connecting

physician reward with treatment rationing.

David H. Souter, writing for a unanimous Supreme Court in the case of Pegram v. Herdrich, June 12, 2000.

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care rules. These rules have created an apparatus of incentives, procedures, and structures that revolutionized the nature of American health care, funda- mentally altering relationships among doctors, hospitals, drug and insurance companies, and employers, and putting cost considerations front and center in the decision-making process.

Cost considerations, of course, were never absent from health care, but the dominance of public and nonprofit auspices in the field, and the power- ful centrality of the medical profession, traditionally limited the intensity of budget-oriented thinking. Under traditional fee-for-service medicine, the pri- mary model of healthcare finance until the 1990s, doctors and hospitals largely determined overall costs by the fees they charged. These fees, pretty much taken as a given, were paid automatically and without question by third-party insurance companies and by public agencies. But in the last two decades, with remarkable swiftness, this automatic payment, fee-for-service model has disin- tegrated, supplanted by managed medicine and its rationalizing cost–benefit techniques. Chief among these techniques are gatekeeping, utilization manage- ment, and provider cost-control incentives.

Gatekeeping controls access to services, especially to high-cost services, by giving a central authority the power to influence fundamental decisions about the level and nature of services. In healthcare settings, the gatekeeper, typi- cally a primary care physician, is the initial contact for the patient. It is usually this physician who directs and coordinates care and who is responsible for authorizing prescriptions, referrals to specialists, or hospital care.

Utilization management, the second cost-control device, establishes an- other level of screening. The health provider in managed care often must apply to a utilization manager for approval to initiate a particular treatment regimen. This oversight by external cost-oriented monitors diminishes the degree of au- tonomy exercised by professionals and may also erode the professional’s abil- ity to maintain client confidentiality because contractual agreements between managed care companies and service providers often contain a clause allowing the organization access to whatever patient record information is necessary to make sound decisions concerning access to service.63

The final cost-control mechanism, physician cost incentives, rewards doc- tors who restrain the utilization of healthcare services, and often attempts to limit what the managed care company may consider excessive treatment. Since managed care physicians are often “capitation” funded, receiving one annual lump sum per enrolled patient, they have a financial incentive to impose their own rationing on patient care. The more they can restrain patient costs, the more they can earn.

For managed care advocates, these various rationing arrangements provide a rational, coordinated approach to medicine, an approach that enhances services and encourages prevention while restraining unnecessary costs. Under fee-for- service medicine, it was clearly in the financial interest of the care provider to offer more care, not less, whatever the actual circumstances of need. Doctors and hospitals, automatically paid their “prevailing” charges by third-party insurers, had few reasons to limit care—no matter how unnecessary or redundant it might be. This perverse incentive to oversupply care and treatment—an excess of care and treatment that bore no relation to good health—is precisely what sustained the great healthcare inflation of the 1980s and early 1990s and resulted in the cost pressures that managed care set out to, and in fact did, stabilize. HMOs, for example, one common form of managed care provider, reduced hospital stays by 30 percent between 1992 and 2000, without any detriment to health.

The Design of the Delivery System 179

Managed care critics, on the other hand, provide an arsenal of dramatic horror stories about inappropriate restrictions, or denials of care, with which to argue the incompatibility of cost containment and good health care. For the critics, managed care doesn’t rationalize care; it inappropriately withholds it by creating an unconscionable conflict of interest between the practitioners’ obligation to their clients and their obligation to their employers. As Strom- Gottfried and Corcoran explain, competitive pressures in the managed care en- vironment have resulted in “financial incentives to limit treatment or referrals, pressures to ‘skim’ populations for healthier clientele, and the risk of sanctions should one advocate for improved patient care.”64

EMERGING ISSUES: CULTURALLY COMPETENT SERVICE DELIVERY

After the mid-1980s when the era of rapid growth in the welfare state came to a close and political support arose for market alternatives, the discourse of ser- vice delivery shifted to services rationing, voucher and choice strategies, priva- tization, the contracting out of services, and, recently, a reliance on faith-based organizations to organize and deliver social programs. Along with these developments came an increasing sen- sitivity to the challenges of successfully engaging ethnic and cultural minorities in service delivery. As we noted in Chapter 4, many needy people who are officially eligible for social benefits fail to receive them. Others receive ser- vices, but fail to benefit from them. While the “disparities” problem has been best documented in the health field, the gap between white and minority service outcomes is per- vasive in the broad range of the human services, from edu- cation to criminal justice to child welfare.

Often, the service delivery gap results from a lack of knowledge: People may simply be unaware that useful ser- vices are available, or that they may be eligible. In other situations, those who know they qualify for services may be unable or un- willing to apply for them. This may result from fear, disinterest, pride, anti- government attitudes, misunderstanding, religious or cultural perspectives, or any number of other factors. Many Latino families, for example, find the idea of nursing homes, of strangers caring for their relatives, unacceptable, while American Muslims may perceive such homes as a violation of the Koran, which obligates families to care for their own elderly relatives. Some Latinos, citizens or legal residents, may fear being perceived as undocumented immi- grants when applying for services. Still others, limited in their English fluency, may find service personnel and agency forms and documents unintelligible.

In recent years, considerable attention has been focused on issues of unde- rutilization, culture, and diversity. While the social work profession, from its beginning, has emphasized the importance of assessing problems, formulating services, and delivering programs in a fashion that engages the reality of their clients’ world, today’s parlance is increasingly presented in terms of overcom- ing “barriers,” be they impediments of language or culture or class.

A significant number of service delivery strategies have been implemented to bridge the gap between social service organizations and the “socially

Diversity in Practice

Practice Behavior Example: Social workers

recognize the extent to which a culture’s

structures and values may oppress, marginal-

ize, alienate, or create or enhance privilege

and power.

Critical Thinking Question: Besides language limitations, what are other cultural barriers

present in social service delivery systems and

how should they be addressed?

Chapter 6180

excluded.” We have already discussed the use of paraprofessionals and ser- vices duplication as a vehicle to engage hard-to-reach populations. While it is generally acknowledged that practitioners who speak the same language as their clients, and have an awareness of their culture, can facilitate access to services, there remains a significant scarcity, especially in mainline social ser- vice organizations, of such staff.

Professionals themselves, of course, have adapted to the increasingly di- verse communities in which they work. Aware of the difficulty newcomer and minority populations often encounter in their dealings with public and vol- untary agencies, and committed to the idea that culturally competent services can overcome barriers to care and well-being, professional schools have modi- fied their instructional programs. At the same time that they have endeavored to enroll more minority students, for example, schools of social work have in- corporated coursework that both facilitates an awareness of cultural patterns and develops skills for successful practice with diverse populations. Coupled with traditional social work skills—empathy, acceptance, respect for the cli- ent, individualized treatment, technical competence—these skills can lead to more effective services for underserved racial and ethnic populations.

Direct service practitioners, for example, are increasingly trained to be sensitive to cultural variations in social problems and to identify appropriate methods of communication and intervention. Administrators and policymak- ers, for their part, recognizing the many ways in which communication affects success, are implementing new service strategies to better engage their clients.

Some agencies try to bridge the language gap by encouraging limited Eng- lish proficiency (LEP) clients to provide their own interpreters. Sometimes mi- nor children play this role, or friends and neighbors. Such an approach can be useful in an absence of alternatives, but it may also present significant prob- lems when the untrained interpreter either inhibits or obstructs communica- tions, as in cases where confidential or embarrassing material is presented, or fails to accurately understand and translate agency terminology.

Other agencies rely on paraprofessionals, often hiring minority staff to serve as grassroots liaisons to assess community attitudes, disseminate infor- mation, and, hopefully, foster trust. The New York City Police Department, for example, has hired community affairs officers in each precinct of the city as well as special outreach staff for immigrant and gay/lesbian/transgender popu- lations. The city also recently hired Muslim civilians for outreach purposes and to help train police officers in matters of culture, language, and tradition.

Similarly, localities and states have hired outreach and community development workers to better relate to immigrant and minority populations, to increase goodwill, and to better engage citizens in the business of govern- ment. In other instances, local governments have encouraged the develop- ment of ethnic-specific agencies to improve service delivery to underutilizing populations. In the San Francisco Bay Area alone, for example, there are contract agencies for Native American child welfare (The American Indian Child Resource Center, Oakland), Latino mental health ( Clinica de la Raza, Oakland), Asian elders (On Loc Senior Services, San Francisco), and African–American youth development (Bayview Hunters Point Foundation for Community Improvement). These agencies, and the many others that ex- ist in almost all urban centers today, not only provide a friendly front door for services, but also frequently serve as intermediaries for clients who deal with county and state child welfare, mental health, public health, and edu- cation agencies.

The Design of the Delivery System 181

For agency managers, one of the essential keys to effective service deliv- ery is ensuring meaningful communication channels for people with limited English-speaking abilities. In this respect, language is obviously a primary area of concern. As the number of residents with LEP has risen, effective commu- nication has become an essential issue. A lack of language understanding can be a significant barrier to service, either excluding eligible foreign-language speakers from services, or delaying their access to services, or providing less- than-optimal services. Language barriers are especially problematic in fields that depend on complex client–professional communication, as with doctors and nurses in health care or with social workers in child protection or mental health counseling.

Consider, for example, a young Latino man who presents himself in the emergency room as feeling “intoxicado” (i.e., “nauseated”) before collapsing. A physician on duty, misinterpreting this as meaning “intoxicated,” might in- appropriately order emergency treatment for a drug overdose. This could have dire consequences. Similarly, a Spanish-speaking mother might report that her young child had fallen off her bike, “hitting herself.” The resident taking the report could misinterpret this as child abuse, contact Child Protective Ser- vices, resulting in the mom having to relinquish her children.

Language access can be facilitated in a variety of ways. Interpreter services can be provided. Bilingual frontline as well as professional staff can be hired. Computer technology can provide information in multiple languages, as can forms and information packets. Non-English telephone helplines can expand services coverage.

National social policies in many welfare states have contributed to the ef- fort for culturally and linguistically responsive services. In England, a five-year program, Delivering Race Equality in Mental Health, funded the creation of 500 community development workers to improve ethnic minority access to public services.65 In Australia, federal initiatives have been operating to over- come the long history of discrimination against the aboriginal peoples.

In the United States, federal civil rights legislation since the 1960s has re- quired states and local health and service organizations to ensure access to ser- vices for individuals who don’t speak or understand English. Under Title VI of the 1964 Civil Rights Act, for example, states and localities must provide equal access to services to a variety of racial, ethnic, and national origin groups. Under this last category, those with LEP must be provided fair, nondiscrimi- natory access to all federally funded programs. Specifically, all governments

Capsule 6.11 Ethnics and Ethics

a. Social workers should understand culture and its

function in human behavior and society, recogniz-

ing the strengths that exist in all cultures.

b. Social workers should have a knowledge base of

their clients’ cultures and be able to demonstrate

competence in the provision of services that are

sensitive to clients’ cultures and to differences

among people and cultural groups.

c. Social workers should obtain education about and

seek to understand the nature of social diversity

and oppression with respect to race, ethnicity,

national origin, color, sex, sexual orientation,

marital status, political belief, religion, and

mental or physical disability.

NASW Code of Ethics. Copyright © 1999, National Association of Social Workers, Inc. Used by permission.

Chapter 6182

or organizations receiving federal funds must ensure that individuals receive, free of charge, the language assistance necessary to ensure their equal access. Under these laws, and their elaborating regulations, culturally competent ser- vices are a fundamental civil rights issue, not merely an issue of culturally competent practice.

State and local health, mental health, welfare, and child protection au- thorities, as well as private contract agencies, have responded to the Title VI mandate in a variety of ways. Some mental health agencies, for example, have implemented “threshold language” policies that specify a number or propor- tion of foreign language speakers that, when exceeded, requires special steps to be taken to ensure “linguistic access.”66 Schools, for their part, are obligated to provide special language supports when a critical mass of English-language- learning students is present.

But, while federal legislation mandates services like interpretation and translation and provides some limited funding under Medicaid, Food Stamps, and the State Children’s Health Insurance Program (SCHIP), many providers still lack the resources to engage effectively many of their clients. Language requirements are often viewed as onerous “unfunded mandates,” unfairly dic- tating federal priorities to state and local agencies, rather than as supports for improved equality and effectiveness in service delivery.

SUMMARY

This chapter outlines the various choices associated with the design of service delivery systems. Issues regarding public versus non-profit versus commercial service delivery are central to current debates. To promote service coherence and accessibility, several strategies are proposed, such as restructuring policy- making authority, reorganizing task allocation, and altering the composition of the delivery system itself. In contrast to the service expansion of the 1960’s and 1970s, the trend since the 1980’s has been to control the cost of services through mechanisms like conditionality and managed care. Responding to dis- parities in service outcomes between whites and people of color, culturally competent service delivery is receiving considerable attention.

183

1. Since the 1980s, there has been considerable growth in:

a. Citizen participation initiatives

b. Federalized social services

c. Fee-for-service medicine

d. Public-private purchase-of-service arrangements

2. The largest component of the American voluntary sector:

a. Religious institutions

b. Libraries

c. Hospitals

d. Nonprofit meal delivery services to the frail elderly

3. Not a criticism of local service delivery systems:

a. Discontinuity b. Centralization

c. Unaccountability d. Inaccessibility

4. “Managed care” human services seek to improve the efficiency of care and treatment by increasing the

attention given to:

a. Costs b. The use of technology

c. Client participation d. Cultural incompetence

5. A disadvantage of “contracting out” to private nonprofits:

a. Costs tend to increase.

b. Public accountability is diminished.

c. Local communities are involved in service delivery.

d. Volunteers must be paid.

6. The phrase that best describes the strategy to reorganize the allocation of tasks in terms of “role attachments”:

a. Create a “one-stop” community center.

b. Utilize a union organizer to promote citizen participation.

c. Employ a bilingual social worker.

d. Hire an indigenous nonprofessional to perform outreach.

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

C H A P T E R 6 R E V I E W

Log onto MySearchLab to access a wealth of case studies, videos, and chapter and EPAS assessment. (If you did not receive an access code to MySearchLab with this text and wish to purchase access online, please visit www.MySearchLab.com)

Succeed with

7. What are the key differences between for-profit and nonprofit organizations?

Watch and Review

Watch These Videos

* Engaging the Client to Share Their Experi- ences of Alienation, Marginalization, and/or Oppression

* Recognizing Personal Values * Building Alliances * Advocating for Human Rights and Social

and Economic Justice

Read and Review

Read These Cases/Documents ^ Mental Health Services Consumers

^ Linguistic, Interpretive, and Ethical Issues

^ Military Veteran Justice Outreach and the Role of a VA Social Worker

* Diversity in Practice

Reinforce what you learned in this chapter by studying videos, cases, documents, and more available at www.MySearchLab.com

M Y S E A R C H L A B C O N N E C T I O N S

Explore and Assess

Explore These Assets

Interactive Case Study: What Are American Civic Values?

Health Resources and Services Administration—http://www.hrsa.gov/

Society for Social Work and Research—http://www.sswr.org/

Veterans Affairs—http://www.va.gov/

* = CSWE Core Competency Asset ^ = Case Study

184

185

Competencies in This Chapter (with Practice Behaviors)

Sources of Funds 187

The Philanthropic Contribution 188 Voluntary Financing: Not Entirely a Private Matter Functions of Voluntary Services Problems and Issues in Voluntary Financing The Mixed Economy of Welfare Accountability Conservatives and Voluntarism Liberals and Voluntarism

Contributory Schemes and Fee Charging 199

Public Financing: Not Entirely a Public Matter 201 Tax Types, Tax Burdens Social Earmarking Taxes and Behavior

Emerging Issues: Financing Social Security 213

Summary 216

Practice Test 217

MySearchLab Connections 218

The Mode of Finance: Sources of Funds

7

C H A P T E R O U T L I N E

Professional Identity

Ethical Practice

Critical Thinking

Diversity in Practice

Human Rights & Justice

Research-Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

x x x

x

Chapter 7186

The Congress shall have power to lay and collect taxes on incomes, from what-

ever source derived, without apportionment among the several States, and

without regard to any census or enumeration.

The 16th Amendment to the U.S. Constitution,

February 25, 1913

Taxes are a changing product of earnest efforts to have others pay them.

Louis Eisenstein

“The Ideologies of Taxation.” Harvard University Press, 1961

People don’t much care for paying taxes. Although Supreme Court Justice Oliver Wendell Holmes considered taxes “what we pay for a civilized society,” most Americans view them, at best, as a burden to be reluctantly endured. Taxes may constitute the basic foundation for health, education, and welfare policies, but they aren’t likely to ever place high in the public’s regard.

Likeable or not, taxes—along with philanthropy and other sources of rev- enue—provide the essential fuel for social welfare endeavors. Our objectives in this chapter and in Chapter 8, therefore, are to examine the process of rev- enue raising in the United States, to explore some of the basic policy choices involved in financing the welfare state, and to identify the implications of dif- ferent funding sources and different systems of funding transfers. In social welfare, the things that money can do are substantially influenced by how that money is obtained.

Questions about the mode of finance interest policymakers, managers, and planners more than they do direct practitioners. Managers and planners are concerned with securing resources to sustain their programs. They need to un- derstand the kinds of activities funders will support. Funders, whether they’re legislators, foundation trustees, or executives at the United Way, are concerned with making choices among competing interests and programs to achieve their goals. In negotiations for program support, both funders and fund seekers ad- dress the fundamental questions posed in this book: Who is eligible for help? What kind of help will they receive? How will the delivery of that help be organized?

The direct service practitioner is usually less attentive to questions of fi- nance than to other dimensions of policy choice. This is because financing choices appear remote from the exigencies of day-to-day practice, and their effects on client welfare are typically indistinct. Funding decisions for almost any kind of social welfare program—whether mental health, housing, or AIDS counseling—are likely to involve “big government” somewhere along the line. Because most programs of significance require the money, sanction, or surveil- lance of one or more levels of government, direct practitioners are likely to consider funding questions outside of their influence. This view, certainly, is

not entirely unrealistic. Funding arrangements are com- plex, and final program decisions are frequently made by individuals and groups many steps removed from actual service delivery.

Nevertheless, it is critical that social welfare profes- sionals have a working knowledge of the major issues, concepts, and values involved in the mode of finance. While tax matters tend to be viewed with extreme disinter- est by many, few areas of social policy have more direct and immediate impact on the everyday lives of vulnerable

Professional Identity

Practice Behavior Example: Social workers

engage in career-long learning.

Critical Thinking Question: Why is learning about sources of funding important for social

workers?

The Mode of Finance: Sources of Funds 187

individuals and families. Although the vast majority of professionals may not participate directly in program financing, they can, in their role as citizens, members of professional associations, and agency employees, affect how deci- sion makers think and act. It is not unreasonable, then, to expect social welfare professionals, regardless of their specific job, to be able to respond thought- fully to questions such as these: Should a public agency “purchase” services by entering into a contract with a voluntary or for-profit agency? If so, under what circumstances? Are block grants preferable to categorical funding? What are the constraints of voluntary financing? What assumptions support the use of contributory schemes and fee-charging arrangements? What are the distribu- tional implications of different kinds of taxes?

Two interrelated sets of choices are fundamental to the financial dimen- sion of policy design. These choices pertain to:

The source of funds. Should financial support be derived from recipients in the form of user charges, from taxes that make up general revenues, from some form of social insurance, from voluntary contributions, or from some combination of these?

The system of transfer. What arrangements should govern the flow of money from the level of government where it is raised to the level where it is used, the different levels of review between funders and providers, and the conditions placed on the transfer of funds?

We will discuss choices that inform the design of transfer systems in Chapter 8; here we will examine alternative sources of funding and their implications.

SOURCES OF FUNDS

Funds to pay for social welfare benefits are obtained in three fundamental ways: through taxes, through voluntary giving, and through fees. Taxes are compulsory and governmental. They constitute public levies on citizens and businesses, and they are the primary source of support for public social wel- fare activities. Voluntary giving involves private contributions. Whether de- scribed as charity (which connotes giving for the poor) or philanthropy (which connotes giving for a broader range of health, research, cultural, and religious activities), contributions represent voluntary, uncoerced donations. Fees con- stitute the charge for social welfare goods and services in the open market. The providers of these goods and services may be entrepreneurs who are selling products or nonprofit agencies that are requiring user fees in order to cover their expenses. In a few instances, public institutions (chiefly colleges and uni- versities and hospitals) also impose charges.

In the actual conduct of the welfare state, these three funding sources often are intermixed. That is, the budgets of social welfare agencies and organizations frequently include revenues deriving from taxes, voluntary giving, and fees and charges. Although public agencies, for example, tend to be funded with tax dollars, they may rely on user fees (e.g., tuition) or private giving (e.g., PTA fund raising). Similarly, private nonprofit agencies depend on tax support, sup- plementing their private revenue with contracts and grants from government. And profit-making organizations, like commercial hospitals, frequently rely on payments from third-party insurers, public or private, for their income.

The pluralistic funding patterns of the welfare state, often described as the mixed economy of welfare, can create terminological confusion. To clarify the

In the actual conduct of the welfare state, the three funding sources—taxes, voluntary giving, and fees—are often intermixed.

Chapter 7188

terrain a bit, the distinctive characteristics of the major social welfare auspices must be specified. In our discussion, voluntary agencies refer to charitable, nonprofit organizations that are financed, at least to some extent, with volun- tary contributions. These organizations devote their resources to education, science, religion, art, culture, and social service and are therefore commonly perceived as serving a public, or community, interest. In this sense, volun- tary agencies may be conceived of as privately administered public-interest institutions.

Public agencies, established by law, and directly accountable to elected of- ficials, are supported by governmental funds. Their programs are often referred to as “statutory” or “legislative.”

For-profit organizations, a relatively new phenomenon in many sectors of the U.S. welfare state, are providers that operate on an entrepreneurial basis, like any commercial business. The role of these organizations remains con- troversial despite the strong ideological and legislative support harnessed on behalf of “privatization” since the Reagan years.

THE PHILANTHROPIC CONTRIBUTION

There are presently close to a million nonprofit agencies registered under fed- eral tax code section 501(c)(3) as charitable organizations. The 501(c)(3) desig- nation, synonymous with tax deductibility, covers a broad range of nonprofits, from traditional social service agencies to civic, environmental, health, edu- cational, and religious bodies. Charitable organizations vary in their reliance on voluntary contributions. Although religious congregations depend almost entirely on private giving, for example, hospitals rely on charity for less than 5 percent of their funding. In the social services, private giving provides about a fifth of total revenues. Although much of the support provided voluntary agencies is not of private origin, philanthropy remains the irreducible private core of private agencies.

As Table 7.1 indicates, philanthropy provided $291 billion in 2010 for community purposes, with almost three-quarters of this amount coming from ordinary individuals.1 Some donations are organized through the annual fund- raising activities of federations such as the United Way and the United Jewish Appeal, “umbrella organizations” that collect on behalf of member agencies. The United Way, for example, collects around 4.2 billion dollars annually through its 1350 local affiliates, chiefly through workplace giving campaigns. Alternatives to the United Way—federations representing social action, envi- ronmental, ethnic, and women’s causes—raise over $200 million annually in their own fund-raising drives. Overall, however, these federations tap only a small portion of individual giving. Most people contribute directly to the char- ity of their choice, and most of these contributions go to religious groups. The very rich give heavily to universities and hospitals although, as Table 7.2 indi- cates, human services donations are not insignificant.

After individual giving comes corporate and foundation donations and bequests. Corporations gave $15.3 billion to philanthropy in 2010, about 5 percent of overall giving. Although corporate giving aids the spectrum of non- profit activities, elementary and secondary schools have been a major priority since the mid-1980s, reflecting businesses’ concern with the capacity of U.S. workers to compete in the global marketplace. Education, indeed, has received the largest portion of corporate giving every year since 1978.

The Mode of Finance: Sources of Funds 189

Table 7.1 Sources and Recipients of Philanthropic Contributions, 2010 (in Billions of Dollars)

Sources

Foundations $41.0 14.1%

Corporations $15.3 5.3%

Individuals $211.8 72.8%

Bequests $22.8 7.8%

Total $290.9 100.0%

Recipients

Religion $100.6 34.6%

Education $41.7 14.3%

Human Services $26.5 9.1%

Health $22.8 7.8%

Foundations $24.3 8.4%

Arts, Culture $13.3 4.6%

Unallocated, Misc. $61.7 21.2%

Total $290.9 100.0%

Source: Giving USA Foundation, Giving USA, 2011.

Table 7.2 Notable Giving for Human Services since 1995

Andre Agassi

$1 million to the Las Vegas Boys & Girls Club

David Geffen

$2.5 million to New York’s Gay Men’s Health Crisis

Paul Newman

$2 million to establish the Barretstown Gang Camp at Barretstown Castle, Ballymore

Eustace, in County Kildare, Ireland

Henry and Lucy Moses Fund

$2 million to four New York City hospitals to help pay for uninsured patients

New York Times Neediest Cases Fund

Annual Christmas fund raises about $5 million for human services charities in

New York City

Edna McConnell Clark Foundation

$5 million to the Harlem Children’s Zone

Century 21 Real Estate

$5.8 million to the National Easter Seal Society

Jim Morgan

$1 million to Broward County, Florida, Urban League for Community Empowerment

Programs

(continued)

Chapter 7190

Private foundations are voluntary funding entities that primarily exist to give money to other nonprofit organizations. There are approximately 77,000 grant-making foundations operating today, holding nearly $600 billion in as- sets and annually awarding $46 billion for social welfare, scientific, and cul- tural activities.2 Private foundations, a unique creation of U.S. capitalism, were originally built on the fortunes of late-nineteenth- and early-twentieth-century tycoons such as Andrew Carnegie, John D. Rockefeller, and Henry Ford. In the modern era, media and computer entrepreneurs such as Ted Turner and Bill Gates are renewing the philanthropic tradition, using a portion of their great wealth to advance health and educational and social service causes. The larg- est American foundation, the Bill and Melinda Gates Foundation, which held $33.5 billion in assets in 2011, gives away more than two billion dollars a year, chiefly for public health–related programs, much of it focused on the nations of the developing world.

Voluntary Financing: Not Entirely a Private Matter

Reflecting an individualistic orientation, the United States is unique among welfare states in the elaborate development of its voluntary and for-profit wel- fare sectors. The parallel development of the voluntary and the public sectors, furthermore, has created a social welfare system that is distinctly bifurcated—a system that is dynamic in its ability to change and innovate, yet difficult to manage and control. One critical aspect of this dual system lies in the nature of its funding. “Voluntary” financing of social welfare services is not really

Ronald MacDonald Children’s Charities

More than $1.1 million to 45 children’s organizations

George Soros

$50 million to create the Emma Lazarus Fund to help immigrants become U.S.

citizens

Walmart Foundation

$760,000 to Hunger Relief Programs

Ford Foundation

$9 million to Oxfam America

Frankie and Stan Harrell

$4 million to Metropolitan Ministries, Tampa, Florida, for Project Uplift, to provide

care for homeless and at-risk families and individuals

Theodore Forstmann and John Walton

$50 million for a scholarship program to help 50,000 inner-city school children

attend private schools

Mark Zuckerberg

$100 million for the Newark, NJ, schools

Joan Kroc

$80 million for a Salvation Army community center in San Diego

Source: The 2007 Slate 60, February 22, 2008; The 2011 Slate 60, February 7, 2011.

Table 7.2 (continued)

The Mode of Finance: Sources of Funds 191

as private or as philanthropic as one might think. This is because the money contributed to nonprofit organizations reflects not only private generosity but also public policy. Most notably, private contributions are untaxed, and have been since 1915 when Congress sought to promote philanthropy by making donations tax deductible. Private generosity, in this sense, is partially private altruism, partially a tax break.

One study of the relationship between tax exemptions and voluntary giv- ing, for example, estimated that 96 percent of large-sum donors would sub- stantially reduce their contributions if tax benefits were removed.3 Because “tax deductions are a monetary ointment to salve the strains of charity,” they provide an indispensable incentive for individuals to support the nonprofit services of their choice.4 Little wonder that attempts to limit the deduction are always greeted with fierce denunciations by the beneficiaries of philan- thropic largess, most notably, universities, art museums, and scientific re- search institutions.

In addition to questioning the charitable impulse behind philanthropic giving, one might also question how “voluntary” contributions are in the first place. Community pressures to give, for example, whether at the office or else- where, can exert sufficient social coercion so that a choice not to give may be available only at great cost to an individual’s prestige and social position. Such pressures, of course, do a disservice to the voluntarism ideal.

Functions of Voluntary Services

For their advocates, philanthropic incentives encourage the development of pluralism in community services and provide opportunities for the religious, ethnic, and cultural interests of individuals and groups to flourish. Ralph Kramer has identified this as the “value guardian” function of voluntary agen- cies, which allows for the expression of particularistic and sectarian values in social welfare.5 In its role of value guardian, the voluntary organization is one of the major social devices for mitigating many of the strains that exist in U.S. political life. The history of successive waves of ethnic and racial minorities who have been assimilated into U.S. society, indeed, can be written as a biog- raphy of their organizational lives.6

In addition to supporting diversity and pluralism in community life, voluntary services provide an important vehicle for implementing new and possibly unpopular ideas. The flexible and changing characteristics of some voluntary agencies make them uniquely suited to this “vanguard” function.7 This function was exemplified in the early 1960s by the Ford Foundation’s sponsorship of the Grey Areas Projects, the demonstration program that paved the way for the President’s Committee on Juvenile Delinquency and the War

Private generosity in the case of philanthropic contributions is partially private altruism, partially a tax break.

Capsule 7.1 The Giving Pledge

The Giving Pledge, a campaign initiated by Bill and Melinda Gates and Warren Buffett, encour- ages billionaires to donate a majority of their wealth

to philanthropy. At the end of 2011, 70 had taken

the pledge, including Larry Ellison, George Lucas,

Ted Turner, Mark Zuckerberg, Michael Bloomberg,

and Diane von Furstenberg. The Gateses and

Buffett visited India and China in 2011 in an

effort to promote the idea of charitable giving to

the international stage.

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on Poverty.8 It occurred again in the 1980s when local voluntary agencies in cities such as New York and San Francisco took the initiative in confront- ing the AIDS epidemic. This is not to imply that governmental agencies are incapable of innovation and experimentation. On the contrary, most of the funds used for research, experimentation, and innovation in social welfare come from public sources. Nevertheless, voluntary agencies often are able to pursue ideas and initiatives that would be far too unpopular to secure govern- ment sanction.

Voluntary agencies also may function as “improvers” and “supplemen- ters” of public services. They can serve as vigilant critics, ensuring the quality of public services. And, finally, they can support programs to meet needs that public agencies are unable or unwilling to undertake.9

The case of the Family Service Association of America (FSAA) provides a good illustration of the supplementary function performed by a voluntary agency.10 The FSAA was founded in 1911 as the National Association for Or- ganizing Charities (NAOC), an outgrowth of the Charity Organization Societies of the late 1800s. The primary function of NAOC was to coordinate the work of community agencies involved with charitable giving.11 The organization was opposed to public relief giving.12 In the first decades of the twentieth century, NAOC dropped its coordinating functions, concentrating instead on the reha- bilitation of distressed families. In 1919, it became the American Association for Organizing Family Social Work, using the combined methods of relief giv- ing and social casework.

When the Social Security Act was passed in 1935, the federal government undertook substantial relief for special categories of the needy. The FSAA re- sponded by abandoning the “quantitative” job of providing income relief in favor of the “qualitative” task of providing family casework. By 1953, FSAA had developed a “family-oriented” casework approach for dealing with social problems and, for a while, the difference between public and voluntary ser- vices seemed clear. But with the 1956 amendments to the Social Security Act, public welfare itself took on a family orientation and states were encouraged to grant assistance and “other services” to needy children, parents, and relatives “to help maintain and strengthen family life.” The 1958 and 1962 amendments to the act further strengthened this orientation. By the mid-1960s, therefore, agencies such as FSAA once again began to reassess their functions vis-à-vis public services. While, no doubt, there were many other reasons for the change, in 1971 the Community Service Society of New York City abandoned its long tradition of family casework and took up a strategy of community organization for neighborhood self-improvement.13 In 1973, member agencies of the FSAA in Chicago and Minneapolis also began to emphasize social advocacy. In the 1980s, family service agencies returned to their historic services-focused mis- sion and in 1998, FSAA merged with the National Association of Homes and Services for Children to form a new Alliance for Children and Families, repre- senting more than 350 child and family organizations serving more than five million individuals through a wide assortment of programs. The San Francisco Family Service Agency, for example, provides day care, residential care, HIV/ AIDS supports, foster grandparent, and drug and alcohol services, along with conventional family counseling.

Voluntary agencies increasingly serve another important function, one not noted in Kramer’s system of classification, and that is their role as protector of the poor in an era of diminishing welfare state spending. When federal policy, in particular, threatens significant cutbacks—as occurred during the Reagan

The Mode of Finance: Sources of Funds 193

era in the mid-1980s, the Contract with America campaign in the mid-1990s, and the great recession beginning in 2008—national attention turns to non- profit organizations to protect the country’s most vulnerable citizens. Nonprof- its, presumably more efficient, more sensitive, and more effective than their public counterparts, would step into the breach, offset public cuts, and rescue the poor. The problem, however, is not only that public cutbacks impair pri- vate action—frequently state and local governments pass their federal cutbacks along to private charities by reducing their contracts—but that the magnitude of government reductions often simply overwhelms any potential remediation by community agencies.

Problems and Issues in Voluntary Financing

Even without such emergency demands, several problems arise in financing voluntary social welfare services. First, there is the fundamental question of the public–private relationship. Are there some community activities that should be exclusively private and voluntary? Are there others that should only be public? And if public financing of private endeavors is appropriate, how should we balance cultural pluralism and social equality? Should contribu- tions to ethnically or religiously exclusive educational, health, and social wel- fare agencies, for example, be tax exempt? Should governments provide direct support for faith-based agencies (such as Catholic schools) if they meet com- munity requirements and standards? Does such support violate constitutional guarantees separating church and state? These issues become difficult to un- tangle when there is a “mixing” of voluntary and public funds.

Public support for voluntary agencies occurs in a variety of forms. The tax deductibility of charitable contributions has been noted. Direct public subsi- dies, largely unconditional lump-sum grants to voluntary agency programs, although uncommon today, were at one time quite the norm. They have come to be considered poor public policy, however, because, as an essentially “agency- oriented” means of financial support, they commit government to supporting all of the goals and purposes of an organization. Purchase-of-service contract- ing, the contemporary option, is an arrangement whereby governments buy specific services, such as foster care, job training, or respite services. In some cases, governmental units may even contract with private agencies to perform “indirect” activities such as program development, social planning, and ser- vices evaluation.

The Mixed Economy of Welfare

As discussed earlier, government provides a major part of the funds expended by voluntary agencies. Catholic Charities USA, one of the country’s larg- est charities, receives nearly two-thirds of its income from government. The Planned Parenthood Federation relies on public support for one-third.14 In the overall social services arena, indeed, half the budget comes from public funds, as Figure 7.1 indicates. It is estimated, for example, that more than half of all Title XX social services funds are spent on services purchased from volun- tary and for-profit organizations. Considering these trends, Ralph Kramer has stated, “It is ironic that a national coalition of nonprofit organizations chose as its name ‘The Independent Sector’ when its constituents had become, more than ever, dependent on government.”15

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One major virtue of these subventions is that they enable governments to start programs quickly, utilizing the existing capacity of voluntary organiza- tions while avoiding the rigidities of civil service and bureaucracy. Contract- ing can also reduce the costs of having to pay civil service salaries and being restricted to negotiating with public services unions. This is especially advan- tageous for experiments and demonstrations. Contracting also permits public officials to tailor programs to the special circumstances of hard-to-reach popu- lations. Relying on the access and expertise of existing community-based agen- cies, governments can be far more responsive to special population groups than if they tried to provide services in-house.

For the voluntary agency, the obvious advantage of purchase arrangements is access to the public coffer. But they pay a price for public resources. To the extent that a voluntary agency is supported by government funds, it forfeits some degree of autonomy. Consequently, the ability of an agency to function

as an agent of new or unpopular ideas, as a critic of pub- lic services, and as a guardian of pluralistic values may be limited. Family-planning clinics funded with federal grant-in-aid funds, for example, are prohibited from pro- viding information about abortion, a severe limitation on their ability to provide their clients a comprehensive set of options. In the extreme, voluntary agencies may sim- ply become instruments of government policy. The degree to which governmental constraints may be imposed, of course, depends in part on the method of financing that is employed. Indirect subsidies through tax deductions and vouchers are relatively benign and laissez-faire, whereas direct contracting through purchase-of-services arrange- ments hold the potential for considerable intrusiveness.16 In the view of some, when voluntary agencies accept funds

Government 50.1%

Other 12.4%

Fees 17.5%

Giving 20.0%

Figure 7.1 Sources of Funding for Human Service Nonprofits, 1995.

Giving USA 2011. Giving USA Foundation.

Practice Contexts

Practice Behavior Example: Social workers

continuously discover, appraise, and attend to

changing locales, populations, scientific and

technological developments, and emerging

societal trends to provide relevant services.

Critical Thinking Question: What are the ben- efits and challenges of the mixed economy

of social welfare? How do these benefits

and challenges affect direct service social

workers?

The Mode of Finance: Sources of Funds 195

from government, they should be treated no differently than any other agency of government. According to Glasser, for example, the private agency that ac- cepts public funds should forgo the privilege of autonomy.17

Accountability

The issue of governmental support places voluntary agencies in a paradoxi- cal situation. Government controls are seen as undesirable, as contrary to the independence and the special role of voluntary agencies. On the other hand, reasonable controls must be employed to protect the use of public dollars. Gov- ernment policymakers, under law, must be prudent in their use of tax revenue, and prudence demands reasonable mechanisms for accountability.

Even before the modern era of massive contract financing, charitable trusts were held to be “in the public interest” and therefore subject to a degree of gov- ernment regulation.18 It is on this basis that voluntary funds have been restricted and some degree of public control exercised. Tax-exempt organizations must be chartered by state governments, and the states may require various kinds of accounting procedures and impose standards of practice. One important limitation is that “no substantial part” of the voluntary agencies’ activities may consist of efforts to influence legislation.19 This restriction accounts, in part, for the reluctance of many voluntary welfare agencies to become engaged in politi- cal action.

Capsule 7.2 Charities on the Dole

Those who expect America’s charities to replace government as a provider of social welfare ought to look a little closer. They will find

that the so-called independent sector, which

receives between one-quarter and one-third

of its funds from taxpayers, isn’t so independent

after all.

In fact, many social-service agencies actually

receive most of their funding from government.

Save the Children owes 60 percent of its budget

to the generosity of taxpayers, Catholic Charities

65 percent, CARE 78 percent, and the United

Cerebral Palsy Association more than 80 percent.

Topping this list is the ineptly named Volunteers of

America, which receives 96 percent of its $51-

million budget from government sources. There

are, of course, many small, innovative, and values-

driven grass-roots charities that are addressing

human needs much more efficiently than failed

federal programs and social-service agencies.

These groups mostly avoid government money, be-

cause they know that government support comes

with strings attached ….

These strings involve more than just paperwork

and regulations. Government support also changes

charities’ incentives, giving them reasons to keep

caseloads up instead of getting them down by suc-

cessfully turning around peoples’ lives. It distorts

their missions. It turns lean, cost-effective organiza-

tions into bloated bureaucracies and dilutes their

spiritual or religious message. In instances where the

Salvation Army decided to accept government funds

(which constitute about 15 percent of its revenues),

it stopped requiring church attendance as a condi-

tion of its assistance. Unfortunately, this experience

is all too common. The charity that stays genuinely

independent from government is still the exception.

Although charities are supposed to offer an

alternative to government provision of social welfare,

they have become so dependent on and aligned with

government that they no longer represent a way out

of the welfare state. If we place our faith in private

non-profits as they are currently organized, we are

in for a big disappointment. Before we can rely on

charities to help us dismantle government, they

must wean themselves off the dole.

From “Charities on the Dole” by Kimberly Dennis, Policy Review, 5, March/April 1996. Used by permission of Policy Review.

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Public concern regarding the accountability of voluntary organizations, particularly philanthropic foundations, found legislative expression in the Tax Reform Act of 1969. Although not as severe as many critics of voluntary orga- nizations desired, the act imposed several important limitations on voluntary organizations. Almost one-third of the act concerned foundations, establishing policies regarding the investment of funds, public reporting, and the amount of income that could be received on assets. In addition, the act required foun- dations to pay a 4 percent excise tax on their income and to dispose of at least 5 percent of their capital annually.20

The problem of establishing accountability for voluntary agencies can be understood in relation to a much older and more general notion known as “charitable immunity.” Originating in centuries-old English law, this con- cept holds that charitable trusts cannot be held responsible for derelictions of duties to clients (negligence and neglect, for example) because, without such immunity, government intervention might eventually violate the intentions of the donors and limit the functions of voluntary charity.21 The questions of charitable immunity and the extent to which bequests may be altered by action of government are significant.

For many years, charitable bequests and legacies have been protected by this concept of immunity (sometimes referred to as “the dead hand”) and have been allowed to follow donors’ original purposes, even when some of these appear frivolous, discriminatory, or otherwise socially harmful. Whimsical ex- amples from recent history include a trust fund for Christmas dinners (“one bushel of oats or a half bushel of corn chops”) for hungry horses in Kansas City, a trust fund establishing “marriage portions” for poor young women about to be married, and a legacy providing “a baked potato at each meal for each young lady at Bryn Mawr.”22

A more serious illustration was the Girard College case of the 1950s. In this instance, the U.S. Supreme Court decided that the charitable bequest, which restricted its educational benefits to “poor, male, white orphans,” could not receive a tax exemption since it conflicted with the public interest by discrimi- nating against minority groups.23 Here, the grip of “the dead hand” was loos- ened by another important legal concept, the cy pres (i.e., “as near as may be”) doctrine, which holds that courts may modify bequests to be “as near as” pos- sible to the original intent of the giver in light of social changes that have taken place in the community.24

Another case of this kind involved the Buck Trust, an interesting test of the strength of the “dead hand” in respect to community definitions of “social

Charitable immunity holds that charitable trusts cannot be held responsible for derelictions of duties to clients because, without such immunity, government intervention might limit the functions of voluntary charity.

Capsule 7.3 Fatal Embrace

How [can we] protect [voluntary institutions] from the fatal embrace of government regula- tion? The problem … grows immensely when

tax funds are channeled to them—in the name of

accountability, equity, or whatever moral principle

is supposedly to govern the expenditure of public

money…. When such institutions are first

“discovered” and then funded by government,

the very vitality that originally distinguished them

from government agencies is destroyed. Indeed,

they become government agencies under another

name.

Peter Berger and Richard John Neuhaus, “Response,” in Michael Novak (ed.), To Empower People: From State to Civil Society, 2nd ed.

1996, 150–51.

The Mode of Finance: Sources of Funds 197

need.” In 1973, Mrs. Buck, following her husband’s wishes, willed her estate, valued at that time at $10 million, to Marin County, California, “to be used exclusively for nonprofit charitable, religious, or educational purposes in pro- viding care for the needy.” When Mrs. Buck died in 1979, her estate had vastly increased in value; by 1984, it was worth $360 million and was producing approximately $20 to $25 million a year in income. The San Francisco Foun- dation, the administrators of the trust, challenged the “Marin only” provisions, arguing that this wealthy county (with the fifth highest income per capita in the United States) was not able to make use of the funds. Marin County, ul- timately supported by the courts, argued for a strict construction of the will and its clear geographical limitation. Despite the fact that Marin County, by all statistical measures, had only a small amount of need—and a small population of the needy—the court decided that the definition of “need” was fundamen- tally subjective. Marin residents perceived of themselves as needy, the Buck instructions were clear, and the trust would not have to be shared with neigh- boring communities.

The vast increase in purchase-of-service contracting since the 1960s has made the accountability issue especially critical for state and local govern- ments. Several billion dollars worth of public services are purchased annually, providing government policymakers a flexible tool for delivering community services in a cost-efficient, responsive manner, often engaging clientele groups that might be reluctant to deal directly with public bureaucrats. But clearly, contracting brings with it accountability issues with respect to both fiscal and program standards. The typically diffuse goals and objectives of contract agen- cies, for example, make it difficult to determine effectiveness.

Public policymakers address accountability through the contract docu- ment itself, negotiating funding agreements that set forth the ground rules for the purchase of service. As in all contracts, there must be “consideration”: In exchange for a grant, provider agencies agree to deliver a specified quantity of services of a particular sort to an identified target group. Public control can then be exercised through a variety of monitoring and evaluating procedures, such as audits, site visits, and agency program reports.

“Accountability,” of course, is a rather ambiguous term. And the conven- tional dichotomy of autonomy versus accountability—the need of private agen- cies for independence versus the need of public bodies to ensure the proper use of tax dollars—often generates more heat than light. Nevertheless, it poses a real dilemma in today’s mixed economy of welfare, a dilemma that typically is answered more on ideological than on technical grounds.

Conservatives and Voluntarism

Voluntarism involves more than money, whatever its source. Classic volun- tarism, the voluntarism of Tocqueville, of the Victorian Lady Bountiful, of today’s weekend or spring break volunteer, involves action, good works, and civic engagement. More than the citizens of any other advanced industrial nation, indeed U.S. residents donate money and time. They give to charitable organizations and nearly a quarter join churches, help with the local PTA, paint and caulk for Habitat For Humanity, and serve on the boards of directors of local agencies.25

For many conservatives, volunteer civic responsibility is the best way to approach social provision, representing a humane and effective alternative to

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an inefficient, bureaucratic, and bloated welfare state. This view, advanced since the 1980s by an influential body of literature from the political right, has found voice—and expression—in national developments.26 Conservative lead- ership, such as the Reagan–Bush administrations in the United States and the Thatcher government in the United Kingdom, advanced the view that a large part of the welfare system should be the domain of the voluntary sector. Under Reagan, it was declared policy that public sector welfare should be substan- tially privatized, absorbed by “the voluntary spirit.” Advocates of President Bush’s “compassionate conservatism” later called for greater use of faith-based organizations. In 2011, British Prime Minister David Cameron launched his “Big Society” program, designed to set up a wide array of volunteer schemes to improve local communities.

Voluntarism is an enticing idea: Get government off our backs and neighbors will help neighbors, families will pitch in, and church and civic agencies will roll up their collective sleeves and get the job done. The only thing wrong with this idea is that it doesn’t work. The readiness of Americans to volunteer, as Figure 7.2 indicates, is extremely impressive in the international context. How- ever, the welfare state developed because, in modern society, neighbors, friends, family, and local communities—the entire “thousand points of light” celebrated by the first President Bush in 1989—were unable to adequately provide for so- cial needs. That is not to say that public agencies and social welfare profession- als should disregard private support systems and community groups. There is clearly major work to be done to better articulate the functions of human ser- vice professionals and the natural helping networks and voluntary activities of communities. But, it is quite another thing to glorify the community spirit of Tocqueville’s 1830 America as a solution to contemporary social problems.

Liberals and Voluntarism

The spirit of service—to neighbors, community, nation, or humankind—is far from a conservative monopoly. Tocqueville’s pattern of volunteerism has been a U.S. phenomenon, across the spectrum, from the start. But whereas

Percentage of Population Volunteering, 1993

Slovakia

Bulgaria

Ireland

Denmark

Belgium

Britain

Sweden

Netherlands

United States

0 5 10 15 20 25 30 35 40 45 50

48

38

36

34

32

28

25

19

12

Figure 7.2 National Volunteers.

A New Civic Europe? A Study of the extent and Role of Volunteering, Volunteer Centre UK; Giving and Volunteering in the U.S. Giving USA, 1996, p. 162..

The Mode of Finance: Sources of Funds 199

conservatives tend to view private action as an alternative to public responsi- bility, liberals promote volunteer effort as a way to advance national goals. It was this spirit that framed John Kennedy’s famous injunction, “ask not what your country can do for you—ask what you can do for your country.”

Since the Kennedy years, Democratic presidents have promoted public efforts to stimulate individual volunteering. Lyndon Johnson initiated VISTA (Volunteers in Service to America), an effort to replicate the Peace Corps on the domestic scene. In the 1970s and 1980s, new programs enlisted older citizens (RSVP) and young teachers. And in 1993, Congress and President Clinton cre- ated AmeriCorps, the largest community service program since the Great De- pression. Run by a federal Corporation for National and Community Service, AmeriCorps has engaged close to 50,000 young citizens in service jobs that are part volunteer, part student aid. Participants earn a $4725 scholarship for each year of service, a modest room and board allowance, and healthcare benefits, while working for charitable purposes ranging from the Red Cross and Habitat for Humanity to jobs as teachers’ aides in disadvantaged inner cities.

CONTRIBUTORY SCHEMES AND FEE CHARGING

Those receiving social benefits may be asked to finance them in two ways: through “contributions” to statutory (i.e., public) social and health insurance programs and through fees paid for services. Public social security programs, although somewhat akin to private insurance, do not operate according to general marketplace rules of exchange. Rather, the conditions of exchange are regulated by government, reflecting recipient need as well as recipient contri- bution. Private profit, of course, is not allowed.

Social Security, officially Old Age, Survivors, Disability, and Health Insur- ance (OASDHI), is the outstanding example of a contributory system in the United States. Its basic principle is that all those eligible for benefits at the time they withdraw from the labor force will have paid insurance-like “con- tributions” during their working years. Like any other insurance system, their investments “earn” an entitlement to benefits. Social Security, of course, is not like “any other” insurance system. First, despite the euphemism, “contri- butions” constitute a tax on both earnings (for employees) and payrolls (for employers); both workers and employers, therefore, are obligated to support the system. In 2011, approximately 98 percent of the U.S. workforce was cov- ered by a combination of Social Security and other governmental retirement systems. Second, unlike private insurance, OASDHI benefits are not paid on the basis of a written contract. Although there is a uni- versally understood obligation for government to stand by its commitments, the exact nature of Social Security taxes and benefits are determined by Congress and change from time to time. And while there is an important actuarial relationship between contributions and benefits, Congress awards benefits on the basis of need as well as on the ba- sis of contributions.

Fee charging, although associated with the buying and selling of goods found in the commercial marketplace, is not at all uncommon among voluntary, commercial, and,

Policy Practice

Practice Behavior Example: Social workers

analyze, formulate, and advocate for policies

that advance social well-being.

Critical Thinking Question: What is the feasibil- ity of a contributory system such as benefits

for family leave in the United States?

Chapter 7200

often, public organizations. Health care, notably, is primarily fee-for-service care, with payments provided by consumers in the form of insurance premi- ums, deductibles, co-shares, and co-payments. As a result, of course, the afflu- ent receive excellent health care in the United States, whereas the less affluent, especially those having to rely on public assistance (Medicaid), or having no insurance at all, get less.

The high cost of health care contributes in a major way not only to the sig- nificant percentage of uninsured Americans, but also to the increasing reluc- tance of businesses to offer health insurance to their employees. In 2008, firms paid $9325 in family health premiums for each insured worker, with workers contributing an additional $3354.27 One consequence of these steep and increasing costs is a decreasing number of companies offering health benefits. Since 1999, the percentage of firms providing health policies to their workers has dropped from 66 to 63 percent. At the same time, more and more workers have been opting out of their employers plans. Even though they only pay a portion of the total cost—around 25 percent on average—their premiums are often too high to afford.28

In the social services, fees, of necessity, are less common. While daycare and private schools rely heavily on user fees, agencies serving the poor must rely on subsidies from charities, foundations, and government. Nevertheless, even programs serving the disadvantaged often utilize fees and charges to cover part of the cost. Under these arrangements, fees may be calculated on a graduated “sliding scale” according to the user’s economic circumstances. Rarely covering the entire cost of the services rendered, these fees subsidize poorer clients, and no one is turned away due to an inability to pay.

Sliding-scale fees, for example, have long been used by family service as- sociations, with charges for counseling sessions ranging from zero to over $100 an hour, according to income. Mental health agencies similarly rely on pay- ments, depending on the caseworker to negotiate an appropriate fee with the client. According to one analysis of fee-setting procedures, payment schedules generally “attempt to resolve the tension between consumers’ expectations of paying fees for service, their ability to pay, the true cost of the service, and an agency’s need to raise additional revenue.”

Fee charging is also frequently introduced into public contributory pro- grams. Medicare, the health insurance program for the aged and disabled under Social Security, gives beneficiaries an option to participate in a Supplementary Medical Insurance Program (Part B) that covers physicians’ fees. In 2012, those electing Part B paid $99.90 per month for coverage. In addition, there is an annual deductible for physicians’ care plus a 20 percent co-payment above that amount. There is also a deductible for hospital insurance under Part A (which means that the recipient must pay this amount of the bill first before the program covers any costs) and an additional co-payment for hospital days sixty-one through ninety. In some health plans (such as Britain’s National Health Service), members may be required to pay a fee that covers part of the cost for each episode of care, be it a visit to a dentist, prescribed medication, or a hospital stay.

Assumptions about psychological and behavioral dynamics underlie much of the debate concerning the use of contributory and fee-charging schemes. From the psychological point of view, it is argued that recipients are less likely to feel stigma or shame when they pay their own way, even if they are still partially subsidized. At the same time, the act of contributing is believed to enhance the individual’s sense of social responsibility. This has been one of

The Mode of Finance: Sources of Funds 201

the major arguments for operating Social Security on a contributory basis. The behavioral rationale for contributory schemes and fee charging, as applied to service-giving programs, is that user payments restrain overutilization. That is, even small fees for doctor or therapist visits, or for prescriptions, are said to discourage unnecessary or excessive care.

There is a limited amount of empirical evidence addressing these psycho- logical and behavioral arguments. Recipients of Social Security benefits appear to feel a greater sense of entitlement to benefits than do recipients of other pro- grams, but what part of this is due to having made contributions and what part is due to general public acceptance of the program is not clear. There are other well-accepted programs where beneficiaries do not make direct contributions (such as unemployment insurance, public education, and veterans’ services) yet seem to develop the same sense of entitlement as OASDHI recipients.

A sense of entitlement can be based on factors such as compensation or general public commitment to the program. Supplementary Security Income recipients receive better benefits, feel more entitled to them, and are socially perceived as being more deserving than recipients of Temporary Assistance for Needy Families (TANF). Although contributory schemes may have some effect on the sense of entitlement, they are by no means determinative.

Similarly, it is not clear whether contributions and user fees reduce the excessive consumption of benefits or whether they act as a barrier to needed services. User fees, even when nominal, can be a significant burden for peo- ple who are having a difficult time making ends meet. Given difficult choices that have to be made between spending for different necessities, for example, health insurance may often give way to immediate food, day care, and housing needs. In Medicare, co-payments of $2.50 on generic prescriptions (and $6.30 for brand-name drugs) can add up quickly for the elderly needing multiple medications, resulting in some people foregoing some of the drugs necessary for their health. Similarly, in private agencies, the contribution required for programs under sliding-scale arrangements may not be affordable for those al- ready living at the margin. This cost barrier also explains, in part, why many workers decline to participate in employer-sponsored insurance coverage.29 In private-managed-care plans, several studies have found that even modest co-payments for office visits significantly reduce the use of primary care ser- vices, although they appear to have no impact on visits to medical and surgical specialists.30

PUBLIC FINANCING: NOT ENTIRELY A PUBLIC MATTER

Despite the importance of private and voluntary welfare, the essence of today’s welfare state is public provision and public finance. Government remains the major source of funds for health, education, income maintenance, and welfare services, and the primacy of public financing means that social welfare policy choices are fundamentally matters of politics rather than matters of consumer choice or voluntary philanthropy.

In the same way that voluntary financing is not completely a matter of pri- vate philanthropy, public (or governmental) financing of social welfare services is not quite as public a business as it may initially appear. In the broadest sense, taxation is a central instrument regulating the interaction between government

Chapter 7202

and the private economy. The core ideological debate between redistribution and social justice on the one hand, and the need for profit and economic ef- ficiency, on the other, clearly comes into play here. In a narrower sense, tax policy directly impacts the private, nonstatutory realms of social welfare. Tax exemptions for charitable contributions illustrate one way in which government uses its taxing powers to subsidize private welfare—the exemption provides a substantial public incentive for private generosity. Other incentives—includ- ing the federal income tax deductions for catastrophic medical expenses, home mortgage interest, and child and dependent care expenses—all influence pri- vate activity in publicly specified ways. All of these represent private “welfare” elements in the public finance system. In Chapter 2, we introduced the con- cept of “tax expenditure” to denote those special tax features that are designed to encourage certain kinds of behavior. Whether called tax credits, deductions, preferences, or exclusions, these provisions constitute a system of welfare that parallels regular social welfare spending. Although they are analogous to nor- mal expenditures in that they represent a decision by government to direct re- sources to particular objectives, they are far less visible.

The purpose of tax expenditures is not to finance government but rather to encourage different kinds of valued activities. But while regular benefits— such as Social Security, TANF, or highway outlays—are cash outlays, allocated through the annual budget process, tax expenditures occur when government doesn’t tax at the level it normally would. They are, basically, targeted tax cuts. To subsidize childcare for working families, for example, Congress authorizes direct spending in the form of cash payments to eligible families and also uti- lizes special tax deductions and credits.

The use of the tax code as a system of special benefits has long been de- rided as welfare for the rich. And tax loopholes, many extraordinarily compli- cated, do frequently advance the interests of people with high incomes. This is because almost all tax breaks are linked to tax brackets, meaning that earners in higher brackets receive more of a reduction for each dollar deducted than do those in lower brackets. A 35 percent bracket taxpayer gets back 35 cents per dollar deducted; a 15 percent taxpayer gets back 15 cents; those paying no taxes get back nothing.

In the federal system, nevertheless, two of the most significant tax expenditures—exclusions for income-transfer payments and employee fringe benefits—serve distinctly social objectives. The income tax exclusion granted public assistance, and Social Security payments derives from the simple logic of protecting the limited income of the poor. It hardly makes sense, after all, to provide income support with one hand while taxing it back with the other. The exclusion, however, is not absolute. Because Social Security beneficiaries are often reasonably well-to-do, federal policy does tax a portion of the Social Security payments of the better-off elderly.

Employee fringe benefits—compensation received in the form of health and pension plans, special housing allowances, and employee-assistance ser- vices such as counseling and day care—are doubly benefited under the federal tax code. First, the cost to employers of these benefits constitutes a deductible business expense. As such, they can be deducted from taxable income, appre- ciably lowering the taxes owed by a firm. Second, employees benefit because compensation in the form of wages and salaries is taxed but compensation in the form of fringe benefits is not. This means that a valuable and costly form of remuneration is given to employees on a tax-free basis.

The Mode of Finance: Sources of Funds 203

These provisions have been enormously successful in broadening our system of private welfare. Tax expenditures have promoted pension plans by making them less costly for employers to sponsor. The pension deduction, the second largest of the over 100 items listed in the most recent federal tax expen- diture budget (some of which are enumerated in Table 7.3), provides a huge tax savings for businesses, important benefits for employees, and, of course, cor- responding losses to the Federal Treasury.

Similarly, private health plans have been encouraged. Today, employers provide health insurance for over 150 million employees and dependents, de- ducting some $300 billion for these benefits, resulting, as Table 7.3 indicates, in a $173 billion loss in tax revenue. Once again, in addition to providing a major business deduction, fringes provide an enormous break for employees. Because health benefits are tax free, they constitute a favorable alternative to

Table 7.3 Revenue Losses from Major Social Welfare Tax Expenditures in the Federal Individual and Corporate Income Tax, Fiscal Year 2011 (in Billions of Dollars)

Tax Expenditure Revenue Loss (in Billions)

Social Security (OASDI) exclusion $31

Retirement 401(K) plans $52

Employer pension plans $40

Exclusion of employer contributions for medical insurance

and care

$173

Veterans benefits $5

Child and dependent care credit $23

Charitable contributions

    for education $5

    for health $5

    for education, employment, religion, social services $34

Earned income credit $8

Source: U.S. Budget for Fiscal Year 2012, Historical Tables, Analytic Perspectives, Table 17.1,

pp. 239–244.

Capsule 7.4 Health Care by Loophole

The tax code is intrinsically linked to the nation’s system of health care. Since 1860, when railroads, then lumber and mining companies,

first hired doctors to keep their workers healthy and

on the job, employers have been the primary provid-

ers of the nation’s health care protection. That

approach flourished during World War II when wages

were frozen and businesses offered free health

benefits to attract workers. Today, employer-financed

insurance covers about 160 million Americans

and provides a $140 billion tax deduction for

businesses. Workers save another $200 billion

a year because they continue to get this insurance

tax-free.

From “Health Care Loophole” AARP Bulletin, March 2007, p. 3. Reprinted by permission of AARP.

Chapter 7204

regular, taxable wages. Workers furnished with $8000 a year in medical cover- age, for example, receive the full benefit value. If the $8000 were provided in the form of salary, however, that would buy only $5760 worth of insurance for a worker in the 28 percent income tax bracket.

The overall cost to the government of tax expenditures is considerable: over one trillion dollars, an amount equivalent to approximately one-third of all federal revenues. In some areas of activity, the magnitude of tax expen- ditures approaches and even exceeds that of direct spending. In the federal budget category “education, training, employment, and social services,” for example, direct outlays are just barely ahead of the amount given up in tax ex- penditures. In the housing field, homeowner deductions for mortgage interest, property taxes, and capital gains exemptions on home sales cost the federal government about five times the amount spent for low-income housing pro- grams like Section 8.

Public objectives, it is clear, can be advanced by both tax expenditures and regular outlays. As noted, day care is a major area of federal and local activ- ity under spending programs such as Title XX, the Elementary and Secondary Education Act, and Head Start, as well as under tax programs such as the de- pendent care credit, and the employer-provided childcare exclusion. Although spending programs generally provide revenues directly to program and agency providers, tax credits and deductions give consumers additional purchasing power for use in the marketplace. In this way, they resemble vouchers, provid- ing substantial freedom of choice to their users.

Are tax expenditures a good thing? Do they, on balance, help the poor? The answer to these questions is complex. Some tax expenditures clearly aren’t redis- tributive. For one thing, only taxpayers benefit from them; if one’s earnings fall below the tax threshold, then no benefits are generally available. Even socially oriented tax expenditures—such as those for day care, charitable contributions, and health plans—often wind up providing the most to those with the fewest needs. The dependent care credit, like the others, is tilted upward, with much of its benefits going to middle- and upper-income families. Health plan tax expen- ditures also vary considerably in their impact because younger workers, women, minorities, and unorganized workers, as a group, are less likely to be covered than older workers, men, whites, and union members. In addition, the benefits of those who are covered are likely to be far broader for the second group.

The prevailing view is that the overall system of tax expenditures is regres- sive. One calculation estimates that at least half their total benefits goes to the richest fifth of the population.31 According to Isabel Sawhill, moreover, few tax subsidies are targeted so as to help those who need them most. They “neglect the housing, health care, and income security needs of low-income families while simultaneously providing billions to assist the affluent and the middle class.”32 This kind of “welfare for the rich” clearly diminishes the overall pro- gressivity of the income tax. It accounts, in addition, for the fact that although income taxes remain the most redistributive form of taxation, real rates vary only moderately among income groups. (Real, or “effective,” rates refer to ac- tual taxes as a proportion of overall income.) Despite the nominal 35 percent federal income tax bite on the marginal income of the rich, the top 1 percent of taxpayers actually pay a bit less than one-fifth of their income to Uncle Sam.33

Tax expenditures have other weaknesses. First, they are a relatively dis- guised form of public support, which means that they generally avoid the review and scrutiny afforded direct spending. Many states and localities, for example, fail to identify tax expenditures in their annual budgets, and most

The Mode of Finance: Sources of Funds 205

exert little fiscal control over them in their committee deliberations. For the most part, tax expenditures are a form of entitlement, continuing unexamined from year to year to qualifying taxpayers.

A second problem is their impact on the tax base. By their very definition, tax expenditures remove funds from the public coffers. It is estimated, indeed, that federal tax loopholes reduce almost by half the amount of income subject to taxation.34 This means that taxes that in many instances would have been paid by the better-off are forgone. With less income taxed, less revenue is pro- vided, reducing funds available for tax-supported programs—social programs in particular. A substantial portion of the present deficit problem, for example, is clearly the result of fewer dollars being available for public support. In re- cent years, indeed, there has been an enormous increase in the number and size of tax expenditures, resulting in a substantial gap between forfeited re- ceipts and taxes actually collected, and an ever greater abandonment of the implication of the Sixteenth Amendment to the U.S. Constitution that federal taxes be paid on income from all sources.

The erosion of the tax base has resulted in a steady decrease in federal tax revenues as a portion of the entire economy. In 2011, indeed, federal taxes made up less than 15 percent of the gross domestic product (GDP), its lowest in sixty years.35 In addition to reducing overall government revenues, tax ex- penditures impact different activities and different groups in different ways. The charity deduction, for example, not only results in the federal government giving up many billions a year in revenue, it also draws resources to the partic- ular charities—culture, research, and higher education in particular—favored by the biggest givers. Without attempting to judge the relative value of differ- ing nonprofit endeavors, it is clear that when J. P. Getty willed his fortune for a new museum of art in Los Angeles, everybody paid for the project indirectly because of the taxes forgone. It is not the case, though, that everybody will benefit equally from what Getty’s gift produced. In quite the same way, all citi- zens, atheists, agnostics, as well as the faithful, make up the taxes lost through the billions of dollars deducted for donations to religious institutions.

Tax Types, Tax Burdens

Taxes make up a very substantial part of all welfare economies. Among the wealthy industrial nations of the world, the United States has been one of the least burdened when taxes are measured as a proportion of GDP. Just 25 percent of its GDP goes to taxes, compared to 31 percent in Canada, 36 percent in the United Kingdom, 43 percent in France, 46 percent in Sweden, and 48 percent in Denmark.36

Tax expenditures are a relatively hidden form of public support, and generally avoid the review and scrutiny afforded direct spending.

Capsule 7.5 The Leaky Bucket

The idea among tax theologians is that the income tax on individuals and corporations—before deductions, exclusions, and the like are factored in—

represents a sort of ideal tax structure. The revenues

due the Treasury under this ideal structure are like

water that flows into a bucket. The deductions and

exclusions are represented by holes punctured in the

bucket. The holes have become quite large.

Paul Starobin, “Washington Update,” National Journal (August 21, 1993): 2087.

Chapter 7206

Taxes provide the wherewithal for a country’s spending and affect the distribution of nation’s resources just as much as direct allocations do. Redis- tribution is therefore a double-edged sword, achieved by both financial and expenditure measures. We have discussed the expenditure side of the equation in the chapters dealing with the basis of allocation and the nature of provi- sions. In the remaining part of this chapter, we intend to look at some of the essential choices confronting social finance, especially choices concerning the fashion in which taxes are levied.

In the United States, as in most other industrial countries, taxes are im- posed in a variety of ways. Most importantly, taxes are levied on income, both on individuals, through personal income taxes, and on businesses, through corporate income taxes. In the United States, individual income taxes make up the largest single source of federal income, 45 percent of the total, with cor- porate income taxes providing an additional 9 percent. Taxes are also levied on the costs of things that people buy (sales taxes), on earnings and payrolls (Social Security “contributions,” or taxes), on the value of things people own (property taxes), and on estates and gifts.

One way to distinguish among types of taxes is to consider their fairness, the relative burdens they impose on different income groups. At the progres- sive end of the continuum are levies that are proportionally higher for the wealthy than for the poor. The federal personal income tax, the most progres- sive tax in the United States, is an example, being levied in accordance with the “ability to pay.” As income rises, in other words, so does the tax rate.

Most low-income families are actually exempt from the federal income tax. Many, in fact, as we indicated, receive a tax credit (the Earned Income Tax Credit [EITC]), which offsets a good part of their Social Security payroll taxes as well. According to the nominal rates, that is, not taking into account exemptions, credits, or deductions, families are taxed at 10 percent to about $17,000. As income increases, so does the marginal rate, from 15 percent

TOLES © 1995 The Washington Post. Reprinted with permission of Universal Press Syndicate

The Mode of Finance: Sources of Funds 207

(above $17,000) to 25 percent (above $68,000) to 28 percent (above $137,000) to 33 percent (above $212,000). The top rate, 35 percent, levied on incomes over $373,000, has dropped considerably in recent decades. It stood at 91 per- cent in 1960, 70 percent in 1980, 50 percent in 1986, and 39.6 percent in 2000.

These, of course, are the official (or nominal) rates; in the actual world, as we have seen, these rates are lessened considerably by the significant variety of tax expenditures that reduce taxpayer obligations. After all these various tax expenditures are factored in, the real (or effective) tax rates are a good deal less. It is estimated, for example, that most of these in the bottom two-fifths of the income ladder pay no federal income taxes. And federal income taxes on middle-income families are just 4.6 percent, a historic low.37

The overall impact of the personal income tax clearly favors poorer fami- lies. As Table 7.4 indicates, the top 20 percent of the population wind up with roughly a 15 percent effective income tax rate, while the poorest 40 percent pay nothing at all. In fact, as a consequence of the EITC (combined with the Federal Child Tax Credit), low- and lower-middle-income individuals and families often receive a rebate, what we earlier characterized as a negative tax. While the rate progressions indicated in Table 7.4 may not be as steep as many would desire—both for the income tax and for the totality of federal taxes— higher income groups clearly pay higher rates.

Another way of illustrating the redistributive effects of taxation is to ex- amine the share of national income accruing to different income groups before and after federal taxes are applied. In 2011, poor families—those constituting the bottom fifth of all households—held 3.8 percent of the nation’s income before taxes and 4.5 percent after. The richest household quintile, on the other hand, had their income share reduced from 54.6 percent to 51.3 percent. The richest of the rich—the top 1 percent—had their income share reduced from 16.8 percent to 14.8 percent. In considering federal taxes, then, it is fair to con- clude that some income redistribution favoring those in need occurs, although not a very impressive amount. And, clearly, the main instrument of that redis- tribution is the federal income tax.38

Taxes that disproportionately burden the poor are called regressive. In the United States, a primary example is the sales tax. Levied by most states on most purchases, the sales tax is fixed: Everyone pays the same rate. When buy- ing a computer, for example, the consumer, rich or poor, pays the same sales tax percentage. In some states, the sales tax is as low as 2 percent, in others as

Table 7.4 Real Tax Burden of Major Federal Taxes by Income Group, 2007

Income Group

(Quintiles)

Personal Income Tax

Burden (%)

Social Security Tax

Burden (%)

Corporate Income Tax

Burden (%)

Total Federal Tax

Burden (%)

Bottom fifth –5.0 7.3 1.2 3.4

Lower-middle –2.8 8.9 1.1 7.3

Middle 2.8 10.7 0.9 14.4

Upper-middle 6.8 10.8 1.2 18.8

Top fifth 14.5 6.9 4.2 25.9

All 10.2 8.3 3.0 21.7

Top 1 percent 19.4 1.7 9.9 31.2

Source: Urban Institute—Brookings Institution Tax Policy Center, June 25, 2007, www.taxpolicycenter.org/taxfact.

Chapter 7208

high as 8 percent. While the tax is fixed, however, the resulting burden isn’t, as it takes a greater proportion of the incomes of those on the low end of the income scale than it does from those with higher incomes.

Most taxes fall somewhere between the extremes of progressivity and regres- sivity. The payroll tax that finances Social Security is a good example. In 2011, all workers paid the same 4.2 percent of their earnings up to $106,800, with earnings above this limit untaxed. Thus, workers who earned $106,800 a year paid the same annual tax ($4485.60) as those earning $200,000, or $10 million, a year—clearly, regressivity at work. Nevertheless, Social Security is generally perceived as redistributive on its allocative dimension since the benefits pro- vided to those earning the smallest amounts are more generous, proportionately, than to those who earned at higher levels. At present, for example, retired low- wage earners receive 58 percent of their former monthly wages, whereas aver- age earners receive 44 percent, and high-income earners receive 22 percent. The Social Security system is also redistributive between generations because pay- ments to the presently retired come from the Social Security Trust Fund, which is supported by the current generation of workers. When we examine the actual burden of the Social Security tax on different income classes, as we do in Table 7.4, it is clear that the wealthy, who could afford the most, are taxed the least. While the overall impact of the Social Security tax on all workers is 8.3 percent, for the top fifth of taxpayers, it is just 6.9 percent.

The regressive features of Social Security make it considerably less effec- tive than the income tax as a means of redistribution. While the income tax is progressive because it exempts low-income people and has a progressive rate structure (10 to 35 percent), the Social Security tax clicks in at the first dollar earned and exempts high incomes—incomes over the $106,800 wage base are not taxed. Second, the Social Security tax burdens ordinary taxpayers who rely on their wages and salaries for a living since it is levied only on payrolls (i.e., earned income) and therefore exempts income from other sources, like invest- ments. While this is in line with the program’s character as “insurance” against interruptions in work-related income, it results in full taxation for working people and only partial taxation for those who are wealthy enough to get in- come in other ways. The more affluent—those who typically enjoy nonwork income such as capital gains, dividends, and significant family gifts—pay no

Capsule 7.6 Code of Good Conduct

The tax code has become the lawmaker’s code of good conduct. Way back during the reigns of FDR, Kennedy, Johnson, and, yes, even Nixon,

if the government wanted to support some worthy

purpose, it funded a program—along with some (of-

ten inadequate) mechanism for administering it and

judging its success. But that was before “spending”

became a curse and “tax cuts” a blessing. Spend-

ing has been deemed woefully inefficient, resulting

in large, unresponsive government bureaucracies

that consume much of their money in overhead

and redundant activity. Tax cuts, by comparison,

are simplicity itself—the money stays right in your

pocket, and you can spend it as you please, with

maximum flexibility and efficiency. So these days if

politicians want, for example, to increase the supply

of affordable, quality day care, they don’t fund and

license daycare centers. Instead, they give parents

a tax credit so that they can make arrangements on

their own.

From “Go Figure” by Jodie Allen as appeared in The New Republic, July 31, 2000. Reprinted by permission of Jodie T. Allen, a senior editor

for the Pew Research Center.

The Mode of Finance: Sources of Funds 209

Social Security taxes on that income. Tax experts point out, finally, that the employers’ contributions to Social Security taxes are substantially passed on to consumers (through higher prices) and employees (through lower wages), further aggravating the regressive aspect of the program.39

So far, we have been examining federal taxation. But what is the impact of the overall tax system—the impact of federal and state and local taxes— on the distribution of income? Although economists have long debated this question—and the methodologies appropriate to answering it—the general consensus is that, on the whole, it is mildly progressive, due mainly to the very powerful impact of the federal income tax. As the federal tax burden on the rich has declined, however, first during the Reagan supply side years of the 1980s and then during the Bush tax cut years of the early 2000s, and as regres- sive taxes have increased, particularly state and local sales taxes, the overall tax burden has become significantly less progressive.

Studies by the Congressional Budget Office (CBO), for example, that track tax impacts have found a decided pro-rich trend in effect since the 1980s, and a resulting increase in income inequality. CBO figures show that the gap be- tween rich and poor, and between the very rich (top 1 percent) and everyone else, is as large today as it was on the eve of the Great Depression. And while all groups have enjoyed increased real incomes since the Reagan years, in- comes have grown fastest for the affluent. The income of the poorest fifth of American families, for example, has barely increased over the past thirty years while the increase for the top income fifth rose by over 50 percent. For the very affluent, the picture has been even more dramatic, with the top 1 percent of all households more than doubling their incomes.40

Social Earmarking

A broad body of policy analysis has examined social welfare financing in terms of “fairness,” that is, in terms of issues of equity, redistribution, and antipov- erty. More recently, the role of tax policy in influencing other aspects of social welfare has drawn considerable interest. Tax laws have been examined as a form of intervention (“social engineering” to critics) that can advance specific objectives in a variety of ways. The way taxes affect individual as well as orga- nizational behavior, for example, has been increasingly recognized. So too has the way tax systems focus revenues on special social needs.

Tax revenues can be designated for either general or specific purposes. “General revenues,” such as those provided by federal and state income taxes, finance the broad range of governmental operations. Special-purpose taxes, of- ten called “earmarked” or “dedicated” taxes, are restricted to narrowly specified activities. The Social Security payroll tax is the best-known example, although in recent years, policymakers at all governmental levels have enacted numer- ous self-financing programs (i.e., programs that provide their own revenues).

Pairing new taxes with new spending has been popular because it permits programs to be adopted or broadened without increasing budget deficits (at the federal level) or threatening spending limits (in the states). Earmarking, in addition, makes clear the connection between dollars raised and services pro- vided. Taxpayers can see where their money is going, something that isn’t pos- sible with general taxes. Experience with Social Security—as well as excises such as gasoline taxes that are linked to road improvements—indicates that such designation, especially in times of fiscal austerity, may be one of the few ways available to expand governmental activities.

Chapter 7210

An increasing number of designated taxes have been earmarked for social welfare. Many states utilize alcohol beverage taxes for social programs, espe- cially education. Some have financed programs for the blind with amusement taxes. And in several, alcohol and tobacco taxes support prevention and treat- ment efforts. California voters, for example, passed Proposition 10 in 1998, in- creasing tobacco taxes to provide significant new revenues, currently about $500 million annually, to help expand early childhood programs and to improve the availability of health and developmental services for the state’s young children and their families. More recently, California voters passed an initiative imposing a “millionaires tax” earmarked to improve services for the mentally ill.

Gambling taxes, lotteries, and other quasi-tax measures similarly focus revenues on particular social ends. Since 1980, for example, a majority of the states have raised fees on marriage licenses, birth certificates, and divorce de- crees to create Children’s Trust Funds to support programs to prevent abuse, neglect, and family violence.41

At the local level, cities such as San Francisco and Boston have required com- mercial developers to put money into low-income housing and childcare trust funds on the principle that new office buildings create social needs. Other com- munities have added surcharges to property and sales taxes to support libraries and programs to serve the homeless, or have created special taxing districts to finance programs for children. Although not dissimilar in their legal structure from school districts, and other special-purpose districts, these taxing entities expressly generate revenues for health and social services. Palm Beach County voters, for example, created an independent taxing district in 1986 establishing a Children’s Services Council to plan, coordinate, fund, and evaluate programs for children. Among the priorities defined by the Council in its first year of operations were substance abuse prevention, childcare, and teen-pregnancy programs.42

Earmarking places the burden of program support on a clearly identifiable source of payment. We have noted some of the general implications of this arrangement for contributory programs, where the taxpayer is also the recipient of benefits, as in Social Security. In programs where taxpayers don’t benefit directly, earmarking may elicit less popular support, although creatively link- ing taxes and programs can substantially allay taxpayer resistance.

Attaching revenues to programs, however, can be hazardous if it under- mines the ability of policymakers to utilize revenues flexibly for priority needs. Linking programs to special taxes makes an overall, integrated, planning, and budgeting process difficult to maintain. Earmarking, in addition, is not likely to help disadvantaged groups with poor reputations, or unpopular causes— voters are hardly likely, for example, to target taxes for welfare payments or affirmative action. Finally, the automatic nature of earmarking means that the magnitude and character of program spending may be driven by the amount of money generated, rather than by changing needs.

Taxes and Behavior

Traditionally, public policy attention has focused on the ways taxes influence economic (particularly saving and investment) behaviors. But taxes also af- fect important social behaviors, such as when people retire, how much they save for it, whether they have children or care for dependent relatives, and their philanthropic activity. In contrast to regulatory legislation (such as Pro- hibition) that directly outlaws certain kinds of behavior, taxes influence how people act through economic incentives. Certain activities are discouraged by making them costly; others are encouraged by making them inexpensive.43

The Mode of Finance: Sources of Funds 211

Activities that are socially detrimental can be reduced by heavy taxes; desir- able behaviors can be promoted by light taxes, or no taxes at all.

Taxation, for example, has been used internationally as a means of popula- tion policy. Along with children’s allowances, tax policies can reward larger families. In France and the Netherlands, most notably, tax rates at all levels of income are negatively correlated with family size.44 Even in the United States, the federal income tax provides a modest reward for extra children through the personal exemption, child tax credit, and childcare tax deduction. Although taxes can attempt to advance “pronatalist” policies, they can equally promote “reproductive nonproliferation.” In 1979, for example, China enacted its first baby tax on couples having three or more children, imposing wage reductions up to 10 percent for the birth of a third child and as much as 20 percent for a fifth child. Small families, conversely, were rewarded with low taxes and preferential treatment with respect to pensions, housing, jobs, and schooling.45

Income tax deductions can be used to encourage families to care for ill or dependent relatives. Long-term care is an overriding need of many older peo- ple. Although programs such as Social Security, Title XX, and Medicaid pro- vide important public support, many families caring for their parents, or other relatives, still face enormous financial and emotional burdens. In recent years, the magnitude of these costs, and the belief that home care is better than in- stitutional care, has resulted in many tax proposals. But only a few have been enacted. Most notably, Congress changed the childcare credit in 1971 into the dependent-care tax credit to encourage at-home care. Several states also give tax relief to families caring for elderly relatives.

Tax policy can encourage other salutary behaviors. California, for example, permits taxpayers to deduct child adoption expenses that exceed 3 percent of their adjusted gross income; this limitation is waived for families adopt- ing “hard to place” (disabled or older) children. Work be- havior is frequently encouraged by making different kinds of work-related expenses deductible. And several states have devised tax schemes to help parents save for their children’s college educations.

Just as tax policies encourage some activities, they dis- courage others. Sales (or excise) taxes, in particular, are widely used to control behaviors that are viewed as harmful. In the United States, for example, excises on cigarettes and alcohol are levied at federal, state, and local levels. Although such taxes are often simply a way of raising additional revenue, or “punishing” people for bad conduct (thus the phrase “sin tax”), they also serve as a behavioral dis- incentive, rewarding those who eschew an undesirable, socially damaging prod- uct. In recent years, for example, many states have considered “fat taxes” on soft drinks and fast foods, both to raise revenues for health programs and to encourage consumers to shift their eating choices toward healthy alternatives. According to Mark Bittman in the New York Times, for example, taxes increasing the price of high-sugar soda drinks by 20 percent would likely result in a 20 percent decrease in soda consumption. This, in turn, could prevent, over a decade, one and one- half million people from becoming obese, reducing by 400,000 the number of dia- betes cases and saving about $30 million in medical and related expenses.46

Alcohol and tobacco “sin taxes” have been a major source of revenues throughout the world for many years. Beverage taxes are used worldwide to control alcohol consumption, and Finland, the Czech Republic, France, Nor- way, Sweden, and Switzerland all explicitly utilize excises to reduce drinking. Furthermore, in these countries and others, beverages are taxed so that those

Human Behavior

Practice Behavior Example: Social workers

critique and apply knowledge to understand

person and environment.

Critical Thinking Question: What are some unintended consequences of behavior-

shaping taxes?

Chapter 7212

having the highest alcohol content are subject to the heaviest levies, this pre- sumably in an effort to shift consumption from hard liquor to beer and wine.47

In the United States, the federal government has levied alcohol excises since the 1790s. Prior to the imposition of the federal income tax in 1913, alco- hol excises constituted the federal government’s main revenue source, supply- ing nearly two-thirds of all Treasury receipts. In recent years, given the clear evidence of a positive correlation between social costs and drinking behavior, taxes have increased. While it is true that drinking habits are not easily changed, data suggest that alcohol taxes do have an impact on sales and use. While fed- eral tax charges on beer, wine, and hard liquor haven’t changed (meaning that they have been falling in inflation-adjusted terms) in over a decade, state and local rates have. As a result, consumption has been reduced and, concurrently, so have alcohol-related problems such as auto fatalities and cirrhosis mortality. The reductions, so far, have been modest but real.48 Although critics argue that alcohol demand is relatively “inelastic”—that is, not responsive to price, espe- cially for heavy users—support for tax increases continues to grow.

Other detrimental behaviors can also be restrained. Cigarette taxes have increased as the association between tobacco and disease has become known. Between 1982 and 2006, the federal excise tax on a pack of cigarettes increased from 8 cents to 39 cents. And all 50 states tax cigarettes, with the rate per pack ranging from a low of 17 cents (Missouri) to a high of $4.35 (New York).49 In addition, nearly 400 local governments levy cigarette taxes. In Norway, taxation is near draconian, with 85 percent of the price of a pack of cigarettes composed of taxes and fees. In Canada, the price per pack is approaching $7 in some prov- inces.50 The effects in all countries have been dramatic: Since 2000, for example, tobacco sales in the United States have dropped 15 percent. According to the Coalition on Smoking and Health, every 10 percent increase in the price of ciga- rettes decreases cigarette consumption among young people by about 4 percent.

Taxes on alcohol, cigarettes, gambling, and junk food are often attacked for their regressive nature, and it is undeniable that they do impose a far greater burden on people with lower incomes. It is estimated, for example, that alco- hol taxes absorb five times as much of the income of households with incomes under $15,000 than they do of over-$50,000 households. Nevertheless, it is shortsighted to dismiss the social value of excise taxes. First, these taxes can be enacted as part of broader tax packages that include balancing progressive measures. Second, excise taxes can themselves be progressively structured: Alcohol taxes, for example, can be linked to the price of the beverage so that drinkers of an expensive scotch such as Chivas Regal pay higher rates than

Capsule 7.7 Wine for Welfare

Senator Strom Thurmond, R-S.C., introduced leg-islation yesterday that would raise excise taxes on wine to what they are for distilled spirits, which

would double or triple the rate, depending on the

alcohol content. “Generally I do not favor increased

taxes,” Thurmond said, “but in this era of shrinking

budgets, the only way in which we will be able to

finance adequate, impartial and trustworthy research

into alcohol-induced diseases such as hypertension,

breast cancer and birth defects is to generate a new

revenue flow that will be used specifically for investi-

gating such killers.”

From “Thurmond Tries to Bar New Labels for Wine” from San Francisco Chronicle, February 22, 1999. Copyright 1999 by San Francisco

Chronicle. Reproduced with permission of San Francisco Chronicle in the format Textbook via Copyright Clearance Center.

The Mode of Finance: Sources of Funds 213

those imbibing Bud Lite. Finally, although sin taxes may fall disproportion- ately on poor and middle-income U.S. residents, these groups make up most of the victims of cigarettes and liquor. Increased taxes may be burdensome; more importantly, however, they save suffering and lives.

EMERGING ISSUES: FINANCING SOCIAL SECURITY

One of the most contentious and important twenty-first-century social pol- icy issues involves the financing of Social Security, America’s largest social program, and one that directly affects nearly all of us, either as taxpayers who fund the program or as recipients who benefit from it. Since its inception in 1935, employers and employees have paid nearly $5 trillion in employment (payroll) taxes into the Social Security Trust Fund, and more than $4.5 trillion have been paid out in benefits.

Social Security’s financing dilemma is the actuarial certainty that the pro- gram’s tax revenues, large as they are, will not be sufficient to pay all promised benefits. While there is currently a $2.6 trillion surplus in the Social Secu- rity accounts, the long-term picture is bleak. This is because revenues over the next decades will increase far less rapidly than spending. Ultimately, unless changes are made, annual expenditures will exceed annual revenues, and the Trust Fund will be diminished as it is called upon to cover the difference. Around the year 2033, according to the best predictions, available revenues will not be enough to cover the full cost of benefits.51

This long-term funding shortfall, in part, reflects the growing longevity of the elderly, who are living an increasing number of years after retirement. It also reflects the overall size of the baby-boom generation, that enormous cohort of post–World War II babies who are just starting to leave the workforce. A large number of new retirees, of course, would not be a problem if the growth in their numbers was paralleled by growth in the number of working taxpayers. Unfortunately, the ratio between those workers paying into Social Security and those retirees receiving benefits from it is ever the more “adverse.” The ratio, indeed, called the “social security dependency ratio” by economists, will be just 2.1 to 1 in 2030, meaning that only slightly more than two taxpayers will

Capsule 7.8 Birthdays and Taxes

Many American women, mindful of the re-quirements of the tax code, choose to deliver their babies in time to enjoy a tax benefit. Specifi-

cally, they use cesarean section or induced labor

to assure birth in the last week of December-rather

than the first week of January.

• A child born on December 31 allows the parents

to enjoy all the tax benefits of being born anytime

during that year—while a child born one day later,

in the next calendar and tax year, provide no

tax benefits for the previous year.

• Statistics show that the number of births in the

last week of December is greater than those in

the first week of January.

The tax benefits to parents of December

births take three forms: the personal exemption,

the earned income tax credit, and the standard

deduction.

From “Of Taxes and Birthdays” Macroscope, “Of Taxes and Birthdays,” Investor’s Business Daily, July 1, 1999.

Chapter 7214

be available to support each beneficiary. The ratio is more than 3 to 1 today. And it was approximately 5 to 1 back in 1960.

Fixing the long-term financing gap has engaged the interest of a large num- ber of policy analysts and during the administration of George W. Bush raised the perennial battle between left and the right on the role of private markets versus government. To simplify a complex debate, reformers on the right gen- erally have viewed Social Security’s salvation in privatization—in transform- ing the program from a public tax-financed operation to one based on private investment—while liberal and progressive reformers see the need to retain So- cial Security’s basic features while broadening its funding base, either through higher taxes, or better public investment of Trust Fund assets, or through some subsidy from the general federal budget.

As with welfare reform, the radicals in the Social Security debate are con- servatives who, in this case, have called for replacing “Social Security as we know it” with a marketized pension system, a system that would permit citizens to divert all or part of their social security taxes into “personal retirement ac- counts.” Instead of a universal Social Security Trust Fund incorporating every- body’s taxes and investing in U.S. Treasury Bonds, citizens could invest their tax dollars however they choose. They would have to invest for retirement; the accounts are mandatory, but they would select the kind of investment to make.

This form of privatization, it must be noted, is different from the kind described in Chapter 6. Traditionally, the term privatization has referred to government utilizing a private agency or company to carry out public business— contracting with a community agency, for example, to deliver meals on wheels to the homebound elderly, or selecting a private school to provide special edu- cation to needy children. Privatizing Social Security is different. Rather than relying on private organizations to administer programs for the public, it entails giving workers choices to control their own social security investments.

The primary argument in favor of private investments has been that it would provide citizens a far better rate of return on their money than Social Security. Given the robust growth over much of the past fifty years in private investments such as those in the major stock market funds, privatization advocates—at least until the market crash of 2008—considered a reliance on Social Security to be an anachronism. Young people, in particular, it was argued, were being cheated by a system that provides them very modest returns on their tax dollars.

The argument against privatization was that it is risky—no one is guaran- teed a fixed benefit—and is far less fair, since private accounts give no special attention to the needs of vulnerable groups. As the recent economic downturn made clear, Wall Street investments can rise as significantly as they can fall. For advocates of the status quo, moreover, privatization represents a dangerous abro- gation of the fundamental principles that made Social Security such a successful

Capsule 7.9 Boomer Files

The nation’s first Baby Boomer, Kathleen Casey-Kirschling, today filed for her Social Security retirement benefits online. Ms. Casey-Kirschling, who

was born one second after midnight on January 1,

1946, will be eligible for benefits beginning January

2008. As the nation’s first Boomer, Ms. Casey-

Kirschling is leading what is often referred to as

America’s silver tsunami. Over the next two decades,

nearly 80 million Americans will become eligible for

Social Security benefits, more than 10,000 per day.

Social Security Administration News Release, October 15, 2007.

The Mode of Finance: Sources of Funds 215

instrument of income security over the years. While it is acknowledged that modifications will have to be made in order to assure Social Security’s long- term fiscal health, supporters of the present system call for reformist, incremen- tal change. It has been proposed, for example, that the retirement age be raised, as well as the level of wages on which taxes are paid. Some have called, in ad- dition, for small increases in the tax rate or a recalculation of the cost-of-living formula to reduce future benefits or for public authorities to invest part of the Social Security Trust Fund in private stocks and bonds, much like many states do when investing the assets of their public employee retirement funds.

The major points of contention between partisans of privatization and those who support the basic features of today’s Social Security program reflected radi- cally different visions of what social welfare ought to be in a modern capitalist economy. As in other areas of debate, a fundamental clash exists between indi- vidual and collective values, between private action and public responsibility, and between redistribution and individual equity. While proponents of private accounts relied on the marketplace ethos that benefits should be calibrated to one’s acumen in choosing wise investments, partisans of the present system see the “social” component of Social Security as its essential, primary, raison d’être. Social Security guarantees security, promising a basic level of support for all workers in their old age as well as a measure of redistribution to help women, mi- norities, and low-wage earners in general. For liberals and progressives, a social retirement system is not principally a matter of pension benefits commensurate with previous earnings or stock market investments, but rather a matter of fur- nishing a pension adequate to meeting old people’s basic needs. Social Security taxes, in this way, express society’s collective responsibility, while Social Secu- rity benefits express society’s common commitment to decency for the elderly.

To use insurance terminology, Social Security pools risks and responsi- bilities across the workforce and over the generations. Taxes go into a national fund: the Social Security Trust Fund. They are protected against the vagaries of the stock market. And they fund benefits utilizing a statistical algorithm that provides for “social adequacy,” that is, that provides higher retirement returns to lower-income earners. The basic benefit formula, in other words, incorpo- rates a community safety net: Social Security payments correlate not only to contributions (the taxes paid in), but also to need.

How significant is the need element in the benefit formula? It is very impor- tant. Low-income workers, to use the technical term, receive a specially high

Capsule 7.10 Privatizing Social Security: Two Views

Social Security promises today’s working people a dismal return on their lifetime of burdensome tax payments. But there is a better way. Workers could

be empowered with the option to save and invest

what they and their employers would otherwise pay

into Social Security into personal savings accounts.

Those accumulated funds would pay all workers of all

income levels much higher benefits than Social

Security even promises, lest along what it could pay.

— Newt Gingrich

Private accounts in place of Social Security are

risky, expensive to administer and require huge

increases in the federal debt. Social Security is an

insurance program, not an investment program. It’s

risk free and inflation proof—something neither in-

vestments, not even most pensions, can guarantee.

— John Rother

—Newt Gingrich, “Unleashing Growth and Innovation to Move Beyond the Welfare State,” November 2011;John Rother, AARP Executive

Vice President, April 28, 2010.

Chapter 7216

“replacement ratio.” As already noted, low-income earners receive retirement benefits worth more than half the amount of their previous income, whereas high-income earners—those who paid in at the maximum tax level—receive a return of just 22 percent. This produces a major degree of redistribution clearly differentiating Social Security from the individualism embodied in individual accounts. Social Security, indeed, because of its magnitude, is the largest pro- gram of income redistribution in the United States, and a far more significant antipoverty program for its recipients than public assistance.

A core issue separating right and left, therefore, is the degree to which Social Security should be retained as an instrument of redistribution. Under privatized financing, benefits would reflect the return on one’s own chosen investment; participants make individual choices and benefit or suffer accord- ingly. Under government financing, participants share important obligations to one another as part of a group, receiving benefits based not on the success of their individual portfolio, but on the basis of the overall program. Under gov- ernment financing, a safety net is insured for the poor, with much of the money that high earners pay into the system transferred to low earners.

As the Social Security debate has emerged into the broad political realm, the harder edges of the controversy have been somewhat muted. Privatization advocates have recently stressed the compatibility of private and public pro- grams. Denying a wish to abolish Social Security, many have called for “partial privatization,” for keeping the payroll tax largely intact but permitting a por- tion of it to be shifted to private investments. Such a two-tiered system, it is argued, would in the future secure the advantages of the stock market while still protecting everybody’s basic retirement nest egg. For opponents, though, even a partial diversion of tax funds constitutes a dangerous “slippery slope,” easily leading to the ultimate dismantling of a guaranteed retirement income.

One thing is clear. Privatization represents a dominant theme in the “do it yourself” social policy of recent decades that elevates individual responsibility and market values over social rights and community mindedness. Like school voucher plans, retirement privatization, whatever its dimensions, is likely to have very different results for different people. While it could provide some Americans expanded resources in their old age, it could also erode the retire- ment incomes of those lowest on the income ladder. The precipitous decline of stock values in 2008 indeed, took some of the wind out of the sails of privatiza- tion, at least for the time being.

Whatever its merits or dangers, the privatization is hardly a solution for So- cial Security’s fiscal woes. The Social Security “crisis” is basically a financial crisis, and if Social Security taxes—fully or partially—are shifted to private accounts, then the gap between future program income and future program expenditures increases. However well individuals may do with their private accounts, the financial basis of the common fund is depleted unless some spe- cial arrangements are made to replenish it with new taxes, or unless benefits are cut to bring them in line with decreased revenues.

SUMMARY

Funds to pay for social benefits are obtained through taxes, voluntary giving, and fees. Reflecting the “mixed-economy” nature of the American social welfare state, tax policies powerfully influence private activities and personal behav- iors. Social Security financing is discussed as a current area of policy conflict.

217

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

1. How much of their income do the bottom 40 percent of American wage earners pay in federal income taxes?

a. 35%

b. 25%

c. 15%

d. Nothing

2. The percentage of philanthropic funding coming from individuals:

a. 75%

b. 50%

c. 25%

d. 10%

3. One reason for requiring recipients to share in paying the cost of service:

a. User payments increase stigma.

b. User payments restrain overutilization.

c. Voluntary fees offset employer contributory schemes.

d. Sliding scales increase accountability.

4. Progressive taxes, as a percentage of income:

a. Are highest for the middle class.

b. Are highest for the poor.

c. Are highest for the wealthy.

d. Are the same for all income groups.

5. Not a “tax expenditure”?

a. The charitable deduction

b. The earned income credit

c. The individual mandate

d. The fringe benefit exclusion

6. Helped dampen the Social Security privatization debate?

a. Inflation

b. The Wall Street “bull market”

c. Unemployment

d. The decline in stock values that occurred after 2008.

C H A P T E R 7 R E V I E W

Log onto MySearchLab to access a wealth of case studies, videos, and chapter and EPAS assessment. (If you did not receive an access code to MySearchLab with this text and wish to purchase access online, please visit www.MySearchLab.com)

Succeed with

7. What are the strengths and weaknesses of private versus public funding to pay for social welfare needs?

218

* = CSWE Core Competency Asset ^ = Case Study

Explore and Assess

Explore These Assets

Interactive Case Study: Comparing Economic Policy

Timelines: Growth of the Budget and Federal Spending

Interactive Case Study: Where the Money Goes

Interactive Case Study: Evolution of Political Parties in the U.S.

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Bailout Hearings

Government Bails Out Automakers

Tea Party Victories Concern for GOP (2008)

Real ID (2008)

American Revolution as Different Americans Saw It

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Andrew Carnegie, “Wealth,” North American Review (1889)

Huey Long, “Share Our Wealth” (1935)

^ Baby Boomers: The Story of the Johnsons

^ Adventures in Budgets and Finances

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M Y S E A R C H L A B C O N N E C T I O N S

219

x

x xx

Competencies in This Chapter (with Practice Behaviors)

Centralization, Decentralization, and their Ideologies 220

How the Money Flows 223 Transfers and Politics Transfers and Policy Analysis

How Transfers are Conditioned 227 Program Conditions Financial Conditions Beneficiary Conditions Procedural Conditions

Devolving Public Welfare 233 Welfare Reformed

Terminating the Guarantee Time Limits Race to the Bottom? Welfare to Work The Responsibility Agenda Evidence and Directions

Emerging Issues: Immigrants, Social Policy, and the States 246

Summary 251

Practice Test 252

MySearchLab Connections 253

The Mode of Finance: Systems of Transfer

8

C H A P T E R O U T L I N E

Professional Identity

Ethical Practice

Critical Thinking

Diversity in Practice

Human Rights & Justice

Research-Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

Chapter 8220

The powers not delegated to the United States by the Constitution, nor prohib-

ited by it to the States, are reserved to the States respectively, or to the people.

10th Amendment to the U.S. Constitution,

December 15, 1791

People want government money, they want higher standards, they want greater

accountability. None of those things in most places come from local control.

Chester Finn, President, The Thomas B. Fordham Institute, 2008

Quoted in the New American Daily Update, October 10, 2011

The political system of the United States divides power in two major ways: horizontally, among the executive, legislative, and judicial branches, and verti- cally, among the different levels of government. In this chapter, it is the vertical dimension that is of primary concern because financing the U.S. welfare state is substantially a matter of national, state, and local relationships. And although the federal government, given its national scope and institutional authority, is certainly preeminent among the three, jurisdiction over the public programs and services that meet this country’s social needs is broadly distributed. Some programs are exclusively the responsibility of one level. Social Security, Medi- care, and veterans programs, for example, are entirely federal in their fund- ing and operations, whereas General Assistance, libraries, and juvenile justice are principally state and/or local. Other programs operate intergovernmentally, under combined authority. States, for example, share substantial authority with the federal government in Medicaid and child welfare, whereas federal– city partnerships govern programs for housing and the homeless.

The balance of authority over social welfare programs typically parallels the balance of financial responsibility. Although numerous arrangements exist for transferring funds from their source of origin—the governmental unit collect- ing revenues—to the point of service delivery—the governmental unit spending them—it is usually the primary funder that exercises primary control. “He who pays the piper calls the tune” is quite the appropriate aphorism.

Two major questions of finance that are paramount in structuring inter- governmental arrangements for social welfare are how money flows and how money is conditioned. The question of flow deals with the fashion in which public moneys are transformed from being revenues to being outlays. This is often described in terms of funding streams. The question of conditions deals with the priorities, stipulations, and regulations that are placed on the flow of money from one governmental level to another.

Before one can understand the nature of these fiscal choices, however, their ideological context must be considered.

CENTRALIZATION, DECENTRALIZATION, AND THEIR IDEOLOGIES

Given the size and diversity of our federal system, the balance between cen- tralization (power concentrated nationally) and decentralization (power de- volved to state and local governments and institutions) is a perennial issue. In the design of social welfare policy, the values and assumptions related to de- centralization and centralization are generally expressed in choices concern- ing pluralism versus uniformity, small versus large. During much of the past

The Mode of Finance: Systems of Transfer 221

quarter century, ideals of decentralization have been ascendant. Starting in the Reagan era, important service responsibilities have been returned to the level of the states and localities. Although these units have been generally eager to increase their program authority, their record with respect to social investment and social sensitivity has been mixed. While the consequences for the poor of reduced federal control are far from uniform, the combination of decentraliza- tion and funding restriction has often been detrimental for those dependent on public assistance and social services.

This is not to deny the values of decentralization. Local governments are often more knowledgeable than large centralized units about problems in their areas and more responsive to the special needs of their constituencies. In addi- tion, small units can more easily experiment, and if they fail, the scope of the consequences is limited. Indeed, losses suffered through the failure of one unit’s experiment may be compensated for by the lessons of successful alternatives. Finally, there is a quality metaphysical about small localities that is appealing. They lend themselves more readily to visions of the gemeinschaft marked by warm, meaningful relationships and a sense of belonging to a vibrant, caring, manageable civic community. As Richard Thompson Ford has stated,

Local and state governments can be more innovative, daring, and proactive—in short, more progressive—than even the liberal Congresses of distant memory. A growing number of state legislatures have pio- neered public-school finance reform, working to ensure that kids from poor neighborhoods are not stuck in inferior schools. Many states have civil rights guarantees that are stronger than those under federal law, es- pecially with respect to sexual orientation discrimination.1

Conservative theorists, in Europe and America, have articulated thoughtful visions of the role localities can play in the modern welfare state. The idea of “subsidiarity” has gained particular attention in Europe as social policy there has evolved into a three-tiered system of governance with powers divided among Eu- rope-wide institutions such as the European Union, national governments, and regions and communities. Subsidiarity refers to the principle that although dif- ferent public functions are appropriate for different governmental levels, action should be carried out at the lowest level where it can be performed effectively.

The devolution argument, as we have seen, is advanced not only by federalists who wish to see more authority given to states and localities but by conservatives who extol the responsiveness and efficiency of private institutions—individuals, families, voluntary associations, and the market- place. Libertarian theorists, for example, often call for limitations on all levels of government through tax limits and privatization. Both versions of decentral- ization see bigness as the enemy; both view society’s smaller, more “organic” units as natural reflections of the true public interest.

Although many of these arguments are cogent, they often ignore the limi- tations of decentralization. As Chapter 2 indicated, the national welfare state emerged as a result of the incapacity of local institutions—public and private— to address twentieth-century problems of poverty and insecurity. In the United States, the federal government—not states, localities, private charities, or the marketplace—responded to the crisis of the Great Depression, securing broad economic gains for ordinary citizens. It was the federal government again, in the 1960s, that advanced civil rights and social protections for the impover- ished and the excluded. And in response to 2008 recession it was the federal government that extended unemployment benefits to 99 weeks.

Chapter 8222

National action has been necessary for many reasons. For one thing, localism can be parochial and oppressive. Privacy and freedom may shelter more securely in the cold impersonality of large centralized units. As McConnell argues,

Impersonality is the guarantee of individual freedom characteristic of the large unit. Impersonality means an avoidance of arbitrary official ac- tion, the following of prescribed procedure, conformance to established rules, and escape from bias whether for or against any individual. Imper- sonality, and the privacy and freedom it confers, may be despised, and the human warmth and community concern for the personal affairs of individuals characteristic of the small community preferred. Neverthe- less, the values involved are different, and are to a considerable degree antagonistic.2

The defense of minority interests and civil rights within small units is often more difficult to achieve than within larger units. In small units, it is easier to weld a cohesive majority that may disregard the interests of others or that bring great pressure for conformity to bear. “States’ rights” ideologies, for example, long justified the powers and privileges of whites in the South. Through the 1970s, “states’ rights” remained the battle cry of segregationists such as George Wallace, Orval Faubus, and the racist White Citizens’ Coun- cils in Mississippi. Up until the present, African–American and other minority communities—whether based on ethnicity or sexual preference or disability status—have looked to the federal government not only to support their rights against hostile or indifferent states and localities, but also to promote programs of social and economic assistance. In the American experience, larger central- ized units have been decidedly more progressive and reformist.

National units, moreover, command greater resources; some problems are simply beyond the scope of secondary bodies. State and local revenue sys- tems are often deficient. Constrained by regressive tax systems, the fear of los- ing businesses and affluent taxpayers to rival low-tax jurisdictions, and an increasing proliferation of spending limits, they lack the wherewithal to ad- dress pressing needs. Their technical and administrative capacity, despite vast improvements since the 1960s, are often inadequate, with poorly trained and badly paid personnel as much the rule as the exception. State and local units, by their very nature, can do little to affect problems of national scope. Redis- tributive programs, for example, must be financed by progressive taxes levied by large governmental units. Only the federal government can levy taxes in all jurisdictions at once, so only the federal government is able to bring about sig- nificant redistribution in income or services.

The decentralization of authority also results in a troubling degree of variation in local social welfare ef- forts. Having significant diversity in state and local activi- ties may reflect a salutary degree of pluralism, but it also blocks a national approach to problems and can result in substantial discrepancies in benefit arrangements from place to place. Perhaps the most dramatic example of this is the variation in welfare payments. Over the past twenty- five years, for example, maximum benefits for needy families in Alaska have been five times the level in Ala- bama, which, in part, reflects different costs of living. Al- though the federal government modifies this discrepancy a bit through the food stamp program, which has uniform

Practice Contexts

Practice Behavior Example: “Social workers

continuously discover, appraise, and attend to

changing locales, populations, scientific and

technological developments, and emerging

societal trends to provide relevant services.”

Critical Thinking Question: Why is ideologi- cal context so important to understand when

thinking about systems of financial transfer?

The Mode of Finance: Systems of Transfer 223

nationwide eligibility and benefit standards, the gap between high-payment and low-payment states in Temporary Assistance for Needy Families (TANF), and other program areas, remains dramatic.

The more general critique of decentralization is that it tends to reduce the emphasis on helping the poor. Historically speaking, in this country, and in oth- ers, it has been national leadership that has evidenced the greatest degree of concern with society’s disadvantaged and vulnerable. Although it is difficult to characterize the multitude of state and local policies with glib generalizations, it is certainly clear that, for the most part, they have often been less than willing, and perhaps financially less than able, to undertake an effective social agenda.

HOW THE MONEY FLOWS

How, exactly, should the United States face the question of dividing political, administrative, and fiscal powers and responsibilities among governments at different geographical levels? Should policymakers rely heavily on national decision making, or should regional and local control be the rule? Can a sys- tem somehow combine the best features of both arrangements?

In establishing its own system of differentiation, the United States de- vised a unique answer to the question of structure and balance: American federalism. The federal division of powers between the national capital and the states, formulated in the Constitution in 1789, has remained the funda- mental legal framework of local–national relations. The concept, of course, has evolved considerably over the years. At first, it referred to an arrangement of “dual sovereignty” in which the different levels of government operated more or less separately, each with a large amount of autonomy. Today, federalism is characterized by a substantial measure of cooperative activity. Indeed, when we speak of federalism nowadays we are really speaking of intergovernmental relations, of different levels of government jointly formulating, operating, and financing domestic policies. The foremost instrument of modern federal rela- tions is the intergovernmental grant-in-aid, commonly known as federal aid.3

Federal grant programs express the common interest of localities, states, and the national government in addressing common purposes in a coopera- tive fashion. The federal government, taking financial leadership, provides money to states and localities for the conduct of particular types of programs. In this fashion, federal aid is both a fiscal and a policy device for collective decision making. The purpose of aid programs is defined by Congress, often

Today, federalism is characterized by a substantial measure of cooperative activity.

Capsule 8.1 Failing Grades on Child Protection

To be eligible for federal child welfare funds states must comply with a variety of service delivery and service outcome requirements. States,

for example, have to measure things like child

safety, child well-being, and the “permanency”

of out-of-home foster placements. Are children in

foster care protected from abuse and neglect? Do

they receive annual physical and dental checkups?

How long do they stay in placements? If they are at

home with a parent are their educational and mental

health needs being met?

A federal “report card”, the Child and Family

Service Review, measures outcomes such as these

state-by-state, assigning grades to each state. So

far, the results are not impressive. The first assess-

ment in 2003, assigned failing grades to each state

reviewed. A second review cycle, currently under

way, will tie continuing funding to the results.

Chapter 8224

in very broad terms, whereas actual program implementation is the respon- sibility of states and localities. And because states and localities run the pro- grams, and often share in their financing, they have a great deal of influence over their character. State and local participation, it is important to note, is fully voluntary. The core of the federal relationship, in other words, is built on cooperation, not coercion, in preserving local diversity within a framework of nationally shared values.

Although federal cash grants to states date back to 1879, their importance as a basic organizing instrument for social welfare didn’t emerge until the New Deal. When the Social Security Act became law in 1935, for example, all but two of its dozen or so programs were organized and financed through grants- in-aid. Aid to Dependent Children (AFDC), Aid to the Blind, and Old-Age Assistance, the three programs that established the United States’ basic pub- lic assistance system, were all formulated as grants-in-aid. Other titles of the act provided aid to states for maternal and child welfare services, for crippled children, and for vocational rehabilitation.

In the 1960s, the second major era in the development of the U.S. welfare state, Congress again relied on the grant-in-aid principle. Except for Medicare, all the principal social programs enacted as part of the Great Society followed the fed- eral format: financial aid from Washington in exchange for program commitments by states and localities. Lyndon Johnson, like Roosevelt before him, used federal money to promote national purposes by enlarging and diversifying the scope of state and local programs. During the 1960s, however, greater stress than before was focused on antipoverty and urban programs, and more and more federal dol- lars went directly to cities rather than (as before) almost exclusively to states. In some instances, indeed, such as the Community Action Programs (CAPs) of the War on Poverty, aid was funneled to private nongovernmental community organi- zations at the neighborhood level, bypassing both states and cities.

Today, the vast majority of America’s social programs are multilevel part- nerships. Only in a few areas of social welfare policy (mainly Social Secu- rity, programs for Native Americans, and veterans affairs) does the national government have sole responsibility. States, for example, are the responsible program partner in mental health, social services, and Medicaid. Local govern- ments take principal responsibility for operating aid programs in elementary and secondary education, community development, urban mass transit, and employment/training. State programs are generally administered at the federal level by the Department of Health and Human Services (DHHS), whereas city and county programs are generally administered by the Department of Housing and Urban Development.

As Table 8.1 indicates, grant policy has evolved somewhat fitfully over the past half century. During the years of the Great Society, the number, size, and relative importance of federal grants grew rapidly, with outlays more than tri- pling in the 1960s, making state and local governments increasingly depen- dent on federal aid as a source of revenue. While these figures may appear relatively stable, both as a portion of total welfare state spending and of state and local outlays, they actually portray a significant deterioration in the great system. This is because, for many years now, Medicaid, by far the largest grant program, has increasingly influenced total intergovernmental spending. So while the overall magnitude of expenditures seems relatively steady, the story excluding Medicaid is not so rosy. When Medicaid is deleted from the overall data, the federal grant portion of gross domestic product (GDP), and of state and local spending, has been steadily dropping.

The Mode of Finance: Systems of Transfer 225

While the level of grant support has waxed and waned, the principle of federal–state–local partnerships in social policy remains strong. Given the fun- damentally centralizing trends that characterize modern society, this is sur- prising. The endurance of the states is particularly surprising, given the many predictions over the course of the last 100 years that their days as viable units of government were numbered. In 1933, for example, Luther Gulick, an emi- nent scholar of government, wrote:

Is the state the appropriate instrumentality for the discharge of . . . important functions? The answer is not a matter of conjecture or delicate appraisal. It is a matter of brutal record. I do not predict that the states will go. I affirm that they have already gone.4

Gulick’s view represented a dominant theme of the Great Depression years, one that found the states unprepared to deal with the enormous economic and social problems facing the nation. The states, primarily rural-oriented, did not seem to have the financial, administrative, or leadership powers required to deal with the effects of the Depression, which fell most heavily on urban areas. And the centralization of power that occurred under Roosevelt, and later John- son, did significantly change U.S. politics, for a while at least, making “the White House, not the State House … the fountainhead of ideas, the initiator of action, the representative of the national interest.”5

Transfers and Politics

The power to implement and administer programs, it must be noted, carries with it not only a degree of control over major policy dimensions—the nature of provisions, the bases of allocations, and the systems of service delivery—but also political power. The transfer of program funds confers the ability to dis- pense benefits to a constituency, to hire and appoint staff, and to award con- tracts. Apart from programmatic choices, therefore, the transfer of funds among governmental units represents the exchange of important political resources.

The Great Society, revenue sharing, and block grants all illustrate how political coalitions are a consideration in transfers. Both the War on Poverty and Model Cities, directed at urban areas, enhanced big-city mayors and their

Table 8.1 Federal Grants-in-Aid, Selected Years

Amount (Billions

of Dollars)

As Percentage of

Federal Outlays

As Percentage

of GDP

Number

of Grants

1950 2.3 5.3 1.1 60

1960 7.0 7.6 1.4 130

1970 24.1 12.3 2.4 400

1980 91.4 15.5 3.4 434

1990 135.3 10.8 2.4 463

2000 285.8 16.0 2.9 653

2010 608.4 17.6 4.2 1122

Source: Budget of the U.S. Government, FY 2012, Historical Tables, p. 255; Chris Edwards,

“Federal Aid-To-State Programs Top 1,000”, CATO Institute, February 2011.

Chapter 8226

constituencies. In the War on Poverty, particularly its Community Action com- ponent, the system of transfer reflected the desires of the Democratic Party to link itself with newly developing municipal voting blocks, particularly minor- ity groups. Model Cities, a variation on this theme, advanced the development of new coalitions between low-income and minority residents and city hall.

Revenue sharing and block grants, although not ignoring cities, usually had little in the way of an urban emphasis. The term general revenue sharing refers to arrangements, now defunct, where the federal government made grants with virtually no strings attached, whereas block grants, very much alive, are fed- eral aid programs that come with only limited conditions. The development of both kinds of programs during and after the Nixon era offers another example of how transfer systems reflect political coalitions.

Since the 1970s, decentralization has been a clear political priority of Republican national administrations. The Republicans inherited a vast con- glomeration of categorical programs from their Democratic Great Society pre- decessors. Because these programs were established in law, tradition, and experience, and were supported by an elaborate organizational and institu- tional apparatus, the Republicans had to live with them temporarily while attempting to contain and modify them with an eye to their reduction, and, at least in some cases, their ultimate elimination. Low-income and minority groups in urban areas did not represent a major segment of the Republican constituency. State governments were more likely to reflect Republican inter- ests and to represent important parts of the Republican constituency. There- fore, transferring power to the states was of greater interest to Republicans than to Democrats.

Transfers and Policy Analysis

Although political considerations may influence choices concerning the gov- ernmental units to which funds will be provided, some degree of scientific analysis also enters into these decisions. That is, technically, there are some identifiable characteristics that can be utilized in selecting the unit most ap- propriate to receive funds. These characteristics include the degree of expertise and resources required to administer a program, the appropriate governmental size given the substantive nature of the program, and the nature of the problem for which a solution is being sought. However, application of these technical considerations requires considerable care. Often, for each logical reason given to vest a program in one unit (“They will be more efficient” is one example) an- other equally compelling reason can be found to vest it in another unit (“They are more committed to the policy goals,” or “They are closer to the problem”).

Daniel Patrick Moynihan’s observations on a report by the Task Force on Jurisdiction and Structure of the State Study Commission for New York City

Capsule 8.2 The New Division of Labor

The feds have the money,

The states have the power,

And the localities have the problems.

—Contemporary Aphorism

The Mode of Finance: Systems of Transfer 227

illustrate how technical considerations apply to the allocation of program re- sponsibility. Regarding the allocation of services, the Task Force suggested that rat control services be a central function, whereas service centers to provide information on poison control should be a local responsibility. In both cases, Moynihan argued the reverse arrangements as technically superior. As for rat control services, he noted,

Given stable food and harborage, the model urban rat lives and dies in an area extending at most a few hundred feet. [T]he urban rat is pre- eminently a neighborhood type, preferring when possible, never even to cross the street. As for rodent control, opinion is universal (as best I know) that the fundamental issue is how humanoids maintain their im- mediate surroundings. I cannot conceive a municipal service more suited to local control, nor one which more immediately calls on those quali- ties of citizenship which the Task Force describes as constituting in some degree a “quasi-governmental responsibility” toward the community. It comes down, alas, to the question of keeping lids on garbage cans. What better issue for Neighborhood Service Representatives to take up?6

On the other hand, poison control centers provide services that require great knowledge about the chemical nature of different substances that people might ingest as well as possible antidotes in cases where the chemicals are poi- sonous. Quick access by day or night to a tremendous bank of information is required. In light of these requirements, Moynihan suggested,

At the very least it should be a city function, although a good case could be made for making it regional, or perhaps national: one telephone num- ber anywhere in the nation, putting the doctor through to a laboratory/ computer facility that would provide the information fastest. The idea that such a function could be broken down into thirty to thirty-five sepa- rate centers, in New York City alone, each to be manned day and night is . . . not persuasive.7

Finally, a major consideration in the flow of funds is whether lesser juris- dictions should operate programs for which they have no financial responsibil- ity. Here, the issue is how careful a unit will be in spending funds that it does not have to raise, and whether it will act in the financial interests of the grant- ing authority. For example, one general critique of current Medicaid financing is that the federal government gives broad discretion to the states by paying for a program where many of the basic determinants of costs—number of recipi- ents, the type and level of benefits—are decentralized.

HOW TRANSFERS ARE CONDITIONED

Conservatives favor local control in the allocation of government funds. This is the heart of the devolutionary strategy that has dominated federal domestic policy since the Reagan 1980s. For conservatives, it is the states and counties and cities that should have primary responsibilities for directing and adminis- tering social programs, not “big government” in Washington.

Devolution, in theory and in practice, has been a reaction to the central- izing trend of earlier grant-in-aid policy. Beginning in the 1930s, the focus of federal aid moved increasingly toward establishing national standards in the provision of income support and government services. The Great Society of the

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1960s established a nationally directed urban-focused system of social provi- sions that utilized grant funds as primary instruments for social reform. Great Society programs not only expanded the sum total of aid but also ushered in new goals and procedures that significantly altered the balance of intergovern- mental relations.

In terms of their ultimate purpose, the programs of the 1960s sought to guarantee minimum levels of opportunity and well-being throughout the na- tion. Comprehensive (if not precise) statements of national welfare goals were incorporated in a framework of grant-funded services for the disadvantaged, especially the urban disadvantaged. Although the Great Society recognized the importance of utilizing local government and community organizations as pro- gram partners in the planning and delivery of services, these new programs in- corporated extensive and detailed federal regulations and substantial program monitoring and oversight.

The ideology underpinning the aid programs of the Great Society genera- tion was decidedly centralist. Program direction as well as program finance shifted to Washington. The nation’s obligation to eliminate poverty was as- serted. Administrative procedures were formulated to ensure that national purposes were properly carried out. Presidents Kennedy and Johnson both knew how very easily social programs could sway off target when carried out by states and local units that were not fully committed to social objectives. Memories of Jim Crow and anti-urban biases were still fresh in the minds of Washington policymakers. Grant policies were therefore carefully formulated to ensure that benefits were effectively routed to the needy.

By the late 1970s, the era of the Great Society had run its course. Although many of the programs it spawned were maintained, much of their underlying spirit, along with their substantial reliance on federal leadership, faded away. Confronted with a series of major managerial problems and a new farther-to- the-right philosophical zeitgeist, federal policies acquired a different face. Federal control and program expansion were replaced by “devolution, disen- gagement, and decremental budgeting.”8 The Great Society was displaced by the New Federalism.

The New Federalism of Richard Nixon and Ronald Reagan initiated a transfer system that was far more reliant on states and localities. Whereas Great Society programs expressly advanced specific national purposes, New Federal- ism grants were formulated as a means of helping state and local governments accomplish their objectives. Federal interventionism was abdicated in favor of decentralized policymaking. Federal spending, federal control, and federal regulation were all sharply reduced.

The contrast between Great Society centralization and New Federalism devolution can be clearly seen in the basic components of intergovernmental transfers. Financial transfers, whatever their philosophical rationale, always impose a set of reciprocal relationships—aid is never provided without condi- tions. The conditions that are required, often called “strings” or “controls,” govern how the aid can and cannot be used.

There are four fundamental types of federal aid conditions: program con- ditions, which define grant purposes; financial conditions, which govern the dollar-matching arrangements; beneficiary conditions, which determine who is eligible for assistance; and procedural conditions, which specify planning, administrative, and reporting procedures. In each arena, the character of grant policy has changed markedly over the past forty years as the respective roles of federal, state, and local governments have been redefined.

The Mode of Finance: Systems of Transfer 229

Program Conditions

Federal aid legislation generally specifies the kinds of activities they are in- tended to support. We therefore have grants for nutrition, mental health, runaway centers, drug and alcohol abuse, special education, homelessness, do- mestic violence, foster care, medical care, cash support for the poor, and so on. Historically, most grant programs have been defined rather narrowly, which is why they are often referred to as categorical (i.e., targeted on specific issues or population groups). Despite the recent emphasis on program flexibility, the over- whelming majority of all federal aid programs remain categorically specific.

Programs are categorical when their basic purposes are specified in de- tail. Categorical grants specify who is to be served, what benefits are to be re- ceived, and how the delivery system is to be organized. For this reason, AFDC for many years was identified as the prototype categorical program, although the term applied to many others. Categorical programs may specify any num- ber of conditions, including requirements regarding certification and licensing of personnel, how recipients are to be interviewed, and appeals machinery to handle client complaints. Categorical funding ensures that the unit of govern- ment financing a program substantially controls its expenditure.

Since the Great Society, the federal aid system has become less categori- cal. This shift is in keeping with the conservative critique of the welfare state, which supports reducing the scope of big government. For conservatives, a powerful centralized government threatens democracy and efficiency because basic decisions are made in Washington rather than in local communities where, it is said, the problems “actually are.” For devolutionists, categorical aid is wasteful, supporting programs in which there is no compelling national interest, and creating excessive red tape, paperwork, and regulation.

One major objection to the categorical system has been managerial: The great number of specific programs are often difficult to administer effectively at the local level. It has been said that, although individual programs make individual sense, the aggregate of programs produce administrative overload. Each program is usually separately administered. Coordination is absent. In many cases, mayors or governors may not even be aware of all the programs serving their jurisdiction. When they are aware, they often find themselves powerless to make the system operate as a cohesive whole.

Addressing these concerns, Republican presidents since the 1970s have sought to decategorize federal aid. When Ronald Reagan took office in 1981, a major plank in his domestic platform was to consolidate multiple, detailed, cate- gorical grants into a limited number of broadly formulated “block” grants. Though some of Reagan’s proposals weren’t accepted by the Congress, seventy-seven cat- egorical grants-in-aid were collapsed into nine block grants in 1981. For example, ten separate grants that addressed alcohol, drug abuse, and mental health prob- lems were combined into one new block grant, streamlining administration, re- ducing paperwork, and giving the states increased discretion to define programs as they chose.

These new block grants defined goals broadly, giving local officials signifi- cant discretion within broad functional areas such as community development, employment and training, and social services. Although the federal government continues to provide general direction, recipient governments have considerable leeway in specifying program priorities as well as administrative and service- delivery arrangements. These features, of course, marked a significant federal retreat, with a commensurate increase in the role of states and localities.

Chapter 8230

Under Title XX, for example, about $1.7 billion a year is currently avail- able to the states for “social services.” Title XX is a block grant because these services aren’t defined in programmatic terms. Instead of specifying money for family planning, or homemaker services or AIDS education or child abuse prevention, or any other specific activity, Congress lets the priorities be set by the states. Similarly, Community Development Block Grants provide sup- port for “community development,” a term that can encompass anything from street repair to daycare services to low-interest facility loans for neighborhood nonprofits.

A more radical devolutionary reform, but one not nearly as successful as block grants, was General Revenue Sharing. Initiated in 1972, General Rev- enue Sharing constituted a major break with the categorical tradition in that it provided, for the first time, federal aid without any specification of program priority. In other words, revenue sharing was unconditioned with regard to function. Depending on their preferences, localities or states could develop new programs, use the money for tax relief, or build new facilities. If they decided to develop new programs or expand old ones, they could invest in health, recreation, police, sanitation, or code enforcement. For over a decade, General Revenue Sharing provided more than $6 billion a year—one-third to the states, two-thirds to local authorities—for their unhampered use.

The program, despite its appeal to conservatives, was abolished in 1987, as part of the effort to trim the federal deficit. This is ironic, given the Reagan ad- ministration’s commitment to “returning power to the people,” but it indicates the political vulnerability of grants that lack a clear program and constituency focus. General Revenue Sharing was extremely popular among state and local elected officials. It was, after all, money for nothing, grant aid for free. But it was never terribly appealing in Washington.

While “decentralization” has been a defining characteristic of conserva- tive social policy, it remains the case that in important policy areas, categori- cal specification remains as powerful as ever. In child welfare, despite several abortive efforts to block grant federal aid, national accountability standards have strengthened over time. Increases in child welfare funding since 1997, for example, have been accompanied by new mandates regarding permanency planning, child safety, program monitoring, and outcome accountability. In this last regard, the federal government now requires states to provide detailed information concerning child and family outcomes as part of its periodic Child and Family Services Reviews. Recent child welfare legislation also requires states to provide services such as education, housing, health care, and training support for “aging out” 18- to 21-year-olds.

Financial Conditions

The second major form of federal control governs financing. In most cases, aid recipients are required to put up a “local match.” That is, states and locali- ties must be willing to pay a share of program costs if they desire federal aid. Matching serves a variety of purposes. For one thing, it reduces the federal cost burden. Equally important, it helps to ensure cooperation and efficient pro- gram management. States or localities putting up their own resources are more likely to take their administrative responsibilities seriously than when simply spending somebody else’s funds.

Matching is also used to influence policymaking. Federal funds offer an important “carrot” by providing incentives for involvement in high-priority

The Mode of Finance: Systems of Transfer 231

national programs. Because states and localities, through long periods of U.S. history, were reluctant to take on social responsibilities, federal aid constituted a major tool for Washington to promote social welfare initiatives. States and localities may be reluctant to move into new areas of activity if they must bear the full cost. But federal aid in the form of 50 percent, 75 percent, or even 100 percent grants may be difficult to turn down. The offer of ten federal dollars for just one raised locally is very enticing.

Different cost-sharing formulas apply to different programs. In most cases, the state/local share ranges from 10 to 50 percent. Under the Maternal and Child Health Act, for example, states contribute $3 for every $4 they receive from the federal government. Over time, however, state and local contributions have been diminishing. In the 1960s, to ensure state and local participation in new welfare efforts, the federal government “sweetened the pot,” offering ever higher payment shares. The War on Poverty, for example, was 90 percent federal, 10 percent local. Public housing and Elementary and Secondary Edu- cation Act Title I grants were 100 percent federal; recipient governments had to pay only the administrative costs. Food stamps operated the same way. Had Congress demanded more, full national coverage simply could not have been achieved, given the reluctance of many jurisdictions to contribute even modest amounts to social programs.

The trend to minimize the local share continued under the New Federal- ism. General Revenue Sharing required no local share: It was “free” money. Block grants, for the most part, are the same. Title XX initially required a 25 percent state match, but that was eliminated in 1981. Most block grants cur- rently operating require no state or local funds.

Beneficiary Conditions

A third area of federal control governs who receives aid, since federal aid is conditioned with respect to both governmental and individual beneficiaries. Not all governmental units, for example, are eligible for all grant programs.

The simplest way to distribute federal aid among the states is proportion- ally, strictly in terms of population. Title XX Social Services operate this way. California, with about 13 percent of the national population, receives about 13 percent of the available funds. Every other state also gets funds proportional to its population. Clearly, there is no special effort in such a procedure to focus help on those states with the greatest needs.

When the federal government desires to target aid to reflect need, it utilizes allocation formulas based on various problem indicators. Housing and Urban

Table 8.2 Mode of Finance: Systems of Transfer

Funding Arrangements Specification of Purpose Role of States/Localities

Categorical grants Specified narrowly Strictly implementing federal policies and procedures

Block grants Specified broadly Establishing and implementing policy within a given

functional area

General revenue Sharing Unspecified Independent policymakers

Created by the authors

Chapter 8232

Development (HUD) grants, for example, frequently focus on municipalities with the worst housing stock. Education aid, such as No Child Left Behind, provides support to “districts serving areas with substantial concentrations of children from low-income families.” Other programs concentrate on jurisdic- tions with high poverty, high unemployment, or low per capita incomes.

Beneficiary conditions not only specify jurisdictions, they also identify eli- gibility norms for different populations groups. Public assistance programs, by definition, are targeted on those with limited income. Other programs, such as Food Stamps (now called SNAP—Supplemental Nutritional Assistance Program), are “assistance linked,” meaning that eligibility is often tied to in- dividuals already eligible for other welfare programs. The State Child Health Insurance Program (SCHIP) has been particularly controversial in this regard. Originally intended to supplement Medicaid for children slightly above the poverty line, amendments over the years extended eligibility considerably up the income ladder, a phenomenon critics often refer to as “eligibility creep.”

Procedural Conditions

In addition to financial, program, and beneficiary conditions, aid legislation frequently contains a variety of procedural conditions relating to planning, re- porting, contracting, client rights, and the like. Some of these standards are “cross-cutting,” meaning that they apply to all aid programs. All programs, for example, prohibit discrimination in hiring personnel and allocating benefits to clients. These civil rights requirements were expanded in the 1970s and 1980s to prohibit discrimination against, among other groups, racial and ethnic mi- norities, language and gender minorities, women, the disabled, and the aged. Other crosscutting requirements exist for environmental protection, labor stan- dards, merit personnel systems, and disclosure of information to the public.

Many conditions, however, apply only to specific programs. Some, for ex- ample, require citizen participation: The CAPs of the 1960s, for example, man- dated “maximum feasible participation” of the poor in formulating and running antipoverty programs. Under Model Cities, municipalities had to undertake a “comprehensive” planning process that involved community residents and public officials in producing detailed analyses of community needs and in de- scribing one- and five-year plans of action. The McKinney Homeless Assistance legislation requires jurisdictions to submit comprehensive homeless-assistance plans that include statements of need, inventories of existing services and facili- ties, and remediation strategies that take account of the needs of the homeless mentally ill, families with children, the elderly, and veterans.9

Some grants require procedures to ensure that funded activities are coordinated with related programs. Others govern appeals for applicants who are denied benefits, and specify standards for hiring employees with particu- lar kinds of education. No Child Left Behind, for exam- ple, requires that all teachers be “highly qualified,” while community mental health legislation, for many years, mandated that psychiatrists head up clinical programs. In the early years of federal child welfare, the federal gov- ernment strongly promoted the use of social work profes- sionals. A similar emphasis was incorporated within the federal social services legislation of the early 1960s.

Policy Practice

Practice Behavior Example: Social workers

analyze, formulate, and advocate for policies

that advance social well-being.

Critical Thinking Question: Which type of fed- eral aid condition—program, financial, benefi-

ciary, or procedural—do you think influences

social well-being the most?

The Mode of Finance: Systems of Transfer 233

There is a large and varied body of regulation governing monitoring and recordkeeping. The federal government generally specifies report standards concerning expenditures and clientele. These demands may be relaxed or rigorous. Probably no other grant condition excites more disquiet and resent- ment than these accountability requirements. Detailed report forms, often on a monthly basis, may be a fact of bureaucratic life, but that hardly makes them palatable to state and local practitioners.

DEVOLVING PUBLIC WELFARE

David Ellwood described the 1996 welfare reform legislation as a compromise among four distinct strands of conservatism. Work-oriented reformers, emphasiz- ing the critical importance of jobs, sought to build on earlier welfare legislation by strengthening work requirements and supportive services. Ideological critics, seeing dependency and immorality resulting from misguided government pro- grams, emphasized the importance of behavioral incentives—ending support for teen motherhood and out-of-wedlock births while encouraging school attendance, sexual responsibility, and other positive behaviors. Budget cutters, the third group of reformers, viewed the welfare problem as one of excessively generous support and therefore favored program cuts, time limits, and other measures to reduce spending. Devolvers, finally, saw the welfare problem in terms of excessive fed- eral “command and control,” with red tape and regulations impairing the ability of the states to create welfare solutions crafted to their own circumstances. For devolvers, welfare reform required sorting out federal and state roles, assigning to Washington resource allocation, broad oversight, and central information gather- ing, while making the states responsible for programmatic substance.10

Several of these themes have already been discussed: the conservative cri- tique of public welfare in Chapter 2, the “perverse incentives” of income trans- fers in Chapter 4, and the role of services as an alternative to cash support in Chapter 5. The devolution theme, however, the centerpiece of the 1996 welfare enactment, needs some elaboration.

Welfare reform, that is, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), addressed a range of low-income pro- grams, from food stamps and day care to child welfare, Title XX, and cash assistance to poor families with children. Its most dramatic element, Title I, transformed AFDC into a new block grant, TANF, providing the states broad powers to adopt welfare plans suited to their own circumstances. While far from eliminating federal influence over the welfare system, TANF incorpo- rated a sweeping decentralization of authority.

In some respects, the “devolution revolution” of 1996 was hardly a radi- cal departure from previous arrangements. AFDC, for example, had always fol- lowed a markedly decentralist orientation. As a grant-in-aid program, it was based on state action. States were never compelled to participate. If they did, they retained broad power over benefit levels and eligibility. The federal role wasn’t inconsequential but it was largely that of financier: AFDC committed the national government to match state spending for programs the states de- vised and operated. Federal requirements, of course, typically accompany fed- eral funds, and the original 1935 Act specified at least a dozen stipulations.

Through the mid-1960s, AFDC resembled the program enacted by the Congress in 1935: States were in command, setting fundamental rules with minimal federal oversight. But under Lyndon Johnson’s Great Society, and for

Chapter 8234

nearly twenty-five years thereafter, AFDC came to incorporate an increasingly large number of federal conditions reflecting an evolving national sense of what constituted proper welfare policy.

This activist welfarism was expressed in detailed federal stipulations on a broad number of subjects. A series of reforms made welfare fairer and sim- pler, reducing bureaucratic impediments to assistance for those eligible, and expanding the due process rights of clients. Other stipulations sought to pro- mote work. To reduce the disincentives built into AFDC, for example, federal reforms in 1967 created the “$30 and one-third” rule requiring states to allow recipients to keep their initial $30 in monthly earnings, and one-third of all re- maining earnings, before their AFDC allotments were reduced.11 Stipulations enacted in the 1980s broadened eligibility, requiring states to provide benefits to needy two-parent families and mandating transitional childcare and Medic- aid subsidies for families who had worked their way off welfare.

At the same time, however, there were important devolutionary actions. Federal regulations were somewhat loosened in the 1980s, in keeping with the general tenor of the New Federalism, and a wide range of state welfare experi- ments were initiated after the 1988 Family Support Act liberalized the Section 1115 waiver program. By the time AFDC was repealed in 1996, 43 states had been granted waivers from statutory regulations.

Welfare Reformed

In 1996, TANF replaced AFDC with a program far more responsive to state priorities. The federal TANF allocation, currently around $16 billion a year, is available for the states to use “in any manner reasonably calculated,” that is, for any purpose advancing the general goals of the legislation. This provides states considerable discretion to organize their welfare programs in their own fashion. TANF funds, for example, can be spent on cash aid, emergency as- sistance, childcare, job training, or job subsidies. States, if they wish, can limit assistance to particular categories of poor families. They can prohibit cash pay- ments to immigrants, legal or not, or two-parent families, or families failing to meet certain procedural rules. Cash doesn’t have to be provided at all: States, if they wish, can structure “assistance” in the form of vouchers, services, or other benefits that meet ongoing basic needs.

Assistance levels, in addition, can vary, just as they did under AFDC. But, different from the old system, states under TANF can impose “family caps” denying mothers additional benefits if they have children while on welfare, and they can also provide uniform benefit levels throughout the state (“state- wideness”) or match levels to the cost of living in a particular city or county, paying less, for example, in areas with low housing costs. They can transfer some TANF funds to other programs, such as Title XX. They can do away with at least some of the broad civil rights protections that were incorporated into welfare law in the 1960s and 1970s. And states can structure service delivery pretty much as they choose. Under AFDC, public assistance was for the most part publicly administered. Under TANF, an array of administrative options are available. Many states, for example, have privatized their job-training efforts and several now rely on commercial firms to manage their income- maintenance activities. Under TANF’s “charitable choice” provision, more- over, church-affiliated groups are frequently utilized to provide social services.

In extending state control over eligibility, benefit levels, and benefit duration, TANF freed the states of long-standing federal mandates. Symbolizing

TANF provides states considerable discretion to organize their welfare programs in their own fashion.

The Mode of Finance: Systems of Transfer 235

the changed relationship between Washington and the states, TANF dramati- cally restricted federal administrative oversight. Although Congress specified a number of functions for the federal DHHS—reviewing state plans and opera- tions; monitoring state “maintenance of effort” levels; conducting research and analysis; providing technical assistance and information on “best practices”— it cut DHHS oversight staff by 75 percent, substantially reducing the capacity of federal officials to participate in meaningful program oversight.

Welfare reform, nevertheless, is far from the decentralized block grant ideal advanced by devolution purists. While TANF loosened some strings, it fash- ioned several new ones. As Table 8.3 indicates, TANF incorporated a rather sig- nificant array of moralistic “personal responsibility” messages—that it’s wrong to have out-of-wedlock babies, that sexual abstinence is the best way to prevent pregnancy, that it’s vitally important to work. Accordingly, TANF prohibited federal assistance to teen moms living separately from their parents or not at- tending school, as well as to individuals convicted of significant drug offenses. It also demanded that states address out-of-wedlock pregnancies and statutory

Table 8.3 Federal Welfare Conditions, Then and Now

AFDC TANF

System of

transfer

Categorical grant-in-aid Block grants melding AFDC with Job

Opportunities and Basic Skills (JOBS) Act and

emergency assistance

Federal

funding

Entitlement: open-ended funding guaranteeing

aid to poor families meeting state requirements

No entitlement: fixed annual funding

State funding State matching required State maintenance of effort required

Beneficiaries Mandated inclusion: All families below the

state eligibility threshold must be served

Mandated exclusions: States must deny benefits

to families not meeting job requirements

and time limits; states can deny aid to other

categories of poor families

Nature of

social provision

Chiefly cash assistance Cash, services, work-support subsidies

Service delivery Public agency delivery by state and/or

local units

States can select public operations or

contracting out

Time limits? No Yes, five-year lifetime limit, with 20 percent

exemption for “hardship cases” (earlier at

state option)

Work

requirements?

Yes. WIN and, later, JOBS require states to

offer work-training programs

Yes. Work or “work activities” within two years

or loss of assistance

Statewide

uniformity?

Yes. “Statewideness” required No. State can vary benefit levels geographically,

such as between high- and low-cost areas

Family cap? No Yes

Fund shifting? No Yes. 30 percent can be shifted to childcare and

social services

Due process

protections?

Yes. Client rights to “fair hearings” required Maybe. Client rights specified in vague terms

Created by the authors

Chapter 8236

rape. Most importantly, it conveyed a clear message that welfare is not a right by imposing a sixty-month lifetime limit on federal assistance for most benefi- ciaries (permitting states to impose even stricter time limits) while compelling states to move a significant portion of their caseload into jobs or work programs.

Rather than eliminating federal controls, then, TANF signifies a marked shift in the character of regulation. Under six decades of AFDC, federal law generally served as a liberalizing influence, a vehicle for guaranteed, nonpu- nitive public aid. To protect the rights of vulnerable parents and children, standards for state conduct were established, and the more egregious and de- meaning features of local welfare administration were outlawed. In 1962, for example, Congress prohibited state eligibility conditions that denied assistance to out-of-wedlock children, requiring instead that “illegitimacy” be addressed through services and rehabilitation. Later in the 1960s, Congress, prompted by the U.S. Supreme Court, prohibited unannounced “midnight raids,” bed and closet checks to see if the “man-in-the-house rule” was being violated.

Under the new welfare, federal regulations have morphed from protective to punitive, from an emphasis on rights to one on responsibilities. Rather than mandating inclusion, TANF is characterized by eligibility exclusions. Rather than advancing guarantees, federal funds are denied to several classes of the poor, with the states invited to establish their own restrictions.

Terminating the Guarantee

The most important guarantee under the old welfare regime was the federal pledge to contribute to the financial support of all eligible parents and children in poverty. For sixty-one years AFDC, and ADC before that, provided a modest income safety net by ensuring open-ended grants to the states. No limits were placed on the size of the federal allotment; states determined how much of their own money to spend and the federal government automatically contrib- uted its share. The portion paid by Washington varied. In AFDC’s last year— fiscal year 1996—it ranged from 50 percent for the highest per capita income states, like Connecticut, to 78 percent for the poorest states, like Mississippi.

This guarantee of open-ended matching made AFDC a federal entitle- ment: All families meeting state eligibility criteria had a statutory right to as- sistance. The entitlement, though modest, was important. It never covered all the poor, only those deemed income eligible by the states. And it never carried with it standards for minimum benefits: Assistance levels were rarely suffi- cient to remove recipients from poverty. The guarantee of federal matching,

Capsule 8.3 The TANF Contract

Contracting with nongovernmental entities to provide TANF-funded services occurs in almost every state and exceeds $1.5 billion in federal TANF

and state funds for 2001. This level of funding rep-

resents 13 percent of total federal and state TANF

funds expended for services. About 88 percent of the

total funds contracted are with nonprofit providers,

which include national organizations, faith-based

organizations, and community-based organizations.

The most commonly contracted services include

education and training, job placement, and support

services to promote job entry or retention.

U.S. General Accounting Office, Welfare Reform, GAO-02-245, April 2002.

The Mode of Finance: Systems of Transfer 237

nevertheless, ensured a critical safety net. Families stranded by the economy, a lack of ability, or just bad luck had a right to aid. Matching also powerfully encouraged state spending because the more the state put in, the more Uncle Sam contributed. Finally, the open-ended character of the grant was respon- sive to changing conditions. In prosperous times, caseloads could be reduced and AFDC funding (federal and state) dropped. In recessions, caseloads could be increased and, with them, AFDC funding.

In ending the federal entitlement, TANF subordinated assistance to the availability of funds. Rather than matching state spending, the federal govern- ment provides a fixed annual sum. Unconnected to state spending, and to chang- ing levels of need, this allotment has proven to be inadequate. Despite growing numbers of families and children below the poverty standard, since 2009, TANF has been providing assistance to an ever smaller number of recipients.12

The end of AFDC’s cash entitlement eliminated the assurance of a reli- able public aid safety net. State policymakers, given unprecedented authority to design their own antipoverty programs, could well sponsor effective and humane welfare interventions. But without federal standards, and without a right to assistance, they have been far more likely to cut benefit levels and nar- row eligibility.

Time Limits

While welfare reform imposed a five-year lifetime limit on federal assistance, it permitted states to set even lower limits, and nearly half have embraced this authority. Idaho, for example, cuts off aid after just twenty-four months. Some states have also set time limits on continuous benefits, placing a maximum (two years is common) limit on any single welfare stay. For a while, the conse- quences of time restrictions were limited. In 2003, for example, the first year in which an appreciable number of cases reached their fifth year, less than 1 percent was closed. Several states have continued aid using their own funds, either granting exemptions or extending the limit period.13 New York State, for example, provides a constitutional guarantee that obligates local governments to help all the needy, irrespective of how long they have been on assistance. Other states have exempted a portion of welfare families based on hardship. Under federal TANF provisions, states can provide up to 20 percent of their caseloads a “hardship exemption,” undefined in the law but illustrated by the so-called family violence option, designating victims of domestic violence for special consideration.

As one might imagine, selecting the groups eligible for the hardship ex- emption engendered considerable controversy. In the years following the en- actment of welfare reform, advocates representing needy groups around the country mobilized to protect their constituencies. Perhaps the most active groups were, in fact, advocates for domestic violence victims. They argued that public assistance was indispensable for abused mothers, since welfare support provided perhaps the single alternative to victimization by a violent boyfriend or husband. Other groups made their own compelling arguments. Those repre- senting moms with AIDS/HIV, and other chronic disabilities, argued that those conditions often made work impossible, requiring lengthier support. Grand- parents caring for grandchildren constituted another group seeking hardship exceptions, since they were often elderly, ill, and unable to work.

Nearly all the states now permit various group exemptions. Thirty-three have adopted the family violence option exempting abuse victims.14 Other

The end of AFDC’s cash entitlement eliminated the assurance of a reliable public aid safety net.

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states exempt adults with disabilities, parents with very young children, and family heads facing special childcare or transportation needs. Just one state, Wisconsin, prohibits all exemptions, operating on the assumption that every welfare recipient should be able to get a job within five years.15

Race to the Bottom?

Welfare reform critics originally hypothesized that the structure of the block grant would lead to lowered assistance levels and a denial of help to those fami- lies least likely to be able to support themselves. They predicted that the dis- entitlement of welfare would subject public assistance to competitive cycles of state budget politics, resulting in a significant erosion in welfare spending over time. Public assistance legislation is high-cost, politically unpopular legislation, and the taxes necessary to support it put more generous states at a disadvantage. High benefits mean high taxes, which not only produce dissatisfaction among residents but also can scare off potential new sources of revenue such as in- dustries, new businesses, and new residents. What’s worse, liberal benefits may serve as a “welfare magnet,” attracting poor people from less generous areas.16

The old welfare system was explicitly designed to counter the tendency to minimize benefits since states knew that their own AFDC investments would elicit generous federal matching. Mississippi, for example, received more than $4 in federal AFDC support for every dollar it put up. This provided a signifi- cant incentive—some might say “bribe”—for poorer states to maintain at least minimum welfare levels.

Under TANF, however, this incentive has diminished since states are only required to maintain a level of spending equal to their own FY 1994 AFDC budget. And while states are required to maintain their own financial partici- pation, provisions scarcely guard against limiting benefit and service levels or narrowing eligibility. While the “race to the bottom” hypothesis—states com- peting with one another to avoid welfare costs—remains largely unconfirmed, benefit levels have failed to keep up with living costs, especially since 2008. Overall, the annual federal block grant to the states, about $17 billion, has been frozen since 1997, losing about 28 percent of its value to inflation by 2011. This reduction in value has been passed on by the state to recipients.

In 2010 alone, for example, at least four states—California, Washington, New Mexico, and South Carolina—cut monthly TANF benefits. In the South Carolina case, benefits were reduced to $216 monthly for a family of three, the equivalent of just 14 percent of the poverty line. Overall, benefit levels have declined by at least a fifth, in real terms, in 30 states since 1997. In the median state, according to the Center on Budget and Policy Priorities, current TANF benefits equal only half the market cost of a modest two-bedroom apartment.17 Payments, however, as under AFDC, still vary significantly from state to state, from a low of under $200 a month for a single-parent family of three in Missis- sippi to a high of over $900 in Alaska.

Cash payment levels, however meager, provide just one measure of a state’s generosity, or lack of it. Under AFDC, welfare, by and large, was the monthly cash benefit. But under TANF, states employ their spending for a multitude of antipoverty purposes, many not targeted specifically on welfare recipients at all. Some states, for example, have invested in wage supplements through a state version of the Earned Income Tax Credit (EITC) in order to increase salaries for low-wage earners. Others, such as New York, have created pub- lic jobs. Still others have expanded day care, transportation, counseling, and

The Mode of Finance: Systems of Transfer 239

job training. As we noted in Chapter 5, welfare spending has shifted markedly from cash to in-kind (see Figure 8.1).

Welfare to Work

In addition to enforcing time limits, states must engage a significant portion of their TANF recipients in work or work-related activities. While the welfare system has long been oriented to jobs, the earlier emphasis was primarily on developing “human capital” (i.e., promoting job training, education, counsel- ing, and financial incentives encouraging employment). Even the JOBS pro- gram, the centerpiece of the 1988 reform law, identified its primary goal as reducing “barriers to employment,” that is, providing basic education and em- ployment skills.

Welfare reform, on the other hand, incorporates powerful “work first” re- quirements that emphasize full-time jobs rather than job preparation. Although states have considerable freedom in determining the nature of their work re- quirements, federal law provides strong incentives for aggressively moving

Table 8.4 TANF Benefit Levels, Selected States, as a Percentage of the Federal Poverty Line

1996 2011

Alabama 15 14

California 55 41

Illinois 35 28

Massachusetts 52 40

New York 53 48

Ohio 32 28

Pennsylvania 39 27

Texas 17 17

Center for Budget and Policy Priorities, October 2011.

Cash assistance

Other services

Childcare

Systems & administration

Work support & employment programs

Transportation

36%

24%

18%

12%

8% 2%

Figure 8.1 TANF Spending, Fiscal Year 2004.

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people into jobs. TANF, for example, defines strict employment goals. Each state must ensure that a rising proportion of aid recipients work, with family heads having to work within two years of going on assistance. If states fail to transition clients from welfare to work, federal financial penalties are imposed.

States have initiated a diverse array of employment strategies. A significant set of services and cash incentives, on the one hand, serve as “carrots,” pulling clients into job seeking, job taking, and job holding, while coercive penalties, the “sticks,” push nonworkers off the rolls. On the penalty side, welfare reform in- corporates some very coercive policies. Strict time limits, most obviously, send a clear message—“if you don’t work, don’t count on support.” In addition, states have stiffened their welfare rules. While public welfare has never been very “user friendly,” new procedures have served both to divert applicants from seek- ing aid and from remaining on aid. Welfare “sanctions,” such as aid cut-offs or reductions, for example, are frequently applied even for minor rule infractions. And many states place multiple barriers before the applicant seeking aid. Karen Houppert describes the situation at one New York City TANF Job Center:

Applicants are commonly misinformed. When they first arrive at a job center, receptionists routinely tell them that there is no more welfare, that this office exists solely to see that they get a job, that if they miss any ap- pointments their application will be denied, that emergency food stamps and cash grants don’t exist, that there is a time limit on benefits—without explaining that they can apply for Medicaid or food stamps. Receptionists also tell people who arrive after 9:30 a.m. that they must return another day. If they aren’t already deterred, applicants are given a five-page pre- liminary form to fill out. They must return the next day to get an appli- cation. They are fingerprinted, undergo several interviews and are then directed to meet with a financial planner and an employment planner. The financial planner tries to deter people from applying by directing them to churches, charities, and food pantries. At various stages, applicants are orally denied benefits or told they are not eligible to apply, but they re- ceive no written notice of denial or their right to appeal the decision.18

While states frequently rely on penalties to induce compliance with their work-first priorities, many also embrace a variety of work incentives. Special financial arrangements, for example, serve to make work as enticing as pos- sible. One of the most common, the earned income “disregard,” permits cli- ents to keep a portion of their wages without having their welfare allotment reduced. All the states but one, Wisconsin, protect a portion of client earn- ings, with around half adopting disregards of 50 percent or more. Over a dozen states permit families to retain up to $1000 in earnings per month before losing TANF payments. These disregards, coupled with the EITC, and, often, day- care and transportation assistance, make paid employment far more financially attractive than in the past.

Many states, in addition, have strengthened the role of welfare workers, transforming them from eligibility clerks to job counselors who are able to focus on clients individually, designing strategies to match them with jobs in the community, arranging necessary job supports (Medicaid, food stamps, childcare, transportation), following up to make sure they develop “traction” in their new jobs, and, in some cases, facilitating client, and former client, self- help groups to share job-hunting and job-keeping experiences.

As noted, states often invest their TANF resources in a multitude of antipov- erty purposes beyond simple cash assistance. In 2011, considerably more was

The Mode of Finance: Systems of Transfer 241

spent on social services than on cash aid, a continuation of the pattern shown in Figure 8.1. Many states support day care, transportation, counseling, and job- training services, typically focusing on families facing the most severe barriers to work—those with low skills and little education, young teen mothers, ex-con- victs, the physically or mentally disabled—groups frequently described as the “hard to employ.” Substance abusers are a program priority in several states. Michigan, for example, launched a program in the late 1990s requiring welfare applicants to submit to drug tests. Individuals receiving aid were to be tested at random, with users required to get treatment or lose their grant. While this was soon declared unconstitutional by the courts, other states, more sensitive to civil liberty concerns, administer drug use questionnaires to clients and applicants.

Individuals whose physical, cognitive, and psychological disabilities pre- vent or substantially limit employment are also receiving special services in many states, since the disabled constitute a disproportionate segment of the least employable. A major study of welfare reform in Michigan, for example, found that over a quarter of all recipients met the DSM criteria for major de- pression, while 14 percent suffered from traumatic stress disorder, a diagnosis often related to domestic violence. Another 20 percent had health problems resulting in significant functional impairments.19

Those with very low levels of education, English proficiency, and job skills constitute another target group. A full 30 percent of welfare users have less than a high-school education, and nearly a quarter are functionally illiterate. The lack of basic skills, even when the level of personal motivation is great, substantially restricts job opportunities. People with low skills, for example, often can’t carry out necessary tasks like understanding written instructions, filling out forms, reading bus schedules, or totaling a bill.20

A range of social safety net programs funded through programs other than TANF also assists the hard-to-employ. Daycare programs like Head Start, Title XX counseling services for groups like domestic violence victims, homeless services under the McKinney Act, AIDS-HIV services under the Ryan White Act, and oc- cupational rehabilitation services are all necessary components of any strategy addressing the needs of families who, even in the best of economic times, have trouble being absorbed into the labor market. And job-training programs sponsored through the Department of Labor, while rather disappointing in their suc- cess over the years, are also critical for people with the few- est skills and the least-developed orientation to employment. Subsidized jobs can also be utilized as a step toward regular employment. In many states, TANF has developed a variety of linkages to these efforts and in some has tried to create integrated systems of assistance. Nevertheless, in a compre- hensive review of existing programs, the Urban Institute con- cluded that comprehensive support systems rarely exist.21

The Responsibility Agenda

In Chapter 4, we discussed teen pregnancy and the assertion of welfare critics that public aid encouraged illegitimacy. Welfare reform, building on this sup- position, incorporated a number of features meant to promote personal respon- sibility among young people, especially in the areas of sexuality, childbearing, and child raising. Responding to the 1996 law, and its subsequent revisions, states established a great number of programs aimed at reducing illegitimacy,

Critical Thinking

Practice Behavior Example: Social workers

distinguish, appraise, and integrate multiple

sources of knowledge, including research-

based knowledge, and practice wisdom.

Critical Thinking Question: What are the merits and drawbacks of welfare reform, and what is

your opinion about its effectiveness?

Chapter 8242

fostering abstinence, increasing the parental involvement of fathers, and pro- moting “healthy marriage.”

“Family caps,” a key element of the responsibility agenda, are limits on TANF eligibility designed to discourage welfare families from having addi- tional children. Whereas AFDC required states to adjust the welfare grant to family size, increasing monthly payments as the number of children increased, states are now permitted to establish fixed benefit levels, regardless of family composition. While most states continue to vary benefits, about half have in- stituted caps. Idaho, for example, created its assistance ceiling in 1998, with no allowance for family size. Wisconsin similarly implemented a “one size fits all” policy. Whether family caps have, in fact, succeeded in reducing welfare births isn’t clear. Findings in one state, New Jersey, appear to show a decline in birthrates, although this seems to have been partially explained by an increase in abortions, a consequence particularly dismaying to social conservatives.22

Other initiatives aim at discouraging teen childbearing. TANF, for example, re- stricts federal benefits to unwed teenage parents under 18 who do not live at home (or another “supervised setting”) and attend school. States, at their discretion, can

Table 8.5 Welfare Labs

Michigan Family Independence Program. Michigan started experimenting with welfare reform in 1992. Its program

requires recipients to participate in some combination of work, training, general education, and community

service. Among the initiatives in the program are “license penalties,” that is, fathers who don’t pay their obligated

child support can lose their drivers license and other professional licenses.

Illinois TANF. Unmarried mothers under 18 must live with their parents and be enrolled in school or they lose part

of their grant. The “family cap” eliminates extra funding when families have additional children. Benefits can be

obtained only if paternity is established within six months of birth.

Iowa Family Investment Program. Welfare recipients are encouraged to work and build up savings through

“individual development accounts,” from which they can make withdrawals only to start a business, buy a home,

pursue education or job training, or take care of a family emergency.

Vermont Reach Up. Vermont, one of just a few states refusing to impose a lifetime limit on welfare support, describes

its approach as a “kinder, gentler” form of welfare reform. While requiring single parents to work, the state provides

a generous cash supplement to poor workers; it has also created its own nearly universal healthcare program for

children. Most recipients must do community service after two and a half years of benefits. If a recipient is unable to

secure a private-sector job, the state provides ten months of employment in a public or nonprofit organization.

Mississippi WorkFirst. WorkFirst requires welfare recipients to accept any job offered or else lose all benefits.

Employers hiring welfare recipients are provided a TANF subsidy of $3.50 an hour, to which they must add $1.00

an hour. In this fashion, public assistance is turned into a wage subsidy program.

Wisconsin Works (W2). Touted by conservatives as a “welfare miracle,” Wisconsin cut its welfare rolls by 80

percent through “diversion,” a tough work program requiring nearly all recipients to work for their benefits on

penalty (strictly enforced) of reduced (or eliminated) welfare checks. Wisconsin claims that 75 percent of those

now off welfare have private jobs; critics argue that a major portion are poorer than ever, many in homeless

shelters. Wisconsin has invested heavily in private support services including day care, health care, wage

supplements, and job training.

Wisconsin LearnFare. Wisconsin and several other states penalize TANF families whose minor children are not

in school. The penalty is stiff—$50 per month per child. Children who are dropouts, habitual truants, or parents

themselves can be exempted from the LearnFare requirement if they participate in case management activities.

New York City Work Experience Program. The nation’s largest workfare program requires more than 30,000

residents monthly (i.e., 10 percent of its welfare population) to don orange workfare vests to clean parks, empty

lots, and city offices, to answer phone calls, and to otherwise assist public and nonprofit agencies.

The Mode of Finance: Systems of Transfer 243

also deny minors all welfare benefits, an option just a few have exercised. TANF requires the U.S. Department of Justice to educate state and local law enforcement officials on the prevention and prosecution of statutory rape. And it provides spe- cial financial payments—“illegitimacy bonuses”—to the five states that decrease out-of-wedlock births the most, without increasing abortions.

While welfare reform’s primary focus has been on single mothers and their children—nearly 90 percent of all adult welfare recipients are unmarried women—the responsibility agenda has also reached out to young men. A num- ber of “fatherhood” programs, especially emphasized in the 2006 welfare reform renewal, have been implemented, some aimed at raising the incomes of noncus- todial fathers, others at strengthening ties between dads and their children.

Table 8.5 (continued)

TANF Wyoming. One of the nation’s most punitive welfare systems, Wyoming requires recipients to meet work

requirements before their first welfare check either by job hunting, work-related training, or volunteering. As a

result, the state has reduced the recipient caseload by 90 percent while substantially increasing employment

among single mothers.

Florida Welfare Transition Program. Florida spends less than a third of its welfare allotment on cash grants. The

rest goes to services like day care and mental health treatment for families both on and off the welfare rolls. The

maximum TANF grant is 17 percent of the federal poverty line.

Texas Works. The Texas program is largely controlled by 28 local boards composed of local business leaders,

educators, and social service workers. It follows a work-first philosophy that seeks out quick placements in low-skill

jobs rather than emphasizing training and education.

Temporary Assistance for Families in Idaho (TAFI). Idaho represents a punitive version of welfare reform. On

TANF’s enactment, the state required all AFDC clients to reapply for aid, immediately reducing its caseload by

half. TAFI has a 24-month lifetime limit, with very few hardship exemptions; pays $309 per month, regardless

of household size; and requires alcohol- and substance-abuse screening. Only families with incomes below 32

percent of the federal poverty level are eligible.

Created by the authors

Capsule 8.4 Congress Just Says No

To qualify for “abstinence-only education” fund-ing under welfare reform’s Adolescent Family Life Program, Congress requires that educational or

motivational programs for youth have as their “exclu-

sive purpose” the following content:

• Teaches the social, psychological, and health gains

to be realized from abstaining from sexual activity.

• Teaches abstinence from sexual activity outside of

marriage as the expected standard for all school-

age children.

• Teaches that abstinence is the only certain way

to avoid out-of-wedlock pregnancy, sexually trans-

mitted diseases, and other health problems.

• Teaches that a monogamous relationship in the

context of marriage is the expected standard of

human sexual activity.

• Teaches that sexual activity outside of marriage is

likely to have harmful effects.

• Teaches that bearing children out-of-wedlock is

likely to have harmful consequences.

• Teaches young people how to avoid sexual ad-

vances and how alcohol and drug use increases

vulnerability to sexual advances.

• Teaches the importance of attaining self-suffi-

ciency before engaging in sexual activity.

U.S. Department of Health and Human Services, Adolescent Family Life Program, Abstinence-Only Education Grant Guidelines, 1999.

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The law, for example, helps states to get absent fathers to pay their obli- gated child support by requiring welfare applicants to identity the father of all children seeking aid and strengthening efforts to collect court-ordered support. The law requires businesses to identify all new employees to the local child- support authorities so that delinquent parents can be located. Subsequent legislation, chiefly the Welfare-to-Work enactments of 1998, provides job ser- vices for noncustodial parents facing major “labor market disincentives,” en- abling states to establish training and counseling programs for absent fathers. Combined, these father-focused programs have contributed to an appreciable increase in the number of fathers involved with their children. States have succeeded not only in persuading unwed mothers to identify fathers at the time their children are born, but in confirming paternity from the fathers them- selves. Since the mid-1990s, paternity statistics have almost tripled, helping both to ensure that fathers pay child support and to increase the likelihood of their staying in contact with their offspring.23

A third responsibility initiative, perhaps the law’s most dramatic, was tucked away on page 501 of the original 502-page enactment. Promoted by social conservatives and the right-wing Heritage Foundation, it provided states $50 million annually for “abstinence only” programs emphasizing the “social, psychological, and health” benefits of abstinence along with the neg- ative consequences of premarital sex. Within these ideological parameters— comprehensive sex education is verboten—states have some latitude in program planning and service delivery. Most have delegated the administra- tion of their abstinence programs to public schools, health departments, and church and other community organizations for activities that teach the impor- tance of chastity, the perils of illegitimacy, and the sanctity of marriage. The program in North Carolina, for example, identifies “mutually faithful monoga- mous heterosexual relationships in the context of marriage” as the standard for responsible sex. Other states are sponsoring ad campaigns encouraging parents to talk to their children about sex, developing programs that promote self- esteem, and creating mentoring and counseling programs that teach good decision making and “refusal skills.”

A growing body of research shows that abstinence-only education has no significant impact on teen sexual activity or rates of unprotected sex.24 Given the evidence, the generally narrow priorities of these programs, the denigra- tion of single parenthood, and the refusal to incorporate any elements of the traditional public-health/safe-sex/contraceptive-counseling model of sex edu- cation, several states have opted out of the program. In 2007, for example, 14 states refused to accept abstinence dollars.25

Evidence and Directions

Despite the large body of data and commentary that has accumulated concern- ing welfare reform, significant controversy remains concerning its operations, its significance, and its future. The most dramatic and publicized evidence—the startling reduction in caseloads—has been touted by conservatives as an argu- ment for success. And plunging caseloads, down more than half since 1996, did reflect a real shift from welfare status to work status on the part of hundreds of thousands of household heads. Given the failure of previous welfare initiatives to move recipients off the rolls, the remarkable welfare exodus of TANF’s first decade constituted a decided affirmation of the view that a degree of coercion in enforcing a work obligation could change behavior, and attitudes as well.

The Mode of Finance: Systems of Transfer 245

The basic tenet of welfare reform (i.e., that poor people who make the ef- fort will get jobs, jobs that put them on the road to escaping poverty) seemed to work. At least half the mothers who left the welfare rolls between 1997 and 2007, for example, secured regular full-time jobs, earning incomes above the welfare level. Indeed, even the economic circumstances of those remaining on welfare improved for several years. According to the Urban Institute, the me- dian income of families on public assistance—many of whom have at least some work income—rose to $11,820 in 2004, some $4000 above the level of 1997.26

Why did large numbers of welfare moms join the workforce? This, in good part, was obviously the consequence of the clear “welfare to work” message. But there is no doubt that other policy incentives, enacted around the same time as TANF, contributed greatly as well. Investigators such as Isabel Sawhill and Douglas Besharov, for example, have estimated that perhaps even more important than the economy in stimulating job seeking were the increases in the minimum wage, liberalized EITCs, and TANF-supporting state-level enact- ments that reinforced the spirit of welfare reform.27

The workfare data is pretty clear, as is its relationship to the broader econ- omy. From 1996 through 2007 the United States experienced a period of lively growth as GDP increased at an average rate of 3.17 percent a year. Unemploy- ment rates remained relatively low even as the proportion of the working-age population in the labor force rose. TANF moms got jobs. However, after 2007, economic conditions deteriorated rapidly as the GDP growth rate dropped into negative territory, averaging minus 1.9 percent from 2008 through 2009. With this contraction of economic growth, the United States entered a period of hard times, one that has posed a stern test to the states’ management of the TANF reforms, particularly the “work-first” approach to increase the employ- ment of welfare recipients.

It stands to reason that services, incentives, and sanctions work best to move people into employment when there is plenty of work to be had, but success in getting a job stalls when work is scarce. Of course, even when jobs are in short supply some people find employment. But as the percentage of unemployment moves up toward two digits, the push and pull of incentives and sanctions often produce more social frictions and stress than get-up-and- go among job-seekers being thrust into a shrinking market.

One analysis suggests that rather than trying to squeeze an increasing num- ber of unemployed people into a contracting job market, a TANF strategy that reinforces work habits and builds human capital should be the priority. This means less emphasis on incentives and sanctions and more emphasis on mea- sures that generate public jobs and educational and vocational advancement. The objective, in other words, focuses less on increasing the immediate rates of employment and productivity and more on maintaining a recipient’s con- nection with the quotidian habit of work by providing skills training for future job mobility and productivity gains. During an extended period of economic stagnation and high unemployment, this may be the best that work-oriented policies can accomplish.28

In response to the 2008 recession, indeed, several measures have already been initiated that mark a palpable shift from “work first” to education and training for building human capital, along with the extension of passive sup- ports to cushion against the insecurities associated with job loss. Under the 2009 American Recovery and Reinvestment Act, for example, federal funds were provided for extending the duration of eligibility for unemployment

With the contraction of economic growth that began in 2008, the United States entered a period of hard times that poses a stern test to the states’ management of the TANF reforms.

Chapter 8246

benefits and increasing the level of benefits by $25 per week, for exempting the first $2400 of unemployment benefits from federal income taxes, and for providing an emergency contingency fund to help states meet the increasing costs of social assistance. The act also included a provision that provided a 65 percent subsidy to help unemployed workers maintain continuation of their employee healthcare coverage for nine months. Finally, the Obama administra- tions plans to invest $12 billion in community colleges over the next ten years to help prepare a new generation of workers in the coming years. Although these new benefits are still not as generous as those provided by most other Organization for Economic Cooperation and Development (OECD) countries, recent developments have moved the U.S. labor market policies closer to those of Western European countries.

While workfare programs are likely to change, it is important to examine some of the outcomes of TANF in the recent years of recession. TANF has not been available for most of the families that have fallen into poverty since 2009. Those who do receive cash benefits are only rarely lifted out of poverty and

many don’t even rise to the “deep poverty” threshold of 50 percent of the poverty line. The portion of poor families re- ceiving assistance today—about 27 percent—is far less than half of what it was when TANF was enacted. Some of the decline in TANF spending, it should be noted, represented the changing structure of social assistance.29 U.S. govern- ment spending on means-tested social safety net programs, as was shown in Chapter 2, has shifted dramatically since the 1990s, with Medicaid and Food Stamps growing dra- matically larger—both in expenditures and the number of people covered—while TANF had become relatively small.

EMERGING ISSUES: IMMIGRANTS, SOCIAL POLICY, AND THE STATES

The status of immigrants in American society is another issue that has been vitally affected by welfare reform. Historically, the ambivalent attitudes that Americans hold toward immigrants has been reflected in social welfare pol- icy and in the way policymaking responsibilities around immigration issues have been divided in our federal system. For while immigration policy, policy governing the entry of foreigners into the United States, has always been the purview of the federal level of government, what might be called immigrant policy, policy that addresses the well-being of newcomers once in America, has come to reflect an inchoate mixture of local, state, and national, and also private agency, activities.

Federal immigration policies, since 1965 at least, have, on the whole, been inclusionary. The Immigration Act of 1965 repudiated a long-standing quota system based on national origins in favor of a relatively open door, and this re- sulted in a vast increase in the number of foreigners joining the American com- munity. Assimilation, of course, is a complex process, one that is influenced by a myriad of economic, political, social, and cultural factors. Most evidence indicates, however, that assimilation generally proceeds rapidly. Immigrants learn English, get jobs, eat fast food, follow the mainline mass media, and ab- sorb (and influence) the mass culture. Most of this occurs, of course, without

Research Based Practice

Practice Behavior Example: Social workers

use research evidence to inform practice.

Critical Thinking Question: To what extent should the knowledge developed over the past

fifteen years about TANF influence social work

practice?

The Mode of Finance: Systems of Transfer 247

specific legislative intervention. And until the last decade or so, immigrant policy—when it wasn’t entirely overlooked—was more or less ad hoc. Unlike countries like Canada and Israel, countries with systematic national settlement policies for integrating and assimilating newcomers, the United States pretty much assumed that immigrants—who today compose nearly 15 percent of the population—would be able to take care of themselves. For this reason, Con- gress generally ignored critical social policy questions, including whether new immigrants should be treated the same, or differently, from citizens for pur- poses of service eligibility. Should immigrants, in other words, be excluded from some, or all, social welfare benefits until they are naturalized?

When immigrants did receive explicit federal attention, it was generally on a temporary basis. Some modest federal provisions were made, for example, for short-term resettlement assistance for special groups of refugees such as Cubans and Kosovars. And English-language education for children and adults has been promoted through federal aid. For the most part, though, the needs of immigrants have been left to their American sponsors (who have to sign finan- cial responsibility statements), friends, family, voluntary agencies, and state and local governments.

Capsule 8.5 TANF in Recession

The weaknesses in TANF that the recession has exposed cast serious doubt on the often- extravagant claims of welfare reform’s success. In its

early years, the combination of welfare reform and a

strong economy contributed to declining caseloads

and increased employment among single mothers

with low levels of education. But, a number of those

improvements were short-lived, and they tell only

part of the welfare reform story. The success of wel-

fare reform should be judged by the lessons of the last

15 years as a whole—and in particular, on TANF’s

performance during the recession, since a safety net

is needed most when the economy is weak. TANF’s

record here is not impressive:

TANF now provides a safety net for very few families, even though the need for assistance is large. In 1995, AFDC assisted 75 families with children for

every such 100 families in poverty. By 2009, TANF

assisted just 28 families for every 100 in poverty.

The employment gains of the early years of welfare reform, when the labor market was unusually strong, have not been sustained over time. The share of poorly educated single mothers with earnings rose

sharply in the years immediately following welfare

reform, from 49 percent in 1995 to 64 percent

in 1999. However, as the economy started to

weaken, much of the early gains were lost. The

share of poorly educated single mothers with

earnings stayed below 60 percent in every year

after 2003 and reached a low of 54 percent in

2009.

The poorest families have become poorer. In 1995, AFDC lifted 62 percent of children who would oth-

erwise have been below half the poverty line out of

severe poverty. By 2005, this figure for the TANF

program was just 21 percent. The result has been

a steady increase in the number of children living

in severe poverty. The number of children living

below half of the poverty line rose from 1.4 million

in 1995 to 1.7 million in 2000 and 2.4 million in

2005, nearly a 75 percent increase.

Welfare reform has left a large and rising number of families with children disconnected from both work and the safety net. A recent policy brief from the Assistant Secretary for Planning and Evaluation

found that about one in five low-income single

mothers neither worked nor received government

cash assistance from 2004 to 2008—a big jump

from one in eight in 1996–1997.

LaDonna Pavetti and Liz Schott, TANF’s Inadequate Response to Recession Highlights Weakness in Block-Grant Structure. Center on

Budget and Policy Priorities, July 14, 2011.

Chapter 8248

Since the early 1990s, as the number of foreign-born residents has risen to historic highs—with nearly two-thirds not yet citizens—critics have been complaining that immigration has become excessive, and damaging to the country. Much of the criticism focuses on the newest arrivals with the fewest skills—immigrants, in particular, from developing countries such as Mexico, the Dominican Republic, the Philippines, Vietnam, and China. Undocumented immigrants have been a particular focus of concern. Some argue that immi- grants, legal or not, take jobs away from Americans. Others feel that they im- pose heavy costs on government, especially on states and localities that have the responsibility for providing services. It has been argued further that many immigrants are taking advantage of the welfare system, even coming to the United States explicitly to get welfare benefits.

It is true, of course, that immigration, as in generations past, has had a major impact on the size and growth of America’s poverty population. At pres- ent, more than one in five living in poverty reside in immigrant households, compared with less than 10 percent in 1979. Immigration, indeed, is one of the primary explanations for why the overall poverty rate has remained high in recent years, despite significant economic growth and reasonably low un- employment. Some immigrant groups, moreover, are especially likely to be impoverished. Immigrants from Mexico, the Caribbean, and Central America have relatively high poverty rates, while those from Europe and Asia have low rates. And, as might be expected, immigrants who are newly arrived tend to be poorer as a group than those who are more established.30 And while it is hazardous to generalize about welfare use, we do know that some groups of immigrants (e.g., refugees and the elderly) have been heavy service users.

But focusing on welfare illustrates only a sliver of the immigrant experi- ence. To the degree that broad statements can be made, most studies find that immigration has been more an economic blessing for the nation than a bur- den. Enthusiastic, hard-working, and enterprising newcomers bring powerful long-term economic benefits to the United States. They pay taxes, buy homes, serve in the military, and provide valuable resources for U.S. employers. While about 30 percent of all immigrants come to the United States with few skills or education, many more are technically trained and possess a wide array of advanced skills.31

Nevertheless, immigration continues to be a volatile public policy issue, with substantial political pressures to restrict immigrant access to welfare. One of the earliest, and most dramatic, manifestations of the public’s discontent was the passage of California’s Proposition 187 in 1994, which barred undoc- umented individuals from most public services. Another was the provisions limiting assistance for legal immigrants incorporated into the 1996 welfare re- form bill. The devolution theme of welfare reform dramatically changed the way policies affecting immigrants were shaped.

Before welfare reform, immigrants were largely ignored in the welfare de- bate. No longer. The new law, reflecting the suspicion that immigrants were exploiting the welfare system, significantly reduced immigrant benefits while making state policymakers key players in determining the rules for eligibil- ity and benefits. As Peter Schuck stated, “Congress sought to ‘revalue’ U.S. citizenship by adopting a firm national policy favoring discrimination against [immigrants] in the distribution of public benefits and by conscripting the states in the implementation of that new policy.”32 Immigrant policy, for the first time, distinguished nonrefugee immigrants into separate eligibility catego- ries, “qualified” and “unqualified,” based on when they entered the United

The Mode of Finance: Systems of Transfer 249

States. The “qualifieds,” those who entered before welfare reform, were sub- ject to one set of rules; post-enactment immigrants, the “unqualifieds,” were subject to another. Only the pre-enactment immigrants, for example, retained their federal eligibility for Supplemental Security Income (SSI), and only pre- enactment immigrant children, elderly, and the disabled (but not working-age adults) were able to maintain their food stamps. Eligibility for other programs, chiefly Medicaid and TANF, became a matter for state determination.

For post-enactment immigrants, eligibility for most federally supported programs was prohibited for five years. After this period, SSI and food stamps, as well as TANF and Medicaid (at state option), could be received. Here, once again, Congress ceded considerable authority to the states. States, if they wish, could bar noncitizens from their programs, or they could create their own pro- grams for immigrants to substitute for the loss of federal support.

Given the new restrictions on welfare in general, and on immigrants in particular, and the decentralization of immigrant policy, how have noncitizen immigrants been affected? One salient consequence of welfare reform has been a substantial reduction in the benefits available to noncitizens: a reduction greater than among the native born. A second outcome has been a dramatic variation in benefits among immigrant groups. Some, Cuban immigrants, for example, have been relatively unscathed while others, typically the most re- cent immigrants, have suffered considerably. A third result has been divided eligibility within families: Children born in the United States (and who there- fore are citizens), for example, are often eligible for benefits while their parents or older siblings may not be. A fourth outcome has been a dramatic increase in the number of immigrants seeking citizenship. Since welfare reform puts social welfare benefits in jeopardy, the number of immigrants annually secur- ing citizenship has jumped from 400,000 to over 1 million.33

The effects of welfare decentralization on the states have been carefully monitored by The Urban Institute, a Washington, D.C., think tank. According to the Institute, the states with the greatest number of immigrants (California, Texas, New York, Florida) have “provided considerable assistance, particu- larly when the costs are shared with the federal government. Despite fears of a race to the bottom providing as few benefits as possible, nearly every state has opted to maintain TANF and Medicaid eligibility for immigrants who were already in the United States when the federal welfare law was passed.”34

Even though states must bear the costs, many have elected to provide as- sistance, and a few have undertaken new initiatives in areas of special impor- tance such as job training, English-language instruction, and other programs designed to foster assimilation. California, despite its anti-immigration rheto- ric and the passage of Proposition 187, has devoted more resources than any other state to advancing the well-being of low-income legal immigrants, both the pre- and the post-welfare reform groups, generally replacing lost federal benefits and providing food stamps, health insurance, TANF cash support, and SSI payments.

What has been the result of welfare reform? Census bureau data provide a wealth of interesting information on welfare use by both legal and undocu- mented immigrants. Despite the fact that welfare reform sends the message that discriminating against immigrants vis-à-vis citizens in the determination of benefit eligibility is appropriate public policy, many states, including Califor- nia and New York, have strongly defended the rights of immigrants to benefits.

And while the nativist sentiment embodied in welfare legislation has been harmful not only to America’s immigrant communities but also to America’s

Chapter 8250

Capsule 8.6 The Undocumented Dilemma

As the debate over the residency status of the nation’s 12 million illegal immigrants boils, another battle is simmering over what—if any—

benefits they deserve while they’ve here. Some of

the most heated arguments on the issue focus on

health care. So far, immigrants are losing.

On a national level, an effort to add legal immi-

grant children to the State Children’s Health Insur-

ance Program was blocked in the Senate in 2007.

Instead, lawmakers added language to ensure that

illegal immigrants were excluded. Illegal immigrants

can get emergency care through Medicaid, but they

can’t get non-emergency care unless they pay. They

are ineligible for most other public benefits [although

they can access] a patchwork of federally funded

community health centers, which charge little for

basic services and don’t seek proof of citizenship.

Some states, including New York, Illinois and

Washington, as well as several California counties,

cover illegal immigrant children with state dollars.

From “Rising Health Care Costs Put Focus on Illegal Immigrants” by Richard Wolf, USA Today, January 21, 2008. © USA TODAY, January 22,

2008. Reprinted with permission.

Table 8.6 Immigrants and Native-Born Americans: A Fact Sheet, 2007

Foreign Born 37.9 million (14% of the U.S. population) Percentage citizens 39%

Percentage noncitizens 61%

Region of Birth Europe 12%

Asia 23%

Latin America 55%

Poverty Rate Native born 11%

Foreign born 17%     Asian 11%

    European 10%

    Latin American 21%

Completed High School (Adults) Native born 92%

Foreign born 71%

    Asian 87%

    European 84%

    Latin American 49%

Receiving Public Assistance (Households) Native born 19%

Foreign born 33%

    Asian 20%

    European 14%

    South American 25%

    Mexican 51%

Source: Steven Camarota, Immigrants in the U.S. 2007, Center for Immigration Studies, November 2007.

The Mode of Finance: Systems of Transfer 251

traditional image of welcoming refuge, welfare use among immigrants in need is by no means a thing of the past. It is true that very few immigrant households today receive TANF assistance, but when we examine the range of public assistance programs—cash aid and food assistance and Medicaid— immigrants remain significantly more likely to receive help than the native born. Considering all these programs, as Table 8.6 indicates, a full third of all immigrant households receive aid, compared with just 19 percent of U.S.-born households.35

SUMMARY

This chapter describes the intergovernmental—federal, state, local—financing of the American welfare state. Two topics are emphasized: How dollars flow from Washington D.C. to states and localities, and how those money transfers are regulated. Underpinning these choices is the ideological debate between centralization (national control) and decentralization (local control). American federalism, characterized by a blending of national and state control, is ex- pressed in federal grant-in-aid programs. Conditions attached to these grants typically specify how federal dollars can be used. These regulations specify, either broadly or narrowly, the types of activities that can be funded, the share of program costs that must be provided by the recipient government, and those individuals or groups who are eligible beneficiaries. Welfare reform is offered as a case example of an intergovernmental social program. The chapter closes with a discussion of immigration policies.

252

7. What are the major critiques of assertive federal authority in social policy? Assess each critique’s validity.

1. A program run entirely by the Federal government:

a. Medicare

b. Medicaid

c. TANF

d. Child Welfare

2. Requires states and localities that receive federal grant funds to pay a share of program costs:

a. Program conditions

b. Financial conditions

c. Beneficiary conditions

d. Procedural conditions

3. A difference between categorical and block grants:

a. Categorical grants are available only to low-income states and cities whereas block grants are provided by

private donors.

b. Block grants have fewer strings attached than cat- egorical grants.

c. Categorical grants are state grants to the federal gov- ernment whereas block grants are federal grants lim-

ited to cities and counties.

d. Block grants are mainly in the form of cash aid whereas categorical grants are mainly in-kind.

4. Characterized the transition from AFDC to TANF:

a. Federal block grants to states ended.

b. States lost the discretion to organize their own welfare programs.

c. Federal standards guaranteeing a cash entitlement were strengthened.

d. The federal guarantee of welfare benefits to eligible recipients ended.

5. Conservatives argue in favor of:

a. A powerful federal government.

b. Rigorous controls over federal grants-in-aid.

c. Focusing federal aid on cities rather than states.

d. Decentralization.

6. One of the major benefits of the 2009 American Recovery and Reinvestment Act:

a. Universal health care

b. Child care subsidies

c. Extension of unemployment benefits

d. Mother’s pensions

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

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* = CSWE Core Competency Asset ^ = Case Study

Explore and Assess

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Interactive Case Study: Federalism and Regulations

Interactive Case Study: Explaining the Differences in State Laws

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Interactive Case Study: Growth of the Budget and Federal Spending

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Herbert Croly, from Progressive Democracy (1914)

Ladies Home Journal, “Young Mother” (1956)

Caroline Manning, The Immigrant Woman and Her Job (1930)

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Jesse Jackson, Common Ground (1988)

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254

Policy Dimensions: International Trends in the Twenty-First Century

9

C H A P T E R O U T L I N E

Pressures for Change 255

Directions of Change 260

Emerging Issue: Toward Comprehensive Integration of Work Requirements and Public Aid 264

Summary 266

Practice Test 267

MySearchLab Connections 268

Professional Identity

Ethical Practice

Critical Thinking

Diversity in Practice

Human Rights & Justice

Research-Based Practice

Human Behavior

Policy Practice

Practice Contexts

Engage, Assess, Intervene, Evaluate

x

x x

Competencies in This Chapter (with Practice Behaviors)

Policy Dimensions: International Trends in the Twenty-First Century 255

[T]he beginning of a new century could inspire minds around the world to

begin the task of building a new international economic and social order, one

that fosters employment creation, that facilitates the exchange of ideas and

technological innovations, and that allows men and women to share more

equally their home and workplace obligations. Social security on its own can-

not achieve these objectives, but it plays a critical role in enabling societies

to achieve them. The critical challenge facing the 21st century is thus to find

a new balance between economic goals—global and national—and the social

protection of the world’s citizens. . . . There is, however, a growing consensus

that the old ideas and familiar terminology are no longer adequate to guide us

into the future. What framework of ideas will therefore dominate in shaping

the world’s economic and social policies in the years to come?

Dalmer Hoskins,

Social Security at the Dawn of the 21st Century, 2001.

New Brunswick, N.J.: Transaction Publishers, p. 149

In the preceding chapters, we examined a series of choices affecting the design of social welfare policies. Generally speaking, these choices address ques- tions of what is to be done, what alternative courses of action can fulfill social welfare objectives, and what their implications might be. In this chapter, our attention shifts to the international scene to examine some of the ways social and economic forces are transforming the essential character of major so- cial welfare policy choices in many, if not all, welfare states in the advanced industrialized nations. To transform is not to dismantle or obliterate the fun- damental institutional arrangements for social welfare—what is being altered, rather, are several of the basic dimensions of social welfare policy choice on which the most progressive welfare states have been modeled.1 In this final chapter, we examine some of the compelling reasons for this shift, its substan- tive character, and several important issues it raises.

PRESSURES FOR CHANGE

The period from 1960 to the mid-1970s is sometimes referred to as the Golden Age of welfare state expansion. According to the Organization for Economic Cooperation and Development (OECD), social welfare expenditures nearly doubled to an average of over 20 percent of gross domestic product (GDP) among the 21 member nations in the two decades after 1960. As noted in Chapter 2, this period of growth ended in the wake of the oil crises that hit the world economy during the 1970s. After 1980, as shown in Figure 9.1, social welfare growth rates as a percentage of GDP slowed, almost leveling off since the mid-1990s. The bump up for social expenditure in the mid-1990s is partly related to unemployment rates in the European Union, which peaked in 1994, then started to fall, although by 2010 they rose again to 9.6 percent.

The fact that spending as a percentage of GDP leveled off does not signify that the absolute amount of social spending remained constant. To the contrary, since the total real growth of GDP for the OECD countries increased by an aver- age of 2.6 percent annually from 1994 to 2007, the actual amount of social ex- penditures continued to rise rather substantially, as seen when the measure of spending shifts from the percentage of GDP to per capita expenditures controlled for Purchasing Power Parity (PPP). Under this metric, not only does social spend- ing continue to rise, but the United States emerges with a level of public social spending higher than the average of OECD countries (as seen in Figure 9.2).

Several of the basic dimensions of social welfare policy choice on which the most progressive welfare states have been modeled are undergoing transformations.

Chapter 9256

Figure 9.1 Social Expenditures OECD Countries.

Source: OECD Stat data ( January 2012) OECD average of 33 OECD countries and Estonia; 1980–1999 data are trended from 23 OECD countries for which data were available..

Public Social Expenditure as a Percentage of GDP United States vs. OECD Average

24%

20%

22%

18%

14%

10%

6%

2%

16%

P e rc

e n ta

g e o

f G

D P

12%

8%

4%

0% 1980 1985 1990 1995 2000 2005 2006 2007

US OECD

Figure 9.2 Public Social Expenditure per Head.

Public Social Expenditure Per Head (Current PPPs) United States vs. OECD Average

$8,000.00

$7,000.00

$6,000.00

$5,000.00

$4,000.00

$3,000.00

$2,000.00

$1,000.00

1980 1985 1990 1995 2000 2005 2006 2007 $2

P e r

H e a d a

t C

u rr

e n t P

P P

s in

U S

D o lla

rs

US OECD

The rise in per capita spending was due in part to increasing demands for public spending on retirement, health services, and social care, which were being generated by the climbing number of elderly people in the OECD countries.

Not only did the rise of social expenditure relative to GDP between 1960 and 1980 diminish dramatically by the mid-1990s, but social welfare policies came

Policy Dimensions: International Trends in the Twenty-First Century 257

under renewed criticism. Rather than being advanced as a remedy for the flaws and insecurities of capitalism, social programs were increasingly condemned as part of the very problem they were designed to solve. Critics claimed that the welfare state promised more than could be delivered without creating del- eterious effects on the market economy by undermining incentives, hamper- ing competitiveness, inhibiting savings, and increasing national debt.2 Much of the Reagan–Thatcher welfare state critique of earlier years found a wide au- dience, even in the countries traditionally associated with progressive, social democratic traditions.

As noted in our discussion of the new social accounting (see Chapter 2), it is now well recognized that direct governmental social expenditures are at best a crude measure of the magnitude of the welfare state since they ignore the impact of taxes, tax expenditures, regulatory transfers, philanthropy, and other forms of voluntary transfers. In analyzing expenditure trends, our point is that social spending has slowed and appears to have hit a ceiling. This is creating a tremendous compression in the welfare state since the demand for income support and services continues to rise. Simultaneously, other forces for change have emerged. Specifically, the welfare state is being challenged by a powerful combination of economic and social pressures. As these economic and social pressures, indicated in Table 9.1, converge, they are significantly reshaping modern social welfare systems.

First, immense fiscal pressures are emerging in response to the interaction of mature social security systems with sociodemographic trends. In most European countries, for example, the proportion of people over age 65 is expected to in- crease by more than half by 2040, to 22.2 percent of overall populations.3 In Europe, in addition, the size of the overall population is falling and is likely to continue to fall. In Europe and the United States, life expectancy is increasing and the average age of retirement is declining. In the United States, for example, men and women retired at the median age of 62 in 2002, about seven years ear- lier than the retirement age in 1940. And workers in the United States retire later than workers in most, if not all, of Europe.4 With social security entitle- ments nearly universal, the rising number of elderly will require increased pub- lic spending for retirement, health services, and social care, threatening its very solvency. In the United States, the Social Security Board of Trustees indicates

Table 9.1 Social and Economic Pressures for Change: Four Lines of Influence

Demographic transition Aging, divorce rates, low fertility, extramarital births

Globalization of the economy Mobility of capital to where production costs are low

Mobility of labor to where benefits are high

Knowledge of unanticipated effects Disincentives to work

Dependency traps

Belief in capitalism Rising faith in market economy

Privatization

The slowdown of social spending is creating a tremendous compression in the welfare state because the demand for income support and services continues to rise.

Chapter 9258

that the cost of Old Age, Survivors, and Disability Insurance (OASDI) began to exceed OASDI non-interest revenues in 2010 and estimates that the cumulated reserves and interest within the OASDI Trust Funds will be exhausted by 2036.5 European old-age pension systems face burdens that are even more acute. In France, there are currently three workers contributing for every pensioner, with projections indicating that by 2030 this support ratio will drop to just 1.6 con- tributors per retiree.6 And France is by no means the exception. By 2005, the ratio of persons over 65 to the number of people employed started climbing pre- cipitously among all the advanced industrialized countries.7

This demographic shift poses a considerable challenge to the financing of social transfers, particularly old-age pensions. Governments could address this challenge by raising taxes or by lowering benefits, both politically unattractive options. Efforts could also be made to increase the number of the employed by raising the retirement age, a reform already enacted in many countries.8 Boosting levels of productivity for those currently employed would also be beneficial. Short of a baby boom, however, one of the broadest and most im- mediate avenues to lowering the “dependency ratio,” the ratio of those who are retired compared to those who are working, is by opening national borders to immigrants. Estimates by the United Nations Population Division, for ex- ample, reveal that maintaining the European population at its maximum level in 1995 would require an average of almost 2 million migrants a year over the next fifty years. These numbers are daunting, as are the cultural implications, particularly for small relatively homogenous countries that may feel culturally threatened.

The rising costs associated with the aging of the population are com- pounded by other demographic trends. For example, between the early 1980s and the early 1990s, the number of lone-parent families increased an average of 25 percent (and as a percentage of all families, they rose proportionately by an average of 17 percent) in 21 of the OECD countries for which these data are available.9 By the turn of the century, lone parents headed more than one in four of all households with children in many countries, including the United States, Germany, Sweden, and the United Kingdom.10 The proliferation of two- income households, as well as lone-parent families, has reduced the modern family’s capacity to provide in-person care for children, the elderly, and other infirm relatives, which creates additional demands for the state to supply child and elder care, financial assistance, and other supportive services.11 Overall, what some are calling the “second demographic transition” forecasts a period of change that will generate new demands while eliminating practically no existing needs.12

The second major “line of influence” stems from what is popularly re- ferred to as economic globalization: rapid technological change, particularly in the realm of information and communications, the growth of transnational cor- porations, and the increased investment of capital in foreign countries. These developments have magnified economic interdependencies and shrunk time and space.

While everyone agrees that globalization is inexorable, there are differences of opinion about what the process represents for the future of state-sponsored social welfare.13 Although the full impact of globalization is unclear, it does ap- pear that the pressures of a highly integrated worldwide market severely curtail the flexibility of national policymakers. Spending on social benefits, for exam- ple, is being squeezed by the mobility of corporations to locate their workforces where production costs are low.14 As Guy Standing suggests, globalization

Policy Dimensions: International Trends in the Twenty-First Century 259

heightens pressures to scale back labor rights and employee benefits in order to maintain a country’s competitive edge in holding and attracting foreign investments.15

Globalization not only expedites the mobility of capital, but it also provides new highways for the movement of labor. Just as corporations are likely to invest in countries where standards of living, social benefits, and labor costs are low, workers are more and more able to migrate to places, either legally or illegally, where standards of living, wages, and social benefits are high.16 Thus, while the competitive discipline of the global market exerts pressure to suppress local public spending on social benefits, a counterforce of increasing demand is being exerted as new immigrants arrive seeking their fortunes in the lands of opportunity, affluence, and relatively generous social welfare benefits.

The third pressure for change emanates from the realm of ideas and knowl- edge. Normative views about social welfare are being remolded by the weight of experience gained during the decades of welfare state growth. This experi- ence suggests that social welfare provisions can, indeed, create disincentives to work, a claim, as indicated in Chapter 4, that in the past was advanced mainly by conservatives, most effectively in the United States. Today, the critique has become part of the social policy conventional wisdom in most welfare states. Thus, for example, a 1991 OECD report on the Netherlands found “clear indi- cations that the generosity of social benefits and the high effective marginal tax rates implicit in income-dependent subsidies create strong disincentives to work and underlie the exceptionally high dependency ratio in the Netherlands, where one employed person supports almost one person on social benefits.”17 To combat what is sometimes known as the “Dutch Disease,” corrective mea- sures were initiated in the mid-1990s, tightening eligibility requirements for disability, reducing benefits, and requiring single mothers to become active in the labor market when their children reached the age of five.18 In 2004, a major reform of the Dutch disability scheme increased the employers’ responsibility for managing disability by extending large and small firms’ responsibility to cover their employees’ full sick pay for two years, after which workers can ap- ply for long-term public disability. In 1985, the rate of disability per thousand workers in the Netherlands had been three times that of the United States: By 2009, it dropped below the U.S. rate.19

The Dutch experience is not unique. From the Revenu Minimum d’Insertion in France to the Newstart program in Australia, recent sociopoliti- cal deliberations in the industrialized welfare states have produced numerous legislative reforms to reduce “poverty traps,” social welfare disincentives to work and self-reliance.20 Even in Sweden, the paragon of progressive social policy, Prime Minister Carl Bildt told the press in 1992 that “if you look at the levels of benefits, they’ve become so high that they reduce the incentives to work.”21 One might well conclude that Charles Murray’s rendition of the disin- centive to work bred by public welfare, viewed as heresy by welfare advocates in the mid-1980s, has become a fundamental anxiety of today’s welfare state.22

Finally, normative views about the proper relationship between the state and the market have undergone a significant conversion as the collapse of cen- tral planning in Russia and Eastern Europe raised to record levels the stock of capitalism’s public acceptance in the marketplace of ideas. Despite our Enrons, WorldComs, and Tycos, the virtues of the free market economy have been widely touted—right up until its stock market tumbled in late 2008.23 While not everyone still believes that laissez-faire economic liberalism has tri- umphed, or that it constitutes a compelling guide to social policy, it has gained

Chapter 9260

powerful converts worldwide. Although the faith in unfettered markets has been shaken by the global financial crisis of 2009, the degree to which govern-

ment regulation of the market and state intervention are re- established remains to be seen as this volume goes to press.

In the meantime, complex and multiple forces are lending impetus to the transformation of the welfare state. It is not demographic shifts alone, or globalization, or nor- mative changes, or the faith in the market economy that ac- count for the fundamental change in the character of social welfare policy—it is the confluence of these lines of influ- ence. What lends particular weight to the pressures ema- nating from these structural and normative forces is that they all press in the same direction, which is away from the traditional model of the progressive welfare state to- ward what might be called the Enabling State model.

The emergence of the Enabling State does not signal the end of social welfare programs. No one imagines that social security, health insurance, disability benefits, public assistance, unemployment insurance, day care, and the rest will be jettisoned. But the social policy environment in which they evolve will be constrained by a set of demographic and mar- ket conditions and informed by normative assumptions that are fundamentally different than those underlying the development of social welfare programs through most of the twentieth century. These structural conditions and social norms have given rise to a new institutional framework that increasingly sub- ordinates social welfare policies to economic considerations, such as the need for labor market flexibility, the opening of new markets for the private sector, the pressures of international competition, and the imposition of limits on def- icit spending. Within this new framework, social welfare policies are increas- ingly designed to enable more people to work and to enable the private sector to expand its sphere of activity.

DIRECTIONS OF CHANGE

The Scandinavian welfare state, long and widely regarded as the highest in- ternational standard for the provision of social welfare, is characterized by its universal orientation to publicly delivered benefits, benefits firmly held as so- cial rights designed to protect workers against the uncertainties of the market. In terms of the dimensions of policy choice, this model represents an approach under which

• the basis of social allocations emphasizes universal eligibility, • the delivery system operates through the public sector, • the core social provisions are designed to protect workers, and • the provision of social welfare benefits is seen as a fundamental right of

citizenship.

These characteristics represent a Weberian ideal type, a model of social policy in the progressive social democratic mold, a model that is increasingly on the defensive.

Given the social, political, and intellectual developments we have de- scribed, what exactly does the erosion of the traditional progressive welfare state model, and the emergence of the Enabling State, mean for social policy?

Practice Contexts

Practice Behavior Example: Social workers

continuously discover, appraise, and attend to

changing locales, populations, scientific and

technological developments, and emerging

societal trends to provide relevant services.

Critical Thinking Question: Which of the four “pressures for change” identified in this

chapter do you think is having the greatest

influence on welfare states?

Policy Dimensions: International Trends in the Twenty-First Century 261

Table 9.2 summarizes these changes. First, what were previously termed income maintenance programs (public assistance, unemployment, and disabil- ity benefits) involved benefits that were designed to provide a secure source of income for people who were not employed. This liberated citizens from de- pendency on wage labor for their survival. Their labor was, in the Marxist ex- pression, “decommodified,” made less like a commodity that was bought and sold purely in response to market forces. Recent policy reforms, however, have increasingly tied these benefits to incentives and sanctions that pressure recip- ients to return to, or to connect to, work as soon as possible. In contrast to an income-support program for social protection, the new work-oriented reforms can be seen as promoting the “recommodification of labor.” Indeed, it has be- come almost universally accepted that unconditioned cash benefits, “passive” income supports based entirely on need, should be replaced by “active” mea- sures designed to stimulate movement into the paid labor force. These reforms have altered the basic requirements to enter and exit programs originally de- signed to protect people out of work.

Throughout the industrialized nations, therefore, policy reforms have raised the eligibility bar on entrance into social welfare programs and acceler- ated program exit by reducing the duration of benefits, providing incentives for self-support, and imposing sanctions for continued benefit use. In the realm of old-age pensions, for example, many countries are requiring people (particu- larly women) to work longer, either directly by raising the formal age of re- tirement or indirectly by increasing the period of contributions, before being eligible for benefits. Regarding unemployment insurance, many countries are extending the period of paid employment required to qualify for benefits, and a few have introduced or lengthened benefit waiting periods.24 New Zealand, for example, raised the minimum age to qualify for unemployment benefits.25 The United States raised the age requirement for social security to 67, to be phased in slowly over a decade, and narrowed the criteria for disability to ex- clude, for example, people addicted to drugs.

Table 9.2 Shift in Central Tendencies from the Welfare to the Enabling State

Welfare State Enabling State

Protecting labor Promoting work Social support Social inclusion

Decommodification of labor Recommodification of labor

Unconditional benefits Use of incentives and sanctions

Universal entitlement Selective targeting Avoiding stigma Restoring social equity

Public provision Privatization Delivery by public agencies Delivery by private agencies

Transfers in the form of service Transfers in cash or vouchers

Focus on direct expenditures Increasing indirect expenditures

Benefits as social rights Benefits linked to obligations Solidarity of shared rights Cohesion of shared values and civic duties

Source: Adapted from Transformation of the Welfare State: The Silent Surrender of Public Respon-

sibility by Neil Gilbert (2004), Table 2.1 p. 44 “Shift in Central Tendencies from the Welfare to the

Enabling State”. By permission of Oxford University Press.

Chapter 9262

Reforms have not only raised the threshold for access to benefits, they have changed the conditions for continuing eligibility, particularly in unem- ployment, disability, and social assistance programs. Upon entering these programs, recipients are increasingly being segmented according to charac- teristics, such as age and length of unemployment, that forecast their service needs and employability. In the United Kingdom, welfare-to-work programs are tailored to the needs of five main groups: the young unemployed, the long- term unemployed, single parents, people with disabilities or long-term ill- nesses, and partners of the unemployed.26

Efforts to differentiate among claimants are also closely linked to what, perhaps, is the most crucial development in the daily administration of social assistance, unemployment, and disability programs—the introduction of quasi- contractual agreements, referred to in Europe as “activation plans,” which are formulated by mutual consent between clients and administrative officials. Denmark, Britain, Finland, France, the Netherlands, New Zealand, Australia, and Sweden, among others, have adopted policies requiring individualized ac- tion plans, plans spelling out the steps—education, training, job search, subsi- dized work, and other activities—that will be taken toward employment.27 The introduction of individually tailored social contracts, which take into consid- eration different peoples’ needs and circumstances, has obvious benefits. At the same time, however, their use converts benefits from entitlements based on impartial and uniform bureaucratic procedures to individualized and dis- cretionary dispensations based on case-by-case assessments. Policy reforms in recent years, finally, have initiated an unprecedented array of work-oriented incentives and services designed to strengthen readiness to work through edu- cation and training, to make work pay by subsidizing low-income employment through refundable tax credits, and to heighten the costs of nonparticipation in work through the impositions of sanctions. The American variants of these reforms have been detailed in this book, especially in Chapter 8.

The reconfiguration of social protection is aptly summarized in the motto of the Dutch “purple coalition” (red Social Democrats allied with blue Liberals), which formed the governing coalition in the Netherlands in the mid-1990s: “Work, work and work again!”28 Or one might take a leaf from the Norwegian 1992 White Paper on Rehabilitation formulating a “work approach” to social welfare policy premised on the idea “that individual rights are not exclusively tied to cash benefits; each individual has, as far as possible, a right and a duty to work, to participate in rehabilitation programs or enter education ….”29 Or one might refer to the 1998 Green Paper on Welfare Reform issued by the New Labour government in Britain, which identified the government’s aim as re- building the welfare state around work through active work-oriented policies, supportive services, tax measures that make work pay, and “ensuring that re- sponsibilities and rights are fairly matched.”30

In 2008, the Labour Government issued another Green Paper on welfare reform, No One Written Off: Reforming Welfare to Reward Responsibility. Ac- cording to the Trade Union Congress (TUC), this report proposes a new system that applies harsh conditions to working-age claimants of the Jobseeker’s Al- lowance (previously known as unemployment benefits) and the toughest sanc- tions the United Kingdom has ever known.

The second major component in the transition from the welfare state to the Enabling State involves a shift from universal to selective criteria as the basis for social allocation. Since the mid-1980s there has been increasing use of tar- geting in eligibility policies for social benefits, with eligibility criteria designed not so much to identify new groups of beneficiaries as to reform programs by

Reforms have limited access to benefits and changed the conditions for continuing eligibility, specifically in unemployment, disability, and social assistance programs.

Policy Dimensions: International Trends in the Twenty-First Century 263

limiting the number of recipients.31 Constriction of eligibility, for example, has occurred in the disability programs of many, if not most, industrialized coun- tries.32 These reforms include narrowing the definition of disabling conditions and more rigorously specifying degrees of disability.33 Targeting on the basis of impairment allows a program to continue serving its original category of social need while raising the threshold of eligibility. The program appears the same until one looks beneath the surface. Analyzing the “flight from universalism” in Sweden, for example, Sune Sunesson and his colleagues have noted that criteria for elder care have tightened so much that benefits have shifted from services to most elderly people to care for just the weakest and frailest.34 A similar trend has been documented in the allocation of home help and home care for older people in England.35

Like a balloon that expands on one side when squeezed down on the other, however, policy reforms that constrict access and levels of social benefits in one area often create a “bubble effect,” shifting recipients from restricted ben- efits to other program areas. Thus, for example, a high degree of interaction is found among social provisions such as unemployment benefits, disability ben- efits, and social assistance. When eligibility criteria for unemployment benefits are narrowed, and benefit rates lowered, the reduction in spending may be offset by increased growth in the public assistance and disability rolls.36

The third element in the shift toward the Enabling State—increasing priva- tization—reflects the extent to which public faith in the virtues of the private sector have impelled social welfare transactions to adopt the values and meth- ods of the market economy. This development is conspicuous in the myriad arrangements for the privatization of social welfare functions37 (see Chapter 6). In the United States, corporations large and small have been hired by the states to deliver a wide range of welfare services. The for-profit firm Maximus, for ex- ample, contracts with more than a dozen state Temporary Assistance for Needy Families (TANF) agencies to provide welfare-to-work and job readiness ser- vices, and with other state bodies for child support enforcement, children’s health services, and disability programs. Maximus, with its mission to “Help Government Serve the People,” has more than 4800 employees in 170 offices nationwide. Another leading corporate player is Affiliated Computer Services, successor to the Lockheed Martin Corporation, which has multiple contracts for TANF services, child support collection, and electronic benefit transfers. In addition, the great majority of the states contract with nonprofit social welfare agencies to provide a broad range of support services in the job training, alco- hol and drug treatment, childcare, and pregnancy prevention fields.

And the United States is hardly alone in the movement to privatize wel- fare. Between 1979 and 1996, for example, the proportion of all public expen- ditures on personal social services contracted out to the private sector in the United Kingdom more than tripled, from 11 to 34 percent. Most of this increase reflected a change in the provision of residential care, which shifted from fa- cilities operated by local authorities to home care under private auspices.38 Commercial firms have also moved into services such as in-home meals, clean- ing, home nursing, and emergency alarm systems, under contracts with local public authorities who are “expected to be enablers rather than providers.”39

In Sweden, since the early 1990s, there has been substantial growth in childcare arrangements that are publicly financed and privately operated, mainly by parent cooperatives and other nonprofit organizations.40 Private for- profit arrangements are also on the rise. For twenty years now, Swedish coun- ties that used to operate local healthcare systems under which physicians were public employees have been contracting for medical services with doctors in

Chapter 9264

private practice. By the mid-1990s, “what [had] started out as a minor revival of private practice [became] a boom.”41 In the area of residential care, the public sector provided almost 90 percent of the beds in residential-care facili- ties for children and youth in the 1970s. By 1995, close to 60 percent of these beds had shifted over to private in- stitutions, many of them medium-scale operations larger than foster-care homes but smaller than the traditional state-run institutions.42 A similar trend is evident in con- tracting out beds in residential treatment homes for alco- holics, where for-profit providers came to dominate the field after the mid-1980s.

In a number of countries, old-age pensions are also marching on a slow but steady course toward privatization. In the United States, between 1976 and 1992, retirement benefits in the form of employee pensions increased from 25 to 33 percent of the total income received by the elderly from employee plans and social security payments.43 From 1962 to 2001, income from private pensions almost doubled as a share of the total income of the elderly from all sources, including earnings and assets, while Social Security’s share of the to- tal rose by less than one third. The U.S. experience tracks that of private pensions in some of the more generous Nordic countries. In Denmark, for example, be- tween 1980 and 1992, private pension expenditure jumped from 20 to 30 percent of the total share of public and private pensions. After 1985, the share of private pensions also increased in Norway, albeit at a slower pace.44 Sweden, in one fell swoop in 1998, privatized 14 percent of the total public pension contributions.

EMERGING ISSUE: TOWARD COMPREHENSIVE INTEGRATION OF WORK REQUIREMENTS AND PUBLIC AID

In contrast to the emphasis on social rights and citizen entitlements that sup- ported the growth of social provisions during the Golden Age of welfare state ex- pansion, the policy framework of the Enabling State seeks to balance rights with individual responsibilities to work and contribute to the community. The new framework also aims to contain costs by targeting benefits more narrowly on those in need and using the private sector for the delivery of welfare provisions.

Under the new framework, it is increasingly difficult to distinguish sub- stantive differences between the political left and the right. The political com- pass has lost its conventional bearings. Where is the left? In the 2000 United States presidential campaign, Republicans wanted to expand private activity through the use of educational vouchers and a partially privatized Social Se- curity. Democrats opposed these measures. At the same time, the privatization of social security contributions and the use of educational vouchers have been approved in Sweden under a Social Democratic regime traditionally to the left of both parties in the United States.

Over the last decade, some policy experts have argued that privatization, targeting, and “activation” of the unemployed constitute little more than mar- ginal changes from existing policy.45 Today it is difficult to deny that serious changes, on the order of a paradigm shift, are occurring. Unemployment and disability benefits in the European welfare states that once lasted almost forever

Policy Practice

Practice Behavior Example: Social workers

analyze, formulate, and advocate for policies

that advance social well-being.

Critical Thinking Question: To what extent does the shift to the Enabling State enhance or

detract from the ability of social workers to

advocate for policies advancing social justice?

The policy framework of the Enabling State seeks to balance rights with individual responsibilities to work and contribute to the community.

Policy Dimensions: International Trends in the Twenty-First Century 265

are now more time-restricted, even in the midst of the recession. Definitions of suitable employment have been broadened well beyond the occupational status of the previous position held. Client–government contracts are now re- quired, which allow for financial sanctions as well as incentives to work. This new orientation not only involved quantitative targets of cost-containment policies. As Evers and Guillemard conclude it was “above all a qualitative ap- proach that sought to invent a new way of providing welfare arrangements that would both be suited to the post-industrial era and bring about greater efficiency. In this sense, this new strategy for public intervention in the social sphere signaled a fundamental change in the prevailing paradigm.”46

One of the emerging trends in this qualitative approach involves seeking greater efficiency with an expanding emphasis on work-oriented requirements through the administrative consolidation of various programs of public aid, par- ticularly those offering welfare, unemployment, and disability benefits. In Ger- many, for example, the “Hartz” reforms implemented between 2002 and 2005 significantly revised unemployment insurance by merging that program with social assistance. Under the new system, standard unemployment benefits are provided for up to one year, after which the recipient is moved into the pub- lic assistance program and receives a much lower means-tested benefit, which is subject to a 30 percent reduction if the recipient does not take “acceptable work” including community service and job training. At the same time, one-stop centers were opened to serve those on welfare and unemployment benefits. In 2006, Nor- way merged the administration of unemployment insurance, social assistance, disability payments, and old-age pension programs into the Norwegian Labor and Welfare Administration (NAV). By placing these programs under one roof, the new agency seeks to facilitate the application process and service provision.47 And in 2010, the United Kingdom created the “Universal Credit,” which intro- duces an integrated benefit that replaces a number of means-tested in-work and out-of-work benefits including Income Support, income-based Jobseeker’s Al- lowance, income-related Employment and Support Allowance, Housing Benefit, Child Tax Credit, and Working Tax Credit. Administered through the Department for Work and Pensions, this reform aims to streamline a range of overlapping sup- port payments that interact to create various disincentives for work.48

This degree of consolidation has yet to occur in the U.S. welfare state. Instead , in 2009, the federal government spent $708 billion on 80 income-tested programs, an increase of 23 percent over the amount spent on this population in 2008.49 This figure excludes state spending on income-tested programs, which added to 36 percent of the federal bill of $427 billion in 2004.50 Advocates of conditionality may invoke the experience of TANF work requirements in low- ering caseloads and increasing employment to justify extending conditionality to related means-tested programs such as food stamps and public housing. As experience is gained from the European measures to consolidate various bene- fits to low-income people, policy makers in the United States may be persuaded to take a leaf from the British White Paper on Universal Credit.

It is important to understand the nature of recent policy developments, which emphasize tying social benefits to work—what they mean, and where they are leading us. Is the movement toward “conditionality,” “personal re- sponsibility,” and “social inclusion” (which underscores going to work) sim- ply a billowing smoke screen for radical free marketers who are scheming to return us to a nineteenth-century laissez-faire capitalism, where “welfare” is but a residual element in society directed at the destitute and disabled? Or will the emerging form of social welfare continue to embody a collective “social”

Chapter 9266

consciousness as an effective counterforce to the hazards of social marginaliza- tion, poverty, and increasing economic inequality? Can we, should we, main-

tain principles of fairness and justice in the harsh and fiercely competitive work environment of twenty-first- century global capitalism? And how much will the answer to these questions be influenced by the global financial crisis, the depths of which are currently unknown?

The essential question for the future is how to sustain, perhaps, even improve our social policies to ensure social justice and the protection of the weak while preserving economic initiative and broad middle-class prosperity? Addressing this challenge will help clarify the values and principles that ultimately guide social welfare policy choices.

SUMMARY

Social and economic forces are transforming the nature of social welfare poli- cymaking in the advanced welfare states. The context of this transformation reflects four primary influences: demographic transitions, economic globaliza- tion, a greater awareness of the possibility of unanticipated policy effects, and an awareness of the virtues of capitalism. These influences have resulted in the promotion of work-based policies, the selective targeting of benefits, privatiza- tion, and the linking of benefits to obligations.

Capsule 9.1 Universal Credit: Conditionality and Sanctions

Individuals who are able to look for or prepare for work should be required to do so as a condition of receiving benefit, and those who fail to meet their

responsibilities should face a financial sanction. This

is known as conditionality.

We will introduce a “claimant commitment” to

clearly set out what is expected of each recipient.

We will raise the requirements placed on some indi-

viduals and will introduce tougher sanctions to en-

sure recipients meet their responsibilities.

This approach will be introduced in existing ben-

efits and Universal Credit.

Under Universal Credit, requirements will be set

according to individual capability and circumstance.

There will be four broad conditionality groups:

• full conditionality—jobseekers;

• work preparation—people with a disability or

those with a health condition which means

they have limited capability for work at the

current time;

• keeping in touch with the labour market—lone

parent or lead carer in a couple with a child

over age one but below age five; and

• no conditionality—people with a disability or

health condition which prevents them from work-

ing, carers, lone parents or lead carers with a

child under the age of one.

Conditionality under the Universal Credit will

apply up to a threshold. Initially this threshold will

be set at broadly the same point at which people

lose entitlement to out-of-work benefits. In the fu-

ture, however, it will be possible to raise the thresh-

old to apply conditionality to greater numbers of

recipients.

People receiving Universal Credit but earning

above the relevant threshold would not be subject to

conditionality. Those in work but earning below the

threshold would be in the conditionality group appli-

cable to their circumstances.

Universal Credit: Welfare That Works, Presented to Parliament by the Secretary of State for Work and Pensions by Command of Her Majesty,

November 2010.

Critical Thinking

Practice Behavior Example: Social workers

distinguish, appraise, and integrate multiple

sources of knowledge, including research-

based knowledge, and practice wisdom.

Critical Thinking Question: How can social work practice wisdom help inform us about

changes in the welfare state?

267

P R A C T I C E T E S T The following questions will test your knowledge of the content found within this chapter. For additional assessment, including licensing-exam type questions on applying chapter content to practice behaviors, visit MySearchLab.

1. Public social welfare expenditures in most OECD nations are:

a. Higher than in the United States, as a percentage of GDP.

b. Lower than in the United States, as a percentage of GDP.

c. Roughly the same as in the United States, as a percentage of GDP.

d. Higher than in the United States, as a percentage of GDP, except in 2005 and 2006.

2. The age required for new retirees to receive full Social Security benefits in the United States is being raised to:

a. 65

b. 67

c. 69

d. 70

3. What best describes how the four “pressures for change” (demographic changes, globalization, knowledge of un-

anticipated effects, or belief in capitalism) promote the

transformation of industrialized welfare states?

a. It is the confluence of these pressures.

b. It is the divergence of these pressures.

c. It is about how the first two pressures affect the sec- ond two.

d. Globalization affects changes to a much greater extent than the other pressures.

4. What are the key components of the Enabling State:

a. Labor union protections, universal entitlements, public provision, and benefits as social rights.

b. For-profit services, means testing, recipient cost-sharing, and cost-of-living adjustments.

c. Family allowances, long-term care guarantees, prohibition of profit making in the social services, and

living wages.

d. Work promotion, selective targeting, privatization and benefits linked to obligations.

5. Which of the following characterizes the Enabling State in the area of elder services?

a. Generous Social Security payments, linked to the cost of living.

b. Contracting with local nonprofits for the provision of senior nutrition services.

c. Free and universal home care for fragile seniors.

d. Maintenance of the poverty line at 50 percent of national mean income.

6. Which of the following exemplifies the change from “benefits as social rights” to “benefits linked to

obligations”?

a. Social Security

b. No Child Left Behind

c. TANF

d. Medicare

7. To what extent does the transformation of the welfare state to the Enabling State align with social work values as expressed in the Social Work Code of Ethics? Pick one ethical principle and provide examples.

C H A P T E R 9 R E V I E W

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268

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Historical Significance of the 2008 Presidential Election

Economic Policy Debate at the G20 (2010?)

YouTube Politics (2008)

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Read These Cases/Documents ^ Golem, Albania

^ Elderly People

^ Divorce, Remarriage and Stepparenting

United Nations, Universal Declaration of Human Rights (1948)

Bob Stinson, Flint Sit-Down Strike (1936)

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Luxembourg Income Study—http://www.lisdatacenter.org/

* = CSWE Core Competency Asset ^ = Case Study

269

22. Sheila Kamerman and Alfred Kahn, Helping America’s Families (Philadelphia, PA: Temple University Press, 1982), 202.

23. Employee Benefit Research Institute (March 2011), Data- book on Employee Benefits. For a detailed analysis of the costs and development of these benefits, see Neil Gilbert, “Accounting for Employee Benefits: Issues of Measure- ment, Valuation and Social Equivalencies,” in Kenneth Crouch and Douglas Besherov (eds.), Measuring Poverty: Lessons from Europe (New York: Oxford University Press, 2012).

24. Barnaby Feder, “Ministers Who Work around the Flock,” New York Times, October 3, 1996, C1. For a general discus- sion of EAPs, see Kathryn Troy, Meeting Human Needs: Corporate Programs and Partnerships (New York: Confer- ence Board, 1986); and Paul Kurzman and Sheila Akabas (eds.), Work and Well-Being: The Occupational Social Work Advantage (Washington, D.C.: NASW Press, 1993).

25. Lester Salamon, America’s Nonprofit Sector, A Primer (New York: The Foundation Center, 1999), 118.

26. C. E. Born, “Proprietary Firms and Child Welfare Ser- vices,” Child Welfare, 62(2) (1983): 109–118.

27. Salamon, 55. 28. Margaret Gibelman and Philip Schervish, Who We Are: A

Second Look (Washington, D.C.: NASW Press, 1997). 29. R. C. Kessler et al., “Patterns and Correlates of Self-Help

Group Membership in the U.S.,” Social Policy, 27 (1997): 27–46.

30. Salamon, 111–12. 31. Roy Wallis, “Institutions,” Encyclopedia of the Social Sci-

ences, 14 (New York: MacMillan, 1968), 410. 32. Employee Benefit Research Institute (March 2011), Data-

book on Employee Benefits. 33. Gosta Esping-Andersen, “Occupational Welfare in the

Social Policy Nexus,” in Michael Shalev (ed.), The Priva- tization of Social Policy (New York: St. Martin’s Press, 1996).

34. Ibid. 35. Abraham Flexner, “Is Social Work a Profession?”

Presented at the Conference of Charities and Corrections, May 17, 1915.

36. Harold Wilensky and Charles Lebeaux, Industrial Society and Social Welfare (New York: Russell Sage, 1958), p. 140.

37. Ibid., 140. 38. For example, in Robert Perlman and Arnold Gurin, Commu-

nity Organization and Social Planning (New York: Wiley, 1972), an entire chapter is devoted to various ways in which the administrator of a direct-service agency is engaged in community organization and social planning tasks.

Chapter 1 1. See, for example, Martin Rein, Social Policy (New York:

Random House, 1970), 3–20; Kenneth Bouding, “The Boundaries of Social Policy,” Social Work, 12(1) (January 1967): 3–11; Richard Titmuss, Essays on “The Welfare State” (London: Unwin University Books, 1963).

2. See, for example, David A. Gil, “A Systematic Approach to Social Policy Analysis,” Social Service Review, 44(4) (December 1970): 411–26.

3. AARP Bulletin, July–August 2007, 27. 4. National Center for Health Services Research and Health

Care Technology Assessment. Research Activities 87 (July 1997).

5. Maggie Jackson, “More Sons Are Juggling Jobs and Care for Parents,” New York Times, June 15, 2003.

6. Jane Gross, “The New Old Age,” New York Times, No- vember 25, 2008.

7. “Children in Kinship Care Gaining Ground,” New Fed- eralism Series No. B-68, The Urban Institute, April 28, 2006.

8. U.S. Department of Health and Human Services, Report on Kinship Foster Care, June, 2000.

9. Devon Brooks, “Kinship Care and Substance-Exposed Children,” The Source, 9(1) (Winter 1999): 1.

10. Stacey J. Oliker, “Examining Care after Welfare Ends,” Fo- cus (2) (Spring 1999): 38. Oliker notes that ethnographic studies of welfare tend to emphasize the importance of family networks while surveys show a more modest level of help.

11. U.S. Census Bureau, Who’s Helping Out? Support Net- works among American Families, 1988.

12. Michael Lou, “Jobless Turn to Family for Help,” New York Times, January 30, 2010.

13. Lynn Alder, “More Generations Living under Same Roof,” Reuters, February 22, 2010.

14. “Greater Child Support Is Linked to Parents Who Visit Children,” New York Times, April 24, 1999, A14.

15. U.S. Census Bureau, Custodial Mothers and Fathers and Their Child Support—2007, 2009.

16. Ibid. 17. Eduardo Porter, “Flow of Immigrants’ Money to Latin

America Surges,” New York Times, October 19, 2006. 18. Ginger Thompson, “Big Mexican Breadwinner: The

Migrant Worker,” New York Times, March 25, 2002, A3. 19. Blaine Harden, “Families Quietly Shelter Dispossessed

Kin,” San Francisco Chronicle, September 8, 2005. 20. “Mormons and the ‘Sin’ of Being Poor,” San Francisco

Examiner, December 19, 1982, A16. 21. Ibid.

Notes

Notes270

2. See, for example, J. Ambler (ed.), The French Welfare State (New York: New York University Press, 1991); R. Cos, The Development of the Dutch Welfare State (Pittsburgh: Pittsburgh University Press, 1993); Christopher Pierson, Beyond the Welfare State (University Park, PA: The Pennsylvania State University Press, 1991).

3. Tony Judt, Post War—A History of Europe Since 1945 (New York: Penguin Press, 2005), 74–76.

4. Gosta Esping-Andersen, The Three Worlds of Welfare Capitalism (Princeton, NJ: Princeton University Press, 1990), 149.

5. Organization for Economic Cooperation and Develop- ment, The Future of Social Protection (Luxembourg: OECD, 1988), 11.

6. Progressive Policy Institute (PPI). 7. Organization for Economic Cooperation and Develop-

ment, Economic Surveys: Netherlands (Paris: OECD, 1991), 89; and OECD, “Editorial: The Path to Full Employment: Structural Adjustments for an Active Society,”Employment Outlook, July 1989.

8. S. Marklund, “The Decomposition of Social Policy in Sweden,” Scandinavian Journal of Social Welfare, 1(1) (1992): 10.

9. See Paul Pierson, “The New Politics of the Welfare State,” World Politics, 48(2) (January 1996): 150–3.

10. T. H. Marshall, Sociology at the Crossroads and Other Essays (London: Heinemann, 1963).

11. See Reinhard J. Skinner, “Technological Determinism,” Comparative Studies in Society and History, 18(1) (Janu- ary 1976): 2–27; and J. K. Galbraith, The New Industrial State (London: Hamish Hamilton, 1967).

12. Frances Fox Piven and Richard A. Cloward, Regulating the Poor: The Functions of Public Welfare (New York: Pantheon Books, 1971); and James O’Connor, The Fiscal Crisis of the State (New York: St. Martin’s Press, 1973).

13. Asa Briggs, “The Welfare State in Historical Perspective,” European Journal of Sociology 2 (1961): 221–58.

14. FactCheck.org, Fiscal FactCheck, July 15, 2011. 15. U.S. Office of Management and Budget, Fiscal Year 2012

Budget of the U.S. Government, Historical Tables. 16. Richard Titmuss, Essays on the “Welfare State,” 2nd ed.

(London: Unwin University Books, 1958), 34. 17. Neil Gilbert, “Accounting for Employee Benefits,” in

Douglas Besharov and Kenneth Couch (eds.), Measuring Poverty: Lessons for Europe (New York: Oxford Univer- sity Press, 2012).

18. Statistical Abstract of the United States, 2012, table 552. 19. Titmuss, Essays on the “Welfare State,” 44. 20. Stanley Surrey, Pathways to Tax Reform (Cambridge, MA:

Harvard University Press, 1973). 21. See, for example, Mimi Abramowitz, “Everyone Is on Wel-

fare: The Role of Redistribution in Social Policy Revisited,” Social Work, 8(6) (November/December, 1983): 440–45.

22. Irving Kristol, Two Cheers for Capitalism (New York: Mentor, 1978), 194.

23. Center for American Progress, “Ten Charts That Prove the U.S. Is a Low-Tax Country,” June 10, 2011.

24. San Francisco Chronicle, October 8, 1985, 10. 25. Sherry Glied et al., “Consider It Done? The Likely Ef-

ficacy of Mandates for Health Insurance,” Health Affairs (November/December 2007).

39. Carroll L. Estes et al., Fiscal Austerity and Aging (Beverly Hills, CA: Sage Publications, 1983).

40. James Leiby, The History of Social Welfare and Social Work in the United States (New York: Columbia Univer- sity Press, 1978).

41. Joseph Heffernan, Introduction to Social Welfare Policy: Power, Scarcity, and Common Human Needs (Itasca, IL: F. E. Peacock, 1979).

42. Martha Derthick, Uncontrollable Spending for Social Service Grants (Washington, D.C.: Brookings Institution, 1975).

43. Linda Gordon, Pitied But Not Entitled: Single Mothers and the History of Welfare 1890–1935 (New York: Free Press, 1994).

44. Neil Gilbert and Harry Specht, Dynamics of Community Planning (Cambridge, MA: Ballinger Publishing, 1977).

45. Theda Skocpol, Boomerang: Clinton’s Health Security Effort and the Turn Against Government in U.S. Politics (New York: W.W. Norton, 1996).

46. Frances Fox Piven and Richard A. Cloward, Regulating the Poor: The Functions of Public Welfare (New York: Vintage Books, 1993).

47. Howard Freeman and Clarence Sherwood, Social Research and Social Policy (Englewood Cliffs, NJ: Prentice Hall, 1970), 13.

48. Jason DeParle, American Dream (New York: Viking, 2004). 49. Douglas Besharov and Pheobe Cottingham, The Work-

force Investment Act: Implementation Experiences and Evaluation Findings (Kalamazoo: W.E. Upjohn Institute, 2011).

50. Jill Duerr Berrick and Neil Gilbert, With the Best of In- tentions: The Child Sexual Abuse Prevention Movement (New York: Guilford Press, 1991).

51. See, for example, U.S. General Accounting Office, Early Childhood Programs, GAO/HEHS-94-169BR, May 1994; Public Housing: Housing Persons with Mental Disabili- ties, GAO/RCED-92-81, August 1992; Homelessness: McKinney Act Programs and Funding, GAO/RCED-91- 126, May 1991; U.S. Department of Health and Human Services, Final Report, Head Start Impact Study, 2010.

52. See Byron E. Shafer (ed.), Is America Different? A New Look at American Exceptionalism (New York: Oxford University Press, 1991).

53. George Will, syndicated column, November 16, 1984 54. Alan Brinkley, The End of Reform: New Deal Liberal-

ism in Recession and War (New York: Alfred A. Knopf, 1995), 10.

55. Friedrich A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1944), 32–42.

56. Theda Skocpol, Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States (Cambridge, MA: Belknap Press of Harvard University Press, 1992).

57. Christina Hoff Sommers, Who Stole Feminism? (New York: Simon and Schuster, 1994).

58. Mimi Abramowitz, Regulating the Lives of Women: Social Welfare Policy from Colonial Times to the Present (Boston, MA: South End Press, 1988), 32–3, 39–40.

Chapter 2 1. Harold Wilensky and Charles Lebeaux, Industrial Society

and Social Welfare (New York: Russell Sage, 1958), 138.

Notes 271

Social Services,”Social Service Review, 51(4) (December 1977): 624–49.

16. Martha Derthick, Uncontrollable Spending for Social Services Grants (Washington, D.C.: Brookings Institution, 1975), 8.

17. Alan Pardini and David Lindeman, Eight State Compara- tive Report on Social Services, Working Paper No. 21 (San Francisco, CA: University of California, Aging Health Policy Center, 1982).

18. A prominent example of the extreme faith on which the movement for intensive services by trained caseworkers relied is expressed in the design of a study that compared special intensive services by professional caseworkers with 50 multiproblem families over two-and-a-half years to a control group receiving routine services by staff with- out professional training. The primary assumption on which the study is based is that some degree of variation in social casework skills can have a significant impact on the severe problems created by economic deprivation. The results of this study showed no significant differ- ences between the two client groups and were deemed inconclusive due to methodological flaws. But it is in the methodological design that faith is revealed. The goals of the service and how workers’ activities related to these goals were defined in such general terms as to be unmea- surable. See Gordon E. Brown (ed.), The Multiproblem Dilemma: A Social Research Demonstration with Multi- problem Families (Metuchen, NJ: Scarecrow Press, 1968).

19. Derthick, Uncontrollable Spending for Social Services Grants, 9.

20. President’s Commission on Income Maintenance, Back- ground Papers (Washington, D.C.: Government Printing Office, 1970), 307.

21. Joel F. Handler and Jane Hollingsworth, The Deserving Poor: A Study of Welfare Administration (Chicago, IL: Markham Publishing, 1971), 127.

22. Derthick, Uncontrollable Spending for Social Services Grants, 19.

23. Mildred Rein, “Social Services as a Work Strategy,” Social Service Review, 49 (December 1975): 519.

24. Derthick, Uncontrollable Spending for Social Services Grants, 19.

25. Social and Rehabilitation Service, Department of Health, Education, and Welfare, Social Services USA, Oct.–Dec. 1975, Publication No. SRS 76-03300 (Washington, D.C.: National Center of Social Statistics, 1975), 7.

26. Washington Social Legislation Bulletin, 31(32) (April 23, 1990): 125.

27. The evolution of caretaking services is discussed in Robert Morris and Delwin Anderson, “Personal Care Services: An Identity for Social Work,” Social Service Review, 49 (June 1975): 157–74.

28. Gilbert Y. Steiner, The State of Welfare (Washington, D.C.: Brookings Institution, 1971), 106–10.

29. There were ways to circumvent this restriction. In prac- tice, for example, it was not uncommon for a donation to be made by a United Fund Organization with the request that the contribution be used to support a particular type of activity in a specified community, one performed only by an agency affiliated with the United Fund Organiza- tion. In this fashion, private donations could be covertly earmarked as the local share for a designated agency. See,

26. George Will, “Bishops: God Subscribes to the Liberal Agenda,” The Free Lance Star, November 19, 1984.

27. Jeffrey Jones, “Big Government Still Viewed as Greater threat Than Big Business,” Gallup News, April, 20, 2009.

28. Willem Adema, Marcel Einerhand, Bengt Eklind, Jorgen Lotz, and Mark Pearson, Net Public Social Expenditure: Labour Market and Social Policy Occasional Papers No. 19 (Paris: OECD, 1996).

29. New York Times, “Editorial: The Less-Than-Generous State,” August 16, 2007.

30. Richard Freeman, America Works: Critical Thoughts on the Exceptional U.S. Labor Market (New York: Russell Sage Foundation, 2007).

31. OECD, Economic Surveys: The Netherlands (Paris: OECD, 1991).

32. Neil Gilbert, “The Least Generous Welfare State? A Case of Blind Empiricism,” Journal of Comparative Policy Analysis, 11 (September 3, 2009).

Chapter 3 1. Eveline M. Burns, Social Security and Public Policy (New

York: McGraw-Hill, 1956), ix. 2. T. H. Marshall, “Value Problems of Welfare Capitalism,”

Journal of Social Policy 1(1) (January 1972): pp. 19–20. 3. For further discussion of social and economic markets,

see Neil Gilbert, Capitalism and the Welfare State (New Haven, CT: Yale University Press, 1983) and Neil Gilbert and Barbara Gilbert, The Enabling State: Modern Welfare Capitalism in America (New York: Oxford University Press, 1989).

4. Robert Reich, The Next American Frontier (New York: Times Books, 1983), 247.

5. Anthony Giddens, The Third Way: The Renewal of Social Democracy (Cambridge, UK: Polity Press, 1998).

6. Adalbert Evers and Anne-Marie Guillemard (eds.), Social Policy and Citizenship: The Changing Landscape (New York: Oxford University Press, 2012).

7. For a review of these developments, see Alfred Kahn and Sheila Kamerman (eds.), Privatization and the Welfare State (Princeton, NJ: Princeton University Press, 1989) and Norman Johnson (ed.), Private Markets in Health and Welfare (Oxford, England: Berg Publishers, 1995).

8. Gilbert and Gilbert, 129. 9. Marshall, “Value Problems of Welfare Capitalism.” 10. For example, see Richard Titmuss, Commitment to Wel-

fare (New York: Pantheon Books, 1970), 124; and Martin Wolins, “The Societal Function of Social Welfare,” New Perspectives, 1(1) (Spring 1967), 5.

11. Mayer Zald (ed.), Social Welfare Institutions (New York: Wiley, 1965), 4.

12. Neil Gilbert, Welfare Justice: Restoring Social Equity (New Haven, CT: Yale University Press, 1995).

13. Lawrence Mead, Beyond Entitlement: The Social Obliga- tions of Citizenship (New York: Free Press, 1986).

14. The analytic questions with which we will deal have also been explored by Martin Rein, Social Policy (New York: Random House, 1970); Titmuss, Commitment to Welfare, 130–36; Kahn, Theory and Practice of Social Planning, 192–213; and Gilbert Steiner, The State of Welfare (Wash- ington, D.C.: Brookings Institution, 1971), 1–30.

15. This case analysis draws substantially on material origi- nally presented in Neil Gilbert, “The Transformation of

Notes272

48. T. H. Marshall, Class, Citizenship, and Social Develop- ment (Anchor Books Edition) (New York: Doubleday, 1965), pp. 258–59.

49. An analysis of cost-effectiveness as it is expressed in different income-maintenance strategies is provided by James Cutt, “Income Support Programmes for Families with Children: Alternatives for Canada,” International Social Security Review, 23(1) (1970): 100–112.

50. Titmuss, Commitment to Welfare, 69–71. 51. “Learnfare: Policy Implications,” Youth Law News, May/

June, 1989, 12–13. 52. Peter Blau, Bureaucracy in Modern Society (New York:

Random House, 1956), p. 107. 53. Various studies on the War on Poverty and Model Cities

have documented this result. See, for example, Ralph Kramer, Participation of the Poor (Englewood Cliffs, NJ: Prentice Hall, 1969); Neil Gilbert, Clients or Constituents (San Francisco: Jossey-Bass, 1970); and Neil Gilbert and Harry Specht, Dynamics of Community Planning (Cam- bridge, MA: Ballinger, 1977).

54. Burns, Social Security and Public Policy, 231. 55. Davis McEntire and Joanne Haworth, “Two Functions

of Public Welfare: Income Maintenance and Social Ser- vices,” Social Work, 12(1) (January 1967): 24–25.

56. Genevieve Carter, “Public Welfare,” in Henry S. Maas (ed.), Research in the Social Services: A Five Year Review (New York: National Association of Social Workers, 1971), 224.

57. Handler and Hollingsworth, “The Administration of So- cial Services and the Structure of Dependency,” 418. For a comprehensive historical review of the issues in “sepa- ration of services,” see Winfred Bell, “Too Few Services to Separate,” Social Work, 18(2) (March 1973): 66–77.

58. Irving Piliavin and Alan Gross, “The Effects of Separation of Services and Income Maintenance on AFDC Recipi- ents,” Social Service Review, 51 (September 1977): 389– 406. Also, see Bill Benton, Jr., “Separation Revisited,” Public Welfare, 38(2) (Spring 1980): 15–21.

59. Sar Levitan and Robert Taggart, III, Social Experimenta- tion and Manpower Policy: The Rhetoric and the Reality (Baltimore, MD: Johns Hopkins University Press, 1971), 53.

60. Mary Bryna Sunger, “Generating Employment for AFDC Mothers,” Social Service Review, 58(1) (March 1984): 32.

61. Judith Gueron, “Reforming Welfare with Work,” Public Welfare (Fall 1987): 13–25.

62. Steiner, The State of Welfare. 63. Alec Levenson et al., “Welfare Reform and the Employ-

ment Prospects of Welfare Recipients,” Jobs and Capital, 6(3) (Summer 1997): 36–41.

64. Steiner, The State of Welfare, 26. 65. Joseph Pechman, Henry Aaron, and Michael Taussig, So-

cial Security: Perspectives for Reform (Washington, D.C.: Brookings Institution, 1968).

66. For a detailed discussion of these inequities, see Neil Gilbert, Welfare Justice, 1995.

67. Martha Ozawa, “Who Receives Subsidies through Social Security and How Much?” Social Work, 27(2) (1982): 129–36.

68. Stephen A. Camarota, Importing Poverty, Center for Immigration Studies, September 2, 1999. www.cis.org/ povstudy/execsummary.html.

for example, Booz, Allen, and Hamilton, Purchase of So- cial Service—Study of the Experience of Three States in Purchase of Service by Contract Under the Provisions of the 1967 Amendments to the Social Security Act, Report Submitted to the Social and Rehabilitation Service, Janu- ary 29, 1971 (distributed by National Technical Informa- tion Service, U.S. Department of Commerce), 40–42.

30. Lester Salamon and Alan Abramson, The Federal Budget and the Non-Profit Sector (Washington, D.C.: Urban Insti- tute Press, 1982), 64.

31. Derthick, Uncontrollable Spending for Social Services Grants, 100–101.

32. Alva Myrdal, Nation and Family (MIT Paperback Edition) (Cambridge, MA: MIT Press, 1968), 1.

33. More precisely, the block grant allocation was based on the highest level of each state’s spending calculated on their AFDC expenditures in 1994, 1995, or the aver- age expenditure from 1992 to 1994. In addition, the act provided a contingency fund to meet increases in needs experienced by the states.

34. Jocelyn Guyer, Cindy Mann, and David Super, The Time- line for Implementing the New Welfare Law (Washington D.C.: Center on Budget and Policy Priorities, 1996), 2.

35. Aristotle, The Politics (Modern Library Edition) (New York: Random House, 1943), 260–63.

36. Gregory Vlastos, “Justice and Equality,” in Richard Brandt (ed.), Social Justice (Englewood Cliffs, NJ: Prentice Hall, 1962), 32.

37. English Poor Law Commissioners, 1834. 38. U.S. Department of Health, Education and Welfare,

Work in America (Washington, D.C.: Government Printing Office, 1972).

39. See, for example, William Shannon, “A Radical, Direct, Simple, Utopian Alternative to DayCare Centers,” New York Times Magazine, April 30, 1972; and Sheila M. Rothman, “Other People’s Children: The Day Care Ex- perience in America,” Public Interest, 30 (Winter 1973): 11–27.

40. John Jankowski, “Caregiver Credits in France, Germany and Sweden: Lesson for the United States,” Social Secu- rity Bulletin, 71(4) (2011): 61–76.

41. Jorma Sipila, Katja Repo, and Tapio Rissanen, Cash-for- Childcare: The Consequences for Caring Mothers (Chel- tenham, UK: Edgar Elgar, 2010).

42. SPIEGEL Online A Land Without Children: Why Won’t Germans Have More Babies? 8/12/11 http://www.spiegel. de/international/germany/0,1518,779741-2,00.html (ac- cessed 12/2012).

43. William Frankena, “The Concept of Social Justice,” in Richard Brandt (ed.), Social Justice (Englewood Cliffs, NJ: Prentice Hall, 1962), p. 23.

44. See Robert Hunter, Poverty, Peter d’A. Jones (ed.) (Torchbook ed.) (New York: Harper & Row, 1965), 51–52.

45. Alden Dinan Kinsley, Budgeting for Basic Needs, National Centers for Children in Poverty, March 2009.

46. Karl Marx, Das Kapital, Friedrich Engels (ed.), Vol. 1 (Gateway Edition) (Chicago, IL: Henry Regnery, 1959), 33–34.

47. For example, see Richard Titmuss, “Equity, Adequacy, and Innovation in Social Security,” International Social Security Review, 2 (1970): 250–67.

Notes 273

12. Mike Reddin, “Universality versus Selectivity,” The Political Quarterly (January/March 1969): 14.

13. Daniel R. Meyer et al., “The Effects of Replacing Income Tax Deductions for Children with Children’s Allow- ances: A Microsimulation,”Journal of Family Issues, 12(4) (December 1991): 467–91.

14. U.S. General Accounting Office, Earned Income Credit, Targeting the Working Poor, Report Number GAO/GGD- 95-122BR (Washington, D.C.: U.S. Government Printing Office, USGPO, March 1995).

15. Copyright © 1989 David T. Ellwood. Reprinted by permis- sion of Basic Books, a member of the Perseus Books Group.

16. Roberta Blank, It Takes a Nation (New York: Russell Sage, 1997), 226.

17. Bruce Ackerman and Anne Alstott, The Stakeholder Society (New Haven, CT: Yale University Press, 1999).

18. James Midgley, “Growth, Redistribution and Welfare: Toward Social Investment,” Social Service Review, 77(1), 1999, 3–21.

19. Jami Curley and Michael Sherraden, The History and Sta- tus of Children’s Allowances: Policy Background for Chil- dren’s Savings Accounts Center for Social Development, Washington University in St. Louis, 1998, 23.

20. Irwin Garfinkel et. al. (eds.), Social Polices for Children (1996), 38.

21. James Cutt, “Income Support Programmes for Families with Children—Alternatives for Canada,” International Social Security Review, 23(1) (1970), 104–105.

22. The classic case is Charles Murray, Losing Ground: American Social Policy 1950–1980 (New York: Basic Books, 1984).

23. George Break, “The Effects of Taxation on Work Incen- tives,” in Edmund Phelps (ed.), Private Wants and Public Needs (New York: W. W. Norton, 1965), 65.

24. Fred Cook, “When You Just Give Money to the Poor,” New York Times Magazine, May 3, 1970, 23, 109–12. A more detailed breakdown of these findings is presented by David N. Kershaw, “A Negative Income Tax Experi- ment,” Scientific American, 227(4) (October 1972): 19–25. For a description of the research design used in this study, see Harold W. Watts, “Graduated Work Incentives: An Experiment in Negative Taxation,” The American Economic Review, 59(2) (May 1969).

25. Michael Keelye et al., “The Labor–Supply Effects and Costs of Alternative Negative Income Tax Programs,” Journal of Human Resources, 13(6) (Winter 1978): 3–26. See also Henry J. Aaron, “Six Welfare Questions Search- ing for Answers,” Brookings Review, 3 (Fall 1984): 13.

26. A description of the Hawthorne effect can be found in almost any textbook on social research methods. This phenomenon derives its name from the study of the Haw- thorne Plant of the Western Electric Company in which the effect was first identified. See F. J. Roethlisberger and W. J. Dickson, Management and the Worker (Cambridge, MA: Harvard University Press, 1939).

27. Martin Anderson, Welfare: The Political Economy of Welfare Reform (Stanford, CA: Hoover Institution Press, 1978), 104–27.

28. Kathryn J. Edin, “The Myths of Dependence and Self- Sufficiency: Women, Welfare, and Low-Wage Work,” Focus, 17(2) (Fall/Winter 1995), 4. See also Jason DeParle, “Better Work Than Welfare,” New York Times

69. For a summary of the fiscal impact of American immi- grants, see National Immigration Forum, A Fiscal Portrait of the Newest Americans, 1999.

70. Peter H. Schuck, Citizens, Strangers, and In-Betweens (Boulder, CO: Westview Press, 1998), 199.

71. U.S. General Accounting Office, “Welfare Reform: Public Assistance Benefits Provided to Recently Naturalized Citizens,” Washington, D.C., June 23, 1999.

72. Steven Camarota, Immigrants in the United States, 2007, Center for Immigration Studies, November, 2007.

Chapter 4 1. Edward Bellamy, Looking Backward (New York: New

American Library, 1960), 75. Originally published 1888. 2. Ibid., 95. 3. See the articles by Theda Skocpol and Robert Green-

stein in Christopher Jencks and Paul Peterson (eds.), The Urban Underclass (Washington, D.C.: The Brook- ings Institution, 1991), 411–59. See also Irwin Garfinkel, “Economic Security for Children: From Means Testing and Bifurcation to Universality,” in Irwin Garfinkel et al. (eds.), Social Policies for Children (Washington, D.C.: The Brookings Institution, 1996), 33–82.

4. Alvin Schorr, Common Decency (New Haven, CT: Yale University Press, 1986), 31.

5. Sheila B. Kamerman and Alfred J. Kahn, “Universalism and Income Testing in Family Policy,” Social Work (July– August 1987): 277–80.

6. Nicholas Lemann, “Target Practice,” The New Republic, November 11, 1996, 29.

7. See James C. Vadakin, “A Critique of the Guaranteed An- nual Income,” Public Interest, 11 (Spring 1968): 53–66; Edward Schwartz, “A Way to End the Means Test,” Social Work, 9(3) (July 1964): 3–12; James Tobin, “The Case for an Income Guarantee,” Public Interest, 4 (Summer 1966): 31–41; Alvin Schorr, “Against a Negative Income Tax,” The Public Interest, 5 (Fall 1966): 110–17; Irwin Garfinkel, “Negative Income Tax and Children’s Allowance Pro- grams: A Comparison,” Social Work, 13(4) (October 1968): 33–39; Helen O. Nicol, “Guaranteed Income Maintenance: Another Look at the Debate,” Welfare in Review, 5(6) (June/ July 1967): 1–13; Alvin Schorr, “To End the ‘Women and Children Last’ Policy,” The Journal of the Institute for Socioeconomic Studies, IX(2) (Summer 1984): 58–78.

8. Eveline M. Burns, “Where Welfare Falls Short,” The Public Interest, 1 (Fall 1965): 88.

9. Not all children’s allowance programs are universal, in the sense that they cover all families in the country. In some countries, such as France, eligibility for the chil- dren’s allowance is employment related and financed through payroll taxes imposed on the employer, rather than out of general funds.

10. For a description and analysis of these experiments, see Mordecai Kurz and Robert Spiegelman, The Design of the Seattle and Denver Income Maintenance Experiments, Center for the Study of Welfare Policy Research Memo- randum, No. 28 (Menlo Park, CA: Stanford Research Insti- tute, 1972) and Martin Anderson, Welfare: The Political Economy of Welfare Reform (Stanford, CA: Hoover Insti- tution Press, 1978).

11. For several child allowance proposals, see Alvin Schorr, Poor Kids (New York: Basic Books, 1966).

Notes274

46. Salil Tripathi, “Caste-ing the Net Too Wide,” Wall Street Journal, May 22, 2006.

47. Bob Herbert, “Renovating HUD,” New York Times, Octo- ber 16, 1998.

48. The Kaiser Commission on Medicaid and the Uninsured, “Who Needs Medicaid?” April, 2006.

49. Vera Shlakman, “The Safety-Net Function in Public As- sistance: A Cross-National Exploration,” Social Service Review, 46(2) (June 1972): 207.

50. Stuart A. Kirk and Herb Kutchins, The Selling of DSM (1992), 229.

51. Ibid., 230 52. Ibid., 226. 53. The “iron law of specificity” is based on our experiences

participating in and observing the behavior of numerous planning and policy-making bodies. To see it operate in a microcosm (for those who doubt its power), we would suggest that at the next meeting in which you participate where a policy decision is pending on a fairly abstract issue, and there is some floundering, deliberately make a proposal that is simply plausible and contains some spec- ification of the issue in concrete units, such as amount of dollars, units of service, and numbers of people to be served. Then mark the time it takes for the discussion to shift from philosophy to considerations of whether the decision should involve a little more or a little less of the concrete units in your proposal.

54. For further discussion of the poverty index, see Mollie Orshansky, “Measuring Poverty: A Debate,” Public Wel- fare, 33 (Spring 1975): 46–55; Peter Townsend, Poverty in the United Kingdom: A Survey of Household Resources and Standards of Living (Berkeley, CA: University of California Press, 1979); The Heritage Foundation, “How ‘Poor’ are America’s Poor,” September 21, 1990; Robert Greenstein, “Attempts to Dismiss Census Poverty Data,” Center on Budget and Policy Priorities, September 28, 1993; and Constance F. Citro and Robert T. Michael, Measuring Poverty: A New Approach (Washington, D.C.: National Academy Press, 1995).

55. Robert Hunter, Poverty, Peter d’A. Jones (ed.) (New York: Harper & Row, 1965, originally published 1904), 2.

56. Matthew Pakula, “The Legal Responsibility of Adult Parents to Care for Indigent Parents,” National Center for Policy Analysis, Brief Analysis No. 521 (July 12, 2005); Eleanor Baugher and Leatha Lamison-White, U.S. Bureau of the Census, Current Population Reports, Series P60–194, Poverty in the United States: 1995 (Washington, D.C.: U.S. Government Printing Office, 1996), xii.

57. See, for example, Richard Titmuss, “Equity, Adequacy, and Innovation in Social Security,” International Social Security Review, 23(2) (1970): 259–68.

58. Richard Hohaus, “Equity, Adequacy, and Related Fac- tors in Old-Age Security,” in William Haber and Wilbur Cohen (eds.), Social Security: Programs, Problems, and Policies (Homewood, IL: Richard Irwin, 1960), 61.

59. Drawing boundaries is a recurrent problem with this method of allocation. Exactly where any given central city low-income neighborhood begins and ends is a matter that even carefully designed empirical research rarely settles to everyone’s satisfaction. For a techni- cal analysis of this issue, see Avery Guest and James Zuiches, “Another Look at Residential Turnover in Urban

Magazine, December 18, 1994, 43–49; and Sheldon Danziger and Robert Plotnik, “Poverty and Policy: Les- sons of the Last Two Decades,” Social Service Review (March 1986): 36–50.

29. Blank, 145. 30. FN ESHRE Capri Workshop Group (2010), Human Repro-

duction Update, 16(6), 590–602. 31. Elizabeth Bryant, “Europe Offers Incentives to Have

Kids,” San Francisco Chronicle, August 10, 2008. 32. Richard Bernstein, “Aging Europe Finds Its Pension Is

Running Out,” New York Times, June 29, 2003. 33. Phillips Cutright, “Income and Family Events: Marital

Stability,” Journal of Marriage and the Family, 33 (May 1971): 291–306.

34. William J. Goode, “Marital Satisfaction and Instability: A Cross-Cultural Analysis of Divorce Rates,” International Social Science Journal, 5 (1982): 507–26.

35. Michael Hannan, Nancy Tuma, and Lyle Groeneveld, “Income and Marital Events: Evidence from an Income Maintenance Experiment,” American Journal of Sociol- ogy, 82 (May 1977): 186–211.

36. Ibid. For additional discussion of the implications of these findings, see Maurice MacDonald and Isabel V. Sawhill, “Welfare Policy and the Family,” Public Policy, 26 (Winter 1978): 107–19.

37. The short-term versus long-term effects of SIME/DIME on marital stability are analyzed in James W. Albrecht, “Neg- ative Income Taxation and Divorce in SIME/DIME,” Jour- nal of the Institute of Socioeconomic Studies, 4 (Autumn 1979): 75–82.

38. Titmuss, Commitment to Welfare (London: George Allen and Unwin Ltd., 1968), 122.

39. Alfred Kahn, Theory and Practice of Social Planning (New York: Russell Sage, 1969), 203.

40. See, for example, Joe Handler and Ellen Hollingsworth, “How Obnoxious Is the ‘Obnoxious Means Test’? The View of AFDC Recipients” (Madison, WI: University of Wisconsin, January 1969 Institute for Research on Poverty Discussion Paper); Richard Pomeroy and Harold Yahr, in collaboration with Lawrence Podell, Studies in Public Welfare: Effects of Eligibility Investigation on Welfare Cli- ents (New York: Center for the Study of Urban Problems, City University of New York, 1968); and Martha Ozawa, “Impact of SSI on the Aged and Disabled Poor,” Social Work Research and Abstracts, 14 (Fall 1978): 3–10.

41. A penetrating description of the ways administrative practices are used to intimidate and deter public assis- tance applicants is presented by Frances Fox Piven and Richard Cloward in Regulating the Poor: The Functions of Public Welfare (New York: Pantheon Books, 1971), 147–82. Also see Betty Mandell, “Welfare and Totali- tarianism: Part I. Theoretical Issues,”Social Work, 16(1) (January 1971): 17–25.

42. For a discussion of income testing, see Sheila Kamer- man and Alfred Kahn, “Universalism and Income Testing in Family Policy: New Perspectives on an Old Debate,” Social Work, 34(4) (July–August 1987): 279.

43. For example, see George Hoshino, “Can the Means Test Be Simplified?” Social Work, 10(3) (July 1965): 98–104.

44. Titmuss, Commitment to Welfare, 114–15. 45. Al Baker, “Six Posed as Abuse Victims to Get Rent Subsi-

dies,” New York Times, October 21, 2009.

Notes 275

Enterprise Institute, November 18, 2004; also see, Eber- stadt, op. cit.

74. In a study of welfare recipients in Illinois between 1988 and 1990, Edin and Jencks found that almost 80 percent of their sample worked (in both legal and illegal activi- ties) without reporting their income. Kathryn Edin and Christopher Jencks, “Welfare” in Christopher Jencks. Rethinking Social Policy (Cambridge, MA: Harvard Uni- versity Press, 1992), 204–36. Other studies reveal signifi- cant employment rates, though not quite as high as in the Edin and Jencks. For example, Maureen Marcenko and Jay Fagan, “Welfare to Work: What Are the Obstacles,” Journal of Sociology and Social Welfare, 70(3) (1996), report 27 percent; Dave O’Neill and June O’Neill, Lessons for Welfare Reform: An Analysis of the AFDC Caseload and Past Welfare-to-Work Programs (Kalamazoo, MI: W.E. Upjohn Institute for Employment Research, 1997) report 49.4 percent; and Kathleen Harris, “Work and Welfare among Single Mothers in Poverty,” American Journal of Sociology, 99(2) (1993) reports 51 percent. As illustrated later, Kathryn Edin and Laura Lein, “Work, Welfare, and Single Mothers’ Economic Survival Strategies,” American Sociological Review, 62(2) (1997), provide strong cor- roborating evidence of large discrepancies between the amount of work AFDC recipients reported to their local welfare offices in four cities and the rates of employment revealed through in-depth interviews.

75. U.S. Energy Information Administration, “Residential Energy Consumption Survey (RECS) Data Tables 2009,” Table HC9.2 http://www.eia.gov/consumption/residential/ data/2009/index.cfm, accessed October 9, 2011; Ameri- can Housing Survey National Tables: 2009 Using Census 2000-Based Weighting; http://www.census.gov/housing/ ahs/data/ahs2009.html, accessed October 7, 2011.

76. Story from BBC NEWS: http://news.bbc.co.uk/go/pr/ fr/-/2/hi/uk_news/magazine/8201900.stm, 2009/08/15 07:07:17 GMT; accessed October 8, 2011.

77. U.S. Energy Information Administration, “Residential Energy Consumption Survey (RECS) Data Tables 2009,” Table HC5.5, HC7.5, HC 3.5. http://www.eia.gov/ consumption/residential/data/2009/index.cfm, accessed October 9, 2011; American Housing Survey National Tables: 2009 Using Census 2000-Based Weighting; http:// www.census.gov/housing/ahs/data/ahs2009.html, accessed October 7, 2011.

Chapter 5 1. Alva Myrdal, Nation and Family (Cambridge, MA:

MIT Press, 1968), 133–53. A similar position is offered in Charlotte Whitton, Dawn of Ampler Life (Toronto: MacMillan of Canada, 1943). For a utopian proposal where benefits in-kind are employed more generally as the foundation of a guaranteed standard of living, see Paul Goodman and Percival Goodman, Communitas, 2nd ed., rev. (New York: Vintage Books, 1960), 188–217.

2. The question of how directly the objective is served can be asked apart from the issue of how well the objective is served. The former involves effectiveness in terms of impact, the latter in terms of performance or ultimate outcome.

3. For further discussion of this assumption, see James Buchanan, “What Kind of Redistribution Do We Want?”

Neighborhoods: A Note on ‘Racial Change in a Stable Community’ by Harvey Molotch,” American Journal of Sociology, 77(3) (November 1971): 457–71. We should add that methodological efforts at boundary definition in most CAPs were superficial.

60. Sar Levitan, The Great Society’s Poor Law (Baltimore: Johns Hopkins University Press, 1970).

61. See Carol Pogash, “Poor Students in High School Suf- fer Stigma from Lunch Aid,” New York Times, March 1, 2008; and Sheila Zedlewski, “Nutritional Assistance for Older Adults,” Urban Institute, November 23, 2010.

62. Center for Law and Social Policy, Families on the Edge: Homeless Young Parents and Their Welfare Experiences (November 20, 2002).

63. For example, see Oliver Moles, Robert Hess, and Daniel Fascione, “Who Knows Where to Get Public Assistance?” Welfare in Review, 6(5) (September/October 1968).

64. Greg Acs et. al., “The Road Not Taken? Changes in Wel- fare Entry during the 1990s,” The Urban Institute, Decem- ber 2003.

65. Robert Samuelson, “Paying for Baby Boomers” News- week, August 6, 2007.

66. Robert Pear, “H.M.O.s Warned on Recruiting Only Fit Medicare Clients,” New York Times, June 11, 1999, 1.

67. Phil Galewitz, “Door Knockers Help Uninsured Kids Get Coverage,” Kaiser Health News, June 16, 2010.

68. Mollie Orshansky, “Children of the Poor,” Social Security Bulletin, 26(7) (1963), 3–13; a little later she refined the measure to include poverty in all families, not just those with children; see Mollie Orshansky, “Counting the Poor: Another Look at the Poverty Threshold,” Social Security Bulletin, 28(1), (1965): 3–29.

69. For a review of the Supplemental Measure see, In- teragency Technical Working Group on Developing a Supplemental Poverty Measure, “Observations from the Interagency Technical Working Group on developing a Supplemental Poverty Measure, March 2010. Retrieved June 13, 2010, from http://www.census.gov/hhes/www/ povmeas/SPM-TWGObservationsw.pdf; also see K. Short, “Who Is Poor?” A New Look with the Supplemental Poverty Measure (Washington D.C.: U.S. Census Bureau, 2011); T. Garner and K. Short, “Creating a consistent poverty measure over time using NAS procedures: 1996– 2005.” BLS Working paper No.417, U.S. bureau of Labor Statistics. Washington, D.C.: Government Printing Office, 2008; David Johnson, “Progress toward Improving the U.S. Poverty Measure: Developing the New Supplemental Poverty Measure,” Focus 27(2) (Winter 2010): 1–3.

70. Consumer Expenditure survey, U.S. Bureau of Labor sta- tistics, 2011.

71. Nicholas Eberstadt, “The Mismeasure of Poverty,” Policy Review, August 1, 2006.

72. There are at least 82 major federal programs that provide a broad range of benefits to low-income groups. Ron Haskins, “Fighting Poverty the American Way,” paper prepared for the conference on Anti-poverty Programs in a Global Perspective: Lessons for Rich and Poor Coun- tries, held by the Social Science Research Center in Ber- lin, June 20–21, 2011.

73. David Johnson, “Measuring Consumption and Consump- tion Poverty: Possibilities and Issues,” paper prepared for “Reconsidering the Federal Poverty Measure,” American

Notes276

Network in Transition: Problems and Prospects,”Social Work, 26(3) (May 1981): 210–16.

24. Friedman, “The Role of Government in Education,” 128. 25. Christopher Jencks et al., Education Vouchers: A Report

on Financing Elementary Education by Grants to Parents (Cambridge, MA: Center for the Study of Public Policy, 1970).

26. Paul Wortman and Robert St. Pierre, “The Educational Voucher Demonstration: A Secondary Analysis,” Educa- tion and Urban Society, 9 (August 1977): 471–91.

27. David Cohen and Eleanor Farrar, “Power to Parents? The Story of Education Vouchers,” Public Interest, 48 (Sum- mer 1977): 72–97.

28. See, for example, D. Weiler (ed.), A Public School Voucher Demonstration: The First Year at Alum Rock (Santa Monica, CA: Rand Corporation, 1974); Wortman and St. Pierre, “The Educational Voucher Demonstra- tion”; and R. Crain, Analysis of the Achievement Test Outcomes in the Alum Rock Voucher Demonstration, 1974–75 (Santa Monica, CA: Rand Corporation, 1976).

29. See Paul Peterson, Jay Greene, and Chad Noyes, “School Choice in Milwaukee,” The Public Interest, 125 (Fall 1996): 38–56.

30. William Howell and Paul Peterson, The Education Gap: Vouchers and Urban Schools (Washington, D.C.: Brook- ings Institution, 2002).

31. Robert Holland, “Voucher Lessons from Sweden,” The Heartland Institute, Document #11451, 2003.

32. Mauricio Rojas, Sweden after the Swedish Model: From Tutorial State to Enabling State. (Stockholm: Timbro Pub- lishers, 2005).

33. E. G. West, “Choice or Monopoly in Education,” Policy Review, 15 (Winter 1981): 103–17.

34. John C. Donovan, The Politics of Poverty (New York: Pegasus, 1967), 40.

35. U.S. House of Representatives, A Bill to Mobilize the Hu- man and Financial Resources of the Nation to Combat Poverty in the United States, 88th Cong., 2nd session, March 1964, H.R. 10443, 17–18.

36. Daniel Moynihan, “What Is ‘Community Action’?” The Public Interest, 5 (Fall 1966): 7.

37. U.S. House of Representatives, Economic Opportunity Act of 1964, Hearing before the Subcommittee on the War on Poverty Program (Washington, D.C.: Government Printing Office, 1964), Part I, 305.

38. Statement of Robert F. Wagner before the Ad Hoc Subcommittee on the Poverty Program of the House Education and Labor Committee, April 16, 1964, 3–4 (mimeographed).

39. For a more thorough discussion of these various interpre- tations, see Moynihan, “What Is ‘Community Action’?”

40. Statement by the Marion H. Crank, Speaker of the Arkan- sas House of Representatives, before the Ad Hoc Subcom- mittee on the Poverty Program of the House Education and Labor Committee, April 10, 1964, 3 (mimeographed).

41. Statement of Robert C. Weaver before the Ad Hoc Subcommittee on the Poverty Program of the House Education and Labor Committee, April 16, 1964, 12 (mimeographed).

42. Quoted in Elinor Graham, “Poverty and the Legislative Process,” in Ben B. Seligman (ed.), Poverty as a Public Issue (New York: Free Press, 1965), 251–71.

Economia, 35 (May 1968); and Martin Rein, “Social Policy Analysis as the Interpretation of Beliefs,” Journal of the American Institute of Planners, 37(5) (Septem- ber 1971). These assumptions are critiqued in Gunnar Myrdal, Value in Social Theory, Paul Streeten (ed.) (Lon- don: Routledge and Kegan Paul, 1958), 137.

4. Raymond J. Struyk and Marc Bendick, Jr. (eds.), Housing Vouchers for the Poor (Washington, D.C.: Urban Institute Press, 1981).

5. Myrdal, Nation and Family, 151. 6. Gerald M. Holden, “A Consideration of Benefits In-Kind

for Children,” in Eveline M. Burns (ed.), Children’s Allowances and the Economic Welfare of Children (New York: Citizen’s Committee for Children of New York, 1968), 151.

7. Asa Briggs, “The Welfare State in Historical Perspective,” in Mayer Zald (ed.), Social Welfare Institutions (New York: Wiley, 1965), 62.

8. Sigmund Freud, Civilization and Its Discontents, James Strachey (trans. and ed.) (New York: W. W. Norton, 1962), 42.

9. Myrdal, Nation and Family, 150. 10. Milton Friedman, “The Role of Government in Educa-

tion,” in Robert Solo (ed.), Economics and the Public Interest (New Brunswick, N.J.: Rutgers University Press, 1955), p. 124.

11. Myrdal, Nation and Family, 1968, p. 150. 12. See, for example, Shirley Buttrick, “On Choice and Ser-

vices,” Social Service Review, 44(4) (December 1970): 427–33; and Anthony Pascal, “New Departures in Social Services,” Social Welfare Forum (New York: Columbia University Press, 1969), 75–85.

13. James Thompson, Organizations in Action (New York: McGraw-Hill, 1976), 17–18.

14. Friedman, “The Role of Government in Education,” 144. 15. John K. Galbraith, The Affluent Society (New York: Men-

tor Books, 1958), 205. 16. See Friedrick Hayek, “The Non Sequitur of the ‘Depen-

dence Effect,’ ” in Edmund S. Phelps (ed.), Private Wants and Public Needs (New York: W. W. Norton, 1962), 37–42.

17. Alice M. Rivlin, Systematic Thinking for Social Action (Washington, D.C.: Brookings Institution, 1971), pp. 137–38.

18. See, for example, Peter Marquis et al., “Barriers to Child Health Care,” Archives of Pediatric and Adolescent Medi- cine, 149 (1995): 541–45.

19. Charles Murray, In Our Hands—A Plan to Replace the Welfare State (Washington D.C.: AEI Press, 2006).

20. A more detailed discussion of these conditions is pre- sented by Milton Friedman, “The Role of Government in a Free Society,” in Edmund S. Phelps (ed.), Private Wants and Public Needs (New York: W. W. Norton, 1962), 104–17.

21. Samuel Mencher, Poor Law to Poverty Program (Pitts- burgh, PA: University of Pittsburgh Press, 1967), 336.

22. For example, see Friedman, “The Role of Government in Education”; Buttrick, “On Choice and Services”; and Christopher Jencks, “Private Schools for Black Children,” New York Times Magazine, November 3, 1968.

23. Neil Gilbert and Harry Specht, “Title XX Planning by Area Agencies on Aging: Efforts, Outcome, and Policy Implications,”The Gerontologist, 19(3) (June 1979): 264–74; Stephanie Fall Creek and Neil Gilbert, “Aging

Notes 277

M. (eds.), Child Protection Systems International Trends and Orientations (New York: Oxford University Press, 2011).

61. R. Geen. The Evolution of Kinship Care Policy and Prac- tice, The Future of Children (2004).

62. Jill Duerr Berrick, Take Me Home: Protecting America’s Children and Vulnerable Families (New York: Oxford University Press, 2009).

Chapter 6 1. Whereas most services are designed for delivery (i.e.,

policy implementation) at the local level, designing and planning activities may or may not occur at the local level. Frequently, program designers and planners may be several steps removed from the local community, located at the State house or the White House. The location of the program planners is a factor of major significance in policy development.

2. Alfred Kahn and Sheila Kamerman (eds.), Privatization and the Welfare State (Princeton, NJ: Princeton Univer- sity Press, 1989); Neil Gilbert, Transformation of the Welfare State (New York: Oxford University Press, 2004); Congressional Research Service, Privatization and the Federal Government, December 28, 2006.

3. E. S. Savas, Privatization: The Key to Better Government (Chatham, NJ: Chatham Publishers, 1987); Neil Gilbert and Barbara Gilbert, The Enabling State: Modern Welfare Capitalism in America (New York: Oxford University Press, 1989); Ken Judge and Martin Knapp, “Efficiency in the Production of Welfare: The Public and Private Sectors Com- pared,” in Rudolph Klein and Michael O’Higgins (eds.), The Future of Welfare (Oxford: Basil Blackwell, 1985).

4. Robert Bellah, “Community Properly Understood: A Defense of Democratic Communitarianism,” The Respon- sive Community (Winter 1995/96), 49–54; Peter Berger and Richard Neuhaus, To Empower the People: The Role of Mediating Structures in Public Policy (Washington, D.C.: American Enterprise Institute Press, 1977); Harry Specht and Mark Courtney, Unfaithful Angels: How Social Work Has Abandoned Its Mission (New York: Free Press, 1994), 152–76.

5. Burton Weisbrod, The Nonprofit Economy (Cambridge, MA: Harvard University Press, 1988); Susan Rose- Ackerman, “Social Services and the Market,” Columbia Law Review, 8(6) (1983): 1405–38.

6. Henry Hansmann, “Economic Theories of Nonprofit Organization,” in Walter Powell (ed.), The Nonprofit Sec- tor (New Haven, CT: Yale University Press, 1987), 29–32.

7. Mark Schlesinger, Robert Dortwart, and Richard Pulice, “Competitive Bidding and State’s Purchase of Services: The Case of Mental Health Care in Massachusetts,” Journal of Policy Analysis and Management, 5(2) (Winter 1986): 245–64; David Young, “Referral and Placement in Child Care: The New York City Purchase of Service System,”Public Policy, 12(3) (Summer 1974): 293–328.

8. Rose-Ackerman, “Social Services and the Market.” 9. Rosabeth Kanter and David Summers, “Doing Well While

Doing Good: Dilemmas of Performance Measurement in Nonprofit Organizations and the Need for a Multiple- Constituency Approach,” in Walter Powell (ed.), The Nonprofit Sector: A Research Handbook (New Haven, CT: Yale University Press, 1987), 154–67.

43. For example, see Advisory Commission on Intergovernmen- tal Relations, Intergovernmental Relations in the Poverty Program (Washington, D.C.: Government Printing Office, 1966); and William F. Haddad, “Mr. Shriver and the Savage Politics of Poverty,”Harpers (December 1965): 43–50.

44. Daniel Moynihan, Maximum Feasible Misunderstanding (New York: Free Press, 1969), 188–89.

45. Suchman, Edward A. “Concepts and Principles of Evalu- ation.” In Evaluative Research: Principles and Practice in Public Service and Social Action Programs. © 1967 Rus- sell Sage Foundation, 112 East 64th Street, New York, NY 10065. Reprinted with permission.

46. Martin Rein, Social Policy (New York: Random House, 1970), 417–45.

47. For a classic example of this perspective, see Alvin Schorr, Slums and Social Insecurity (Washington, D.C.: U.S. Government Printing Office, 1963).

48. See Michael B. Katz, The Undeserving Poor, 1989, es- pecially 9–36; and Isabel V. Sawhill, “The Behavioral Aspects of Poverty,” The Public Interest, 153 (Fall 2003).

49. See, for example, Frances Piven and Richard Cloward, Regulating the Poor (New York: Random House, 1971); and Ian Gough, The Political Economy of the Welfare State (London: Macmillan Press, 1979).

50. Robert H. Connery et al., The Politics of Mental Health (New York: Columbia University Press, 1968), p. 478.

51. Richard Nixon, quoted in Edward Berkowitz, America’s Welfare State from Roosevelt to Reagan (1991), 128.

52. U.S. General Accounting Office, Welfare to Work: Most AFDC Training Programs Not Emphasizing Job Place- ment, GAO-HEHS-95-113, May 19, 1995.

53. William Julius Wilson, “Work,” New York Times Maga- zine, August 18, 1996, 52.

54. LaDonna Pavetti, “Analysis of TANF Spending over Time,” Center on Budget and Policy Priorities (April 27, 2011).

55. Neil Gilbert (ed.), Combatting Child Abuse: International Perspectives and Trends (New York: Oxford University Press, 1997).

56. Neil Gilbert, Nigel Parton, and Marit Skivenes (eds.), Child Protection Systems International Trends and Orien- tations (New York: Oxford University Press, 2011).

57. Jill Duerr Berrick, “Trends and Issues in the U.S. Child Wel- fare System,” in Gilbert, N., Parton, N., and Skivenes, M. (eds.), Child Protection Systems International Trends and Orientations (New York: Oxford University Press, 2011).

58. U.S. Department of Health and Human Services, Administration for Children, Youth and Families, Child Maltreatment 1997: Reports from the States to the National Child Abuse and Neglect Data System (Washington, DC: U.S. Government Printing Office, 1999); U.S. Department of Health and Human Services, Administration for Chil- dren, Youth and Families. Child Maltreatment 2007 (Wash- ington, D.C.: U.S. Government Printing Office, 2009).

59. Adoption Statistics: Foster Care 1999. http://statistics. adoption.com/information/adoption-statistics-foster- care-1999.html, accessed February 5, 2011, and U.S. Department of Health and Human Services, Administra- tion for Children Youth and Families, Trends in Foster Care and Adoption FY 2002-FY 2009. http://www.acf. hhs.gov/programs/cb/state-researcj/afcars/tremds.htm.

60. Jill Duerr Berrick, Trends and Issues in the U.S. Child Welfare System. in Gilbert, N., Parton, N., and Skivenes,

Notes278

23. Ibid. Also see Neil Gilbert, “Welfare for Profit: Moral, Em- pirical, and Theoretical Perspectives,” Journal of Social Policy, 13(1) (January 1984): 63–74.

24. This concern, it appears, is not always decisive. For example, in recent years federal and state agencies have contracted with profit-making corporations to run pris- ons. See Harry Hatry et al., “Comparison of Privately and Publicly Operated Corrections Facilities in Kentucky and Massachusetts,” The Urban Institute, August 1989.

25. Harry G. Bredemeier, “The Socially Handicapped and the Agencies: A Market Analysis,” in Frank Riessman, Jerome Cohen, and Arthur Pearl (eds.), Mental Health of the Poor (New York: Free Press, 1964); Richard Cloward and Frances F. Piven, “The Professional Bureaucracies Benefit Systems as Influence Systems,” in Murray Silber- man (ed.), The Role of Government in Promoting Social Change (New York: Columbia University, School of Social Work, 1966); Alfred J. Kahn, “Do Social Services Have a Future in New York?”City Almanac, 5(5) (February 1971): 1–11; Irving Piliavin, “Restructuring the Provision of So- cial Service,” Social Work, 13(1) (January 1968); William Reid, “Interagency Coordination in Delinquency Preven- tion and Control,” Social Service Review, 38(4) (December 1964); Martin Rein, Social Policy: Issues of Choice and Change (New York: Random House, 1970); Gideon Sjo- berg, Richard Brymer, and Buford Farris, “Bureaucracy and the Lower Class,” Sociology and Social Research, 50(3) (April 1966): 325–37.

26. Herbert H. Simon, Administrative Behavior, 2nd ed. (New York: Free Press, 1965), 238.

27. Peter Townsend et al., The Fifth Social Service: A Critical Analysis of the Seebohm Report (London: Fabian Society, 1970).

28. See, for example, Neil Gilbert and Harry Specht, Coor- dinating Social Services (New York: Praeger Publishers, 1977); Stephanie Fall Creek and Neil Gilbert, “Agency Network in Transition: Problems and Prospects,” Social Work, 26(3) (May 1981), 210–15; Douglas Besharov and Phoebe Cottingham (eds.), The Workforce Investment Act: Implementation Experiences and Evaluation Findings (Kalamazoo, MI: W.E. Upjohn Institute, 2011).

29. James D. Thompson, Organizations in Action (New York: McGraw-Hill, 1967); and Reid, “Interagency Coordination in Delinquency Prevention and Control.”

30. Reid, “Interagency Coordination in Delinquency Preven- tion and Control.”

31. Robert A. Dahl and Charles E. Lindblom, Politics, Eco- nomics, and Welfare (New York: Harper & Row, 1953), 238.

32. David Hage, “Purgatory of the Working Poor,” The Ameri- can Prospect, September 2004, A4.

33. Mary Richardson et al., “Coordinating Services by De- sign,” Public Welfare (Summer 1989): 31–36.

34. Jane Knitzer and Susan Yelton, “Collaboration between Child Welfare and Mental Health,” Public Welfare (Spring 1990): 24–33.

35. Karen Orloff Kaplan, “Recent Trends in Case Manage- ment,” Encyclopedia of Social Work, 18th ed., 1990 Supplement (Silver Spring, MD: National Association of Social Workers, 1990), 60–77.

36. Denise Polit and Joseph O’Hara, “Support Services,” in Phoebe Cottingham and David Ellwood (eds.), Welfare

10. Charles Krauthammer, “A Social Conservative Credo,” The Public Interest, 121 (Fall 1995): 16.

11. Fred Wulczyn, “Status at Birth and Infant Placements in New York City,” in Richard Barth, Jill Berrick, and Neil Gilbert (eds.), Child Welfare Research Review 1 (New York: Columbia University Press, 1994).

12. Neil Gilbert. “The Enabling State? From Public to Private Responsibility for Social Protection: Pathways and Pit- falls,” OECD Employment and Migration Working Papers, No. 26, (2005).

13. Emile Durkheim, The Division of Labor in Society, George Simpson (trans.) (New York: The Free Press, 1933), 28.

14. See, for example, Neil Gilbert, Welfare Justice (New Haven, CT: Yale University Press, 1995), 135–37; Neil Gilbert and Kwong Leung Tang, “The United States,” in Norman Johnson (ed.), Private Markets in Health and Welfare (Oxford: Berg Publishers, 1995).

15. Kahn and Kamerman, Privatization and the Welfare State, 262.

16. As Peter Blau observed long ago, bureaucracy and democracy are different modes of social organization for decision making and implementation that are effective for different ends. See Peter Blau, Bureaucracy in Modern Society (New York: Random House, 1956).

17. See John J. Dilulio, Jr., Godly Republic, 2007, for a review of political and legal issues surrounding federal faith- based initiatives.

18. See, for example, Ralph Kramer, “Public Fiscal Policy and Voluntary Agencies in Welfare States,” Social Ser- vice Review, 53 (March 1979): 1–14; and Alfred Kahn, “A Framework for Public–Voluntary Collaboration in the Social Services,” Social Welfare Forum 1976 (New York: Columbia University Press, 1976), 47–62.

19. Kurt Reichert, “The Drift Toward Entrepreneurialism in Health and Social Welfare: Implications for Social Work Education,”Administration in Social Work, 1 (Summer 1977): 129. See also Mimi Abramovitz, “The Privatization of the Welfare State: A Review,” Social Work (July/August 1986): 257–64.

20. For further discussion of problems in this area, see R. M. Kanter, “The Measurement of Organizational Effectiveness, Productivity, Performance and Success: Issues and Dilemmas in Service and Non-Profit Organi- zations,” Program on Non-Profit Organization Working Paper 8, Institution for Social Policy Studies, Yale Uni- versity, 1979.

21. Richard Titmuss, The Gift Relationship (New York: Pan- theon, 1971); Cynthia Barnett, “Profit and Non-Profit Dis- tinctions in Theory and in Fact: The Lack of Fit Between Theory and Empirical Research in Health Care Organiza- tions,” 1982 (mimeographed paper); Lenard Kaye, Abra- ham Monk, and Howard Litwin, “Community Monitoring of Nursing Home Care: Proprietary and Non-Profit Asso- ciation Perspectives,” Journal of Social Service Research, 7(3) (Spring 1984): 5–19; Catherine Born, “Proprietary Terms and Child Welfare Services: Patterns and Implica- tions,” Child Welfare, 62(2) (March/April 1983): 109–18; Stephen Shortell, “Hospital Ownership and Nontradi- tional Services,” Health Affairs (Winter 1986).

22. For elaboration on this point, see Neil Gilbert, Capitalism and the Welfare State (New Haven, CT: Yale University Press, 1983), 17–19.

Notes 279

(eds.), Handbook of Clinical Social Work (San Francisco, CA: Jossey-Bass, 1983), 779–91.

59. Howard Glennerster, “Prime Cuts: Public Expenditure and Social Service Planning in a Hostile Environment,” Policy and Politics, 8(4) (1980): 367–82.

60. Ellie Scrivens, “Towards a Theory of Rationing,” Social Policy and Administration, 13(1) (Spring 1979): 53–84.

61. For more detailed discussions of these strategies, see Abraham Deron, “The Welfare State: Issues of Ration- ing and Allocation of Resources,” in Shimon Spiro and Ephraim Yuchtman-Yaar (eds.), Evaluating the Welfare State: Social and Political Perspectives (New York: Aca- demic Press, 1983): 149–59; and R. A. Parker, “Social Ad- ministration and Scarcity,” Social Work Today, 12 (April 1967): 9–14.

62. Michael Lipsky, “Bureaucratic Disentitlement in Social Welfare Programs,” Social Service Review, 58(1) (March 1984): 20.

63. For a discussion of this issue, see Barry Rock and Elaine Congress, “The New Confidentiality for the 21st Century in a Managed Care Environment,” Social Work, 44(3) (May 1999): 253–62.

64. Kimberly Strom-Gottfried and Kevin Corcoran, “Con- fronting Ethical Dilemmas in Managed Care,” Journal of Social Work Education, 34(1) (Winter 1998): 109–19.

65. Delivering Race Equality in Mental Health Struggles to Recruit Workers,” www.communitycare.co.uk/articles/ 2006/11/09/102085.html, posted November 9, 2006.

66. L. R. Snowden, M. C. Masland, and R. Guerrero, “Federal Civil Rights Policy and Mental Health Treatment Access for Persons with Limited English Proficiency,” American Psychologist, February/March, 2007.

Chapter 7 1. Giving USA Foundation, Giving USA 2010 (New York:

AAFRC). 2. Foundation Center, 2011. 3. Gordon Manser, “The Voluntary Agency—Contribution

or Survival?” Washington Bulletin, 22(20) (October 1971): 10; Voluntary Giving and Tax Policy (New York: National Assembly for Social Policy and Development, 1972).

4. William S. Vickrey, “One Economist’s View of Philan- thropy,” in Frank G. Dickinson (ed.), Philanthropy and Public Policy (New York: National Bureau of Economic Research, 1962).

5. Ralph Kramer, Voluntary Agencies in the Welfare State (Berkeley, CA: University of California Press, 1981), 193–211.

6. For example, see Oscar Handlin, The Uprooted (New York: Oxford University Press, 1964).

7. Kramer, Voluntary Agencies in the Welfare State, 173–92. 8. Peter Marris and Martin Rein, Dilemmas of Social Re-

form: Poverty and Community Action in the United States (New York: Atherton, 1967). For a dramatic account of how foundations undertake projects that the govern- ment may abjure because of political considerations, see Thomas C. Reeves, Freedom and the Foundation: The Fund for the Republic in the Era of McCarthyism (New York: Alfred A. Knopf, 1969).

9. Kramer, Voluntary Agencies in the Welfare State, 242–47. 10. This example is based on the article by Herman Levin,

“The Future of Voluntary Family and Children’s Social

Policy for the 1990s, (Cambridge, MA: Harvard University Press, 1989), 191–92.

37. Ibid., 193. 38. Sherry Arnstein, “A Ladder of Citizen Participation,”

Journal of the American Institute of Planners, 35(4) (July 1969).

39. Hans B. C. Spiegel et al., Neighborhood Power and Control: Implications for Urban Planning (New York: Columbia University, Institute of Urban Environment, 1968), 157.

40. Ralph M. Kramer, Community Development in Israel and the Netherlands (Berkeley, CA: University of California Press, Institute of International Studies, 1970), 127.

41. Gilbert, Clients or Constituents (San Francisco, CA: Jossey-Bass, 1970), 145; and Arthur B. Shostak, “Promot- ing Participation of the Poor: Philadelphia’s Antipoverty Program,” Social Work, 11(1) (January 1966).

42. Ralph M. Kramer, Participation of the Poor (Englewood Cliffs, NJ: Prentice-Hall, 1969), 127.

43. George Peterson et al., The Reagan Block Grants: What Have We Learned? (Washington, D.C.: Urban Institute Press, 1986).

44. Sjoberg, Brymer, and Farris, “Bureaucracy and the Lower Class.”

45. S. M. Miller and Frank Riessman, Social Class and Social Policy (New York: Basic Books, 1968), p. 207.

46. The Aspen Institute, Direct-Care Health Workers, January, 2001, 1–2.

47. David A. Hardcastle, “The Indigenous Non-Professional in the Social Service Bureaucracy: A Critical Examina- tion,” Social Work, 16(2) (April 1971): 63.

48. “Schram to Explore Punitive Welfare Policy,” Bryn Mawr Now, June 28, 2007.

49. Lonnie Snowden and David Derezotes, “Cultural Factors in the Intervention of Child Maltreatment,” Child and Adolescent Social Work, 7(2) (April 1990).

50. Gerald Levy, “Acute Workers in a Welfare Bureaucracy,” in Deborah Offenbacher and Constance Poster (eds.), Social Problems and Social Policy (New York: Appleton- Century-Crofts, 1970); see also Harry Wasserman, “The Professional Social Worker in a Bureaucracy,” Social Work, 16(1) (January 1971): 89–95.

51. Piliavin, “Restructuring the Provision of Social Service,” 35.

52. National Association of Social Workers, Practice Research Network, “What is NASW’s Practice Research Network?” February 6, 2003.

53. T. Whitaker and P. Arrington, Social Workers at Work. NASW Membership Workforce Study. (Washington, D.C.: National Association of Social Workers, 2008).

54. Robert Pruger, “The Good Bureaucrat,” Social Work, 18(4) (July 1973): 27.

55. Results of the project are reported by Bleddyn Davies and David Challis, “Experimenting with New Roles in Domiciliary Service: The Kent Community Care Project,” Gerontologist, 20 (June 1980): 288–99.

56. Alfred J. Kahn, “Perspectives on Access to Social Ser- vice,” Social Work, 15(2) (March 1970): 99.

57. Dawn McCarty and Catherine Clancy, “Telehealth: Implications for Social Work Practice,” Social Work, 47(2), (April 2002): 153.

58. Henry Miller and Connie Philipp, “The Alternative Ser- vice-Agency,” in Aaron Rosenblatt and Diana Waldfogel

Notes280

Olasky, Compassionate Conservatism (New York: Press, 2000).

27. Kaiser Family Foundation, Employer Health Benefits, 2008 Summary of Findings, 1.

28. Ibid., 3. 29. Sharon K. Long, Hardship among the Uninsured: Choos-

ing among Food, Housing, and Health Insurance, The Urban Institute, B-54, May 2003.

30. Daniel Cherkin, “The Effect of Office Visit Co-Payments on Utilization in a Health Maintenance Organization,” Medical Care (July 1989).

31. Daniel Weinberg, “The Distributional Implications of Tax Expenditures,” National Tax Journal, XL(2) (June 1987): 237–54.

32. Isabel Sawhill, quoted in Urban Institute, Policy and Research Report (Winter/Spring 1990): 28.

33. See Table 7.4. 34. Taxable income constitutes about 55 percent of total

personal income. See U.S. Advisory Commission on Intergovernmental Relations, Facts and Figures on Government Finance, Table C41, 1990, 130.

35. Office of Management and Budget Figures reported by the Center for American Progress, 2011.

36. Organization of Economic Cooperation and Development (OECD), OECD Tax Database, 2010 provisional statistics.

37. Chuck Marr and Gillian Brunet, “Federal Income Taxes on Middle-Income Families at Historically Low Levels,” Center on Budget and Policy Priorities, April 14, 2010.

38. Urban-Brookings Tax Policy Center Microsimulation Model, May 19, 2011, Table T 11-0096.

39. Joseph Pechman, Social Security: Perspectives for Reform (Washington, D.C.: Brookings Institution, 1968). Eveline M. Burns, Social Security and Public Policy (New York: McGraw-Hill, 1956); Richard M. Titmuss, Essays on “The Welfare State” (London: Allen & Unwin, 1958).

40. Center on Budget and Policy Priorities, New CBO Data Indicates Growth in Long-Term Income Inequality Contin- ues, January 30, 2006.

41. Thomas Birch, Children’s Trust Funds: An Update, National Committee for Preventing Child Abuse, 1984. See also Ronald K. Snells, “Earmarking State Tax Revenues,” Intergovernmental Perspective, 16(4) (Fall 1990): 12–16.

42. Healthy Children Report, Special Taxing Districts for Children, Harvard University Division of Health Policy, 1988.

43. Charles Lindblom refers to “tax inducements” and “tax punishments.” See his “The Market as Prison,” Journal of Politics, 44(2) (May 1982).

44. Harvey E. Brazer, “Income Tax Treatment of the Family,” in Henry J. Aaron and Michael J. Boskin (eds.), The Eco- nomics of Taxation (Washington, D.C.: Brookings Institu- tion, 1980), 223.

45. Matt Rosenberg, China’s One Child Policy, About. com: Geography, geography.about.com/od/ populationgeography/a/onechild.htm. Posted June 18, 2008.

46. Mark Bittman, “Bad Food? Tax It,” The New York Times, July 24, 2011.

47. Mavis M. Brown, Margo F. Dewar, and Paul Wallace, International Survey of Alcohol Beverage Taxation and Control Policies, 5th ed., Brewers Association of Canada, November 1982, 378.

Work: An Historical View,” Social Service Review, 38(2) (June 1964): 164–73.

11. Salvatore Ambrosino, “Family Service Agencies,” Encyclopedia of Social Work, 17th ed. (New York: NASW, 1977), 429.

12. Herman Levin, “Voluntary Agencies in Social Welfare,” Encyclopedia of Social Work, 17th ed. (New York: NASW, 1977), 1574.

13. “Social Work Unit Changing Tactics,” New York Times, January 29, 1971, 1.

14. The NonProfit Times. The NPT 100—America’s Biggest NonProfits, 1999.

15. Ralph Kramer, “Voluntary Agencies and the Personal So- cial Services,” in Walter W. Powell (ed.), The Handbook of Non-Profit Organizations (Cambridge, MA: Yale Uni- versity Press, 1985).

16. Elizabeth Wickenden, “Purchase of Care and Services: Effect on Voluntary Agencies,” in Proceedings of the First Milwaukee Institute on a Social Welfare Issue of the Day (Milwaukee, WI: School of Social Welfare, July 1970).

17. Ira Glasser, “Prisoners of Benevolence: Power vs. Liberty in the Welfare State,” in Willard Gaylin, Ira Glasser, Ste- ven Marcus, and David I. Rothman (eds.), Doing Good: The Benefits of Benevolence (New York: Pantheon Books, 1978), 110.

18. Austin W. Scott, “Charitable Trusts,” Encyclopedia of the Social Sciences, Vol. III, Edwin R. A. Seligman et al. (eds.) (New York: Macmillan, 1937), 338–40.

19. The Tax Reform Act of 1969 made the prohibition on so- cial and political action even more stringent for organiza- tions classified as “private foundations” by removing the qualifying word substantial.

20. See General Explanation of the Tax Reform Act, 9162, H. R. 13270, Public Law 91-1972 (Washington, D.C.: Govern- ment Printing Office, 1970), 48–49.

21. For a detailed discussion of the concept of charitable im- munity, see George W. Keeton, The Modern Law of Chari- ties (London: Sir Isaac Pitman and Sons, Ltd., 1962).

22. Warren Weaver, U.S. Philanthropic Foundations (New York: Harper & Row, 1967), 11, 23; see also Julius Rosenwald, “Principles of Giving,” Atlantic Monthly, May  1929; and Wilmer Shields Rich, Community Foun- dations in the U.S. and Canada (New York: National Council on Foundations, 1961).

23. For a detailed history of the Girard College case, see Milton M. Gordon, “The Girard College Case: Desegrega- tion and a Municipal Trust,” Annals of the American Academy of Political and Social Science (March 1956): 53–62.

24. For further discussion of cy pres, see Keeton, The Modern Law of Charities, and Edith L. Fisch, The Cy Pres Doc- trine in the United States (New York: Matthew Bender, 1950), 141–42. On the general controlling legal principle as applied to Girard College, see “Validity and Effect of Gifts for Charitable Purposes Which Exclude Otherwise Qualified Beneficiaries Because of Race or Religion,” in 25 ALR 3d 736 (1969).

25. Bureau of Labor Statistics, 2009, reported in the New York Times, November 29, 2009.

26. See, for example, the articles in Michael Novak (ed.), To Empower People: From State to Civil Society, 2nd ed. (Washington, D.C.: AEI Press, 1996). Also see Marvin

Notes 281

18. “You’re Not Entitled! Welfare Reform Is Leading to Gov- ernment Lawlessness (excerpt),” by Karen Houppert from the October 25th, 1999 issue of The Nation.

19. Sandra Danziger et al., “Barriers to Work among Welfare Recipients,” Focus, 20(2) (Spring 1999): 31–34.

20. Sheila R. Zedlewski et al., Hard-to-Employ Parents, The Urban Institute, June, 2007.

21. Ibid. 22. Jennifer Preston, “With New Jersey Family Cap, Births

Fall and Abortions Rise,” New York Times, November 3, 1998.

23. Susan Page, “Number of Unmarried Fathers Who Accept Paternity Triples,” USA Today, June 22, 1999.

24. Trenholm, C., Devaney, B., Fortson, K., Clark, M., Bridg- espan, L. Q., and Wheeler, J. Impacts of abstinence educa- tion on teen sexual activity, risk of pregnancy, and risk of sexually transmitted diseases. Journal of Policy Analysis and Management, 27(2) (Spring 2008): 255–76; Trenholm, C., Devaney, B., Fortson, K., et al. Impacts of Four Title V, Section 510 Abstinence Education Programs Final Report. (Princeton, NJ: Mathematica Policy Research Inc, 2007).

25. Rob Stein, “States Spurning Abstinence Funds,” San Francisco Chronicle, December 16, 2007.

26. A Decade of Welfare Reform: Facts and Figures, The Urban Institute, June 2006.

27. Isabel Sawhill, quoted in Michael Kelley, “Assessing Welfare Reform,” Washington Post, August 4, 1999; and Douglas Besharov and Peter Germanis, “Welfare Re- form—4 Years Later,” Public Interest, 140 (Summer 2000).

28. Neil Gilbert and Douglas Besharov, “Welfare States Amid Economic Turmoil: Adjusting Work-Oriented Policies,” Policy and Politics (2011).

29. Rebecca Blank, “The New American Model of Work- Conditioned Public Support,” Table 8.1 in Jens Alber and Neil Gilbert (eds.) United in Diversity: Comparing Social Models in Europe and the U.S. (New York” Oxford Uni- versity Press, 2010).

30. Stephen A. Camarota, Importing Poverty, Center for Im- migration Studies, September 2, 1999. www.cis.org/ povstudy/execsummary.html.

31. For a summary of the fiscal impact of American immi- grants, see National Immigration Forum, A Fiscal Portrait of the Newest Americans, 1999.

32. Peter H. Schuck, Citizens, Strangers, and In-Betweens (Boulder, CO: Westview Press, 1998), 199.

33. U.S. General Accounting Office, “Welfare Reform: Public Assistance Benefits Provided to Recently Naturalized Citizens,” Washington, D.C., June 23, 1999.

34. Wendy Zimmerman and Karen C. Tumlin, The Urban Institute, “Patchwork Policies: State Assistance for Immi- grants under Welfare Reform,” Occasional Paper Number 24, 3, April 1, 1999.

35. Steven Camarota, Immigrants in the United States, 2007, Center for Immigration Studies, November, 2007.

Chapter 9 1. For a more detailed analysis of these changes, see Neil

Gilbert, Transformation of the Welfare State: The Silent Surrender of Public Responsibility (New York: Oxford University Press, 2002).

2. Some of the most trenchant critical analyses include Douglas Besharov, “Bottom-Up Funding,” in Peter Berger

48. Philip J. Cook, Paying the Tab: The Economics of Alco- hol Policy (Princeton, NJ: Princeton University Press, 2007).

49. Federation of Tax Administrators, March 2011. 50. Campaign for Tobacco-Free Kids, International Resource

Center, “Taxation and Price,” 2011. 51. Social Security Administration, Summary of the 2011

Annual Reports, May 5, 2011.

Chapter 8 1. Richard Ford, The New Blue Federalists, MSN Slate,

January 6, 2005. 2. Grant McConnell, Private Power and American Democ-

racy (New York: Alfred A. Knopf, 1966), 107. 3. “Opening the Third Century of American Federalism:

Issues and Prospects,” in John Kincaid (ed.), American Federalism: The Third Century, The Annals, Volume 509, May 1990, 11–21.

4. Luther H. Gulick, “Reorganization of the State,” Civil Engineering (August 1933): 420, as quoted in The Book of the States, 1976–77, Vol. 21 (Lexington, KY: The Council of State Governments, 1976), 21.

5. William E. Leuchtenberg, Franklin D. Roosevelt and the New Deal (New York: Harper and Row, 1963), as quoted in The Book of the States, ibid., 24.

6. Daniel P. Moynihan, “Comments on ‘Re-Structuring the Government of New York City’,” in The Neighborhoods, the City, and the Region: Working Papers in Jurisdiction and Structures (New York: State Study Commission for New York City, 1973), p. 15.

7. Ibid., 16. 8. Robert Reischauer, “Fiscal Federalism in the 1980s:

Dismantling or Rationalizing the Great Society,” in M. Kaplan and P. Cuciti (eds.), The Great Society and Its Legacy (Durham, NC: Duke University Press, 1986), 179.

9. U.S. General Accounting Office, Homelessness: McKinney Act Reports Could Improve Federal Assistance Efforts, GAO/RCED-90-121, June 1990.

10. David T. Ellwood, “From Social Science to Social Policy? The Fate of Intellectuals, Ideas, and Ideology in the Wel- fare Debate in the Mid-1990’s,” Center for Urban Affairs and Policy Research, Northwestern University, Evanston, IL, 1996, 23–24.

11. At the time of AFDC’s demise, the $30 and one-third disregard was limited to four months; after that, the $30 disregard continued an additional eight months.

12. Ife French and Liz Schott, “TANF Benefits Fell Further in 2011,” Center for Budget and Policy Priorities, October 2011.

13. Judith Havemann, “The Welfare Alarm That Didn’t Go Off,” Washington Post, October 1, 1998.

14. The Family Violence Option, Family Violence Prevention Fund, endabuse.org/display.php3?docID=306.

15. U.S. Department of Health and Human Services, TANF Seventh Annual Report to the Congress, 2006, I–25.

16. Paul E. Peterson and Mark C. Rom, Welfare Magnets (Washington, D.C.: The Brookings Institution, 1990).

17. LaDonna Pavetti and Liz Schott, “TANF’s Inadequate Response to Recession Highlights Weakness of Block- Grant Structure,” Center on Budget and Policy Priorities, July 14, 2011.

Notes282

Schumpeterian Workfare State,” in R. Burrows and B. Loader (eds.), Towards a Post-Fordist Welfare State? (Lon- don: Routledge, 1994); and Peter Leonard, Postmodern Welfare: Reconstructing an Emancipatory Project (Lon- don: Sage, 1997). Leibfried and Rieger trace the different phases of globalization back to the turn of the twentieth century; Stephan Leibfried and Elmar Rieger, “Conflict Over Germany’s Competitiveness: Exiting from the Global Economy?” Occasional Paper Center for German Euro- pean Studies, University of California, Berkeley, 1995. For a view of globalization as more of a new form than a modern phase of capitalism, see Robert Reich, The Work of Nations (New York: Alfred A. Knopf, 1991).

14. Thus, for example, McKenzie counsels that public spend- ing on redistributive social benefits should be contem- plated with the utmost of care. “Otherwise, officials and policy makers can expect to find their fiscal troubles mounting as capital moves elsewhere or is created else- where in the world. Those who are concerned about the plight of the poor must realize that there are economic limits to how much society can do for the poor, given the mobility of capital.” Richard McKenzie, “Bidding for Business,” Society, 33:3 (March/April 1996): 60–69.

15. Guy Standing, Global Labour Flexibility: Seeking Dis- tributive Justice (London: Macmillan Press Ltd., 1999), 62–63.

16. In 1992, for example, 10.6 million inhabitants of the Eu- ropean Union were nationals of non-EU member states and an additional 5 million nationals of the EU were liv- ing in other than their member states. Helen Bolderson and Simon Roberts, “Social Security Across Frontiers,” Journal of International and Comparative Social Welfare XIII (1997).

17. OECD, Economic Survey: Netherlands (Paris: OECD, 1991).

18. These reforms were initiated under the Reduction Re- quirement on Industrial Disability Act of 1993, which in- troduced a stricter medical evaluation of disability and a reduction of benefits over time and the 1996 reform of the Dutch Social Assistance Act. For discussion of these re- forms, see Hans Ariens, “To Rigorously Combat the Dutch Disease,” World: APB Annual Report 1996 (Heerlen, ND: APB Corporate Communication, 1997); and Romke van der Veen and Willem Trommel, “Managed Liberalization of the Dutch Welfare State.” Presented at the SASE Con- ference on Rethinking the Welfare State, Montreal, July 5–7, 1997.

19. Richard Burkhauser and Mary Daly, The Declining Work and Welfare of People with Disabilities. (Washington D.C.: AEI Press, 2011).

20. For discussion of concerns about the “poverty trap” in re- lation to various groups, see Jonathon Bradshaw and Jane Miller, “Lone-Parent Families in the U.K.: Challenges to Social Policy,” International Social Security Review, 43(4) (1990); Alain Euzeby, “Unemployment Compensation and Unemployment in Industrialized Market Economy Countries,” International Social Security Review, 41(1) (1988); and OECD, The Future of Social Protection (Paris: OECD, 1997).

21. Richard Stevenson, “Swedes Facing Rigors of Welfare Cuts,” New York Times, March 14, 1993.

22. Charles Murray, Losing Ground.

and Richard J. Neuhaus (eds.), To Empower the People: From State to Civil Society (Washington, D.C.: AEI Press, 1996); Nathan Glazer, The Limits of Social Policy (Cam- bridge, MA: Harvard University Press, 1988); Lawrence Mead, Beyond Entitlement: The Social Obligations of Citizenship (New York: Free Press, 1986); Charles Murray, Losing Ground: American Social Policy 1950–1980 (New York: Basic Books, 1984); Dennis Shower, “Challenges to Social Cohesion and Approaches to Policy Reform,” in Societal Cohesion and the Globalization of the Economy: What Does the Future Hold? (Paris: OECD, 1997); and World Bank, Averting the Old Age Crisis (Oxford, UK: Ox- ford University Press, 1994).

3. OECD, The Future of Social Protection (Paris: OECD, 1988).

4. For an analysis of early retirement in Europe, see Susan Devereux, “Pension Systems Reform in Response to the Growth in Retired Populations,” in Dalmer Hoskins, Do- nate Dobbernack, and Christiane Kuptsch (eds.), Social Security at the Dawn of the 21st Century (Rutgers, NJ: Transaction Publishers, 2000).

5. Board of Trustees of the Social Security and Medicare Trust Fund, 2011 Summary of Annual Report of the Board of Trustees (Washington, D.C.: Government Print- ing Office, 2011).

6. Craig Whitney, “In Europe Too, Social Security Isn’t So Secure,” New York Times, August 31, 1997, E4.

7. One set of projections estimates that between 1995 and 2050, the average percentage of GDP spent on old-age pensions in 16 of the wealthiest OECD countries (exclud- ing the United States and Canada) will increase by more than two-thirds, from 8 to 13 percent. See Deborah Rose- veare, Willi Leibfritz, Douglas Fore, and Eckhard Wurzel, “Population, Pension Systems, and Government Budgets: Simulations for 20 OECD Countries,” OECD, Econom- ics Department Working Paper, No. 168, Table 3 (Paris: OECD, 1996).

8. Changes in the standard age of entitlement to pensions are reviewed by Susan Devereux, “Pensions Systems Reform.”

9. The mean change over the decade ranged from –10 per- cent in Sweden to +83 percent in France. OECD, A Car- ing World: The New Social Policy Agenda (Paris: OECD, 1999).

10. Clearinghouse on International Development in Child, Youth and Family Policies, Columbia University, Table 217.a, www.childpolicyintl.org, accessed December 27, 2011.

11. Valeria Fargion, “Current Social Service Regimes in Eu- rope: The Rise and Development (1965–1995).” Paper presented at ISA Research Committee Meeting on Welfare State Challenge, Marginalization and Poverty, Copenha- gen, August 21–24, 1997.

12. R. Lesthaeghe, “The Second Demographic Transition in Western Countries: An Interpretation,” in K. Oppenheim Mason and A. Jensen (eds.), Gender and Family Change in Industrialized Countries (Oxford, UK: Clarendon Press, 1995).

13. This advanced period of capitalism is also referred to as postmodern or post-Fordist and includes new informa- tion technologies and mass cultural consumption. See, for example, B. Jessop, “From Keynesian Welfare to the

Notes 283

36. Knight, for example, provides some evidence that restric- tive measures introduced in the United Kingdom and the Netherlands have resulted in a shift of public expenditure from insurance-related unemployment benefits to social assistance. See Mark Knight, “Restrictive Measures in Un- employment Schemes; Impact on Other Social Security Schemes,” in Harmonizing Economic Developments and Social Needs: ISSA Technical Conferences (Geneva: Inter- national Social Security Association, 1998).

37. The movement toward privatization in the United States and Europe has been widely documented. See Mimi Abramovitz, “The Privatization of the Welfare State,” Social Work, 34(4) (1986): 257–64; Neil Gilbert, Capital- ism and the Welfare State (New Haven, CT: Yale Univer- sity Press, 1983); Norman Johnson (ed.), Private Markets in Health and Welfare (Oxford, UK: Berg Publishers, 1995); Sheila Kamerman and Alfred Kahn (eds.), Priva- tization and the Welfare State (Princeton, NJ: Princeton University Press, 1989).

38. Tania Burchardt, Boundaries between Public and Private Welfare (London: Center for Analysis of Social Exclusion, London School of Economics, 1997).

39. Norman Johnson, “The United Kingdom,” in Norman Johnson (ed.), Private Markets in Health and Welfare (Ox- ford: Berg Publishers, 1995), 29.

40. Anna-Lena Almqvist and Thomas Boje, “Who Cares, Who Pays, and How Is Care for Children Provided? Comparing Family Life and Work in Different European Welfare Sys- tems,” in Comparing Social Welfare Systems in Nordic Europe and France. Text collected by Denis Bouget and Bruno Palier (Paris: DREES/MiRe, 1999), 265–92.

41. Sven Olsen Hort and Daniel Cohn, “Sweden,” in Norman Johnson (ed.), Private Markets in Health and Welfare (Oxford, UK: Berg Publishers, 1995), 183.

42. Tommy Lundstrom, “Non-governmental Actors, Local Administration, and Private Enterprise: New Models in Delivery of Child and Youth Welfare,” Paper presented at the International Conference on Playing the Market Game, at University of Bielefeld, Germany, March 9–11, 2000.

43. Neung Hoo Park and Neil Gilbert, “Social Security and the Incremental Privatization of Retirement Income,” Journal of Sociology and Social Welfare, 26(2) (1997).

44. A comparative analysis of these countries’ experiences suggests that the introduction of a second tier of income- related public pensions in Norway helps to account for the relative containment of private schemes compared to Denmark, where a second public tier did not develop. Axel Pedersen, “Do Generous Public Pensions Crowd Out Private Pensions? Comparative Analysis of Time Series Data for Denmark and Norway.” Center for Welfare State Research Working Paper 7 (1997).

45. For the analyses of those who claim that the changes involve only fine-tuning or cutting the fat off the welfare state, see Sven Olsen Hort, “From a Generous to a Strong Welfare State? Sweden’s Approach to Targeting,” in Neil Gilbert (ed.), Targeting Social Benefits (Rutgers, NJ: Trans- action Publishers, 2002); Gosta Esping-Anderson (ed.), Welfare States in Transition (London: Sage, 1996).

46. Adelbert Evers and Anne-Marie Guillemard (eds.), Social Policy and Citizenship: The Changing Landscape. (New York: Oxford University Press, 2012).

23. Francis Fukuyama, Trust: The Social Virtues and the Cre- ation of Prosperity (New York: Free Press, 1995), 17.

24. Mary Daly, “Welfare States Under Pressure: Cash Benefits in European Welfare States over the Last Ten Years,” Journal of European Social Policy, 7(2) (May 1997): 128–46; Askel Hatland, “The Changing Balance between Incentives and Economic Security in Scandinavian Un- employment Benefit Schemes,” Paper presented at the International Social Security Association Conference on Social Security, Jerusalem, January 25–28, 1998, p. 6.

25. Ross Mackay, “Work Oriented Reforms: New Directions in New Zealand,” in Neil Gilbert and Rebecca Van Voo- rhis (eds.), Activating the Unemployed: A Comparative Appraisal of Work-Oriented Policies (Rutgers, NJ: Trans- action Publishers, 2001).

26. Ken Judge, “Evaluating Welfare to Work in the United Kingdom,” in Neil Gilbert and Rebecca Van Voorhis (eds.), Activating the Unemployed: A Comparative Ap- praisal of Work-Oriented Policies (Rutgers, NJ: Transac- tion Publishers, 2001).

27. For an informative discussion of this development, see Tony Eardley, “New Relations of Welfare in the Contract- ing: The Marketisation of Services for the Unemployed in Australia.” Social Policy Research Center Discussion Paper 79, SPRC, University of New South Wales, 1997.

28. Dick Vink, “Will Wisconsin Works Fit into the Dutch Pol- dermodel?” Focus, 19(3) (Summer–Fall 1998): 41–48.

29. Espen Dahl and Jon Anders Dropping, “The Norwegian Work Approach in the 1990s: Rhetoric and Reform,” in Neil Gilbert and Rebecca Van Voorhis (eds.), Activating the Unemployed: A Comparative Appraisal of Work-Ori- ented Policies (Rutgers, NJ: Transaction Publishers, 2001).

30. Green Paper on Welfare Reform (London: HMSO, 1999). 31. See, for example, Neil Gilbert (ed.), Targeting Social Ben-

efits: International Perspectives and Trends (New Bruns- wick, NJ: Transaction Publishers, 2001).

32. In recent decades, almost every industrialized country has experienced steep growth in their disability rolls, often among young workers. For an analysis of this development and the policy responses, see Christine Kuptsch and Ilene Zeiter, “Public Disability Programs under New Complex Pressures,” in Dalmer Hoskins, Donate Dobbernack, and Christiane Kuptsch (eds.), So- cial Security at the Dawn of the 21st Century: Topical Issues and New Approaches (Rutgers, NJ: Transaction Publishers, 2000).

33. E. Dahl and J. A. Dropping, “The Norwegian Work Ap- proach,” op. cit.; and Piet Keizer, “Targeting Strategies in the Netherlands: Demand Management and Cost Constraint,” Neil Gilbert (ed.), Targeting Social Benefits: International Perspectives and Trends (Rutgers, NJ: Trans- action Publishers 2000).

34. Sune Sunesson, Staffan Blomberg, Per Gunnar Edebalk, Lars Harrysson, Jan Magnusson, Anna Meeuwisse, Jan Peterson, and Tapio Salonen, “The Flight from Univer- salism,” European Journal of Social Work, 1(1) (March 1998): 19–29.

35. Linda Bauld, Ken Judge, and Iain Paterson, “Cross- National Study of Continuities and Change in the Welfare State.” Paper prepared for the Conference on Continuities and Change in the Welfare State, Bellagio Study Center, Italy, August 7–11, 2000.

Notes284

2010; accessed December 28, 2011, www.dwp.gov.uk/ universal-credit.

49. Karen Spar, Federal Benefits and Services for People with Low Income: Programs Policy and Spending FY2008– FY2009 (February 15, 2011), Congressional Research Of- fice Report R41625, January 31, 2011.

50. Karen Spar, Cash and Noncash Benefits for Persons with Limited Income: Eligibility Rules, Recipient and Expendi- ture Data, FY 2002-2004, Congressional Research Service Report RL 33340 (March 27, 2006).

47. Douglas J. Besharov and Douglas M. Call, “Labour Activa- tion in a Time of High Unemployment: Key Developments in the OECD,” University of Maryland School of Public Policy, paper prepared for the Joint OECD/University of Maryland International Conference Labour Activation in a Time of High Unemployment, November 14–15, 2011, OECD, Paris.

48. Universal Credit: Welfare That Works, Presented to Parliament by the Secretary of State for Work and Pensions by Command of Her Majesty, November

285

Photo Credits

Chapter 1: Occupy protestors; p. 1. Stephen Strathdee/iStockphoto

Chapter 2: FDR signing Social Security Act, 1935; Frances Perkins, first woman cabinet member, directly behind; p. 27. Franklin D. Roosevelt Presidential Library

Chapter 3: Welfare Rights march, 1968; p. 59. Jack Rottier Photograph Collection/Special Collections & Archives/George Mason University Libraries

Chapter 4: Homeless Veteran; p. 91. GWImages/Shutterstock

Chapter 5: Elderly woman waiting in line for a bowl of soup; p. 127. Hélène Vallée/iStockphoto SNAP electronic benefits card, State of Georgia; p. 136. Robin Nelson/ZUMA Press/Newscom

Chapter 6: Mother completing eligibility forms. Sacramento County, California, welfare office; p. 153. Rich Pedroncelli/AP Photos One-Stop Service Center, Borough of Hornsey, Crouch End, London; p.  165. Courtesy of Paul Terrell

Chapter 7: Monthly check; p. 185. Library of Congress Prints and Photographs Division Helping the rich along—cartoon; p. 206. TOLES © 1995 The Washington Post. Reprinted with permission of Universal Press Syndicate/Universal Uclick

Chapter 8: Woman with daughter donating clothes; p. 219. Steve Debenport/iStockphoto

Chapter 9: Anti-austerity march, 2011; p. 254. Roberto Serra/Iguana Press/Getty Images

286

freedom of dissent and efficiency, 81 local autonomy and centralization, 82 social effectiveness, 80–1

delivery and finance, 66–7 eligibility criteria, 68–9 equity and emerging issues, 85–8 example: transformation of social services, 68–72 social justice, 73–9

adequacy, 73, 78–9 categories of needy people, 74 equality, 73, 76 equity, 73, 76–8 public assistance categories, 75

Anti-Drug Abuse Act, 68 Area Agencies on Aging (AAAs), 135 Asset building, 100–1 Attributed need, 108–9 Austerity, 36–37

B Behavior, taxes and, 210–13 Beneficiary conditions, 228, 231–2 Benefit allocations, 61–4 Bildt, Carl, 259 Bill and Melinda Gates Foundation, 190 Block grants, 82, 225, 226, 229–31 Break, George, 100 Briggs, Asa, 40–2 British Poor Law, 30 Brown, Jerry, 132 Buck Trust, 196 Bureau of Labor Statistics Consumer

Expenditure Survey, 123 Bureaucratic disentitlement, 177 Bush, George W., 35

faith-based services and, 159

C Cameron, David, 198 Candlelighters, 9 Carnegie, Andrew, 190 Case management, 167–8 Case-level collaboration, 165, 167 Casework, 69–70, 83–4 Cash benefits, 128–34, 135 Cash welfare payments, 35 Categorical grants, 229, 231 Catholic Charities USA, 159, 193 Centers for the Faith-Based and Community

Initiative, 159 Centralization, 80, 82, 165–6, 173, 220–3

A Ability to pay, 200, 206 Abstinence only programs, 244 Access agencies, 174 Access vs. eligibility, 117–21 Accessibility, 162 Accountability

problems of, 162 of voluntary organizations, 195–7

Ackerman, Bruce, 100 Activation plans, 262 Adequacy, 78–9 Adoption and Safe Family Act (1997), 149 Adoption Assistance and Child Welfare Act, 68 Affirmative Action, 109–10 African Americans

affirmative action, 109–10 Great Society programs and, 33–4

Aid to Dependent Children (ADC), 74 Aid to Families with Dependent Children (AFDC), 44, 68, 70,

72, 74–5, 77, 81–4, 103–7, 119, 146, 229, 233–8, 242 Aid to the Blind, 68, 72, 74 Aid to the Permanently and Totally Disabled, 68, 72, 74 Al-Anon, 9 Alcohol excise taxes, 212 Alcoholics Anonymous (AA), 9, 10 Alger, Horatio, 50 Allen Temple Baptist Church, 7 Allocation of tasks, reorganize

citizen participation, 169–73 professional disengagement, 171–3 role attachments, 169–71

Allocations, choice and, 66 Allocative principles, 91–126

attributed need, 108–9 compensation, 109–10 diagnostic differentiation, 110–11 eligibility vs. access, 117–21 institutional-residual conceptions of social welfare, 111–13 means-tested need, 111 operationalizing, 113–17 universalism/selectivity debate, 92–107

Alstott, Anne, 100 “American exceptionalism,” 16, 39 Analytic framework, 59–90

allocations and provisions, 66 application of, 72–3 benefit allocations and mixed economy, 61–4 choice dimensions, 65–7 conservative and progressive values, 80–2

cost effectiveness, 80 freedom of choice, 81

Index

Index 287

Demogrant, 96, 133 Demographic shifts, international, 257–8, 260 Department for Work and Pensions, 265 Dependency ratio, 258 Dependent care credit, 203–4 Dependents’ benefits, 86 Desert Industries, 6 Deserving poor, 50, 93 Diagnostic and Statistical Manual of Mental

Disorders (DSM), 113 Direct service practitioners, 19–21, 180 Disabilities, 109–12, 237–8, 241, 262–3, 265 Disability diagnosis, 113 Divorce, Seattle and Denver Income Maintenance

Experiments and, 105 Durkheim, Emile, 158

E Earmarked taxes, 209 Earned Income Tax Credit (EITC), 96, 98–9, 163, 238, 240, 245 Economic globalization, 258, 259 Economic Opportunity Act (1964), 116, 141, 142 Edin, Kathryn, 103 Educational vouchers, 139, 175, 264 Effective tax rates, 207 Efficiency, 38, 80, 81, 132, 139, 144,

155, 160, 162, 168, 177, 202, 208, 221, 229 Eisenstein, Louis, 186 Elderly, 44–5, 116, 133, 135–6, 173, 201–2, 211–15, 257

caring for, 3–4, 179, 211, 258, 263 equity and, 215 income and, 69, 74, 93, 111, 264

Eligibility criteria, 66, 69, 72, 176, 236, 262, 263 vs. access, 117–21 elimination of federal, 82 See also Allocative principles

Ellwood, David, 99, 233 Ellwood, John, 100 Emerging issues

financial social security, 213–16 immigrants and social policy, 246–51 Poverty, measuring and defining, 121–4 search for equity, 85–8 service delivery, culturally competent, 179–82 shifting provisions, child welfare, 148–50 work requirements and public aid, 264–6

Employee Assistance Programs (EAPs), 7 Employee fringe benefits, 202 Enabling State, 260–4 English language education, 247 English Poor Law, 77 Entitlement, 91–5 Equality, 73, 76, 79 Equity, 73, 76–8, 79, 85–8 Esping-Andersen, Gosta, 11 European Union, social expenditures, 255 Excise taxes, 210–13 Exclusionary practices, 120

F Faith-based services, 6, 158–9 Family Assistance Plan, 146 Family caps, 234, 242 Family Service Association of America (FSAA), 192

Change directions of, 260–4 pressure for, 255–60

Charitable choice, 50, 93, 159 Charitable immunity, 196 Charitable organizations, 188, 197

See also Fund sources Charity Organization Societies, 192 Child abuse, 148–9 Child protection, 148 Child savings accounts (CSAs), 100 Child Support Assurance, 100–1 Child Support Enforcement Amendments, 49 Child Welfare, 148–9

changing policy, 149 Childbearing, children’s allowances and, 104–5 Children’s allowances, 94, 96, 97–8, 102, 104, 105, 108

childbearing and, 104–5 in selected European countries, 97

Choice, 65–7 Church of the Latter Day Saints (Mormons), 6 Churches, 6 Cigarette taxes, 212 Citizen participation, 82, 155, 164, 168–9, 232 City Demonstration Agencies, 166 Civil Rights movement, 33, 45 Civil society, 3, 8–10 Clinton, Bill, 35 Coherence and accessibility, promoting, 162–75 Co-location, 166–7, 173 Command economies, 18 Commercialization, 155–61 Communitarian movement, 64 Community Action Program (CAP), 116, 141, 142, 166, 224 Community Development Block Grant program, 230 Community Services Administration (CSA), 143 Competition, 174–5 Conditionality, 175–9 Congressional Budget Office (CBO), 209 Conservative individualism, 16–17 Conservative perspectives, 18–19 Conservatives, 17–18, 34–5

transfer systems and, 221, 227–30, 244 voluntarism and, 197–8

Contracting, 67, 155–6, 232, 236 Contributory schemes, 199–201 Coordination, 142, 157, 162–3, 164–8 Corporate giving, 188 Cost controlling, 175–9 Cost effectiveness, 101–7 Cost-sharing, 82, 231 Cultural competence, 179–182 Cultural dilution, 105 Cy pres, 196

D Day care, 192, 201–2, 204, 208 Dayton Ohio’s Montgomery County, 166 Decentralization, 220–3, 226, 230, 233, 249 Delivery, choice and, 66–7 Delivery system, Altering, 173–5

purposive duplication, 174–5 specialized access structure, 173–4

Delivery system design, 153–84

Index288

“Hard-to-serve,” 120 Hawthorne effect, 103 Hayek, Friedrich, 18 Head Start, 15, 94, 109, 116, 204, 241 Health insurance, 7, 30, 31, 32, 33, 40, 46, 48, 111, 116, 182,

199–201, 203, 249, 250, 260 Health maintenance organizations (HMOs), 121, 177 Health plans, private, 203 Heritage Foundation, 244 History of Social Welfare and Social Work in the U.S., A

(Leiby), 14 HIV/AIDS, 20, 108, 109, 175, 192,

237, 241 Holmes, Oliver Wendell, 186 Home health industry, 8 Homeless, 7, 20, 111, 118, 120, 134, 210, 229, 232, 241 Hoskins, Dalmer, 255 Houppert, Karen, 240 Household expenditure, 123 Housing vouchers, 139 Human capital, 63, 239

I Immigration, transfer systems and, 105, 119 Immigration Act, 246 Income and expenditure, 123 Income eligibles, 69 Income maintenance

universality and selectivity in, 95–8 Income maintenance programs, 261 Income maintenance recipients, 69 Income taxes, 47, 53, 95–9, 204,

206–7, 209 See also Fund sources; Taxation

Income test, 96, 107 Independent Sector, 193, 195 Individual giving, 188 Individual rights, 81–2, 134, 262 Individualism, 16–17, 50 Industrial Revolution, 38 Informal help, 8–9 In-kind benefits, 115, 123

vs. cash, 128–34 See also Allocative principles

Institutional model, 12, 42 allocative principles and, 111–13

Institutions, 2 civil society, 3, 8–10 government, 2, 10 kinship, 3–6 marketplace, 3, 7–8 religion, 3, 6 workplace, 3, 6–7

Insurance systems, 199 See also Fund sources; Social Security

Interfamilial welfare, 4 Intergovernmental programs, 223 Internal Revenue Service (IRS), 96 “Iron law of specificity,” 114, 115

J Johnson, Lyndon, 30, 41, 199, 224, 225, 228, 233 Judt, Tony, 32 Juvenile delinquency, 191

Family service orientation, 148–9 Family stability, allocative principles and, 101, 105 Family Support Act, 49 Fathers, assistance and, 5, 77, 241–4 Federal grants-in-aid, 82, 225 Federalism, 120, 223, 228, 231, 234 Federation, 188, 193 Fees, 69, 178, 189, 199–201, 210, 212, 216 Feminism, 22, 24 Finance, 185–218, 219–53

choice and, 65, 66–7 Financial conditions, 228, 230–1 First wave feminism, 22 Fiscal welfare, 45–8 Food stamps, 18, 33, 36, 44, 45, 74, 87–8, 93, 115, 118, 120,

121, 132–3, 135–6, 148, 163, 167, 171, 182, 231–3, 240, 246, 249

Ford, Henry, 190 Ford Foundation, 190, 191 For-profit organizations defined, 188

See also Privatization Foster care, 149 Fragmentation, 162 Freedom of choice, 80–1, 130–1, 134–5, 204 Freedom of dissent and efficiency, 81 Fringe benefits, 7, 46–7, 202 Fund sources, 185–218

contributory schemes, 187, 199–201 fee charging, 199–201 taxation, 31, 48, 201–13 voluntary giving, 187, 191

G Galbraith, John Kenneth, 28, 131 Garfinkel, Irwin, 100 Gates, Bill, 190 Gemeinschaft, 221 Gender feminists, 22, 24 General Assistance (GA), 74, 134, 220 General Revenue Sharing (GRS), 226, 230–1 Gilder, George, 105 Girard College, 196 Giving Pledge, 191 Glide Memorial Church, 7 Giving Pledge, 191 Globalization, 258–9 Golden Age, 34, 255, 264 Goods and services, 2, 3, 6–7, 18, 35, 41, 46, 53, 62, 92,

116, 128–34, 140, 142, 187 Government controls, voluntary funding and, 195 Grants-in-aid, 82 Great Depression, 12, 29, 31, 38, 43–4, 53–6, 199,

209, 221, 225 Great Society, 33, 38, 146, 225–6, 227–8, 233 Green Paper on Welfare Reform, 262 Grey Areas Projects, 191 Gross Domestic Product (GDP), 5, 29, 33, 205,

224, 245, 255 Group eligibility, 69 Gulick, Luther, 225

H Hardship, 235, 237 Hardship exemption, 237, 243

Index 289

New Deal, 17, 38 New Right, 34–5 No Child Left Behind, 44, 232 No One Written Off: Reforming Welfare to Reward

Responsibility, 262 Nominal tax rates, 206–7 Nondistributive participation, 168 Nonprofessionals, 170–1 Nonprofit agencies, 71, 160–1,

187, 188 See also Fund sources

Nonprofit providers, 155, 236 Normal participation, 168 Norquist, Grover, “Americans for Tax Reform,” 51 Norwegian Labor and Welfare Administration (NAV), 265 Numerical equality, 76 Nursing home costs, 63

O Obama, Barack, 36 Occupational system, of welfare state, 46–8 O’Connor, James, 39 Office of Economic Opportunity (OEO), 143 Office of Human Development Services (OHDS), 71 Official Poverty Measure, 121

See also Poverty Official rates. See Nominal tax rates Old Age, Survivors, Disability, and Health Insurance

(OASDHI), 109, 116, 199, 255 See also Social Security

Old Age Assistance, 68, 72, 74 Old-age pensions, 258, 261, 264 Older Americans Act, 61, 68, 135, 166 Omnibus Budget Reconciliation Act, 69 One-stop shop, 166 Organization for Economic Cooperation and Development

(OECD), 35, 43, 255 Organization of Petroleum Exporting Countries (OPEC), 34 Orshansky, Mollie, 121 Ozawa, Martha, 86, 96–7

P Participation, 37, 64, 67, 119–20,

140–3, 162, 224, 231–2, 238 citizen, 155, 164, 168–9, 232

Patriarchy, and welfare, 14, 23, 24 Pegram v. Herdrich (Souter’s opinion), 177 Personal exemptions, 98, 211, 213 Personal Responsibility and Work Opportunity Reconciliation

Act (1996), 61, 75 See also Transfer systems; Welfare reform

Perverse incentives, 102, 178 Philanthropy, 8–9, 188–99, 257

human services (1995–2000), 189–90 sources and recipients of (2007), 189 See also Fund sources

“Pink collar” workers, 11 Planned Parenthood Federation, 196 Planning, 13, 18–19, 32, 60, 73 Pluralism, 191, 193, 220, 222 Policy, defined, 2 Policy analysis, transfers and, 226–7 Policy dimensions, 254–68 Policy values, and social provisions, 143–6

K Kafka, Franz, 154 Kinship, 3–6, 11, 21 Kinship care, 149 Kinship security, 5 Kramer, Ralph, 191, 192, 193

L La Leche League, 9 Labor, 259–61, 265 Laissez-faire, 16, 34, 38, 50, 137, 138, 194, 259, 265 Leiby, James, 14 Lesbian, Gay, Bisexual, and Transgender (LGBT), 175 Less eligibility, 77 Liberalism, 17, 29, 32, 259 Liberals, voluntarism and, 198–9 Liebman, George, “Back to the Maternity Home,” 146 Limited English proficiency (LEP),

180, 181 Line of influence, 258 Living Wage movement, 49 Local Authority Social Services Departments (LASSD), 165 Lockheed Martin Corporation, 263 Looking Backward (Bellamy), 92 Losing Ground (Murray), 51 Lutz, Wolfgang, 105

M Malevolent parents, 148 Managed care, 175–9, 201 Mark Bittman, 211 Market economy and social market, benefit allocations and,

61–4 Market exchange, 64 Marketplace, 7, 17, 61–2, 65, 67,

80, 128, 138, 155, 188, 199, 204, 215, 259 Marshall, T. H., 38, 61, 63 Marx, Karl, 79, 92 Marxism, 39 Maternal and Child Health Act, 231 Mawr, Bryn, 196 McKinney Act (Homeless) legislation, 15, 232, 241 Means-tested need, 111, 114, 116, 117 Medicaid, 29, 33, 44, 63, 69, 74, 87–8, 111, 113, 115, 121,

132–3, 148, 163, 182, 200, 211, 220, 224, 227, 232, 234, 240, 246, 249

Medicare, 29, 33, 44, 94, 109, 200–1, 220, 224 Milwaukee, Wisconsin school voucher program, 138 Mixed economy, 61–4, 187, 193–5, 197 Model Cities Program, 61, 82, 166 Moral hazard, 51, 102 “Ms. Information” (Sommers), 24 Murray, Charles, 51, 106, 133, 259

N National Alliance for the Mentally Ill, 9 National Association for Organizing Charities (NAOC), 192 National Association of Homes and Services for Children, 192 National Association of Social Workers, 8, 146

survey on profit-making industries, 173 Negative income taxes, 96, 98–9, 101, 102, 133

See also Earned Income Tax Credit (EITC)

Index290

Public housing, 31, 39, 47, 92, 111, 115, 134, 139, 169, 231 for mentally disabled, 15

Public social services, 155–8 Public subsidies, 193 Purchase-of-service arrangements, 62, 71, 73, 156

See also Privatization, Contracting; Privatization, contracting

Purchasing Power Parity (PPP), 255 Purple coalition, 262 Purposive duplication, 164, 174–5

R Race to the bottom hypothesis, 238–9 Rationing, of services, 67 Reagan, Ronald, 17, 29, 30, 34–5, 50, 69, 147, 221, 227–30 Real rates. See Effective tax rates Redistribution, 42, 76, 135, 140, 168–9, 222

taxes and, 202, 206–9, 215–16 Redistributive participation, 168 Regressive taxes, 209, 222 Regulatory welfare, 48–50, 161 Research methodology, 15 Residual model, 12, 30

allocative principles and, 111–13 Resource deficiency, 144 Responsibility agenda, 241–4 Rockefeller, John D., 190 Role attachments, 164, 169–71 Roosevelt, Franklin Delano, 18, 224, 225

Second Inaugural Address, 28 Ryan White Act, 108, 241

S Safety net, 12, 17–18, 31, 36, 40, 45, 50, 111–12, 119, 120,

215, 216, 236–7, 241, 246, 247 Salamon, Lester, 8 Sales tax, 206–7, 209–10 San Diego Family Justice Center Web site, 166 Sawhill, Isabel, 204, 245 Schuck, Peter, 87, 248 Seattle and Denver Income Maintenance Experiments

(SIME/DIME), 61, 96–7 divorce and, 105 work incentives and, 102–4

Second wave feminism, 22 Section 8, 110, 139, 204 Selectivity, 92, 96, 106, 108 Selectivity/universalism debate, 106–8

See also Allocative principles Self-help groups, 9, 10, 240 Separatism, 174–5 Service coerciveness, 83, 161 Service delivery, 162–75

choices, 163 proposals, 164

Service standardization, 161 Sherraden, Michael, 100 Sin taxes, 211, 213 Skocpol, Theda, 22, 94 Smith, Adam, 50 Social allocations

bases of, 91–126 nature of, 127–52

Social and economic markets, benefit allocations and, 62–3

Policy-making authority, restructure, 164–9 citizen participation, 168–9 coordination, 164–8

Political rights, 23–4, 38, 93 Politics, transfers and, 225–6 Poverty, 121–4

measuring and defining, 121–4 measuring concepts, 122 true, 123

Poverty gap, 101 Poverty level, 78, 85, 95, 100, 115–16, 132, 246 Poverty theory

individual deficiency, 144 institutional deficiency, 144–5 resource deficiency, 144

Poverty traps, 259 Power, 2, 14, 19, 37, 48, 67, 130,

134–5, 145, 161, 168–9, 220–3, 225–6, 233 redistribution of, 135, 140

“Power of the poor,” 141 President’s Committee on Juvenile Delinquency, 191 Privatization, 155–61, 221, 261, 263

See also Profit-oriented agencies Procedural conditions, 228, 232–3 Process studies, 13–14 Product studies, 14 Professional disengagement, 164,

171–3 Profit-oriented agencies, 62–3, 160–1

NASW survey on, 173 See also Privatization

Program conditions, 228, 229–30 Progressive Era, 17, 22 Progressive perspectives, 18–19 Progressive Policy Institute (PPI), 35 Progressive politics, 16 Progressive taxation, 206, 208–9,

212–15 Proportional equality, 76 Provision, forms of, 127–52

cash, 128–34, 146–8 cash vs. in-kind, 128–34 cycles of public assistance, 146–8 emerging issues, 148–50 goods, 135 instrumental provisions, 135 opportunities, 134 power, 135 services, 135 social control, 129–30, 133, 136–9 social provisions as reflections of policy values, 143–6 substance of the social provision, 140–3 tax credits, 135 vouchers, 135, 136–9

educational, 137–9 food stamps, 136 for housing, 139

Provisions, choice and, 66 “Proxy shopping,” 156 Public agencies, defined, 188 Public assistance, 20, 32, 41, 44–5, 68, 73–84, 132, 135, 136,

146–8, 163, 200, 202, 216, 221, 224, 232, 234, 237–8, 245, 250–1, 260, 263, 265

cycles of, 146–8 Public education, 18, 28, 31, 42, 92, 93, 138, 139

Index 291

regressive, 209, 222 sales tax, 209 social earmarking, 209–10 Social Security (payroll tax), 199–200, 205–9 tax burden by income group (2007), 207 tax exemptions for voluntary giving, 191, 196, 202 tax expenditures, 47–8, 53, 56, 88, 202–7, 257 tax rates, 102 See also Fund sources

Tea Party movement, 36 Technological change, 258 Telemedicine, 174 Teletherapy, 174 Temporary Assistance for Needy Families (TANF), 22,

44, 51, 75–6, 78, 81–2, 84, 94, 99, 104, 118–20, 148, 155, 158–9, 162, 171, 176, 201–2, 223, 233–47, 249, 251, 263

assessing, 244–6 contracting, 236 freedom of choice and, 81 new conditions compared to AFDC, 235 replaces Aid to Families with Dependent Children,

234–6 terminating the guarantee, 236–7 time limits, 237–8 welfare to work, 239–41

Thatcher, Margaret, 29, 30, 34–5, 198–9, 257 Three pillars of the welfare state, 41 Title I (Old Age Assistance), 68, 72, 74, 231, 233 Title III (Older Americans Act), 61, 68, 135, 166 Title X (Aid to the Blind), 68, 72, 74 Title XIV (Aid to the Permanently and Totally Disabled), 68,

72, 74 Title XX, 20, 60, 68–75, 193, 204, 211, 230–1, 233–4, 241

social services categories, 71 Titmuss, Richard, 45–8 Trade Union Congress (TUC), 262 Transfer systems, 219–53

AFDC to TANF, 235 centralization and decentralization, 220–3 devolving public welfare, 233–46 immigrants and, 246–51 immigrants and native born Americans (2002), 250 money flow, 223–7 transfer conditions, 227–33 beneficiary conditions, 228, 231–2 financial conditions, 228, 230–1 procedural conditions, 228, 232–3 program conditions, 228, 229–30

“Twelve Steps, The,” 10

U Umbrella organizations, 188 Unemployment insurance, 7, 35, 40–1, 102, 260–1, 265 Unemployment rates, 255 United Jewish Appeal, 188 United Nations Population Division, 258 United Way, 188 Universal Credit, 265 Universal eligibles, 69 Universalism/selectivity debate, 92, 93, 106–8

See also Allocative principles U.S. Supreme Court, Girard College case, 196 Utilization management, 178

Social assistance, 31, 84, 262, 263, 265 Social component, of welfare state, 46, 215 Social controls, 129–30, 134

vouchers and, 136–9 See also Allocative principles

Social effectiveness, 101–7 Social engineering, 81, 129, 209 Social inequity, 86 Social insurance, inception of, 30–1 Social justice

adequacy, 78–9 equality, 76 equity, 76–8

Social regulation, 48–50 Social rights, 38, 216, 260–1, 264 Social Security, 17, 35, 36, 41, 44–5

payroll tax, 199–201 Social Security Act, 20, 23–4, 60, 68–72, 74, 86, 116 Social Security Administration, 71, 74, 77, 83, 86 Social Security and Public Policy (Burns), 65 Social services

Title XX categories, 71 transformation of, 68–72

Social Services Block Grant (SSBG), 68–9, 70–3, 75 Sommers, Christina Hoff, 24 Specialized access structures, 164 St. Augustine Episcopal Church, 7 Stakeholder Society, The (Ackerman and Alstott), 100 Standardization of service, 161, 163, 167, 181, 182 State Children’s Health Insurance Program (SCHIP), 182 States’ rights, 222 Steiner, Gilbert, 84, 85 Stigmatizing recipients, 12, 31, 81, 93, 99, 101, 106–7, 119,

132, 146, 167–8 Substance abuse, 130, 148 Sunesson, Sune, 263 Supplemental Poverty Measure, 121

See also Poverty Supplemental Security Income (SSI), 44, 109, 120, 249 Supplementary Medical Insurance Program, 200 Surrey, Stanley, 47

T Tax base, 205 Tax credits, 134–5, 202, 204, 262 Tax deductibility, 188, 193 Tax deductions, 46, 47. See also Fund sources; Taxation, 191,

194, 202, 211 See also Fund sources; Taxation

Tax expenditures, 47–8, 53, 56. See also Fund sources; Taxation, 88, 202–7, 257

revenue losses from (2003), 203 weaknesses of, 204–5 See also Fund sources; Taxation

Taxation Earned Income Tax Credit (EITC), 96, 98–9, 238,

240, 245 excise taxes, 211–12 family size and, 211 income, 205–9 nominal vs. effective taxes, 206–7 privatization of Social Security, 214–16 progressive, 206, 208–9, 212 redistribution and, 206–9

Index292

duress, 36–7 economic security, 41, 45 fiscal welfare, 45–8 growth, 32–3 inception, 30–1 material sufficiency, 41 maturation, 33–4 mixed economy, 61–4, 187, 193–5, 197 occupational system, 46, 48 patriarchy and, 23 regulatory welfare, 48–50 shift to enabling state, 35, 260–1,

262, 264 spending programs, 50, 204 theories of welfare growth, 37–9 today, 52 transformation, 34–6 welfare goals, 40–3 welfare realms, 45–8 welfare scope, 43–5

Welfare to work, 239–41 White Citizens’ Councils, 222 White Paper on Rehabilitation, 262 Will, George, 17, 50 Women

feminism, 22, 24 working mothers, 103, 112

“Work first” requirement, 239 Work Incentive Program (WIN), 77, 83, 84 Work incentives, 102–4, 240

Aid to Families with Dependent Children and, 105–6 Work-oriented reformers, 84, 233, 261

See also Transfer systems; Welfare reform Wulczyn, Fred, 157

V Vietnam War, 45 Voluntarism, 191, 197–8, 198–9

conservatives and, 197–8 liberals and, 198–9

Voluntary agencies, 2, 3, 9, 62, 71, 180, 188, 191–6, 247 See also Fund sources

Voting rights, 33, 37 Vouchers, 66, 134–40, 234, 264

Alum Rock Union Elementary School District, 137 con, 138 educational, 137–9 food stamps, 136–7 housing, 139 Milwaukee, Wisconsin schools, 138 pro, 137

W Wallace, George, 222 War on Poverty, 41, 61, 82, 135, 141, 143, 166, 169, 175,

224–6, 231 War on Poverty’s Community Action Agencies, 169 Welfare economics, 128 Welfare generosity, 52 Welfare reform, 4, 6, 20, 35, 61, 74, 75, 102, 105, 119, 146–8,

159, 167–8 See also Personal Responsibility and Work Opportunity

Reconciliation Act; Transfer systems Welfare state, 28–58

attack and defense, 50–2 basic services, 41, 45, 250 birth of, 31 defined, 40

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Chapter 4 1. c 2. a 3. d 4. b 5. d 6. a

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Chapter 7 1. d 2. a 3. b 4. c 5. c 6. d

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Chapter 9 1. a 2. b 3. a 4. d 5. b 6. c

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