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Learning Objectives

In this chapter you will learn to:

• Identify key issues and specific areas of concern for contemporary policy makers within the welfare policy arena.

• Articulate the debates within contemporary welfare policy and the arguments advanced by each side.

• Describe the arenas in which welfare policy making takes place and the most common welfare policy instruments.

A Case Study in Formulation and Legitimation of Policy Solutions:

The Forming and Reforming of Federal Welfare Policy

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Section 10.1 The Social Welfare Debate CHAPTER 10

Through the formulation and implementation of social policy, modern governments have provided appropriate and sufficient standards of living to citizens. Social pol-icy encompasses a wide range of social and economic phenomena, from individual rights and needs to complex policy questions such as the relief of indigence, inequalities, and unemployment. Social policy also includes the government’s supplying of goods and services, such as housing, education, and health care.

The extent of a government’s welfare state dictates how much will be allocated for social policy expenditure. Many nations spend the largest portion of their governmental bud- get on social policy: pension programs, unemployment and disability benefits, subsidies to support families with dependent children, and assistance to families and individuals with low incomes. In the United States references to welfare policy—as opposed to social policy—are more common. As a result, many people think of welfare policy as a series of programs designed to assist poor and economically disadvantaged people, thus excluding Social Security and many other social programs from the welfare debate. This text, how- ever, uses the terms social welfare policy and welfare policy to describe all of the programs, including Social Security, which the U.S. government provides to protect and advance citizens’ standards of living.

10.1 The Social Welfare Debate

A vast amount of literature discusses why governments need to provide social wel-fare for their citizens. One argument posits welfare provision as a relief program that supplements economic arrangements (Gough, 1979). In a free-labor market based on supply and demand, certain individuals will be more vulnerable to market fluctuations. Governments provide services that absorb and control unemployment, dis- abilities, ill health, and aging. That is, social welfare policy is made necessary by the instability that is inherent in capitalist economies such as the United States. Another argument contends that welfare policy regulates labor (Mishra, 1990). This perspective sees welfare as punitive and degrading, instilling a fear of receiving government relief. Those who subscribe to this view assert that many individuals would rather work than receive welfare relief. Another argument has it that societies cannot afford large num- bers of individuals suffering obvious inequalities without relief (Frankel, 1962). Wel- fare pacifies those individuals who—without welfare relief—would be forced to find resources through whatever means they could. Thus, welfare exists to help reintegrate disaffected groups back into the system (Piven & Cloward, 1971). In its broadest sense welfare policy provides security, temporary or permanent, to those in need. Finally, the literature offers one other view, that welfare policy fosters independence by encouraging citizens to be self-supporting (Stone, 1988).

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Section 10.1 The Social Welfare Debate CHAPTER 10

The U.S. government has always been much more reluctant than its European counter- parts to intervene in the general area of social policy. Indeed, not until the 1930s did the federal government offer any sort of welfare or Social Security benefits for low-income and elderly people. Even then, the extent and level of coverage were extremely limited. The history of U.S. policy contrasts sharply with that of European governments, which initiated social service programs beginning in the late 19th century (see Table 10.1).

Table 10.1: Year of introduction of various social services in selected nations

Nation Old Age Pension Unemployment Insurance Sickness Pay Medical Services

Germany 1889 1927 1889 1883

Britain 1908 1911 1911 1911

France 1930 1914 1930 1990

United States 1935 1935 1965

Adapted from Theodoulou, S. Z. (2002). Policy and politics in six nations: A comparative perspective. Upper Saddle River, NJ: Pearson, p. 128.

Social welfare in most industrialized nations falls under two general categories: (a) poli- cies that benefit low-income citizens, and (b) policies that help the general public. The first category includes general assistance programs that give money, food, or clothing directly to qualifying individuals; work assistance programs for people in need; and assistance for specific groups, such as aid for low-income individuals. The second category includes policies such as tax breaks and old-age pension programs like Social Security. Such pro- grams can take many forms. For example, social insurance covers income losses due to illness, unemployment, and retirement. Social regulation programs, such as consumer and worker protections, protect individuals from the problems of industrialized society.

Industrialized nations have taken several different approaches in their attempts to address poverty. The preventive approach attempts to ensure that individuals do not become poor in the first place. The alleviative approach attempts to alleviate the poverty of individuals who are already poor. The punitive approach assumes that it is the fault of individuals that they are poor and attempts to discourage them from being dependent by making it difficult to obtain government assistance. The curative approach attempts to cure the causes of poverty. And the incomes approach encourages individuals to work while they are receiving assistance in an effort to help them make their way out of poverty permanently. Table 10.2 summarizes these approaches and provides examples of related policies.

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Section 10.1 The Social Welfare Debate CHAPTER 10

Table 10.2: Approaches taken by governments to deal with poverty

Approach Objective Policy Option

Preventive approach This attempts to ensure that individuals do not become poor.

Social Security (old age pensions)

Unemployment benefits

Alternative approach This deals with those individuals who are already poor and attempts to provide some kind of governmental assistance to alleviate their condition.

Temporary aid to needy families

Food stamps

Punitive approach This is based on the assumption that if individuals are poor, it’s because of their own moral and character defects. In other words, it’s their own fault. Government should try to discourage them from being lazy by making it as difficult as possible to obtain public assistance in the form of governmental benefits. And when government does have to provide assistance, it should be minimal.

Workfare

Curative approach This posits that causes of poverty, such as lack of education and job training, should be cured. Emphasizes programs that attack the causes of poverty. Often used with a political strategy of giving the poor some sort of control over the institutions that affect their communities. Community organization is encouraged.

Headstart

Meals on Wheels

Literacy training

Job training schemes

Incomes approach Individuals are encouraged to work while they receive government assistance. As their job- related income increases, their level of benefits’ decrease. The idea behind this is that an individual is better off working than not working.

Negative income tax

Earned income tax credit

Supplementary security income

All industrialized nations have provided a variety of social welfare programs to citizens as a right of citizenship. The governments’ objective with these programs is to establish a social safety net—social welfare programs that provide minimum assistance—with the hope that the safety net will alleviate poverty among the chronically poor. Government provision of economic assistance to individuals involves three basic questions:

• Who is eligible for assistance? • How redistributive is the program that provides assistance? • How is the assistance provided?

To determine eligibility, governments can take one of two approaches. In the public assistance model of social welfare policy, eligibility for benefits is means-tested, mean- ing that recipients must demonstrate need in order to qualify for benefits. The United States’ individualist heritage has resulted in social welfare policies that are predominantly means-tested. Proponents of this approach argue that means-testing allows governments

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Section 10.1 The Social Welfare Debate CHAPTER 10

to alleviate extreme poverty without unnecessary spending on those who are not truly needy. But critics of means-testing say that, too often, the truly needy struggle to prove their eligibility, whereas others who are not in need qualify for benefits by cheating the system. Means-testing is also criticized because it often leads to stigmatization. Few peo- ple want to be labeled as poor, so building public support for social policy can be difficult. Indeed, negative perceptions of the poor shared by government and the public play a significant role in the formulation of U.S. social welfare policy.

Under a social insurance model of social welfare policy, all individuals in a given circum- stance are eligible for assistance regardless of their degree of need. For example, all unem- ployed individuals are eligible for benefits because they pay taxes to support these programs. The public supports social insurance policies because people realize that they will get back some of their taxes in government benefits of some kind. Yet, this model receives criticism because protecting benefit levels without increasing taxes is difficult— government revenues can be strained if the number of recipients increases, and taxpayers generally oppose raised taxes.

Governments that employ the public assistance model adhere to a policy that is redistributive, meaning that all taxpayers support the program but many of them never qualify for benefits. In contrast, the social insurance approach allows for the possibility of all citizens’ benefitting in some way. Consequently, governments may limit the redistributive element in social insurance pro- grams. In some nations this means that programs are based on the principle of individual equity so that citizens receive benefits in accordance with their level of contributions. In other nations gov- ernments choose to base programs on basic needs so that benefit levels are set at a certain stan- dard and citizens receive a common benefit. This approach combines entitlements and a redistribu- tive element. All citizens receive benefits of some kind, but the wealthy—by paying higher taxes and receiving fewer benefits—subsidize benefits paid to the needy.

Finally, the types of assistance governments provide are determined by their choice of policy instruments. Policy instruments used by the United States are discussed later in this chapter.

Government provision of social welfare programs has stirred heated debate for several reasons. First, many critics, like libertarian political theorist Charles Murray, claim that welfare encourages social dependency, with recipients choosing to become dependent on government support and remain unemployed. Another source of criticism is the pres- ent and future costs of such provision. From the 1980s on, nation after nation has faced conflict not only about the types of social welfare provision, but also about the increasing

Jim West/Age Fotostock/Superstock

Meals on Wheels is an example of a program that uses a curative approach to poverty.

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

drain on national revenues. For example, in recent years numerous welfare states, particu- larly in Europe, have confronted the need for so-called austerity measures, or deep cuts in government-funded agencies and public programs. In these cases governments face a true political dilemma: Should they decrease or eliminate social welfare benefits to control costs, or should they protect those benefits, either by cutting government programs in other policy sectors or by asking citizens to pay more taxes?

The political dilemma is further exacerbated by deep-seated ideological views surround- ing the issue of social welfare. Underlying these positions are two fundamentally different views of human nature, broadly categorized as liberal and conservative. Each perspective shapes opinions regarding the role of government, the issue of poverty itself, and the extent to which policy may effectually resolve the problem. In the liberal view, people are basically at the mercy of their circumstances, and alleviating or solving the problem of poverty requires ensuring equal resources and opportunity for all. Liberals believe poverty is a significant problem in society, one that government has both the ability and responsibility to address. This government assistance may take many forms, including redistribution of resources.

In the conservative view, responsibility for particular situations and economic status largely rests with individuals. For conservatives, poverty is a problem that no amount of government intervention is going to solve. They also consider it a less pervasive prob- lem in society than do liberals. Although conservatives do not rule out some government responsibility in the provision of social welfare, they largely believe it should be limited in scope and that redistribution of resources is not an acceptable policy approach (Stewart, Hedge, & Lester, 2007).

10.2 A Historical Overview of the U.S. Government’s Approach to Social Welfare Policy

The United States implemented social welfare policy relatively late, mainly because U.S. political culture has traditionally emphasized self-reliance and rugged indi-vidualism. Such values encourage individuals to seek remedies from themselves, rather than from government or society. For much of the country’s early history, society blamed poverty on the faults of the individual and not the system. Welfare in the 18th through the early 20th centuries relied primarily on private funding and local political groups, and those responsible for social welfare took a punitive approach to alleviating poverty. Until the Great Depression, only a minority of individuals—called “the worthy poor” in the literature of the day—received assistance.

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

The Early Years of Social Welfare in the United States

The New Deal program, President Franklin D. Roosevelt’s response to the economic hardships brought about by the Great Depression in the 1930s, changed social welfare policy arrangements in the United States. This program established the tradition of fed- eral government provision of social welfare. As the Depression wore on for several years, Americans called on the Roosevelt government to address widespread, sustained levels of poverty. From that point, the idea became acceptable to many Americans and some policy makers that some individuals were poor through no fault of their own and that systemic causes of poverty go beyond some individuals’ ability to manage.

The 1935 Social Security Act was the centerpiece of the New Deal. It combined the preventive and alleviative approaches to dealing with poverty. It established a system of social insurance in the form of Social Security and unemployment compensation to prevent people from slipping into poverty, and it provided payments from the govern- ment to a specified population in order to alleviate existing poverty. The major program of social insurance under the Social Security Act was established to help low-income families with children—this program is now known as Aid to Families with Depen- dent Children (AFDC).

After Roosevelt’s groundbreaking legislation, social welfare dropped from the institu- tional agenda with the advent of World War II and did not return to the agenda in the immediate postwar years of economic growth (Piven & Cloward, 1971). Decreased pov- erty rolls created a general perception among both voters and policy makers that fewer people needed government help. Not until the 1960s did welfare and issues of poverty resume a central place on the federal policy agenda.

An Increased Need for Social Welfare: The 1960s

In 1960 poverty rates had once again climbed (Figure 10.1), as well as social disor- der associated with such poverty, such as increases in crime, homelessness, and sub- stance abuse. The Kennedy administration formulated several programs that were later endorsed and passed as legislation. Most of these programs formed President Lyndon B. Johnson’s War on Poverty, the unofficial name for the legislation supporting his Great Society initiative of 1964. Johnson’s Great Society led to programs aimed at eliminating poverty and social injustice. In reality, what these programs did was extend the New Deal social welfare programs.

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Figure 10.1: U.S. poverty rate, 1960–1965

Welfare reforms during the 1960s aimed to reduce poverty rates.

US Census Bureau. (2011). Income, poverty, and health insurance coverage in the United States: 2010. Washington, DC: US Department of Commerce, Table A-1-3.

In 1965 Medicare was introduced as a program for health insurance for the elderly. In the same year, Medicaid, a program for health insurance for the poor, was also established. Other programs passed by the Johnson administration included housing subsidies, school food programs, and special programs for pregnant women. Most of the established pro- grams were either preventive or alleviative in their approach. However, the administra- tion also employed a curative approach. For example, the 1964 Equal Opportunity Act was the federal government’s attempt to break the poverty cycle at an early age by provid- ing a wide range of educational and job training programs, such as Head Start. The wel- fare reforms of the 1960s attempted to reduce poverty in the United States by extending eligibility and increasing the levels of benefits individuals could receive. The result was increased government spending on welfare.

Changing Course on Social Welfare Policy: The 1970s and 1980s

In the late 1960s and early 1970s, President Richard Nixon attempted to change social welfare by establishing programs that could be identified with the Republican Party and were inexpensive to fund. Nixon and his fellow critics of the Great Society program labeled much of the War on Poverty a failure. Influenced by the work of the conservative economist Milton Friedman, they urged moving away from the alleviative approach to adopt an incomes model. They believed that the alleviative approach encouraged welfare

196519641963196219611960

Poverty Rate

P e rc e n ta g e

Year

22.2 21.9 21.0

19.5 19.0

17.3

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

dependency through its promotion of welfarism, in which the government takes respon- sibility for the financial security of those who cannot manage their own resources. In effect, Nixon changed the focus of the social welfare debate from poverty itself to how the government should provide welfare. The 1970s were years of economic uncertainty, and Nixon and his supporters believed that welfare was a luxury the government and the middle class could not afford. They consequently championed the notion of workfare, a social welfare model based on the view that the poor need work, not welfare.

By President Ronald Reagan’s 1980 election, hostility to welfare among all sections of the population was high. This opposition was fueled in part by a public perception that John- son’s Great Society programs primarily assisted urban minority populations, leaving other groups underserved. In addition, critics like Charles Murray charged that existing welfare programs failed to address underlying causes of poverty, instead creating a “cul- ture of poverty,” or chronic dependence on social aid (Murray, 1984).

Influenced by Murray and others with similar views, government positions on just how much assistance the federal government should provide were also beginning to shift. Many conservatives advocated extensive government cutbacks. Reagan and his sup- porters argued that social welfare policy was a fail- ure, it cost too much, and it discouraged individuals from working. The phrase “welfare queen” came to represent this overarching view: a broad charac- terization of welfare recipients as individuals given to self-destructive behavior, relying on government handouts, and exploiting the system to avoid work. Critics argued that any rational individual would choose public assistance over a low-paying, dead- end job with few benefits.

To further their point, critics argued that the nation’s economic woes were attributable to the burdensome costs of welfare. Many conservatives argued that the Great Society and War on Poverty programs were directly responsible for much of the economic slowdown and the growth of the federal budget deficit. In essence, these critics were return- ing to the philosophy that individuals—not the system—were to blame for their own poverty.

Reagan and his supporters provided a vocal, ideological resistance to active government, placing welfare reform firmly on the institutional agenda. The administration’s aims were rolling back what they perceived to be the expansion of the welfare system since the intro- duction of the War on Poverty and reducing aid to the working poor. Government benefits were to be limited to the truly needy. The goals were clearly laid out: reduce the num- bers receiving welfare, decrease government spending on welfare, and emphasize work requirements for those seeking welfare.

Jim West/Age Fotostock/Superstock

Some argue that the poor needed work and not welfare. Others argue that public assistance is better than a dead-end job with few benefits.

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In the Omnibus Budget Reconciliation Act of 1981, the Reagan administration attempted to achieve its goals by introducing stricter eligibility requirements and benefits calculation. By 1983 approximately 14% of all beneficiaries had been removed from AFDC rolls, and the percentage of welfare recipients who were not working increased. By 1988 a bipartisan consensus in Congress concluded that a broader welfare safety net should enforce stricter work requirements. As a result, Congress passed the 1988 Family Support Act (FSA) that attempted to increase both individual responsibility and governmental responsibility to help families with young children. The FSA expanded the AFDC program for two-parent families, provided for transitional child care, and added monies for states to formulate and adopt programs that would move welfare recipients into jobs.

For the most part, the 1980s and 1990s witnessed cutbacks in social policy that solidi- fied opinion against the notion of welfare. Reagan and his successor, George H. W. Bush, took a punitive approach to welfare provision. The net result was retrenchment in welfare provision and an increase in poverty levels after 1980 (see Figure 10.2). By the late 1980s a general consensus across the political parties and the public determined that welfare’s goal should be helping individuals temporarily until they could find employment that would replace welfare benefits.

Figure 10.2: U.S. poverty rates, 1976–1989

The 1980s and 1990s had higher poverty rates largely due to cutbacks in related social policy areas.

US Census Bureau. (2011). Income, poverty, and health insurance coverage in the United States: 2010. Washington, DC: US Department of Commerce, Table A1-3.

1988 19891985 1986 19871983 19841981 19821979 19801976 1977 1978

13 12.8

14.0 13.5 13.5

15.2 14.4

14.0 15.0

11.6

13.0

11.8 11.5 11.3

Poverty Rate

P e rc e n ta g e

Year

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

Reforming Welfare to Include Workfare: The 1990s

For most of the 1980s and early 1990s, the question of how welfare should be reformed was a subject of deep division. Democrats were split into three major factions. The first called for the expansion of current policy into new areas and new benefit levels, the sec- ond urged protection of the existing system with minor changes, and the third demanded wholesale reform of most programs. Republicans were similarly divided into those calling for minor reform and those advocating sweeping changes.

This debate over welfare reform took place in the context of a divided government. Republican presidents demanded welfare reform, whereas Democrat-controlled legisla- tures advocated expansion of benefits in some programs and contraction of benefits in others. Most program expansions were unfunded mandates, passed only if state govern- ments were paying. During this period, implementation of funded and unfunded federal social programs took place largely at the state level, which led to conflicting and spotty implementation. These implementations enabled great program innovation at the state level, with both positive and negative outcomes. Many states were given permission by the federal government to explore reforms that had been discussed at the federal level for a number of years. For example, in some states there was denial of benefits to certain categories of individuals, variations in means test and asset test levels, the introduction of work requirements for benefits, and time limits on benefit periods.

By 1992 poverty rates and other conditions of social ill health, such as homelessness, had grown. Policy actors and the public more frequently questioned whether some aspects of welfare policy, such as looser eligibility requirements and an increased number of pro- grams, were contributing factors to persistent poverty. As state after state began to cut some welfare programs, the public united behind a desire for federal welfare reform. When Bill Clinton was elected president in 1992, he promised to put an end to welfare. Some 3 years after his inauguration, the electorate was rewarded with the reform they so badly wanted. That reform was made possible by a Republican-controlled Congress beginning in January 1995 and a Democratic president who was committed to changing social policy arrangements.

The reform enacted was the 1996 Personal Responsibility and Work Opportunity Rec- onciliation Act (PRWORA). PRWORA was an example of the welfare-to-work approach to social services policy, which aims to move welfare recipients from dependency into the workforce. Some argued PRWORA was the most comprehensive change in federal social policy since the 1960s. The goal of PRWORA was simple: to increase personal responsibil- ity of welfare recipients while decreasing government’s responsibility for the economic well-being of low-income individuals.

The adoption and implementation of PRWORA represented a dramatic change to wel- fare provision in the United States. The legislation called for welfare recipients to per- form communal service and enroll in job-training programs. The federal government now requires work as a condition of assistance, limits receipt of lifetime welfare to 5 years, and expands state discretion over welfare program administration. In addition, PRWORA replaced AFDC with the Temporary Assistance for Needy Families (TANF) and ended cash assistance entitlements. Table 10.3 provides more detail about the provi- sions of the legislation.

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

Table 10.3: Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA)

Major Provisions of the 1996 PRWORA

• AFDC was eliminated as a nationally funded federal-state contract that ensured cash payments to fami- lies and households supporting children.

• Temporary Assistance to Needy Families (TANF) was created. This is a block grant that provides discre- tionary funding to individual states. States then provide for families in need with these funds. Thus, the 1996 act eliminates a national entitlement. Under TANF, cash support to the needy is limited. Recipi- ents are limited to public assistance for a total of 2 years with lifetime benefits limited to 5 years.

• Teenage mothers can be denied benefits if they do not live in their parental home and do not attend school.

• The act also restricts childless adults, ages 18 to 50, to 3 months of food stamps during a 3-year period. • The policy also requires at least half of all single parents on welfare in any state to work or be in work-

related activities by 2002 or the state will lose some of its federal block grants. • The formula for food stamps was changed to reduce benefit levels almost 20% by the year 2002. • Denies to legal immigrants most welfare benefits until a 5-year residency period has been fulfilled. • In 1997 food stamps eligibility for noncitizens was eliminated, as were disability payments.

The Clinton reform may be classified as a punitive approach fused with an incomes approach. Clinton (1996) stated when he announced his decision to sign the legislation, “Today we have a historic opportunity to make welfare what it was meant to be: a second chance, not a way of life.” During the Clinton administration, the national poverty rate decreased, welfare expenditure as a percentage of GDP fell, and the number of welfare caseloads was reduced by 60% (Haskins, 1996) (see Figure 10.3).

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

Figure 10.3: U.S. welfare expenditure as a percentage of GDP and poverty rate, 1990–1998

It was argued that welfare was the cause of increased poverty rates in the 1990s because some individuals had chosen welfare instead of employment.

US Census Bureau. (2011). Income, poverty, and health insurance coverage in the United States: 2010. Washington, DC: US Department of Commerce, Table A-1-3; and US Census Bureau Statistics Reports, 1990–2002.

Policy theorists make the following observations about the consequences of PRWORA and the aftermath of its enactment:

• The move to federal block grants further decentralized cash assistance to needy families.

• The federally mandated work requirements and time limits presented state governments with the problem of providing meaningful work opportunities for low-income individuals.

• How successful implementation would be achieved was unclear, as uncertainty about how cities would meet funding needs became a reality (Bernstein, 2001).

• The decade’s booming economy and the political compromises of the late 1990s led almost all states to receive more funds than they did prior to the reform, yet the numbers living in poverty did not decrease significantly (Nightingale & Bren- nan, 1998).

As a result of these consequences, many families did poorly and the number of children in extreme poverty (living at less than half the poverty rate) increased (Sherman, 1999). Between 1995 and 1997, the mean income of the poorest 20% of female-headed households fell by an average of $580 per family. This decrease was due mainly to loss of benefits such

2000 20011998 19991996 19971993 1994 199519921990 1991

Poverty Rate % Welfare Expenditure as a % of GDP P e rc e n ta g e

Year

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

Case Study: The Formulation and Legitimation of Social Welfare Policy Under President Bill Clinton

The negotiations that led to PWORA’s passage in 1996 provide a good case study in the dynamics of policy formulation and legitimation. Four sets of actors clearly dominated the policy formulation process around social welfare policy reform in the 1990s: elected officeholders at the federal and state level, bureaucrats, interest groups, and policy experts.

The Formulation of Welfare Reform

For several years Clinton and congressional Republicans strug- gled to reach an agreement on welfare reform. In 1994 Clinton originally submitted a proposal for welfare reform that died in Congress. In early 1995 a new Republican majority submitted its Contract with America, including the Personal Responsibil- ity Act, designed to cut spending for welfare programs and promote individual responsibility.

On September 19, 1995, after several compromises between varying factions of the Republican Party as well as Democrats in both houses, Congress passed a modified version of the original bill, which the president indicated he would sign. However, concerns from the extreme left and right in Con- gress persisted, and compromise began to appear less of a possibility.

The 1996 National Governors Association (NGA) annual meeting offered welfare reform a second chance with a less restrictive reform policy proposal. The governors’ role in the welfare reform for- mulation process was significant. As chief executives of the states, they were essentially in charge of implementing any change.

Meanwhile, many liberal interest groups who opposed reduced benefits and entitlements—such as the National Organization for Women—were shut out of the legislative process because they could not work with the Republican majority. On the other hand, conservative groups such as the Heritage Foun- dation, a think tank, were extremely influential on the congressional leadership. In May 1996 congres- sional Republicans put forward new legislation based on the NGA proposal. Democrats now saw that Clinton would have no choice but to veto this version because it tied welfare reform to

Visions of America/Superstock

Former president Bill Clinton and congressional Republicans struggled for several years to reach a welfare reform agreement.

as food stamps, financial assistance for purchasing food provided to low-and no-income Americans by the Food Stamp Program (Primus, Rawlings, Larin, & Porter, 1999). By April 1999 exceptions to certain rules of the 1996 legislation had been enacted. For exam- ple, states were permitted to continue to provide benefits beyond 5 years to up to 20% of recipients, based on hardship or domestic violence.

For more about the formulation and legitimation of social welfare policy under Clinton, see the case study in this chapter.

(continued)

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

Case Study: The Formulation and Legitimation of Social Welfare Policy Under President Bill Clinton (continued)

Medicaid reform. Republicans knew that Clinton would veto the bill and that he faced public criticism for reneging on campaign promises.

The White House continued to express a desire to compromise. By June the House and Senate com- mittees began marking up the legislation, meaning they reviewed the arguments in favor of and against while considering proposed amendments.

The Legitimation of Welfare Reform

By June 19 all committees had reported back and the bill was sent to the House Rules Committee, a usual practice. At the same time, the Senate was considering the bill. At this point, the legislation was in trouble, because senators on both sides of the aisle had problems with the Medicaid proposal. Many congressional Republicans felt that they would suffer electorally if legislation was not signed quickly. Presidential candidate and Senator Robert Dole urged the Republican congressional leader- ship to pass the reform (Havemann, 1996).

In July 1996 the Republican leadership announced that changes to Medicaid would be separated from welfare reform. The policy window (see Chapter 4) for welfare reform was now opening up. For most of July, Clinton and the Republicans faced off over the bill’s passage.

The Senate received the House bill for consideration. On July 22 Dole again urged Republicans to give Clinton a welfare reform bill that he could sign. The president indicated he would sign the legislation, still hoping that changes he favored could be incorporated. The Senate and House passed different versions of the same bill, so it was sent to the Conference Committee.

Clinton’s welfare proposals mobilized a policy actors on all sides, each maneuvering to gain the advantage. By July 29 Congress had come to an agreement, with a bill that resembled the Senate version more closely than the House version. Clinton now had to decide whether to sign it.

Now, a number of liberal interest groups mobilized to pressure the president to veto. The congressio- nal vote would not take place until Clinton had announced his intention. On August 1, 1996, Clinton met with his cabinet advisers and senior White House Staff for a final discussion of the proposal. Those favoring a veto argued that the bill was too stringent and put holes in the safety net. Those in favor of signing insisted that the bill represented a rational use of resources and encouraged work as a way out of the poverty trap in keeping with Clinton’s campaign promise to limit welfare benefits. Underscoring the whole discussion were the political implications of failing to deliver what Clinton had promised in 1992: to put an end to welfare.

Within 30 minutes of the end of this discussion, speechwriters were told to write a “yes” speech. The president told the public he did not really like the reform, but it was the best that could be expected from this Congress.

On August 26, 1996, the president signed the welfare bill. Bill Clinton had transformed his position on welfare, and welfare as the country had known it for decades was effectively ended.

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

Twenty-First Century Welfare Policy

George W. Bush campaigned for and won the 2000 presidency on a platform of “compas- sionate conservatism.” This position did not represent a typical conservative commitment to wholesale cutting and withdrawal of government from the provision of social welfare. Bush advocated for civil society as an alternative to the bureaucratic welfare state— society should take care of those in need without formal governmental intervention through regulation. In short, he argued that governmental social programs cannot be scaled back without something in place to support individuals and communities that are falling behind. For Bush, the alternative was to channel more support and resources to private charities, both secular and religious, to deal with poverty. This view put into prac- tice PRWORA’s Charitable Choice provisions, which permitted religious groups serving low-income people to be eligible for government antipoverty funds.

One of Bush’s first initiatives as president was to create an office in the White House devoted to supporting faith-based organizations. The measure boosted support for religious chari- ties by making them eligible for more federal grants and by expanding tax deductions for charitable donations. It also moved people off the welfare rolls. Beyond this, the government passed no major welfare policy initiatives from 2000 to 2008. Yet, although the poverty rate never matched that of the early 1990s, it grew under Bush and federal welfare spending increased (Tanner, 2012). In addition, the Bush presidency made many shifts in policy. For example, the Bush White House was far more aggressive in its pur- suit of certain goals of the 1996 reform of welfare policy than the original legislation intended. For example, with the Healthy Marriage Initiative, the administration emphasized reducing births out- side of marriage and promoting marriage, as well as funding programs that supported two-parent families and responsible fathers. In 2006 Congress passed a reauthorization of welfare reform that required stricter, more extensive work participa- tion requirements at the state level.

Bush’s second-term social welfare policy agenda focused on Social Security reform. In his 2005 State of the Union Address, the president argued that Social Security was facing record deficits and potential bankruptcy, and he urged a reform of the program. The Bush initiative called for partial privatization of the system, personal Social Secu- rity accounts, and options to divert a portion of individuals’ Federal Insurance Contributions Act (FICA) tax (a payroll tax that funds Social Security and Medicare) into secured invest- ments (Wolk, 2005). Because of low public support and political fallout from the adminis- tration’s response to Hurricane Katrina, the initiative never moved onto the institutional

Fotosearch/Superstock

Social Security benefits those who are retired or disabled and no longer receive income. Though Social Security faced deficits in 2005, Congress opposed Social Security privatization in 2006.

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

agenda. In addition, Democrats gained control of both houses of Congress in the 2006 midterm elections and opposed any form of Social Security privatization.

Barack Obama’s campaign for the presidency clearly articulated a social-welfare policy agenda attacking an America where many ordinary citizens were excluded from a share in society’s resources. No significant stand-alone welfare policy was initiated during Obama's first term. However, since Obama’s election in 2008, spending on welfare programs has increased dramatically (see Figure 10.4). Much of this increase is due to the economic reces- sion in which the country found itself after 2008, a recession that dramatically affected living conditions for many Americans.

Figure 10.4: Government welfare expenditure as a percentage of GDP, 2005–2012

Some of the increase in funds spent on welfare since 2008 is the result of an economic recession.

US Census Bureau Statistics Reports, 2006–2012.

Conservative critics argue that Obama’s policies have put a strain on the government’s resources. For example, the administration’s policy agenda has set out to ease eligibility rules and expand the number of individuals who qualify for welfare assistance from the government (Rice, 2012). Additionally, such critics argue that the Obama stimulus pack- age and the 2009 American Recovery and Reinvestment Act (Recovery Act) basically con- stitute welfare—the Recovery Act combined tax breaks with extension of welfare benefits, among other things. In his bid for the 2012 Republican presidential nomination, former Speaker of the House Newt Gingrich described Obama as the “most successful food stamp president in the American history” (as cited in Rice, 2012). Gingrich’s claim was based on

2011 20122008 2009 201020072005 2006

P e rc e n ta g e

Year

Welfare Expenditure as a % of GDP

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Section 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10

the fact that in 2011, 44.7 million Americans, or 1 in 7, received food stamps (Luhby, 2012). However, examining the poverty and unemployment rates during the Obama administra- tion makes clear why spending on welfare provision has increased (see Figure 10.5). Anal- ysis shows that the percentage of Americans living in deepest poverty—with incomes below half of the federal poverty line—is the second highest since 1965, when the War on Poverty programs were introduced.

Figure 10.5: U.S. unemployment and poverty rates, 2000–2011

The increase in poverty and unemployment rates since 2008 have impacted funds spent on welfare provisions.

US Census Bureau. (2011). Income, poverty, and health insurance coverage in the United States: 2010. Washington, DC: US Department of Commerce, Tables A1-3; and US Department of Labor Statists, US Unemployment Rate, 1960–2011.

Obama’s presidency also endorsed increased contributions to Social Security through a new FICA tax on incomes above $250,000. The increase represented a response to claims of a possible shortfall in Social Security funding. However, this increase was offset by two payroll tax cuts, which critics argue puts Social Security’s long-term solvency at risk.

2010 20112008 20092006 20072003 2004 200520022000 2001

Poverty Rate Unemployment Rate

P e rc e n ta g e

Year

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Section 10.3 The Policy Process and Social Welfare Policy CHAPTER 10

Poverty and Politics Issues of wealth and policy making for the poor become more important than ever as poverty and unemployment rise. Presidential candidates must address these topics and take steps to change the situation if they wish to be elected or reelected. The following video discusses poverty and politics in the United States: http://www.youtube.com/watch?v=pbtV6lu7vXs.

Critical Thinking and Discussion Questions

1. How did the issue of the poor play and develop within the early part of the 2012 election? 2. Why is poverty such a serious issue in 2012? 3. Is the failure in the 1990s a failure of the safety net or the economy?

10.3 The Policy Process and Social Welfare Policy

As the history surrounding PWORA’s passage makes abundantly clear, welfare pol-icy formulation and decision making occurs in a variety of arenas and involves a large number of actors, all of whom play active roles. Welfare policy involves an extremely complex, diffuse process because of the diversity of individuals directly affected, the wide range of available policy instruments that allow for input from a large number of actors, and the overlapping areas of jurisdiction. In short, the social welfare policy process closely resembles the general dynamics of policy making in the United States. Hence, like all policy making in the United States, social welfare policy making is highly decentralized.

The Department of Labor and the Department of Health and Human Services are respon- sible for most aspects of social welfare policy. State governments have a large say in fed- eral welfare policies because of their ability to execute many crucial decisions. Any major reform must gain executive approval and the approval of both houses of Congress. Within Congress, a number of committees and subcommittees in both chambers play an active role in policy formulation and decision making (see Table 10.4). Interest groups are heav- ily involved in social policy formation. As the case study in this chapter showed, all of these actors influenced the final shape of the PWORA legislation.

Table 10.4: Major legislation affecting social welfare

Year Legislation

1935 Social Security Act

1974 Equal Educational Opportunities Act

1981 Omnibus Budget Reconciliation Act

1988 Family Support Act (FSA)

1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA)

2006 Welfare Reform Reauthorization Act

2009 American Recovery and Reinvestment Act

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http://www.youtube.com/watch?v=pbtV6lu7vXs

Section 10.4 Policy Instruments Used to Implement Welfare Policy Solutions CHAPTER 10

From the perspective of the stages-heuristic framework (see Chapter 5), the delivery of social welfare since the 1930s involves all levels of government. The federal government is highly active in policy formulation, as it decides what types of programs and social issues will be addressed. Also, the federal government is responsible for establishing minimum benefit levels when policy is adopted and for providing funding to states to support deliv- ery of welfare services, such as through grants in aid for unemployment compensation.

The states are responsible primarily for implementation of social welfare. This responsibil- ity includes drafting rules and regulations for eligibility. Individual state governments must supplement federal funding of welfare programs and, additionally, provide supple- mentary welfare assistance through their own general assistance programs. This relief is available to needy individuals such as the elderly, persons with vision impairment or physical disabilities, or those who qualify under Temporary Assistance to Needy Families (TANF) but do not qualify for categorical assistance. People who need more than financial assistance are taken care of in state-maintained institutions, such as facilities for those with mental illness or mental disabilities, orphanages, and senior-citizen homes. Finally, the administration of various welfare programs also involves local government. Local wel- fare officials decide if individuals are eligible to receive benefits and what amounts they should receive.

10.4 Policy Instruments Used to Implement Welfare Policy Solutions

Governments may have different policy goals in mind when they formulate and implement welfare policy solutions. Generally, welfare policy solutions can be categorized into three broad types: rights, rules, and inducements. Rights are ser- vices and programs provided to individuals on the basis of their citizenry and their very existence, such as Social Security. Rules define who is eligible for what services and pro- grams. Finally, inducements encourage or discourage individuals from receiving services and benefits.

In the United States welfare policy instruments include government transfers that provide cash payments or in-kind benefits to individuals—food stamps are an example of this instrument. Instruments also include government subsidies for certain basic needs, such as public transportation or housing at below-market prices. Tax expenditures that reduce citizens’ tax obligations when they spend their money for certain purposes are also a type of policy instrument. For example, individuals may pay lower sales taxes on food and have fewer income-tax deductions if they have dependents or own a home. Addition- ally, the government provides a tax discount, known as the Earned Income Credit (EIC), to low-income people, a program which some people consider welfare. If calculated as expenditure (although it is money the government does not actually collect) EIC is one of the costlier U.S. welfare programs.

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Key Points to Remember CHAPTER 10

Summary

From their earliest forms in U.S. society, social welfare programs have been the subject of competing ideologies and considerable debate. The discussion surrounding just how much responsibility the government bears for the well-being of its citizens— disadvantaged or not—shows little signs of abating. Beginning with Franklin D. Roos- evelt’s New Deal policies in the 1930s, social welfare in the United States has experienced a cycle of growth, restriction, and reform, often aligning with particular political adminis- trations or economic conditions.

Welfare policy and the politics of reform offer key insights into the nature of policy for- mulation (see Chapter 5). As the case study of Clinton’s 1996 welfare reform legislation illustrated, various interested actors—both institutional (the president and the congress) and noninstitutional (interest groups, think tanks, the public)—have significant roles in shaping policy. The welfare reform debate also reveals how policy adoption depends on numerous influences, including policy actors’ values and party affiliation, in addition to the policy’s course through the legislative process. Welfare policy is shaped across vari- ous playing fields—in recent times particularly the executive and legislative arenas. The public and political arenas are also highly visible in formulating welfare policy.

Key Points to Remember

• The debate over U.S. welfare reform climaxed in 1996, when congressional Democrats and Republicans compromised on legislation that changed the nature of social welfare provision in the United States.

• Many critics argue that this particular reform represents an agreement by both political parties to cancel federal welfare policy established by the New Deal.

• Critics also argue that the reform transferred control and responsibility out of the federal government’s hands to individual states.

• As the country faces recession, welfare rolls climb and government often steps in, as the Obama administration has done since 2008.

• Welfare reform offers certain lessons about policy formulation and legitimation:

Know where the locus of power is surrounding any policy issue. In the case of welfare reform, it is Congress. External forces, as the NGA’s prominent role in 1996 indicates, are extremely important. Public opinion cannot be ignored if it is strongly articulated and cuts across every social and political layer in society. In the case of welfare, welfare’s unpopular- ity was so strong among so many groups and individuals that it stimulated the momentum for reform.

• In the 21st century the United States—like its European counterparts—will con- tinue to look carefully at welfare policy expenditures.

• The United States is distinct from many European nations in the severity of its cutbacks in national government’s responsibility for providing an economic secu- rity safety net and an array of social services.

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Key Terms CHAPTER 10

• U.S. social welfare policy is a continuing struggle over poverty, inequality, and other social problems. This continuing struggle is underscored by public atti- tudes that are openly hostile to many welfare assistance policies. From the 1970s through the late 1980s, public opinion polls showed less than 50% of respondents supported government intervention on behalf of the poor (Schlesinger & Lee, 1994). General public support for the 1996 reform reveals little conflict about the public’s views on the role of government or the taxpayers’ burden. However, deep-rooted political division remains over the nature and cause of poverty and inequality in the United States.

• Sweeping changes were possible in the late 1990s because of widespread dismay with a welfare system many characterized as symbolic of big government run amok: costing taxpayers money, demeaning beneficiaries, contributing to the breakdown of the American family by encouraging men and women to forget their marital responsibilities, and encouraging illegitimacy.

• In the early years of the 21st century, the United States no longer guarantees that the poor and their children are entitled to federal benefits for as long as they need them. For many of the American poor, the safety net has been removed.

• Social policy reforms since the 1980s are the result of several fundamental fea- tures of U.S. politics: divided government, weak party discipline, increased state government responsibility for welfare policy, high interest-group mobilization, and politics.

Key Terms

Aid to Families with Dependent Children (AFDC) Program established by 1935 Social Security Act to provide welfare ben- efits to low-income families with depen- dent children.

alleviative approach Antipoverty method that attempts to provide governmental assistance to alleviate the condition of those who are already poor.

Charitable Choice provisions Conditions listed in the 1996 Personal Responsibility and Work Opportunity Reconciliation Act that permit religious groups serving low- income people to be eligible for govern- ment antipoverty funds.

curative approach Antipoverty method emphasizing programs that attack causes of poverty such as lack of education and job skills.

food stamps Financial assistance for purchasing food provided to low- and no-income Americans by the Food Stamp Program (which became the Supplemental Nutrition Assistance Program, or SNAP, in 2008).

Great Society Set of domestic programs promoted by President Lyndon B. Johnson and fellow Democrats in Congress in the 1960s with the goal of eliminating poverty and wiping out racial injustice.

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Key Terms CHAPTER 10

incomes approach Antipoverty method that encourages individuals to work while receiving government assistance.

Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) Sweeping 1996 welfare policy reform enacted during the Clinton administration whose goal was to move welfare recipients from dependency into the workforce, thereby increasing personal responsibility of welfare recipients and decreasing government’s responsibility for the economic well-being of low-income individuals.

preventive approach Antipoverty method that attempts to prevent individuals from becoming poor.

punitive approach Antipoverty method that assumes poverty is the result of indi- viduals’ moral and character defects and that tries to discourage laziness by making public assistance minimal and difficult to obtain.

public assistance model An approach to determining eligibility for welfare benefits by means-testing, meaning that recipients must demonstrate need in order to qualify for benefits.

social insurance model An approach to determining eligibility for welfare ben- efits by specifying that all individuals in a given circumstance are eligible for assis- tance, regardless of need.

social policy A governmental policy that encompasses social and economic phe- nomena, from individual rights and needs; to the relief of indigence, inequalities, and unemployment; to the government’s sup- plying of goods and services.

social safety net Social welfare programs that provide at least minimum assistance to alleviate poverty among the chronically poor.

Temporary Assistance for Needy Fami- lies (TANF) A provision of the Personal Responsibility and Work Opportunity Rec- onciliation Act of 1996 that replaced Aid to Families with Dependent Children, ending cash assistance entitlements and setting time limits on benefits.

War on Poverty Unofficial name for legis- lation supporting the Great Society initia- tive of President Lyndon B. Johnson; so called during his State of Union Address on January 8, 1964.

welfare policy Government policy designed to assist poor and disadvantaged people, as well as provide Social Security, unemployment compensation, and other social programs.

welfare policy solutions Rights, rules, and inducements: (a) rights are the provi- sion of services and programs that indi- viduals are entitled to by nature of their citizenry; (b) rules state who is eligible for what services and programs; (c) induce- ments encourage or discourage individuals from receiving services and benefits.

welfarism Situation in which the state takes responsibility for the financial secu- rity of those in society who are unable to manage their own resources.

workfare A social welfare model based on the view that the poor benefit more from work than welfare.

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Applied Internet Exercises CHAPTER 10

Applied Internet Exercises: Welfare Policy 1. As an investigative journalist, you are deeply interested in how poverty and politics are inextri-

cably intertwined. Expanding the safety net or cutting it back is as much about politics as it is about policy. Your question is what are members of Congress doing—if anything—to solve the problem of poverty? Do they have any ideas? Do they care? Your challenge is to find out. Your tasks are as follows: a. Identify two members of the Senate and the House. Choose at least one Democrat and one

Republican (if possible). We recommend you select individuals who represent your state. b. Prepare a letter for each member that requests information about the Senator’s or Repre-

sentatives ideas for solving or addressing poverty. In your letter be sure to identify relevant statistics from that member’s state. Also, be sure to specify that you need an answer within 5 to 7 days. Be sure to identify yourself as a constituent.

c. Call each office and ask for the e-mail contact for the staffer responsible for welfare policy and related issues. If the office doesn’t provide it, ask for the main e-mail contact.

d. E-mail the letter to each staffer or to the main Senate and House offices. e. After 5 to 7 days, call each office and state that you haven’t received a response from. Ask if

you may leave a voice mail or speak to the staffer responsible for the issues. Be professional and polite if you have the opportunity to speak to the staff member. If you cannot speak to the staffer or leave a message, e-mail your request again.

f. Prepare a two-page memo with the following information: • A chronicle of the process you undertook to get answers and the reaction and/or an-

swers from each office. • If the congressional office did not respond, address what this says about the formula-

tion of welfare policy in Congress. • If the congressional office did respond, explain the representative’s ideas and proposals

for addressing poverty in America.

2. Using your research, prepare a one-page, 350- to 500-word op-ed (opinion) on politics and pov- erty in America in 2012. Be sure to use the insights and facts you derived from your research.

Critical Thinking and Discussion Questions

1. In your opinion, what should be the goals of welfare reform? 2. Design a welfare policy for the United States that takes into account what you

think citizens should be provided with. 3. Some people argue that welfare benefits are abused more often than not and

should therefore be eliminated. Would this be an equitable policy choice?

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