"10 A Case Study in Formulation andLegitimation of Policy Solutions: The Forming and Reforming of Federal Welfare PolicyLearning Objectves In this chapter you will learn to: •\tIdentify key issues and specifc areas of concern for contemporary policy makers within the welfarepolicy arena. •\tArticulate the debates within contemporary welfare policy and the arguments advanced byeach side. •\tDescribe the arenas in which welfare policy making takes place and the most common welfarepolicy instruments. the80472_10_c10_313-338.indd 313 11/27/12 3:06 PM Jim West/Age Fotostock/SuperstockSection 10.1 The Social Welfare Debate CHAPTER 10 hrough the formulation and implementation of social policy, modern governmentshave provided appropriate and sufficient standards of living to citizens. Social pol- Ticy encompasses a wide range of social and economic phenomena, from individualrights 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 andservices, such as housing, education, and health care. The extent of a government’s welfare state dictates how much will be allocated for socialpolicy expenditure. Many nations spend the largest portion of their governmental bud - get on social policy: pension programs, unemployment and disability benefits, subsidiesto support families with dependent children, and assistance to families and individualswith low incomes. In the United States references towelfare policy—as opposed to socialpolicy—are more common. As a result, many people think of welfare policy as a series ofprograms designed to assist poor and economically disadvantaged people, thus excludingSocial Security and many other social programs from the welfare debate. This text, how - ever, uses the terms social welfare policyand welfare policy to describe all of the programs,including Social Security, which the U.S. government provides to protect and advancecitizens’ standards of living.10.1 The Social Welfare Debate vast amount of literature discusses why governments need to provide social wel - fare for their citizens. One argument posits welfare provision as a relief programAthat supplements economic arrangements (Gough, 1979). In a free-labor marketbased on supply and demand, certain individuals will be more vulnerable to marketfluctuations. Governments provide services that absorb and control unemployment, dis - abilities, ill health, and aging. That is, social welfare policy is made necessary by theinstability that is inherent in capitalist economies such as the United States. Anotherargument contends that welfare policy regulates labor (Mishra, 1990). This perspectivesees 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 thanreceive welfare relief. Another argument has it that societies cannot afford large num - bers of individuals suffering obvious inequalities without relief (Frankel, 1962). W -el fare pacifies those individuals who—without welfare relief—would be forced to findresources through whatever means they could. Thus, welfare exists to help reintegratedisaffected groups back into the system (Piven & Cloward, 1971). In its broadest sensewelfare policy provides security, temporary or permanent, to those in need. Finally, theliterature offers one other view, that welfare policy fosters independence by encouragingcitizens to be self-supporting (Stone, 1988). the80472_10_c10_313-338.indd 314 11/21/12 1:02 PMSection 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 thefederal government offer any sort of welfare or Social Security benefits for low-incomeand 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, whichinitiated social service programs beginning in the late 19th century (see Table 10.1). Table 10.1: Year of introducton of various social services in selected natons Naton 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 firstcategory includes general assistance programs that give money, food, or clothing directlyto qualifying individuals; work assistance programs for people in need; and assistancefor specific groups, such as aid for low-income individuals. The second category includespolicies 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 toillness, unemployment, and retirement. Social regulation programs, such as consumer andworker protections, protect individuals from the problems of industrialized society. Industrialized nations have taken several different approaches in their attempts toaddress poverty. The preventive approach attempts to ensure that individuals do notbecome poor in the first place. The alleviative approach attempts to alleviate the povertyof individuals who are already poor. The punitive approach assumes that it is the faultof individuals that they are poor and attempts to discourage them from being dependentby making it difficult to obtain government assistance. The curative approach attemptsto cure the causes of poverty. And the incomes approach encourages individuals towork while they are receiving assistance in an effort to help them make their way out ofpoverty permanently. Table 10.2 summarizes these approaches and provides examplesof related policies. the80472_10_c10_313-338.indd 315 11/21/12 1:02 PMSection 10.1 The Social Welfare Debate CHAPTER 10 Table 10.2: Approaches taken by governments to deal with poverty Approach Objectve Policy Opton Preventve approach This atempts to ensure that individuals do not Social Security become poor. (old age pensions) Unemployment benefts Alternatve approach This deals with those individuals who are already Temporary aid to needypoor and atempts to provide some kind of families governmental assistance to alleviate their conditon. Food stamps Punitve approach This is based on the assumpton that if individuals Workfare are poor, it’s because of their own moral andcharacter defects. In other words, it’s their ownfault. Government should try to discouragethem from being lazy by making it as difcult aspossible to obtain public assistance in the formof governmental benefts. And when governmentdoes have to provide assistance, it should beminimal. Curatve approach This posits that causes of poverty, such as lack Headstart of educaton and job training, should be cured.Meals on Wheels Emphasizes programs that atack the causesof poverty. Ofen used with a politcal strategy Literacy training of giving the poor some sort of control overJob training schemes the insttutons that afect their communites.Community organizaton is encouraged. Incomes approach Individuals are encouraged to work while they Negatve income tax receive government assistance. As their job- Earned income tax credit related income increases, their level of benefts’decrease. The idea behind this is that an individual Supplementary securityis beter of working than not working. income All industrialized nations have provided a variety of social welfare programs to citizensas a right of citizenship. The governments’ objective with these programs is to establish asocial safety net—social welfare programs that provide minimum assistance—with thehope that the safety net will alleviate poverty among the chronically poor. Governmentprovision of economic assistance to individuals involves three basic questions: •\t Who is eligible for assistance? •\t How redistributive is the program that provides assistance? •\t How is the assistance provided? To determine eligibility, governments can take one of two approaches. In thepublicassistance 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 UnitedStates’ individualist heritage has resulted in social welfare policies that are predominantlymeans-tested. Proponents of this approach argue that means-testing allows governmentsthe80472_10_c10_313-338.indd 316 11/21/12 1:02 PMSection 10.1 The Social Welfare Debate CHAPTER 10 to alleviate extreme poverty without unnecessary spending on those who are not trulyneedy. But critics of means-testing say that, too often, the truly needy struggle to provetheir eligibility, whereas others who are not in need qualify for benefits by cheating thesystem. 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 asignificant 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 theseprograms. The public supports social insurance policies because people realize that theywill get back some of their taxes in government benefits of some kind. Yet, this modelreceives criticism because protecting benefit levels without increasing taxes is difficult— government revenues can be strained if the number of recipients increases, and taxpayersgenerally oppose raised taxes. Governments that employ the public assistancemodel adhere to a policy that is redistributive,meaning that all taxpayers support the programbut many of them never qualify for benefits. Incontrast, the social insurance approach allows forthe possibility of all citizens’ benefitting in someway. Consequently, governments may limit theredistributive element in social insurance pro- grams. In some nations this means that programsare based on the principle of individual equity sothat citizens receive benefits in accordance withtheir level of contributions. In other nations gov - ernments choose to base programs on basic needsso that benefit levels are set at a certain stan - dard and citizens receive a common benefit. Thisapproach combines entitlements and a redistribu- tive element. All citizens receive benefits of somekind, but the wealthy—by paying higher taxesand receiving fewer benefits—subsidize benefitspaid to the needy. Jim West/Age Fotostock/Superstock Finally, the types of assistance governmentsMeals on Wheels is an example of aprovide are determined by their choice of policyprogram that uses a curative approach toinstruments. Policy instruments used by thepoverty. United States are discussed later in this chapter. Government provision of social welfare programs has stirred heated debate for severalreasons. First, many critics, like libertarian political theorist Charles Murray, claim thatwelfare encourages social dependency, with recipients choosing to become dependent ongovernment 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 facedconflict not only about the types of social welfare provision, but also about the increasingthe80472_10_c10_313-338.indd 317 11/21/12 1:02 PMSection 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 cutsin government-funded agencies and public programs. In these cases governments face atrue political dilemma: Should they decrease or eliminate social welfare benefits to controlcosts, or should they protect those benefits, either by cutting government programs inother 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 differentviews of human nature, broadly categorized as liberal and conservative. Each perspectiveshapes opinions regarding the role of government, the issue of poverty itself, and theextent to which policy may effectually resolve the problem. In the liberal view, peopleare basically at the mercy of their circumstances, and alleviating or solving the problemof poverty requires ensuring equal resources and opportunity for all. Liberals believepoverty is a significant problem in society, one that government has both the ability andresponsibility to address. This government assistance may take many forms, includingredistribution of resources. In the conservative view, responsibility for particular situations and economic statuslargely rests with individuals. For conservatives, poverty is a problem that no amountof 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 governmentresponsibility in the provision of social welfare, they largely believe it should be limited inscope 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 toSocial Welfare Policy he United States implemented social welfare policy relatively late, mainly becauseU.S. political culture has traditionally emphasized self-reliance and rugged indi - Tvidualism. Such values encourage individuals to seek remedies from themselves,rather than from government or society. For much of the country’s early history, societyblamed poverty on the faults of the individual and not the system. Welfare in the 18ththrough the early 20th centuries relied primarily on private funding and local politicalgroups, and those responsible for social welfare took a punitive approach to alleviatingpoverty. Until the Great Depression, only a minority of individuals—called “the worthypoor” in the literature of the day—received assistance. the80472_10_c10_313-338.indd 318 11/21/12 1:02 PMSection 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 economichardships brought about by the Great Depression in the 1930s, changed social welfarepolicy 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 levelsof poverty. From that point, the idea became acceptable to many Americans and somepolicy makers that some individuals were poor through no fault of their own and thatsystemic causes of poverty go beyond some individuals’ ability to manage. The 1935 Social Security Act was the centerpiece of the New Deal. It combined thepreventive and alleviative approaches to dealing with poverty. It established a systemof social insurance in the form of Social Security and unemployment compensation toprevent 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 programof social insurance under the Social Security Act was established to help low-incomefamilies 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 theimmediate postwar years of economic growth (Piven & Cloward, 1971). Decreased pov - erty rolls created a general perception among both voters and policy makers that fewerpeople needed government help. Not until the 1960s did welfare and issues of povertyresume 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 laterendorsed and passed as legislation. Most of these programs formed President Lyndon B.Johnson’s War on Poverty, the unofficial name for the legislation supporting hisGreatSociety initiative of 1964. Johnson’s Great Society led to programs aimed at eliminatingpoverty and social injustice. In reality, what these programs did was extend the NewDeal social welfare programs. the80472_10_c10_313-338.indd 319 11/21/12 1:02 PMSection 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10 Figure 10.1: U.S. poverty rate, 1960–1965 Poverty Rate 25 22.2 21.9 21.0 20 19.5 19.0 17.3 15 10 5 0 1960 1961 1962 1963 1964 1965 Year 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: USDepartment of Commerce, Table A-1-3. In 1965 Medicare was introduced as a program for health insurance for the elderly. In thesame year, Medicaid, a program for health insurance for the poor, was also established.Other programs passed by the Johnson administration included housing subsidies, schoolfood programs, and special programs for pregnant women. Most of the established pr -o grams were either preventive or alleviative in their approach. However, the administra- tion also employed a curative approach. For example, the 1964 Equal Opportunity Actwas 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 extendingeligibility and increasing the levels of benefits individuals could receive. The result wasincreased 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 socialwelfare by establishing programs that could be identified with the Republican Partyand were inexpensive to fund. Nixon and his fellow critics of the Great Society programlabeled much of the War on Poverty a failure. Influenced by the work of the conservativeeconomist Milton Friedman, they urged moving away from the alleviative approach toadopt an incomes model. They believed that the alleviative approach encouraged welfarethe80472_10_c10_313-338.indd 320 11/21/12 1:02 PM PercentageSection 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10 dependency through its promotion ofwelfarism, in which the government takes respon- sibility for the financial security of those who cannot manage their own resources. Ineffect, Nixon changed the focus of the social welfare debate from poverty itself to howthe 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 themiddle class could not afford. They consequently championed the notion ofworkfare, asocial 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 thepopulation was high. This opposition was fueled in part by a public perception that John - son’s Great Society programs primarily assisted urban minority populations, leavingother groups underserved. In addition, critics like Charles Murray charged that existingwelfare 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 assistancethe federal government should provide were alsobeginning to shift. Many conservatives advocatedextensive government cutbacks. Reagan and his sup- porters argued that social welfare policy was a fail - ure, it cost too much, and it discouraged individualsfrom working. The phrase “welfare queen” cameto represent this overarching view: a broad charac- terization of welfare recipients as individuals givento self-destructive behavior, relying on governmenthandouts, and exploiting the system to avoid work.Critics argued that any rational individual wouldchoose public assistance over a low-paying, dead- end job with few benefits. To further their point, critics argued that thenation’s economic woes were attributable to theburdensome costs of welfare. Many conservativesJim West/Age Fotostock/Superstock argued that the Great Society and War on Povertyprograms were directly responsible for much of theSome argue that the poor needed workand not welfare. Others argue that public economic slowdown and the growth of the federalassistance is better than a dead-end jobbudget deficit. In essence, these critics were return - with few benefits. ing to the philosophy that individuals—not thesystem—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 wererolling back what they perceived to be the expansion of the welfare system since the intr- o duction of the War on Poverty and reducing aid to the working poor. Government benefitswere 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 workrequirements for those seeking welfare. the80472_10_c10_313-338.indd 321 11/21/12 1:02 PMSection 10.2 A Historical Overview of Social Welfare Policy CHAPTER 10 In the Omnibus Budget Reconciliation Act of 1981, the Reagan administration attemptedto achieve its goals by introducing stricter eligibility requirements and benefits calculation.By 1983 approximately 14% of all beneficiaries had been removed from AFDC rolls, andthe percentage of welfare recipients who were not working increased. By 1988 a bipartisanconsensus in Congress concluded that a broader welfare safety net should enforce stricterwork requirements. As a result, Congress passed the 1988 Family Support Act (FSA) thatattempted to increase both individual responsibility and governmental responsibility tohelp families with young children. The FSA expanded the AFDC program for two-parentfamilies, provided for transitional child care, and added monies for states to formulateand 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 welfareprovision and an increase in poverty levels after 1980 (see Figure 10.2). By the late 1980sa general consensus across the political parties and the public determined that welfare’sgoal should be helping individuals temporarily until they could find employment thatwould replace welfare benefits. Figure 10.2: U.S. poverty rates, 1976–1989 Poverty Rate 20 15.2 15.0 15 14.4 14.0 14.0 13.5 13.5 13.0 13 12.8 11.8 11.6 11.5 11.3 10 5 0 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Year 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: USDepartment of Commerce, Table A1-3. the80472_10_c10_313-338.indd 322 11/21/12 1:02 PM Percentage"