11. Income Maintenance: Social Security and Welfare

Study

The gap between the haves and the have-nots is not evident in Social Security, but it is apparent in almost all other elements of social policy in the United States, and in most other countries as well. Especially in the United States, that dual pattern makes the politics of social policy very difficult for reformers, as the political struggle quickly translates into a conflict between the haves and the have-nots. The struggle is exacerbated when the economy is not growing, so that benefits for the poor are perceived as directly reducing the standard of living of the middle classes. Even during periods of affluence there are always alternative uses for money that might be spent on social programs.

A large number of rather diverse social services programs are held together by an overriding concern with individual needs and conditions, some economic and some personal. The programs that have been tried and remain in operation represent attempts by government to improve the conditions of its citizens, although the programs by no means represent entirely satisfactory solutions to the problems. Several have been as unpopular with their clients as with the taxpayers who fund them. This chapter has described some approaches to modifying existing programs, as well as some more sweeping proposals that might benefit both government finances and program clients. Social problems will not go away; if anything, the first years of the twenty-first century have brought increasing demands for services, especially for the elderly and the homeless. What must be found is a means of providing adequate benefits through a humane mechanism that will not bankrupt the taxpayers. This is no easy task, but it is one that policymakers must address.

An enduring problem likely to be exacerbated by the tide of globalization is the number of people who work full-time but still earn wages that keep them in poverty. Further, if average real wages continue to fall, the amount of money available to fund retirement benefits will also decrease, and financial pressures on Social Security will increase.

Spending for social benefits gradually eroded during the Reagan and George H.W. Bush administrations, leaving social spending less, as a percentage of total federal spending, in 1992 than it was before 1985. The welfare state was not dismantled during that period, but its rate of expansion was slowed.

President Clinton placed welfare reform on the agenda during his presidential campaign and pressed Congress for reforms after his election. He and the Republican Congress agreed on major reform in 1996. The new program’s basic premises are that eligibility for social assistance be limited in time and that individuals must prepare to support themselves in the economy. This reformed welfare program almost certainly will be more expensive than the previous program, but it is hoped that the costs will be short term and that over time it will move people off public assistance and into productive jobs. Interestingly, the social policies of the United States and Europe are coming together on this issue, as a number of European countries are beginning to implement welfare reforms similar to those of the United States.

Review Questions: