The Questions listed below


1.  After reading Dye (Chapter 8) and reflecting
upon the chapter.  In 2010, the federal
government passed the Affordable Care Act. 
This was in response to the increasing costs for American Health
Care.  Understanding the readings, the
issues with health care costs, would you keep the ACA, or repeal the ACA?  Why? 
Remember to use examples and not anecdotes from Rush Limbaugh or Glen
2.  After reading Dye (Chapter 10) and reflecting
upon Bardach, please answer the following….In 2010, the Federal Government
ran a $1.7 trillion deficit in the U.S. National Budget.  Today, in 2014, the national debt is $17.5
trillion.  This averages out to each
citizen paying $55,000.  Understanding
the different policies in Dye (Chapter 10), what would your proposed solution
be?  Be very specific in your answer and
make sure to use examples from Dye and apply the Bardach framework to your answer.


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Welfare: The Search for Rational Strategies
Chapter 7 Outline
Brian Flannery
1. Rationality and Irrationality in the Welfare State
a. Welfare Benefits
Social welfare spending is many times the amount needed to eliminate poverty
The poor are not the only beneficiaries of welfare
Social Security and Medicare are the largest programs; recipients are non-poor
Approximately 17% of spending is not income based
Middle class is the major beneficiary of social welfare spending
b. Entitlements
Congress establishes eligibility criteria
1. Criteria based on age, income, retirement, disability, unemployment, and so forth
2. Anyone who meets criteria, is entitled by law to the benefit
Major entitlement programs were launched under:
1. President F. Roosevelt – Social Security, ANDC, TANF, SSI
2. President L. Johnson – Food Stamps, Medicare, Medicaid
33% of the population is entitled to some government benefit (not income based)
In contrast, Public Assistance is based on income or poverty status
1. Cash Welfare Assistance, Medicaid, Food Stamps
2. 50%+ of all families in the US have at least one family member receiving government
Many programs overlap, not possible to know total number of people receiving government
2. Defining the Problem: Poverty in America
a. Rational approach to policymaking requires clear definition of the problem; political conflict
over nature and extent of poverty is a major obstacle.
b. Two contrasting views on poverty:
Persistent, even in affluent society, millions suffer from hunger, exposure, and remedial
Poor are considerably better off than the middle class of fifty years ago and wealthy by
standards of other societies. Believe government programs encourage poverty
c. How Many Poor?
Bureau of the Census – 35 to 45 million (12-15% of population) are poor
Based on cash income that is lower than what is required to maintain decent standard of
living (poverty line)
d. Criticisms
Liberal – poverty is underestimated
1. Without government assistance, the number of poor would be more.
2. Does not include near poor, 19% of population
3. Does not account for regional differences in cost of living, climate, or accepted styles of
4. Does not take into consideration what people think the need to live adequately
Welfare: The Search for Rational Strategies
Chapter 7 Outline
Brian Flannery
Conservative – criticizes poverty definition
1. Does not account for assets; elderly carry less debt, own more assets
2. Many people counted as poor, but do not feel poor i.e. students
3. People underreport their incomes; poor and non-poor
4. Excludes noncash benefits given to the poor by the government; “net poverty” rate
Latent Poverty
1. Persons who would be poor without the governments assistance
2. 20-25% estimate of population
3. Who are the Poor?
a. Family Structure
Female-headed families account for 25-30% compared to married couples 5-6%
Nearly 50% of female-headed families with children under 18 are in poverty
Women and their children account for 66%+ of all US poverty people
b. Race
Blacks poverty rates are almost double white rates
Hispanics also greater than whites
Controversial – 50% of black families are female-headed, 18% of white families are femaleheaded
c. Age
Aged people experience less poverty
1. More likely to have home paid off and have Medicare
2. Older people have less expenses to pay
d. Temporary versus Persistent Poverty
Most people in temporary poverty (under 2yrs)
6% stay in poverty for more than 5 years
Majority of those on welfare are there temporarily
4. Why are the Poor Poor?
a. Low Productivity
Economists explain poverty through Human Capital Theory
1. Poor because their economic productivity is poor
2. They lack knowledge, skills, training, work habits, abilities to work
66% of of the poor are children, mothers of small children, or aged/disabled people
Poorly educated and unskilled have no demand in private sector; government dependence
b. Economic Stagnation
Recessions equal an increase increase poverty rates; less supply/demand, less employment
Continued economic growth and employment opportunity results in fewer poverty rates
c. Discrimination
Unaccounted for by the economic theory
Previously noted blacks experience more poverty than whites
1. Even with educational equivalences, blacks earn less than whites in same job
2. Free market operates with discrimination interference
d. Culture of Poverty
Poverty as a way of life learned by the poor
Lack of self-discipline to work hard, plan and save for the future, and to get a head in life
Welfare: The Search for Rational Strategies
Chapter 7 Outline
Brian Flannery
1. Fosters family instability, immediate gratification,
2. Present-orientedness over future orientedness
Cash payments can’t significantly change lifestyle, per theory, additional money will be
spent immediately
e. Disintegrating Family Culture
Most common in female-headed households, compared to wife-husband households
Children most likely to be poor
20% of America’s children live in poverty, 40% single mother children, 10% married parents
5. The Preventive Strategy: Social Security
a. Social Insurance
Prevent poverty from uncontrollable forces
Same as private insurance; sharing risks and setting money aside for rainy day
Pitched with idea that public assistance programs would be abolished because individuals
are compelled to protect themselves against poverty
Social security, insurance program financed by regular deductions from earnings
Today covers 90% of workers in US including self-employed; not federal employees, they
have own retirement system
Deductions from employee wages w/ equal contributions from employers (standard 6.2%
from each)
2011 Congress reduce employees pay to 4.2% in tax package
Medicare’s hospital insurance contributes 1.45%
d. Retirement Benefits
Monthly payments based on retirement age & amount earned during working years
Receive automatic cost-of-living adjustments
e. Survivor and Disability Benefits
Provide payments to spouses and dependents of insured workers
If there are no dependents, the spouse needs to reach retirement age
Provides benefit payments to those with permanent and total disability for over a year
6. Intended and Unintended Consequences of Social Security
a. The “Trust Fund”
Financed as a pay-as-you-go instead of reserve system; today’s funds pay for last generation
Social Security Payments take 35%+ of federal revenues
FICA taxes appear as current revenue, until recently these taxes exceeded payments made
to beneficiaries
Now benefit payments exceed income; predicted to be exhausted by 2040
b. The Generational Compact
When current working generation pays for benefits of earlier generation of retirees
Low birth rates, longer life spans, and generous benefits are straining workers’ ability to pay
c. The Dependency Ratio
Welfare: The Search for Rational Strategies
Chapter 7 Outline
Brian Flannery
Number of recipients as a percentage of contributing workers
1. People living longer raises ratio
a. Early years 10 workers: 1 retiree
b. Today 3 workers: 1 retiree
c. 2030 prediction 2 workers: 1 retiree
d. Generous COLAs
Based on the CPI that calculates all consumer costs for year
1. Includes costs retirees don’t have (home buying/mortgage, children)
2. Overestimates rises in cost of living (more generous COLA)
e. Wealthy Retirees
Paid to all those eligible/no means test
Claim checks as legal entitlement but payments < benefits received iii. Gives negative distribution of income (take from poor, give to rich) 7. Social Security Reform? a. “Saving” Social Security i. Politically volatile topic -> nonpartisan commissions rather than pres reform themselves
1. Recommendations of 1983 commission (Baby Boom effect)
a. Increase Social Security taxes to build a reserve
b. Increase retirement age to 67
c. Taxes for program increased on working class
d. No real reserve created
b. Reform Options
No proposal has wide support (controversial proposals)
Privatize parts of Social Security/invest payments
1. Bad investment decisions could be made
2. Therefore not popular with Americans
c. The “Third Rail” of American Politics
Social Security most expensive part of fed budget,
‘touch it and die’
1. 1/3 of senior citizens turnout on voting day
2. AARP as the largest interest group in DC
a. Oppose reducing any benefits
d. Unemployment Compensation
Program created in 1935 where states have unemployment compensation through
employer payroll tax
People must report in person & show they are willing/able to work for benefits
Extended Benefits
1. Originally designed as temp and partial replacement of wages
2. ‘Great Recession’ in 2011 created lengthy extension of benefits
a. 3yrs now vs 26wk it was
Welfare: The Search for Rational Strategies
Chapter 7 Outline
Brian Flannery
b. Paid for extension through general revenue
c. This encourages unemployment for longer period of time?
8. The Alleviative Strategy: Public Assistance
a. Supplemental Security Income (SSI)
Means-tested, fed administered income assistance program
Provide monthly cash payments
1. Needy elderly, blind, disabled
2. Disability includes alcoholism, drug abuse, attention deficiency in children
a. Has increased amount of SSI beneficiaries
b. Medicaid
Joint fed-state program
Provides health services to low income Americans
1. Women and children receiving public assistance
2. Those who get SSI cash assistance
States can offer it to ‘medically needy’
1. Facing crushing medical costs but income/assets are too high to get SSI or TANF
Provides federal grants to children who can’t get Medicaid
Targeted to families with income below 200% of poverty level
1. Eligibility for program determined by the states
d. Food Stamps (SNAP)
Get cards used to purchase food and groceries
e. Temporary Assistance for Needy Families (TANF)
Federal block grant to states for needy families with children
Replaced AFDC in 1996
Limits on who can receive it
9. Welfare Reform
a. Public Policy as a Cause of Poverty?
From 1950-1970, American poverty decreased (30% to 12%)
1. Gov welfare programs were minimal
Downward trend ended in early 1980s
1. AFDC payments increased and eligibility rules relaxed
2. Food Stamp and Medicaid program (1965) become new benefits
a. Became costliest programs
3. SSI program quadrupled in recipients
b. Welfare Reform Politics
Consensus grew that long-term dependency needed to be addressed
1994 Congress ended welfare as we knew it
1. Ended AFDC and created TANF (with strings to the state aid)
c. Evaluation: Is Welfare Reform Working?
In terms of people receiving payments, it’s a success
Welfare: The Search for Rational Strategies
Chapter 7 Outline
Brian Flannery
1. Dropped by 2/3 in years following reform
a. SSI, Medicaid, Food Stamps use increased
d. Continuing Welfare Needs
Obstacles to getting people back to work and off welfare
1. 25-40% of those on long-term have a handicap
2. 40% have no work experience, 2/3 no HS degree
a. Half of them have 3+ children (daycare obstacle)
10. The Working Poor
a. The Minimum Wage
FDR’s New Deal sets work week and hourly wage
1. Wages increased over time by Congress
b. The Earned Income Tax Credit
Low-income workers benefit from EITC > minimum wage
EITC is a refund check on income taxes
1. Largest means-tested program besides Medicaid
2. 1/3 of qualifying families don’t claim EITC
11. Homelessness and Public Policy
a. Who Are the Homeless?
Single men 41%
Families with children 44%
Single Women 13%
Unaccompanied youth 5%
Close to half abuse alcohol/drugs
1/4-1/3 mentally ill
Sheltered homeless – usually employed, remain for avg 6mo
b. Public Policy as a Cause of Homelessness
Reforms in public policy leads to homelessness
c. Deinstitutionalization
Released chronic mental patients from hospitals in 1960s/1970s
Nothing can be done to help long-term mentally ill
Can’t be kept in mental institution against own will
d. Decriminalization
Rid vagrancy and public intoxication as crimes
Can be arrested if they are danger to themselves or others
e. The Failure of Community Care
Many people are uncooperative, isolated from society
National social welfare system provides little help
No permanent address means no welfare benefits
LaTonya Perdue
Health Care Attempting a Rational-Comprehensive Transformation: Chapter Eight
Health Care in America

Can America transform its entire health care system according to a rationalcomprehensive plan?
Leading Cause of Death

Historically, most of the reductions in infant and adult death rates have resulted from
public health and sanitation, including immunization against smallpox, clean public water
supply, sanitary sewage disposal, improved diets, and increased standards of living.
Costs and Benefits: Cross-National Comparisons

The United States spends more of its resources on health care than any other advanced
industrialized nation, yet it ranks below other nations in many key measures of the health
of its people.

The United States offers the most advanced and sophisticated medical care in the world
which attracts patients from around the world.
Health Care Costs:

The United States spends over $2 trillion in health care every year, this equals out to
$7,000 per person.

By 2017 more than 4 trillion will be spent on health care.

Advances in medical technology have produced elaborate and expensive equipment.
An Aging Population

Currently one-third of all health care expenditures benefit the aged.
Medical Care as a right

Americans generally review access to medical care as a right.

No one should be denied medical care or suffer pain for lack of financial resources.
Incremental Strategies: Medicare, Medicaid, SCHIP

Medicare was enacted in 1965 as an amendment to the Social Security Act of 1935 and it
represented an extension of the social insurance principle.

Medicare covers persons over 65 regardless of income.
Medicare: Health Care as Government Insurance

Medicare provides prepaid hospital insurance and low-cost voluntary medical insurance
for the aged, directly under federal administration.

Medicare requires patients to pay small initial charges or “deductibles”

Medicare does not cover eyeglasses, dental expenses, hearing aids, or routine physical
Medicaid: Health Care as Welfare

Medicaid is the federal government largest single welfare program for the poor.

Medicaid cost now exceed the cost of others public assistance programs including family
cash assistance, SSI and food stamps programs.

Medicaid is a combined federal and state program.

Medicaid was designed for the needy.

States also set benefits and all states are required by federal government to provide
impatient and out patient hospital care.
SCHIP: Health Care for Children

The federal government provides grants to states to extend health care to children who
would not otherwise qualify for Medicaid.
Heath Care Modifications

Over the year’s significant modifications were made in both private and governmental
insurances programs.
Managed Care Programs

Skyrocketing cost caused both governments and private insurance companies to promote
various types of “managed care” programs.

HMO (Health maintenance organizations) are the most common type of managed care

Patients have to pay more to visit a doctor who is not in the network.
Controversies over Managed Care

Efforts to private insurers and government to control cost created new political

Both doctors and patients complain that preapproval of treatment by medical companies
removes medical decisions from patients and places it in the hands of insurance
Patients: Bill of Rights

The growth of managed care health plans, with their efforts to control cost, fuel the drive
for “patients” bill of rights.
Portability Preexisting Conditions

People with preexisting conditions (heart disease, hypertension or cancer) face
formidable problems in obtaining and keeping health insurance.
Prescription Drug Cost

Prescriptions drugs are more costly in the United States than anywhere else in the
developed world.

Many Americans have resulted to importing drugs fro Canada and other nations that have
much lower prices than those charged in the US.
Prescription Drug Coverage Under Medicare

The long battle over adding prescription drug coverage to Medicare finally came to an
end in 2003 when congress passed and President George W. Bush signed such a bill.
The Health Care Reform Movement

Over the years’ health care reform efforts entered on two central concerns: controlling
cost and expanding access.
The Single Payer Plan

Liberals have long pressed for a Canadian-style health care system in which the
government would provide health insurance for all American’s in a single national plan
paid for by increase taxes.
Americans Reliance on the Private Market

Socialized medicine was never very popular with the American people. They enjoyed the
finest medical care in the world, with the most advanced treatments, state-of-art equipped
hospitals and clinics, the world best medical school and best-trained medical specialist.

American pharmaceutical companies led the way in research and development of lifesaving treatments.
The Uninsured

Prior to health care reform, many working Americans and their dependents had no health
insurance; about 15 percent of the nations population.

Many of these individuals went without medical care or postponed doctors visits.
Cost Versus Outcomes

Overall health care cost in American amount to nearly 16 percent of the nations GDP, the
highest I the world.

The United States ranks well below other nations in many common arears.
Health Care Transformation

President Barack Obama and a Democratic-controlled Congress acted to transform health
care in America with the Patient Protection and Affordable Care Act of 2010.

Incremental change was rejected in favor of 2600 page national-comprehensive plan.
Individual Mandate

Every American will be required to purchase health insurance by 2014 or face a tax
penalty up to 2.5 percent of their household income.
Employer Mandate

Employers with 50 or more workers will be obligated to provide health insurance to their
Medical Expansion

State Medicaid eligibility will be expanded to include all individuals with oncome up to
133 percent of the federal poverty level.
Health Insurance Exchanges

The federal government will assist states in creating “exchanges” or marketplaces where
individuals and small businesses can purchase health care insurance from private

A surtax of 3.8 percent is imposed on potential investment income of individuals with
and adjusted gross income of $250,000 or couples with adjusted gross income of
$250,000 or more.
No Public Option

Congress rejected President Obama’s proposed “public option” a government-run
nonprofit health insurance agency that would compete with private insurers.

President Obama argued the the cost of health care reform could be recovered in savings
from existing health care system- a system that is currently full of waste and abuse.
Repealing “OBAMACARE”

Republicans in Congress promised the repeal of Obamacare.

Repeal is no …
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