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Running head: ECONOMIC POLICY BRIEF 1
Economic Policy Brief
Treylesia Alston
September 11,2022
PADM550-B01
Christopher Sharp
ECONOMIC POLICY BRIEF 2
Defining the problem
The United States government has been in the forefront in
developing strategies to
increase employment levels. Different governments have come
up with proposals on how the
rate of employment can increase through creation of jobs. With
the Covid-19 pandemic’s impact
on the economy, there was a significant decline in employment
levels as more companies and
sectors reduced the production levels thus laying off the
workers. The need to stimulate the
economy through expanding job plans and supporting families
resulted into the Infrastructure
Investment and Jobs Act (IIJA) which was signed into law on
November 15, 2021 (Sharkey,
2022).
May
Biblical guidelines: The Bible has clearly detailed the role of
economic prosperity in the
life of a human kind. The economic prosperity of all people is
God's will. He wishes for us to be
able to meet our basic necessities. Moreover, he wants us to
benefit from the plenty (enough) of
his kindness. It is under this basis that such policies are
implemented in the economy (Fischer,
n.d.).
Constitutional guidelines: The Federal Government has a duty
to ensure there is
attainment of economic goals set. This include ensuring there is
equitable distribution of
resources and presence of a supportive economic environment.
It is under this basis that the
Federal government through the legislative organ created the
IIJA policy (Barile et al, 2021).
Can
Political Feasibility: The new Biden government outlined
promises to aid disadvantaged
Americans immediately and invest in infrastructure and families
in 2021. The American Rescue
Christopher Sharp
143770000000321519
Make sure that you are discussing the specific enumerated
powers in the Constitution that allow the government to
intervene. If it cannot be found, the power cannot be assumed as
anything not belonging to the federal government belongs to the
states.
Christopher Sharp
143770000000321519
Make sure that you are discussing in detail the application of
the Biblical principles of natural law, inalienable rights, sphere
sovereignty, sin vs. crime, etc., as they relate to the topic.
ECONOMIC POLICY BRIEF 3
Program (ARP) and the Infrastructure Investment and Jobs Act
(IIJA) were enacted in 2021. The
deployment and growth of expanded assistance programs
showed the policymaking potential to
alleviate poverty and increase financial security for millions of
Americans (Sharkey, 2022).
Financial feasibility: Originally, the bill was a $715 billion
infrastructure proposal.
Before the bill's implementation, Congress negotiated its
details. This new measure added $550
billion to the recurring spending Congress had already approved
(Sharkey, 2022). This resulted
into a total cost of $1265 for the implementation of the policy.
Practical Feasibility: After discussions, the bill was renamed
the Infrastructure
Investment and Jobs Act to include multiple sectors of the
economic infrastructure such as
electric grid renewal, clean water and broadband access
(Goutsmedt, 2021). This gives the
policy a strong basis under which it can be implanted and
realize the expected goals and
outcome.
Should
The importance of economic success in human life is clearly
addressed in the Bible.
God's will is for all people to flourish economically. In
fulfilment of the goal, the Federal
Government is responsible for ensuring that economic goals are
met. This includes ensuring
equitable resource allocation and the establishment of a
supporting economic environment. This
is evident through introduction and implementation of the
Infrastructure Investment and Jobs Act
(IIJA). The federal government needs to ensure there is
sufficient public participation in attaining
the goals of the policy on the long run (Hills & Nakata, 2018).
Christopher Sharp
143770000000321519
Needed to discuss the logistical resources needed to implement
the bill - new agencies, new employees to monitor, new
buildings, etc.
Also, needed to discuss the practical steps for implementation.
What will it take to get this going? I often use a cake analogy:
What are the ingredients needed and steps needed to
successfully bake a cake (or implement a program)?
Christopher Sharp
143770000000321519
Make sure to tie this back to the May/Can portion of the paper
in clear, concrete points, and clearly identify the Biblical and
Constitutional authorities
Christopher Sharp
143770000000321519
Make sure that you are discussing the political and public
support for the passage off a specific bill in this section.
ECONOMIC POLICY BRIEF 4
Reference
Fischer, K. Biblical principles of government [PDF document].
Retrieved from Lecture Notes
Online website: https://learn.liberty.edu/bbcswebdav/pid-
6267706-dt-content-rid
Sharkey, J. (2022). Infrastructure Investment and Jobs Act
(Iija)/Bipartisan Infrastructure Law
(Bil).
Barile, S., Ciasullo, M. V., Iandolo, F., & Landi, G. C. (2021).
The city role in the sharing
economy: Toward an integrated framework of practices and
governance models. Cities,
119, 103409.
Hills, T. S., & Nakata, T. (2018). Fiscal multipliers at the zero
lower bound: the role of policy
inertia. Journal of Money, Credit and Banking, 50(1), 155-172.
Goutsmedt, A. (2021). From the Stagflation to the Great
Inflation: Explaining the US Economy
of the 1970s. Revue d'economie politique, 132(3), 557-582.
https://learn.liberty.edu/bbcswebdav/pid-6267706-dt-content-rid
Christopher Sharp
143770000000321519
Make sure to be consistent in APA formatting for your
references.
Running head: H. R. 312 1
H.R. 312 “The Mars Exploration Act”
Kahlib J. Fischer
February 11, 2015
PADM 550-B01
Dr. Kahlib Fischer
H.R. 312 2
Defining the Problem
Space exploration has been limited since the moon landing to
space station visits and the
deployment of the Hubble telescope and satellites (2015). In
2012, President Obama signed into
law H.R. 312, “The Mars Exploration Act” (2012). This bill
provides funding for the
development and deployment of: 1) the “rovers”; 2) deep space
transportation for humans; and 3)
laboratory and housing facilities on Mars (Robinson & Smith,
2012).
May
Biblical guidelines: Of course, the Bible says nothing about
space exploration. Government is
charged primarily with protecting the inalienable rights of its
citizens (Fischer). HR 312 does
not violate these rights. The Biblical notion of “sphere
sovereignty” implies that there are other
spheres of society, such as non-profits and industry, which
might be considered as participants in
space exploration (Monsma, 2008). In the past, space
exploration has been linked to national
defense, for fear that other nations would gain the upper -hand in
space and use that advantage
against American citizens (Neuhaus, 2012). Since government
has a divine mandate to protect
its citizens, space exploration might be supported.
Constitutional guidelines: The “common defense” portion of the
preamble supports passage of
this bill. Article 1 section 8 provides further points of support:
the promotion of science and
progress, the development of a sound military, and the
regulation of commerce with foreign
nations.
Can
Political Feasibility: Generally, the public favors further mars
exploration and colonization
(Smith, 2014). The passage of the bill was largely bi -partisan,
but a significant Republican
minority tried to block passage arguing that the funding was not
present for the bill and that the
H.R. 312 3
President was merely doing this to distract from criticism of his
health care legislation and other
scandals (Neuhaus, 2012). Since passage, some experts have
argued that Mars colonization is
not obtainable as NASA is currently constructed and has argued
for either repeal of HR 312 or
significant modification (Richards, 2015).
Financial feasibility: Total cost of the bill was estimated at
$20.5 billion, according to the
Congressional Budget Office (“H.R. 312”). At the time of
passage, Democrats and Republicans
were grappling with the debt ceiling crisis (Barnes, 2011).
Practical feasibility: The bill was set up to fund NASA efforts
for Mars exploration over 20
years. The major challenge was the development of sufficiently
fast and safe space travel for
humans (Geyer, 2012). Rovers have been sent to Mars, so, in
effect, Phase 1 has been achieved.
Significant challenges exist for phases 2 and 3, however, as
NASA grapples with developing the
proper technology for long-term space exploration and
colonization (Richards, 2015).
Should
HR 312 passes the May portion of the analysis, with the caveat
that government should allow for
business and non-profit participation. The Can portion of the
analysis is more challenging,
simply because of current levels of deficit spending in the
federal government as well as the
technological challenges. Nevertheless, HR 312 represents a
legitimate area for government
involvement. Space exploration, if not simply for the sake of
military defense, should continue
and thus government must be involved. We are not able to
choose ideal times for something as
lofty and abstract as space exploration; yet it must remain a
national priority.
H.R. 312 4
References
Barnes, A. (2011). The Debt ceiling crisis. National Review
Online. Retrieved from
http://www.nro.com/dc_13
Fischer, K. Biblical principles of government [PDF document].
Retrieved from Lecture Notes
Online website: https://learn.liberty.edu/bbcswebdav/pid-
6267706-dt-content-rid-
43218699_1/courses/PADM550_B01_201520/Biblical%20Princi
ples%20of%20Govern
ment%281%29.pdf
Geyer, A. (2012). To mars and beyond. Space. 15(1), 52-56.
doi:10.1108/03090560710821161
H.R. 312 (2012). The Mars Exploration Act. Congressional
Budget Office. Retrieved from
www.cbo.gov.HR312.
Monsma, S. (2008). Healing for a broken world. Wheaton, IL:
Crossway Books.
Neuhaus, J. (2012). Mars madness. Space Exploration.
Retrieved from
http://www.spaceex.com/mmhr312
Richards, D. (2015). The Mars question. Journal of Science and
Politics, 10(2), 38-42. Retrieved
from http://www.jsp.org
Robinson, J. & Smith, B. (2012). What does HR 312 mean for
the future of space exploration?
Journal of Science and Politics, 4(2), 3-12.
doi:10.1108/988890560710821161
Sires, D. (2015, October 9). Has NASA lost its way? Popular
Science, 8, 27-29.
Smith, R. (2014). Does the public even care? Space Exploration.
Retrieved from
http://www.spaceex.com/pubhr312
http://www.nro.com/dc_13
https://learn.liberty.edu/bbcswebdav/pid-6267706-dt-content-
rid-
43218699_1/courses/PADM550_B01_201520/Biblical%20Princi
ples%20of%20Government%281%29.pdf
https://learn.liberty.edu/bbcswebdav/pid-6267706-dt-content-
rid-
43218699_1/courses/PADM550_B01_201520/Biblical%20Princi
ples%20of%20Government%281%29.pdf
https://learn.liberty.edu/bbcswebdav/pid-6267706-dt-content-
rid-
43218699_1/courses/PADM550_B01_201520/Biblical%20Princi
ples%20of%20Government%281%29.pdf
http://www.cbo.gov.hr312/
http://www.spaceex.com/mmhr312
http://www.jsp.org/
http://www.spaceex.com/pubhr312Defining the
ProblemMayCanShouldReferences
Policy Brief Template
Your Paper Title
Your Name
Date
Class Name and Section
Dr. Christopher Sharp
Defining the Problem
One paragraph that discusses the problem, and introduces the
policy that was written or passed to address the problem.
May
One brief paragraph for each:
Biblical guidelines and principles
Application of the Biblical principles - when discussing the
topic of the week, make sure to apply the Biblical principles
discussed in question 1 of the Synthesis paper to the specific
policy that you're discussing. How does it meet natural law,
inalienable rights, federalism, etc.?
Constitutional guidelines for federal and state involvement
Constitutional authority - what is the Constitutional authority
for the federal government to get involved? Avoid the use of
the General Welfare clause as it becomes a catch-all for
anything that a politician wants to get passed.
Can
One brief paragraph for each area:
Political Feasibility
Political feasibility - what is the likelihood that the policy will
become law? What is the political and social support for the
policy?
Financial feasibility
Financial feasibility - what is the policy expected to do to the
national debt or spending? For example, the new COVID
stimulus just put us another $2 trillion in debt but was widely
supported by both politicians and the public.
Practical feasibility
Practical feasibility - what are the logistical resources needed
for implementation (buildings, personnel, new programs, etc.)
and what are the steps for implementation (ex; the Affordable
Care Act needed functional websites in order to be
implemented, the lack of these created severe problems with
implementation).
Should
Provide a summary of the key ideas of your analysis in support
of your position. Must be based on the “May” and “Can”
analysis. Offer a recommendation based upon the analysis.
Relate this back to specific Biblical and Constitutional
authorities and discuss whether or not the policy should be
supported based on this and the feasibility of implementation.
References
Make sure to cite quotes in APA format with author, year, and
page number or paragraph number if a web page. Also, make
sure that your references are in APA format. A link to the
Liberty University Writing Center is included in your
assignment resources.
CAN:
"Feasibility"
SHOULD:
"Making the
Case"
Persuasive summary of the key issues supporting your decision
to support or reject the
legislation. This is where you as a political leader speak to the
heart.
Explaining why this is worthy of being focused on by your party
(in light of what the party
is trying to accomplish in Congress)
Make the case knowing that you might be making enemies for
supporting (or opposing)
this piece of legislation
Politics is a battle of ideas and agendas—how are you going to
make the case knowing
that you might make enemies, and knowing that if your party
leadership focuses on your
legislation, it might mean that someone else's agenda will be
stymied?
MAY:
“Authority”
supported by Biblical principles?
keeping with the enumerated
powers listed in the
Constitution?
Political Feasibility: Does the bill have a chance of passing the
House and Senate and
being signed by the President? What public opinion polls are
relevant?
Financial Feasibility: How much would the legislation cost,
particularly in light of current
budget constraints? What impact would there be on the
economy?
Practical Feasibility: what are the key hurdles for implementing
this legislation in terms of
timing, logistics, resources, and technology? As a lawmaker,
you have to anticipate
those challenges in order to weigh the merits of the legislation.
Read: Monsma: Chapters 8
8: Poverty
“Be Open-Handed toward the Poor and Needy”
(Deuteronomy 15 : 11)
PATTI IS A FRIEND OF MINE who dropped out of college to
marry the man she loved. They soon had two little boys. She
was a full-time mom, while her husband worked as a teacher.
Theirs was an all-American, even idyllic, family. Or so it
seemed. Then suddenly Patti’s husband left, moved to another
state, and sued for divorce. Patti soon discovered that her
husband had left her with back rent owed on their house, as well
as other unpaid bills. She had never held a full-time job and,
having left college early, had few marketable skills. Her
husband made only sporadic child-support payments; because he
had moved to a different state, a cumbersome, inefficient child-
support system was unable to collect the financial support that
was due her and her two little boys.
Patti was at the end of her rope. She struggled to feed her
children and faced the very real prospect of being homeless. Not
knowing where else to turn, she obtained welfare through the
Aid to Families of Dependent Children (now called Temporary
Assistance for Needy Families [TANF]). With the help of her
caseworker who was willing to bend a few rules, she returned to
college, completed her degree, obtained full-time employment,
and was able to leave the welfare rolls.
There is much we can learn from Patti’s story. Poverty can
strike suddenly and through no fault of one’s own. Government-
sponsored welfare programs can work as intended, providing
desperately needed temporary help while someone obtains skills
needed to obtain a job and become a self-supporting,
contributing member of society.
But not all stories are like Patti’s. Some people are poor
because they made wrong, sinful choices and are unwilling or
unable to work hard to obtain the training that will lead to
employment. Still others are poor due to ill health or deeply
embedded psychological problems. Their family backgrounds
may never have taught them the attitudes and values needed to
compete successfully in the world of work.
The Bible repeatedly calls us to be concerned and to offer help
to the poor. That much is clear. Exactly how to translate our
concern and offers of help into concrete, practical acts is less
clear. And when it comes to the public policies of government,
what ought they to do and not do? How ought we as Christian
citizens apply the biblical principles discussed earlier in this
book to the problem of poverty?These are the questions this
chapter explores.
Poverty Today
The poor are still very much with us. The United States Census
Bureau has judged that a family of three with an annual income
of less than about $15,000 is living in poverty. Based on this
standard, it estimates that as of 2005 there were 37 million
people, or 13 percent of the American population, living in
poverty. Of these 37 million people, 13 million were children
under eighteen years of age. Poverty varies by racial and ethnic
groups. It was almost three times higher among African
Americans (25 percent) than among non-Hispanic white
Americans (8 percent). Among Hispanic Americans the poverty
rate was 22 percent.1
To understand poverty and its negative effects, two additional
perspectives need to be understood. First, in the United States
poverty exists among unparalleled affluence. While 37 million
people live in poverty, 20 million households have incomes of
over $100,000 a year. The average annual family income in the
United States is $63,000. We are an enormously wealthy
country, and most of us are blessed with material goods that
others cannot even imagine. The combination of great wealth
and poverty existing side-by-side in the same country and even
in the same communities raises crucial and challenging
questions—even while it does not suggest quick, simple answers
for the thoughtful Christian seeking God’s will.
A second key perspective is that poverty is more than a simple
lack of money to buy the necessities of life. It is that. But it is
more. A job that pays decent wages not only pays the rent, puts
bread on the table, and keeps the lights on, but it also tells
people and their families that they are doing useful, worthwhile
work that society values. It daily affirms that they are useful
individuals who contribute to society and support those who
depend on them. In contrast, the unemployed or sporadically
employed, along with those employed at such low wages that
they cannot support their dependents, receive the daily
message—even if falsely—that they are failures. The
implication is that they have nothing of real value to contribute
to society, and that those who are depending on them are
looking to them in vain. How does one go home and tell one’s
children that there will not be enough food for them that
evening?Or as winter approaches, that there will be no warm
jackets or Christmas gifts this year?
“We live in a country rich beyond measure, yet one with
unconscionable ghettoes. We live in a country where anyone can
make it; yet generation after generation, some families don’t.”2
—JASON DEPARLE,
SENIOR WRITER, NEW YORK TIMES
Poverty, with its attending physical and psychological
consequences, severely limits people in their ability to live the
creative, productive lives God intends for all human bei ngs.
God intends that all of us—in joy and thankfulness—be able to
develop the abilities he has given us, support and care for our
families, and contribute to the broader society. All these are
aspects of being God’s image bearers. They may not be
impossible for the poor to accomplish, but they are certainly
made difficult.
The Bible Speaks
I have been told that in the Bible there are more than two
thousand references to the poor. I have never tried to count
them, but both the Old and New Testaments time and time again
insist that as believers we must be concerned for the poor. It is
a requirement. “There will always be poor people in the land.
Therefore I command you to be open-handed toward your
brothers and toward the poor and needy in your land”
(Deut.15:11). “Religion that God our Father accepts as pure and
fault-less is this: to look after orphans and widows in their
distress and to keep oneself from being polluted by the world”
(James 1:27).I could fill the rest of this chapter, in fact the rest
of this book, with biblical commands to care for the poor and
needy. Of all people, we evangelicals—who take the Word of
God authoritatively and seek to pattern our lives after it—
should take these repeated commands seriously. If we ignore
them, we deny the authority of Scripture. There is no way to
escape this conclusion.
Here the Christian principle of solidarity, discussed earlier, and
the many biblical supports for it come front and center. The
poor are not somehow “others,”separate from us and with no
ties of mutual responsibility. They are our brothers and sisters;
we are to see Christ in them.
“Our band of eager young first-year seminary students did a
thorough study to find every verse in the Bible that dealt with
the poor. . . . We found several thousand verses in the Bible on
the poor and God’s response to injustice. . . . [Then] one
member of our group took an old Bible and a new pair of
scissors and began the long process of cutting out every single
biblical text about the poor. . . .
When the zealous seminarian was done with all his editorial
cuts, that old Bible would hardly hold together, it was so sliced
up. It was literally falling apart in our hands.”3
—JIM WALLIS,
PASTOR AND POLITICAL ACTIVIST
While studying welfare-to-work programs in Dallas, I once
interviewed the assistant director of a deeply Christian program
that was working with the homeless. She described the
philosophy of her agency in these words: “We are faith- based—
we strive to be the hands of Christ for the homeless. Our desire
is to touch them as if they are Christ himself.” Her agency had
not only read but was living out Matthew 25:40: “Truly I tell
you, whatever you did for one of the least of these brothers and
sisters of mine, you did for me”(TNIV). This is solidarity with
the poor. Our Lord demands nothing less from us.
Clearly we should live in solidarity with the poor; our attitude
must be one of concern, not indifference. But this is the
beginning of our consideration of the Christian’s duty toward
the poor, not the end. How are we to live out this concern in the
twenty-first century, in a modern, urbanized society such as
ours? And what roles ought individual Christians, nonprofit
agencies, and the public policies of government play? The rest
of the chapter seeks to give some guidance in answering these
questions. Careful thinking and important distinctions are
needed.
The Causes of Poverty
I vividly recall one day back when I was active in Michigan
politics and attended a picnic put on by the United Auto
Workers for its members. I met a man who had worked for an
auto supply firm that specialized in making chrome-plated
bumpers for large Lincoln Continentals. His layoff was due to a
dwindling demand for these bumpers. He looked thoroughly
depressed and plaintively asked me when I thought the economy
would pick up, so he would be called back to work. I mumbled
something about not knowing but certainly hoping it would be
soon. What I could not bring myself to tell him was that deep in
my heart I suspected he would never be called back. He was
caught in two trends: a movement to obtain cheaper car parts
from overseas and a style change away from chrome-plated
bumpers.
“Is not this the kind of fasting I have chosen: . . . ?
Is it not to share your food with the hungry and to provide
the poor wanderer with shelter—when you see the naked, to
clothe him,
and not to turn away from your own flesh and blood?”
—ISAIAH, OLD TESTAMENT PROPHET
(ISA. 58: 6–7)
“Suppose a brother or sister is without clothes and daily food. If
one of you says to them, ‘Go in peace; keep warm and well fed,’
but does nothing about their physical needs, what good is it? In
the same way, faith by itself, if it is not accompanied by action,
is dead.”
—JAMES, APOSTLE AND BROTHER
OF JESUS (JAMES 2: 15–17 TNIV)
We need to recognize that many are poor or threatened with
poverty because of forces they cannot control. The man I met at
the United Auto Workers picnic was affected by forces that
were not of his making. As in the case of my friend Patti, noted
earlier in this chapter, women may find themselves with young
children and no husband or father in the house due to unfaithful,
irresponsible husbands. Or incapacitating illnesses or accidents
can strike a family, leaving it with huge debts and no one able
to work.
But honesty also forces me to acknowledge that poverty is often
due to certain self-defeating actions and decisions. Numbers tell
a powerful story. Of all American families headed by a married
couple, only 5 percent live below the poverty line. Of those
headed by a man without a wife, 13 percent live below the
poverty line; of those headed by a woman without a husband,
the number jumps to 29 percent. Of those who have not
completed high school, 24 percent live in poverty, while of
those who have completed high school, even without any
college, the number drops to 11 percent. These numbers
demonstrate that certain patterns of behavior often lie at the
root of poverty.4 In the United States today, one who completes
high school, does not have a child out of wedlock, marries, and
remains married is very unlikely to be poor.
I hesitated to write the previous sentence because there is a
danger I will be misunderstood. But honesty compelled me to
write it. The fact is that many who are poor in the United States
today are poor because of their own self-defeating, sometimes
sinful choices.
Many people—including many evangelicals—use this basic fact
to conclude that the poor suffer poverty due to their own short-
comings. Thus they have no responsibility to help them. The old
slogan, “I fight poverty, I work,” sums up this attitude. It
implies that if only the poor would exercise some gumption and
get out and work, they would no longer be poor. Surely the
Bible doesn’t demand that we be concerned for those who are
poor due to their dropping out of high school, having children
out of wedlock, using drugs, lacking ambition, or engaging in
other forms of irresponsible, sinful behavior, does it? They are
only reaping what they have sown.
Admittedly, many are poor because of sinful or ill advised
choices they have made. They may have been sexually
promiscuous. They may have dabbled with illicit drugs or
shoplifted and have a criminal record. Or they may have given
up and left high school when things became difficult.
“There but for the grace of God, go I,” however is the
appropriate response. Who of us is to say that, given different
circumstances, a different family situation, a different
neighborhood, or a different set of friends, we might not have
made the same choices? Our God is a forgiving God, whose
grace can cover the worst sins. People who have acknowledged
they did wrong, are now trying to make up for past mistakes,
and are seeking to do what is right deserve our support and
help. Even people who out of discouragement left high school
or who out of anger and frustration have given up on trying to
find a job and to move ahead are still image bearers of almighty
God. If we—perhaps through a tough, demanding love—can
encourage and challenge them to become the productive people
God desires of all his image bearers, we are indeed doing God’s
work. We are truly modeling our Savior who has done as much
for all of us.
It is also important to recall that in today’s world any woman
who bears a child outside of marriage had another decision she
could have made: She could have aborted that child. Every
unmarried mother—even though she made a wrong choice about
sex outside of marriage—made the right choice in choosing life
over abortion. Surely—as I wrote in the previous chapter—we
who as Christians oppose abortion ought to be standing first in
line to offer help to those girls and women who chose life; we
ought to support public policies that will offer them help.
In the face of poverty, what response does the Bible demand of
us? Concern and proffered help. But this does not yet tell us
how we are to respond. This is what I consider in the next two
sections. First, we will look at some basic insights that can
guide us as we seek to live out a truly biblical concern for the
poor and needy among us. Then we will consider some more
concrete applications of those principles.
The Bible, Poverty, and Public Policy: Insights
In the 1960s President Lyndon B. Johnson declared a War on
Poverty and, as some commentators put it at the time, “Poverty
won.” They had a point. Poverty rates barely budged.
Discouragement quickly set in.
How ought we as Christians to react? Does our faith speak to
what public policies our government should pursue in relation
to the 37 million of our fellow Americans living in poverty
today?What guidance can the Bible give us as we seek to work
against the destructive forces of poverty? There are no simple
answers to these questions. The Old Testament Israelites were
given many detailed instructions concerning the poor. But theirs
was a rural, tribal society, and we live in a largely urban,
industrial society that is shifting into a knowledge-based
society. We cannot in wooden fashion apply the specific
instructions given by God to the Israelites to our society today.
But from the principles we considered in earlier chapters, we
can uncover some basic insights to apply in our efforts to
respond to the needs of the poor among us.
Government Is a Partial, but Not a Complete Answer
Some people think government is the complete answer to the
problem of poverty; others think government is never the
answer. Both are wrong . . . and both are right. This is a case
where a response rooted in Scripture leads us to a both-and, not
an either-or, response. While the political right has not looked
to government for help quickly enough, the political left has too
quickly looked to government for help. It is wrong for
Christians who seek to respond to the Bible’s call to care for the
poor to shove off all responsibility onto government—or to
ignore government as a God-instituted means to obtain greater
justice for the poor.
There is much that we as individuals and as members of our
churches and of a variety of nongovernmental agencies can—
and should—do to help the poor. As I will explain shortly, I
have stood in awe of dedicated Christian saints who minister to
the homeless, the drug-dependent, the poor, the incarcerated,
and others of the least of these who live in great need. In doing
so, they are ministering to Jesus Christ himself.
However, government and its public policies also have a role to
play in alleviating poverty. Often individual and other private
efforts to help the poor, as important as they are, can have only
a limited impact on poverty. We live in an urbanized,
industrialized society—which also means we live in an
interdependent society. Indeed, with globalization we live in an
interdependent world. People lose their jobs when a
manufacturer moves its factory overseas to take advantage of
cheaper labor costs. Interest rates go up, and suddenly what had
been a struggle to make house payments or keep up with credit-
card debt becomes a seemingly impossible task. Or individuals
suddenly learn the pensions for which they had worked for more
than thirty years are no longer available due to the bankruptcy
of their company. We no longer live on largely self-sufficient
farms where we could grow most of our own food and spin and
sew most of our own clothes. We live in an interdependent
world. This means we are vulnerable. We all need government
to protect us from economic adversities that can come with
interdependence.
“Lord, we know that you’ll be comin’ through this line today.
So help us to treat you well.”5
—PRAYER OF A FOOD-LINE VOLUNTEER
In addition, with its taxing powers, government has money
available that dwarfs that of individuals and all but a few
nongovernmental agencies. When seeking to help 37 million
people living in poverty and millions more living on the edge of
poverty, government often is the only institution with the
financial resources to make a difference in millions of lives.
Also, sometimes public policies themselves have added to the
problem of poverty. Policies may encourage out-of-wedlock
births, fail effectively to enforce fathers’ support payments for
their children, or encourage easy divorce. When public policies
are a part of the problem, changing those policies must be a part
of the solution.
Antipoverty Programs as Justice
The consistent call of the Bible is that the poor be treated with
justice—not that money simply be taken from those with more
and given to those with less. As seen in chapter 3, justice can
best be defined in terms of giving all people their due. the poor
are not treated justly, government is not fulfilling its God-given
task. All people deserve an opportunity through work to provide
for themselves and their families, to honor their Creator, and to
develop and use their gifts and abilities. This is their due. When
people wish to contribute to society and support themselves and
their families by working but no work is available, or when
even full-time wages are so low that they cannot be self-
supporting, then justice is not being done.
In a just society, public policies ought to protect the poor from
those who would prey upon them and take advantage of them.
One thinks of unscrupulous landlords who charge exorbitant
rents for dilapidated housing that is as unsafe as it is
depressing—simply because the poor have no other choice or
have little bargaining power.
But justice also requires that public policies designed to help
the poor ought not to degenerate into paternalism, where one
person is made so dependent on another that he or she is no
longer the willing, contributing, creative person God intends all
of his image bearers to be. To give help to the poor without any
expectation that they live up to their responsibilities is not the
biblical way. It is not just.
In Leviticus 19: 9–10 and 23:22, God commanded the Israelites
not to harvest their fields to the very edge or to go through their
vineyards a second time to pick all the grapes. Instead, they
were to leave for the poor the grain on the edges of their fields
and any grapes remaining after their first harvest. There are two
principles we can gain from this. First, we must, in solidarity
with the poor, make provision for them, so that they too can
live. Second, the poor have a responsibility to help themselves.
The command was not to give a portion of one’s harvest to the
poor. No, the poor needed to go out in the fields and work hard
to glean that which had been left for them.
Similarly both our private actions and public policies should
aim to help the poor, but those efforts should normally aim to
enable the poor to provide for themselves, not to give handouts
with no corresponding responsibilities. Justice speaks the
language of opportunities and empowerment. It knows little of
handouts with no corresponding responsibilities.
Using Civil Society’s Organizations
Several years ago I conducted a thorough study of welfare-to-
work programs in four large cities. What started out as an
academic research project ended up touching me deeply. I met
many dedicated Christians who had given up more promising
careers to offer help to the most needy: the homeless, the school
dropouts, the unmarried mothers, the drug abusers, and those
simply caught up in the confusing competition for gainful
employment. I interviewed a young man who had left seminary
to work among homeless men in Chicago, for an evangelical
agency. I asked him what motivated him to do this work. He
responded simply, “God has called me to do this work; this is
what I’m supposed to be doing.” Then he added that his work
also gave him joy: “But there are also challenging aspects of the
job I enjoy. These are good folks;they will be good employees. I
enjoy working with them.”
I also interviewed several people to whom the Christian
agencies had offered help. They often recognized the Christian
motivations of the staff and volunteers. One said, “It was a
Christian program; it was encouraging. It helped get me back on
my feet and on the right track. It helped turn me into the mature
woman that I am now. They helped a lot.” Another testified:
“They behaved like Christ. They were gentle, kind, giving, did
not discriminate. They gave me a mentor;they taught me
spiritually.” I repeatedly found myself standing in awe of
present-day saints who were doing God’s work among the poor
and dispossessed of our society.
This brings us straight back to civil society and the principle of
subsidiarity first discussed in chapter 5. Public policies ought
never to undercut or displace the work being done by civil -
society organizations:community-based, nonprofit, and faith-
based programs working to help the poor. Public policies should
recognize and build upon the work they are already doing. Often
the most effective approach for government to take is to work in
partnership with local agencies that make up civil society,
offering them referrals, financial help, and other supports.
The Bible, Poverty, and Public Policy: Applications
At many points in this book I have stressed that applying even
clear biblical principles to concrete situations is a challenge.
This is also the case in combating poverty. Even so, in this
section I consider two concrete areas as examples of how we
can think through specific poverty-related issues in light of
biblical principles.
Working for a Stable, Jobs-Producing Economy
The most effective antipoverty public policies may very well be
those aimed at creating a healthy, jobs-producing economy.
Often people do not see such policies as being “antipoverty” at
all. It is true that such policies—when effective—provide
economic opportunities and even wealth for the middle class
and the affluent. But they also lift many households out of
poverty and prevent many people on the economic fringes from
sinking into poverty. During the 1990s, generally marked by
high employment and low inflation, many people were able to
move out of poverty. From 1994 to 2000 the percent-age of
households under the poverty line dropped from 15 percent to
11 percent. This means there were 7 million fewer people living
in poverty in 2000 than in 1993.6
But what public policies lead to economic prosperity? Here one
quickly gets into very technical, complex issues of taxes,
spending, and interest rates that only a bureaucrat at the Federal
Reserve Board can love! This is not the place to delve into
them. Most of us will always have a difficult time fully
understanding them and applying our Christian principles to
them.
But one thing is clear: These technical, esoteric issues and the
economic results that flow from them are vitally important to
the opportunities and challenges the poor face. When we as
Christian citizens evaluate the president, Congress, and other
national leaders and when we decide how to cast our votes, we
ought to ask ourselves how well our leaders are handling the
national economy. And we should not first of all ask how well
we personally are doing economically. Rather, we should ask
how well the economy is doing in offering greater economic
opportunities to those near the bottom of the ladder.
Welfare
When it comes to antipoverty public policies, the most
frequently debated topic is cash welfare payments to the poor.
Many, including many evangelicals, have harshly criticized
them. Here again we need to do some clear thinking.
The major program in this category today is Temporary
Assistance for Needy Families (TANF), enacted by the federal
government. TANF seeks to provide cash assistance to families
(usually, but not always, mothers with children) that are
economically destitute. Most of the money comes from the
federal government, which the states supplement with their own
funds. State governments administer the program and set its
standards and practices. Thus they vary from one state to
another. The TANF program also has certain work and training
requirements designed to move those receiving its benefits to
full-time employment. In this effort the program provides some
supportive help, such as provisions for transportation to jobs
and child care. There is a lifetime five-year (or less in some
states) limit on being able to receive TANF benefits.
This program continues to be controversial. Some are convinced
that the cash payments are too low to maintain families with
even minimal necessities, that the five-year time limit is
arbitrary and harsh for those who simply cannot find
employment, that supportive child care and transportation
services are inadequate, and that the training programs are often
poorly run and do not lead to jobs. These advocates want higher
payments and more work-training programs with generous
child-care and transportation provisions. Others, however, are
convinced that the program wastes money on people who
manipulate the system to avoid work and encourages out-of-
wedlock births. They work to cut the levels of cash payments,
impose stricter qualifications for help, and compel all recipients
to take part in work and training programs. They think a five-
year limit on help is too long, encouraging an unhealthy
dependency.
Where ought we as Christians to come down in this debate? As
I’ve said, our Lord requires us to show mercy and offer help to
those in need. This would lead us to offer more generous help to
those in need. But our faith also speaks to a sense of
responsibility and of there being consequences for the moral
choices we make. Thus some Christians fear that more financial
assistance with fewer time limits or work requirements may
reward and encourage irresponsible behavior—and, in
comparison, penalize those who come from equally trying
circumstances but stayed in school, avoided premarital sex, and
other ways acted responsibly.
As with many specific, concrete public-policy issues, there is no
one obviously Christian answer. Almost all rightly agree that
government sometimes needs to provide financial assistance to
the poor. When it does so, there are, from a Christian
perspective, two important considerations. As we saw earlier,
justice should be at the heart of government’s efforts to help the
poor. This means it should do all it can to avoid creating an
unhealthy dependence and rewarding ongoing self-defeating
behavior. Instead, it should aim to enable the poor to support
themselves through gainful employment.
Thus the welfare system—when it is working within the bounds
set by Christian principles—is a two-way street of fulfilled
obligations. Society has an obligation to help and support those
who are in desperate need. Justice and solidarity demand this.
The help given, however, should not consist simply of financial
handouts; this creates a dependency and encourages a passivity
that undercuts what God has created us to be. The help should
enable the poor to overcome the challenges they face, obtain the
training and employment they need, and avoid self-defeating
attitudes and behavior. But the street runs both ways. The poor
who receive help also have obligations. They have an obligation
to take advantage of the offered training. They need to work to
change the patterns of behavior and the attitudes that are
holding them back. They need to accept employment that is
offered, even when it is far from an ideal job.
Public policy should insist on this sort of mutual,
complementary obligation. To offer help to the poor without
expecting anything from them in return is wrong. But it is
equally wrong to expect the poor to strengthen their behaviors,
attitudes, and work skills without offering them desperately
needed assistance.
Does this mean that public policy should offer the poor a year
of work-skills training or limit such training to only six weeks?
Should the poor be limited to five years of assistance or should
it be only three years—or should it be for unlimited years as
long as there are needs? When considering such questions,
equally sincere Christians searching the Bible and their God-
directed consciences with equal fervor may draw somewhat
different conclusions. The important thing is that all Christians
act out of a genuine, heartfelt solidarity with the poor, seeking
their good as God’s image bearers with something to contribute
to society. We ought not simply look for a way to save on taxes
or to feel superior because we are not like “one of them.”
A second important consideration for Christian citizens to keep
in mind as they seek conscientiously to influence welfare
policies is to work with and build upon civil-society
institutions. Government policies ought not to undercut or take
over for entities that are already working to help the poor.
Instead, government ought to affirm, help, and strengthen them
in their efforts. This means, first of all, that welfare policies
should do all they can to encourage and strengthen stable, two-
parent families. Stable, faithful marriages are one of the best
antipoverty devices available, as demonstrated by the numbers I
cited earlier in this chapter. Public policies that appropriately
encourage such marriages and discourage divorce and out-of-
wedlock births are effective weapons in efforts to overcome
poverty.
One also needs to appreciate the value of non financial
assistance—working toward changed attitudes and patterns of
behavior, working out difficult child-care or transportation
problems, or convincing people that they are individuals of
value and with something important to offer to their children
and to society. Government agencies are not very good at
offering this sort of assistance, while Christian agencies are.
The importance of civil society and the principle of subsidiarity
suggest that government ought to turn to Christian and other
faith-based and nonprofit agencies to provide much of the
actual, hands-on service to the poor. Many are already doing a
fine job. The greatest need often is to support and strengthen
them in their efforts—and surely not to try to take over for
them.
Conclusion
“Be open-handed toward the poor and needy.” I chose this
phrase from Deuteronomy 15:11 as the subtitle of this chapter. I
have not tried to present neat, simple answers that define
exactly what this command means for us today. But Scripture
and the principles it teaches—when combined with what we
know about poverty in the United States today—set down
guideposts that point to answers. Through careful thinking,
discussion with fellow believers, and much prayer we can find
answers that will honor this charge our Lord has given us.
Read: Kraft & Furlong: Chapters 9
Chapter 9 Welfare and Social Security Policy
Struggling to make ends meet. Kansas City chef Howard Hanna
speaks during an event to introduce the Raise the Wage Act in
the Rayburn Reception Room at the U.S. Capitol on January 16,
2019, in Washington, D.C. Hanna pays the employees in his
restaurants $15 an hour. The proposed legislation, which would
gradually raise the minimum wage to $15 by 2024, is unlikely to
pass in the Republican-controlled Senate.
Poverty
The United States has always had different viewpoints regarding
poverty. The American cultural and social perspective that
encourages individualism and promotes equality of opportunity
leads to a tendency to blame the poor for their own
circumstances. On the other hand, some say there really is
inequality of opportunity that prevents many from increasing
their standard of living. Hurricane Katrina and its aftermath, the
recent economic recessions and slow recovery, and stories
regarding college students going hungry highlight persistent
poverty and inequality and often draw America’s attentio n. This
may be particularly problematic for those considered to be in
extreme or deep poverty. Deep poverty is defined as a
household case income less than half of the federal poverty
amount. Over 6 percent of the population lives under these
conditions.3
There are a number of different ways to examine poverty in the
United States, starting with the official definition. As we noted
in chapter 5, for 2018, the federal government placed a family
of four below the poverty line if its annual income was less than
$25,100 in the forty-eight contiguous states. This rate is
adjusted based on factors such as the number of people in a
family, the composition of a family, and inflation from year to
year. As we stated earlier, in 2017, nearly forty million people
were considered to be impoverished; however, this was down
from forty-six million in 2012.4 Others look at poverty from an
income distribution perspective: the more unequal the
distribution of income, the greater the potential poverty
problem. Still others examine poverty in terms of demographic
characteristics such as race, gender, and age (see Figure 9-1).
As an issue, poverty in the United States came to a head during
the mid-1960s when President Lyndon Johnson declared the
War on Poverty. The government initiated a number of
programs to deal with the problem. Between 1965 and 1973, the
poverty rate fell from 17.3 percent to 11.1 percent, and it
appeared that the nation was winning the war. Unfortunately,
the United States has not achieved a poverty rate this low since
1973. The rate has improved significantly in certain
demographic categories; for example, the elderly and intact
minority families have made definite advances. Single mothers,
children, and poorly educated young people, however, still have
a hard time rising out of poverty.
Some statistics concerning children in poverty help to drive this
point home. In 2007, 18 percent of all children in the United
States were poor, and this percentage increased to 21.8 in 2012,
and decreased to 17.5 percent in 2017. Children make up only
25 percent of the population, but they comprise 33 percent of
the nation’s poor. Moreover, minority populations in the United
States also suffer higher poverty rates than whites,5 which may
indicate something about the weaknesses of government
programs to reduce poverty as well as those aimed at improving
the status of minorities. Figure 9-2 shows the United States’
poverty rate by age over the past fifty years.
Many look at poverty as an income distribution problem. In
other words, a large number of people are living on limited
resources, while a smaller percentage of people earn a large
proportion of the nation’s combined income. Economists often
use the Gini coefficient (see Figure 9-3) as a way of
demonstrating a nation’s income equality and inequality.
Income equality is represented by a forty-five-degree line, on
which each percentage of the population is making the same
percentage of the income. As a curve deviates away from the
forty-five-degree line, it shows an increase in income
inequality. The implicit interpretation of the curve is that if a
few people are making a large percentage of the income, more
people are put at risk of poverty. Based on 2017 data from the
U.S. Census Bureau, the richest 20 percent of the population
makes 51.5 percent of all of the income in the United States,
and the poorest 20 percent makes only 3.5 percent. Another way
to state this is that the top quintile is making more than the
other 80 percent of the population (see Table 9-1). This gap is
even more pronounced when you look at the top 5 percent,
which earns more than 22 percent of all income. Some analysts
and policymakers have begun to look at the poverty problem in
a way they believe will change the debate on the issue.
Although levels of poverty, as defined by the Census Bureau,
have been decreasing, as we noted earlier, in 2010 they reached
the highest level in over fifty years, in part because of the
prolonged economic downturn and high levels of unemployment
or underemployment (working only part-time or for low wages).
a The distribution of income in the United States is even more
unequal than the data in the table suggest. If one examines the
gain in income over the past thirty years of the top 10 percent of
Americans, one discovers that most of the gain went to the top 1
percent of taxpayers, and 60 percent of the gains of the top 1
percent went to the top 0.1 percent. The disparity between the
very rich and the average American has been growing
significantly in recent years. For a commentary about the
erosion of equality in income distribution over the past several
decades, see Paul Krugman, “We Are the 99.9%,” New York
Times, November 24, 2011.
Even before these recent changes, some data can indicate that
the poor increasingly face real challenges. For example, during
the slow economic recovery, the U.S. Conference of Mayors
announced in 2013 that almost all cities reported an increase in
emergency food assistance over the past year. Similar findings
were reported for homelessness.6 While the Census Bureau has
considered revising its definition of poverty, no real changes
occurred until 2011, when the bureau introduced a
supplementary measure of poverty. While the bureau will
continue to use the “official” measure, it will also publish this
supplementary measure that draws upon the recommendations of
the 1995 National Academy of Sciences report.7 In essence, the
new measure takes into account a fuller range of variables
related to both revenue and expenditures. Changing definitions
can dramatically affect poverty statistics, which is probably
why this supplemental measure will not be used to determine
eligibility for programs.
The new measure of poverty also could significantly affect the
political stakes. As an example, based on analyses using some
different definitions of poverty, the income threshold in 2017
would be $27,085, or nearly $2,500 greater than the stated rate.
Thus use of a different definition of poverty could increase the
poverty rate substantially.8 Such changes in the poverty-line
calculations may be necessary because the original poverty line
is based on a number of assumptions made in the mid-1960s that
may no longer be valid. In addition, the poverty level is the
same for the lower forty-eight states and does not take into
consideration what are often substantial cost-of-living
differentials across the country. The supplemental measure
discussed earlier represents the first major effort to reconsider
this measure. It is probably safe to say that even the proposed
increase in the income threshold and the resulting additional
assistance may not be sufficient to cover a family’s expenses —
housing, food, clothing, child and medical care, and everything
else.9
On the other hand, a number of pundits and politicians,
particularly conservatives, have argued that perhaps poverty
may not be what it once was, and that even the poor enjoy a
better quality of life than was the case decades ago. For
example, they say that a large proportion of the population may
not be paying any income taxes at all. Their claim is that
everyone, even the poor, should be helping the nation address
its fiscal challenges, and that they can afford to do so because
they are living with what might be called luxury items in
comparison to how many families lived in the 1960s.10
Another way to examine poverty is from an ideological
perspective, or what some might say are the root causes of
poverty. Is poverty due to broad economic circumstances or to
individual behavior and choices not to work? Liberals and
conservatives have different ideas about why poverty exists and
consequently make different proposals for addressing the
problem. Conservatives see poverty in part as a personal choice;
they believe that little poverty exists in the United States that is
involuntary. Some may also believe in the culture of poverty,
meaning that those brought up in poverty learn how to be poor
and work the current system to their benefit, and that they
choose to remain poor as adults. In addition, conservatives tend
to blame government programs for encouraging people to
remain poor, in part by not requiring any kind of responsibility
in exchange for received benefits. Liberals, on the other hand,
see poverty as a problem brought on by economic and social
conditions over which individuals have little or no control.
Liberals recognize that not everyone has the same opportunity
for quality education or job training, and they favor government
intervention to help equalize the playing field. They believe as
well that the high number of minorities who are poor indicates
that discrimination also contributes to poverty.
As discussed in chapter 6, equity is one of the criteria used to
analyze problems or policies, but the word can have multiple
meanings. In the case of poverty, should the concern be whether
the processes by which people gain an education and jobs, and
thus a certain income, are fair, and thus whether the nation’s
overall distribution of income is fair? Conservatives tend to
think this way about income distribution and poverty. On the
other hand, liberals would ask whether equity means moving
toward a more equal distribution of resources in the nation.
In 2011 and 2012, the Occupy Wall Street and related
movements tended to emphasize the latter perspective. That is,
supporters viewed the current income distribution between the
top 1 percent of the population and the remaining 99 percent as
unfair or inequitable. The strong support for Senator Bernie
Sanders during the Democratic primaries, particularly among
college students, was built in part on the continuing level of
inequality in the U.S. economy. Moreover, analysts pointed to
new studies that showed significant constraints on social
mobility—that is, on the ability of people to rise from the lower
income levels. Recent research indicates that the United States
now provides less mobility of this kind than do comparable
nations. For example, 42 percent of American men raised in the
bottom fifth of the income distribution remain there in
adulthood. This persistent disadvantage is higher than in
Denmark (where it is 25 percent) and Britain (where it is 30
percent).11 Some saw the rise and eventual victory of the
Trump candidacy in 2016 as linked strongly to the perception
and perhaps the reality of economic stagnation and the “left
behind” white working class.12 Even with such data, of course,
liberals and conservatives might disagree about whether
inequality of this kind is acceptable or not. As we have argued
throughout the book, students of public policy know that,
depending on how one sees the causes of a problem and defines
the evaluative criteria, various alternatives to address it will
seem more or less appealing. Some will conclude that the
United States continues to offer a reasonable degree of social
and income mobility and thus the situation is fair, while others
will interpret it as showing an unacceptable degree of
inequality.
Many of the social programs developed throughout U.S. history
have attempted to deal with the poverty issue from different
perspectives. Social Security, for example, was developed
specifically to address poverty among the elderly. By this
measure, the program has been somewhat successful. According
to an analysis conducted by the Center on Budget and Policy
Priorities using U.S. Census Bureau data, 39.2 percent of the
elderly would be in poverty without Social Security benefits.
With these benefits, the number in poverty drops to 9.2
percent.13
One of the goals of the food stamp program is at least to address
issues of severe hunger that could occur as a result of poverty.
The Earned Income Tax Credit (discussed later in this chapter)
supplements wages of the working poor to lift recipients out of
poverty. Programs such as AFDC and the newer TANF have
attempted to deal with the poverty of all individuals who
happen to fall below a certain income level or who have no
income at all.
Social Security
Social Security is the single largest federal government program
today, providing money for retired workers, their beneficiaries,
and workers with disabilities. While almost everyone these days
is covered by Social Security, some federal, state, and local
government employees and certain agricultural and domestic
workers are not. For beneficiaries over the age of sixty-five,
Social Security provides the largest component of their total
income. The presidential budget request for Social Security for
fiscal year 2019 was $1.047 trillion,14 which provides some
idea of the size and budgetary impact of the program. Social
Security was enacted in 1935 during the New Deal period as a
way to ensure that certain segments of society were guaranteed
an income after their working years. The perception of Social
Security both at its birth and today is that it is a social
insurance program. Other examples of such programs are
unemployment insurance and workers’ compensation. With
these programs, citizens pay into a fund from which they expect
to receive money back when they are eligible. Because of this
designation, the public has always looked upon Social Security
as more acceptable than other government welfare programs.
Social Security is regarded not as a government handout but as
money returned based on an individual’s contribution or
investment. It should be noted, however, that in most cases a
Social Security recipient eventually receives more money than
he or she contributed as a worker.
Social Security is typically classified as a redistributive policy
program. Money is being redistributed across generations —that
is, from workers to nonworkers or young to old—rather than
between economic classes. Many people believe that their
personal contributions are going into a benefits account to be
paid out upon retirement, but that is a misconception. Social
Security is a pay-as-you-go program; someone’s current
contributions are paying for someone else’s current benefits.
The program is also considered an entitlement. That is, if a
person meets any of the eligibility requirements for Social
Security, he or she is entitled to its benefits. The program is
typically associated with payments to the elderly, and in fact
this is the system’s largest outlay, but other people are eligible
as well.
Who is entitled to Social Security? Qualifying for the program
is based partially on the number of years one has worked and
contributed to the program. As individuals work, they earn
“credits” toward Social Security. They can earn a maximum of
four credits a year, and most people need forty credits to be
eligible for benefits. Benefits fall into five major categor ies:
Retirement: Full benefits are currently provided at age sixty-
six plus a few months. The minimum age will gradually increase
to sixty-seven for those born in 1960 or later.
Disability: Benefits are provided to people who have enough
credits and have a physical or mental condition that prevents
them from doing “substantial” work for a year or more.
Family: If an individual is receiving benefits, certain family
members such as a spouse or children may also be eligible for
benefits.
Survivor: When individuals who have accumulated enough
credits die, certain family members—for example, a spouse
aged sixty or older—may be eligible for benefits.
Medicare: Part A (hospital insurance) is paid through part of
the Social Security tax. Typically, if individuals are eligible for
Social Security, they also qualify for Medicare.
The Social Security Administration also administers the
Supplemental Security Income benefits program for low -income
individuals who are at least sixty-five years old or disabled. The
program is not financed through Social Security taxes.
The Social Security program has two major goals, and in some
ways, these goals conflict with each other. First, the level of
benefits individuals receive is related to the amount they put
into the system. In other words, the greater their contributions,
the higher their benefits. Second, the program was supposed to
ensure that lower-income individuals had at least minimal
financial protection (Derthick 1979; Light 1995). Both goals are
included in the benefits formula, and although the rich receive
higher total benefits, the amounts are not proportionally higher.
The poor, on the other hand, get a much greater return on their
investment.
Most of Social Security is financed by a specific tax on income.
The rate of this tax has remained stable since 1990, with no
significant increases since 1985. Currently, the government
taxes individuals and their employers 6.2 percent for Social
Security and an additional 1.45 percent for Medicare, for a total
of 7.65 percent of their income. Theoretically, this tax is
earmarked, meaning the money collected goes specifically
toward the benefits; these taxes also are the only source for
these benefits. In reality, the federal government collects more
revenue through Social Security taxes than it is currently
spending to pay benefits. The government uses the excess
dollars for various purposes—most commonly to reduce the size
of the federal deficit.
The Social Security tax is capped at an annual income of
$132,900 (the 2019 amount, which normally increases each year
based on inflation) for a maximum contribution total of $8,240
per year. If an individual’s income is greater than $132,900, he
or she pays the maximum tax and no more for that year. In other
words, a person making $1 million or $10 million pays the same
amount of Social Security taxes as a person making $132,900.
And everyone is paying the same rate of tax, although self-
employed individuals pay twice the 6.2 percent rate since they
must contribute as both employees and employers. As discussed
in chapter 7, this formula makes the Social Security tax
regressive. Is the Social Security tax fair in light of some of the
considerations on tax policy that we introduced in chapter 7?
Keep in mind that limits are also imposed on the amount of
money that each person can receive each month from the
program. Some progressives have argued that one way to better
ensure the long-term stability of Social Security is to raise the
maximum income level or to not put a cap on it at all. This
would represent a Social Security tax increase on upper-income
individuals, but it would generate additional revenue.
Social Security is often referred to as the political “third rail”
because of the potential political danger associated with
attempts to reform it, a reference to the subway that receives its
power from this rail. Politicians foolish enough to touch the
issue of Social Security reform will likely find themselves voted
out of office—in other words, “fried.” Whenever policymakers
suggest changes, intense debate arises, and the proposals often
anger the people who are currently benefiting from the program
or expect to benefit in the near future. From a political
standpoint, there are two closely related reasons for the
controversial nature of any proposal to change the Social
Security system. First, the majority of the recipients are senior
citizens, who are demographically the people most likely to
vote in the United States. Politicians are necessarily wary about
crossing such a politically active group. Second, the power of
AARP, the major interest group representing the concerns of
seniors, is formidable. AARP claims a membership of more than
thirty-seven million people, and it is one of the most influential
interest groups in the nation. It also has a large professional
staff involved in lobbying. With these political resources, it
should be clear why efforts to make major reforms to Social
Security can be challenging. The box “Steps to Analysis: AARP
as an Advocacy Group” suggests some ways to become familiar
with the group’s activities. Nevertheless, almost everyone
believes that something must be done to reform Social Security,
because it is not sustainable under its current model.
Social Security’s Changing Demographics
The Social Security program, and the number of people eligible
for it, has changed dramatically since its inception in 1935. In
1945, the program had fewer than five million beneficiaries, but
by 2019, the number had grown to more than sixty-eight
million.15 The reason for this increase is simple: life
expectancy is higher today than it was fifty years ago. As more
people live beyond the age of sixty-five, larger numbers are
entitled to Social Security benefits. What this has meant is that
Social Security, as a program, has grown enormously since the
New Deal years and, by all estimates, will continue to grow
well into the future. Analysts are especially worried about the
impending retirement of the baby boom generation. The first
wave of Americans born between 1946 and 1964 started retiring
in 2011.
Social Security is obviously larger now in terms of total dollars.
But it also makes up a larger percentage of government
expenditures; it grew from about 14 percent of the federal
budget in 1969 to a projected 24 percent in 2019.16 More
problematic for Social Security is that while the number of
beneficiaries is growing larger, the number of workers
contributing to the program is becoming smaller, leaving fewer
workers per beneficiary. In 2017, the ratio of workers to retirees
was approximately 2.8:1; that is, 2.8 workers were supporting
each recipient. Compare this to 1960, when the ratio was 5.1:1,
or to 1950, when the ratio was 16.5:1, and the problem becomes
apparent. Projected estimates indicate that with no change to
Social Security, by 2033 each recipient will be supported by
only 2.2 workers,17 when the typical 2019 college graduate will
be only in midcareer. The graying of the U.S. population is
actually quite staggering when examined over time. Figure 9-4
shows the ratio of workers to Social Security beneficiaries since
1955 and the dramatic decrease in that ratio. Because of these
changing demographics, projections suggest that the amount of
revenue coming into the Social Security system will finance
only 75 percent of the benefits. For younger workers today to
receive full benefits, it might be necessary to increase the
withholding tax. This issue will affect people not only in the
long term upon their retirement but also in the short term if
Social Security taxes go up. Another option that has been
proposed primarily by Republicans would be to continue to
raise the retirement age up to seventy years. Would these moves
be fair and equitable? If not, what are the alternatives to
increasing the Social Security tax?
Problems with Social Security
Beneficiaries and policymakers have acknowledged for years
that even though the government has addressed some of its
problems, Social Security as it currently exists has a number of
flaws. In 2000, Congress and the president changed the rule
regarding the employment of retired workers and how it affects
their Social Security benefits. Under the old rules, beneficiaries
who chose to work to supplement their income would lose part
of their Social Security benefits if they made more than a
certain amount of money during the year. With the change, all
workers sixty-six and over (the full-benefit or normal retirement
age for those born between 1943 and 1954) can earn as much as
they want without forfeiting part of their Social Security
benefits. Naturally, this change in the law benefits only those
senior citizens who continue to work.
Another Social Security issue the government addressed is the
fixed retirement age. Historically, the official age for collecting
Social Security benefits was sixty-five, but changes to the law
have gradually raised the age of eligibility to between sixty-six
and sixty-seven, depending on the year of birth, in recognition
of the population’s longer life expectancy and people’s
tendency to continue to work.18 Raising the age provides two
major benefits for Social Security’s solvency. First, if people
cannot receive full benefits until sixty-seven, they will not
receive as much money over their lifetimes. Second, if they
continue to work, they will also continue to contribute to the
program.
Increasing the retirement age raises other issues, however, such
as equity. Is it fair to the members of the current working
generation to demand that they work until age sixty-seven when
their parents or grandparents could retire at sixty-five? What
about quality of life? If people cannot retire until relatively late
in life, they may be less able to enjoy their retirement years
because of illness or physical limitations. Some social
commentators have already raised concerns about the amount of
time people spend working in American society, compared to
most European countries. In addition, a policy that encourages
later retirement may exacerbate problems affecting family life
and employment opportunities for younger people. A third
major problem with Social Security is the potential gender
inequity built into the system. When Social Security was
enacted, few married women worked outside the home, but labor
statistics have changed dramatically: in 2016, nearly 70 percent
did.19 Why is this a concern? First, women generally earn about
19.5 percent less money than men,20 which will affect their
benefits upon retirement. Second, women tend to stay at home
for parts of their career to raise families, which again will affect
benefits. Women also tend to outlive men by a few years, which
can be a further financial disadvantage.
Financing Social Security
Obviously, the biggest problem with Social Security and the one
that gets the most attention is the financing of the program and
the projections showing the system running out of money. The
strong economy during the 1990s partially improved the
situation of Social Security by increasing its solvency. Recent
projections by the Social Security Administration, however,
show that benefits and expenses are more than the taxes
collected by the program. In 2018, Social Security began to
draw down on the trust fund reserves in order to pay some of
the benefits.21 By 2033, the trust funds, which are in reality a
promise to pay, will be depleted, and the revenue coming into
the program will pay only about 75 percent of the benefits that
are due to retirees and other recipients.22 These kinds of
numbers spark concern among many younger Americans, who
say they do not believe that Social Security will be around when
they are eligible to collect it after they paid a lifetime of taxes
into the system.
Solution
s to financing Social Security are particularly problematic from
a political perspective. Like any other budget problem, the
“simple” solution to deal with the coming deficit in Social
Security would be to increase revenues flowing into the
program or to cut expenditures. In the context of Social
Security, how might that be done? To bring in more money,
policymakers could increase the tax on individuals and
employers by raising either the withholding percentage or the
maximum income that can be taxed, or both. If, however, the
government made a subsequent change in the benefits to which
retirees are entitled, then the additional revenues would be
partially offset. As discussed in other chapters, Congress always
finds it politically difficult to raise taxes even to protect a
popular program such as Social Security. The other course of
action is to reduce expenditures, which can be done in a number
of ways. As discussed earlier, the age of eligibility for benefits
has already gone up, which postpones the outlay of funds for a
number of years. Another idea, which has been used in the past,
is to delay the cost of living adjustment (COLA). Social
Security benefits go up annually, and the amount is linked to
changes in inflation, as measured by the Consumer Price Index
(CPI). By not implementing the COLA for a period of time, the
Social Security Administration could save billions of dollars.
Another solution would be to decrease the COLA outright. In
other words, it might only be a partial, not a full, inflationary
adjustment.
The reasons for exploring the COLA option are worth
considering. First, many workers in the United States do not
receive inflationary adjustments in their wages. Is it fair that
retirees get regular increases in their income while those who
are working do not? Second, as discussed in chapter 7, many
policy analysts believe the government’s current indicators,
such as the CPI, overstate inflation. There is not uniform
agreement regarding this, though. For example, some prices for
goods purchased by the elderly in areas such as health care and
drugs rise faster than the CPI. If the CPI is overstated, the
COLAs are actually higher than the true rate of inflation. For
the sake of illustration, if Social Security paid out $400 billion
in benefits this year and the inflation rate was determined to be
3 percent, it would mean an automatic increase in benefit
payments the following year (disregarding new beneficiaries or
deaths) to $412 billion. Delaying the payment of the COLA
increase for six months would save $6 billion a year. Adjusting
the COLA down by 1 percent would save $4 billion a year. If
either of these proposals were adopted for a number of years,
significant savings in the program would materialize. Some
have advocated for a different, and more generous, COLA for
seniors since their “basket of goods” is quite a bit different
from others. For example, seniors may be spending more on
prescription drugs, but may drive less and therefore use less
gasoline. Privatization is another approach to Social Security
financing. The idea here is that individuals would be allowed to
invest some of their withholding tax in mutual funds of their
choosing, or the government might be permitted to invest Social
Security funds in the stock market or other private instruments
to generate a higher rate of return than is now possible.
Currently, the money collected for Social Security is invested in
government bonds with a relatively low yield (albeit with little
risk). Many people believe that a partially privatized system
would increase the return and extend the financial life of the
system.
Privatization has been proposed by a number of people and
organizations. President George W. Bush proposed the idea of
personal accounts that would allow workers to contribute up to
four percentage points of their payroll taxes into a larger range
of account options that potentially would have provided them
with a greater return upon their retirement. President Bush’s
proposal would have partially changed the structure of Social
Security from pay-as-you-go to more of a 401(k) plan; it sets up
a private account for each person from which he or she can draw
upon retirement. The Social Security Advisory Council (1997)
included it as one of its proposals, although not all of the
committee members supported it.23 In addition, the National
Commission on Retirement Policy (1999), which addressed a
number of issues on how to fund retirement, included a plan to
allow for private investment of a portion of the withholding
tax.24 Much of the Bush plan was based on the commission’s
proposal, which would direct approximately one-quarter (or two
percentage points) of the current 7.65 percent payroll tax into
individual savings accounts for which people could make
choices about investment strategies for their money.
There are some things to consider with this kind of Social
Security reform. A system that permits individual retirement
accounts and siphons off a portion of the Social Security
withholding tax changes the investment picture. These accounts
would be specifically earmarked for the individual retiree. In
other words, the four percentage points withheld, plus interest,
would be dedicated directly to each worker, who would want to
get the largest return possible on these investments. Doing so
would likely mean investing outside of government securities,
particularly in the stock market. Is this a good idea? Related to
this, in the absence of other policy changes, and with four
percentage points of the withholding tax going into individual
accounts, the solvency of the current Social Security funds
becomes even more fragile. The funds would be depleted earlier
than under current projections. The Center on Budget and Policy
Priorities estimated that such a change would deplete the
reserves in 2030 rather than 2041.25 On the positive side, if
individuals make good investment choices, they will receive a
higher rate of return from Social Security and subsequently a
higher standard of living upon retirement. The negative effects
are equally obvious, and the most important of these is the
impact on financial markets of a prolonged economic downturn.
For example, the markets suffered some of the steepest losses in
2008 when the economy soured in the United States and abroad.
The losses demonstrated that there are large potential risks
associated with these kinds of investments. This situation raises
new questions: Will people be able to manage their
investments? How many will make poor choices on where to
invest their money? Will financial advisers pressure people to
make unwise decisions? Under this proposal, the investment
part of people’s Social Security donations will not be protected,
and retirees could receive less money than they would under the
current plan. Would society be willing to redirect money into
programs to ensure that people can make ends meet? Will action
be taken to provide any protection for these self-invested funds?
If the answer is yes to either of these questions, it may require
so much money from the federal budget that the purpose of the
legislation is defeated.26
The politics of Social Security reform also merits attention. We
have already mentioned the sensitive politics associated with
Social Security and potential reform efforts. Senior citizens are
an attractive target for politicians because, as a group, they turn
out to vote in large numbers. Not surprisingly, seniors and the
interest groups representing them, such as AARP, have been
wary of Social Security reform efforts that may decrease their
benefits. According to AARP, its members should be concerned
about privatization reform plans for two reasons: the potential
unpredictability of the stock market and fears that such accounts
will take money out of the Social Security account and pass the
bill along to future generations.27 It seems clear that any
reform option that includes a form of privatization will need to
proceed cautiously, assuring the current beneficiaries and
people close to retirement that their benefits will continue at the
same rate. Privatization programs tend to be more popular with
younger voters who have the time to take advantage of these
investments, are more likely to invest in the market, and are
concerned about the current pay-as-you-go system and its future
solvency. But there is one problem with this analysis. While the
young should be more supportive of such a plan, they are l ikely
to be the least engaged in the political debate because it is a
program from which they will not see benefits for decades.28
Each of the numerous and conflicting perspectives on proposals
to privatize Social Security comes with plenty of supporting
data and reports, but the debate is not only about personal
retirement and investment but is also, perhaps more important,
about how the program will continue to survive for future
generations. Social Security has been, and will continue to be, a
highly politicized issue, which makes major reforms
exceedingly difficult. Any reform effort, whether it is
privatization or less drastic changes such as increasing the
withholding tax or changing the benefit structure, also has
multiple economic implications for individuals and for the
nation as a whole. In addition, the perceived success of the
program in providing for the elderly and those who cannot work
raises important equity issues. All of these problems will
become even more significant both to individuals and to the
nation as more and more baby boomers retire. We will return to
this issue in the “Focused Discussion” section later in the
chapter. Welfare
Welfare policies, as most Americans think about them, concern
means-tested programs. To qualify for a means-tested program,
a potential recipient usually must meet an income test—perhaps
better described as a lack-of-income test. These programs
include food stamps, job training, housing benefits, and direct
cash payments to the poor. Means-tested programs differ from
social insurance programs such as Social Security: eligibility
for these programs is based on need rather than contributions
made to the program.
Because of this distinction, welfare programs do not engender
the same level of public support as Social Security. Most people
see welfare not as a social insurance program but as a
government handout or charity, which has different
connotations for many. Welfare programs are also
redistributive, but in this case funds are being transferred to the
poor from those who are paying taxes.
The Supplemental Nutrition Assistance Program
One of the largest federal programs for the poor is the
Supplemental Nutrition Assistance Program (SNAP), formerly
known as the food stamp program and administered by the
United States Department of Agriculture (USDA). The plan
provides low-income households with financial resources to
purchase food. Eligible recipients, who need to meet certain
resource and income requirements, are allotted a dollar amount
based on the size of their household. In 2018, SNAP served over
forty million people at a cost of nearly $65 billion.29 One of
the changes made to the welfare program is that SNAP
recipients are expected to register for work and take available
employment. There have been recent reductions in the SNAP
program including some passed in 2014, which cut food stamps
by $800 million over the next decade (about 1 percent per year).
These cuts, along with proposals to require that certain
beneficiaries be required to work more, reflect conservative
criticism of the program, including concerns critics raised about
overreliance on the program by beneficiaries as well as
numerous accusations of fraud in the way benefits are sought
and distributed under the program. On the other hand, many
potential beneficiaries do not seek benefits to which they are
entitled because of complex bureaucratic rules associated with
the program; therefore, they either do not get adequate nutrition
or turn to other sources for help.30
Federal Assistance for Food.
SNAP is only one of many public programs geared to meet the
nutritional requirements of individuals. The USDA also
administers the federally assisted national school lunch and
school breakfast programs, which provide well-balanced,
nutritional meals at either no cost or reduced cost to children
from low-income households. The school lunch program was
first aimed at assisting schools to purchase food for nutritious
lunches. The passage of the National School Lunch Act in 1946
gave the program a permanent funding basis and stipulated how
funds would be apportioned to the states. The purpose of the
law was to ensure the “safety and well-being of the nation’s
children” through a program that encouraged consumption of
nutritious commodities and assisted states to provide such food
and necessary facilities.31 The program, as it is currently
conceived, started in 1971, when subsidized meals were tied
directly to the poverty guidelines. Today, children in a family at
or below 130 percent of the poverty level ($25,100 for a family
of four in fiscal year 2018) are eligible for free meals. Nearly
thirty million lunches were provided or subsidized by the
program in 2018.32 This program is clearly directed at children
living below or near the the poverty line, but it is also part of
the government’s larger effort to provide valuable nutrition
education to all Americans, including yet another revamping of
the food pyramid in 2005 and again in 2011 with the
introduction of the MyPlate campaign.33 Providing information
and education is one tool policymakers use to address public
problems. The federal government has even set up a centralized
website (www.nutrition.gov) where anyone can access nutrition
information.
Aid to Families with Dependent Children
For years, the nation’s major means-tested program was AFDC,
which was what most people referred to as “welfare.” AFDC
was intended to provide financial aid to low-income mothers
and children. The program benefited about fourteen million
people in its last year in existence and cost about $14 billion
annually (Peters 2000).
Critics denigrated the AFDC program for years on numerous
grounds. First, AFDC provided funds to individuals but
expected little in return. Welfare programs are not popular with
voters in the first place, because they believe the recipients are
getting something for nothing. Widespread media accounts of
people taking advantage of the system in various ways made the
public angry. Although little systematic evidence existed to
prove that these practices were common, the stories persisted
and helped lead to the program’s elimination. Other critics
disapproved of several of the program’s practices. In particular,
they said AFDC stigmatized the beneficiaries by requiring them
to respond to personal questions, home inspections, and other
administrative intrusions to qualify for the benefits (Cochran et
al. 1999; Peters 2000). Another frequently raised issue was that
AFDC seemed to provide a disincentive to work. Under AFDC,
beneficiaries could work only so many hours a month. If they
earned more than the specified amount, they would lose a part
of their benefits. The incentive therefore was to work only up to
the point of losing benefits. A related problem was that attempts
to move off welfare by taking a job were not necessarily a
rational solution for beneficiaries. By the time individuals paid
for child care, transportation, and perhaps health care, they
often had little money left, especially if they were being paid
minimum wage. The smart financial decision, therefore, was to
remain in the government welfare program.
The Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a refundable federal
income tax for low-income working individuals and families.
For those who qualify, if the EITC is greater than the amount
owed in taxes, the beneficiary receives a tax refund. The
government implemented the EITC over forty years ago as a
way to encourage work and to provide recipients with some tax
relief and in some cases even a tax refund. In 2018, the
maximum tax credit was $6,431 for a family with three or more
qualifying children. For those in deep poverty, the tax credit is
probably not significant enough to provide much improvement
to living conditions, but it could make a difference for low -
wage workers. Some have argued for an expansion in the EITC,
and President Obama’s 2015 budget request did just that. Such
an increase could protect families from short-term monetary
problems. It could also decrease the number of people who need
other government support programs.
Increases in the EITC would raise budgetary concerns that the
government would need to take into consideration, particularly
in times with large deficits. While the program encourages work
and is generally supported, an expansion of it could have
budgetary effects. In the current political climate, some also
raise the question of how much of a role government should
play in ensuring that people do not live in poverty. These issues
are also obviously tied to the ethical questions associated with
poverty.
All of the welfare programs discussed in this chapter have
raised difficult questions for the United States throughout its
history. Should we be comfortable with a segment of the
population living in poverty? What role should government
play, if any, to address this? What are the most appropriate or
effective programs to address this problem? This brings us to
one of the major changes in welfare that occurred in 1996.
Welfare Reform Options
The concerns with AFDC led to calls for reform from many
ideological perspectives. Liberals saw the program as
inadequate to provide enough benefits to ensure an adequate
standard of living and protect the children who were supposed
to be the primary beneficiaries. Conservatives, on the other
hand, were more interested in correcting the disincentives for
adult beneficiaries to work and try to become self-sufficient. R.
Kent Weaver (2000) discussed this conflict as the “dual
clientele trap” associated with calls for welfare reform:
Policymakers usually cannot take the politically popular step
of helping poor children without the politically unpopular step
of helping their custodial parents; they cannot take the
politically popular steps such as increasing penalties for refusal
to work or for out-of-wedlock childbearing that may hurt
parents without also risking the politically unpopular result that
poor children will be made worse off. (45) During the 1990s,
major forces came together to get welfare reform onto the
government agenda, and the result was a new policy. As Randall
B. Ripley and Grace A. Franklin (1986) state, in the U.S.
system of government, presidential leadership is often needed to
propose any major changes to redistributive programs. The
election of President Bill Clinton in 1992 and the subsequent
Republican victories in the 1994 congressional elections set the
stage for change. On the issue of public support for the poor,
Clinton said he wanted to “end welfare as we know it” (Clinton
and Gore 1992). His ideas to require work to receive benefits
and “demand responsibility” (Clinton and Gore 1992, 164) were
in some ways more in line with Republicans than with
traditional Democratic constituencies. The Republicans had
made welfare reform a tenet of their Contract with Ameri ca, a
set of proposals that formed the basis of their campaign. Their
version of welfare reform emphasized work even more firmly
than the Clinton proposals (Weaver 2000). The ideological
changes in Congress likely also forced some movement in
Clinton’s position. The eventual outcome, after much
negotiation, political posturing, and strong opposition by many
liberal interest groups, was PRWORA.
Welfare Reform Law
PRWORA ended the old AFDC program and welfare as most
people know it, replacing it with the block grant program
TANF, which provided state governments with additional
flexibility to run their welfare programs. The law also imposed
work requirements for beneficiaries and put lifetime limits on
receiving benefits (Weaver 2000). The law included the
following new rules: Teenage parents are required to live with
their parents or in an adult-supervised setting.
States are required to ensure people are moving off the
welfare rolls and into work. For example, 50 percent of the
families were to be working thirty hours a week by 2002. States
not meeting the requirements are penalized by reductions in
their TANF block grant funds.
Adult recipients are limited to a total of five years of
receiving federal TANF funds, and states can either impose
additional limits or use their own money to fund recipients
beyond the five-year period.
The entitlement structure would change from a system in
which individuals who meet the eligibility requirements are
entitled to AFDC funds to one in which the states receive the
entitlement based on a federal block grant formula (Weaver
2000).
As part of the Deficit Reduction Act of 2005, which became law
in 2006, Congress reauthorized TANF and approved changes
that made the program stricter, made it more difficult for states
to meet the established goals, and took away some state
flexibility. These changes included the following:
Work participation rates are based on caseload declines after
2005 rather than 1995. Since significant case reductions
occurred particularly in the late 1990s, the result was that it was
more difficult for states to meet the goals.
Work participation rates are based on both TANF and state-
funded programs. In the past, state-funded programs did not
count toward the work rate.
Uniform methods for reporting hours, type of work accepted,
and other issues are adopted.
A new penalty of up to 5 percent is established for states that
do not implement internal procedures and controls consistent
with Department of Health and Human Services (HHS)
regulations.34
In 2018, more than 2.2 million people were receiving TANF
benefits according to the HHS Administration for Children and
Families.35 The box “Working with Sources: Welfare and Its
Ability to Meet Needs” presents opportunities to examine this
issue in more depth.
Working with Sources Welfare and Its Ability to Meet Needs
The economy can have major implications for the general
population, particularly as it relates to people eligible for
welfare. High levels of unemployment and underemployment
can lead to more people qualifying for welfare programs such as
Temporary Assistance for Needy Families and the Supplemental
Nutrition Assistance Program. Oftentimes, it is left up to state
governments to implement such programs, and this may occur
differently across the country. Go to the following sites and see
what they are saying about welfare and the economy and how
states may be reacting:
Center on Budget and Policy Priorities
(www.cbpp.org/research/index.cfm?fa=topic&id=42)
National Conference of State Legislatures
(www.ncsl.org/research/human-services/welfare-and-
poverty.aspx)
Urban Institute (www.urbaninstitute.org/welfare/index.cfm)
Consider the following questions:
What are these organizations saying about the effectiveness
of welfare programs to address the needs of those populations
most affected by poverty? Are these programs addressing the
needs of the poor?
How is this affecting states and their populations differently?
What concerns are being raised by these organizations?
What is your assessment of what should happen? What
improvements might you recommend, and why?
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Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx
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Running head ECONOMIC POLICY BRIEF 1Economic Policy Brief.docx

  • 1. Running head: ECONOMIC POLICY BRIEF 1 Economic Policy Brief Treylesia Alston September 11,2022 PADM550-B01 Christopher Sharp ECONOMIC POLICY BRIEF 2 Defining the problem The United States government has been in the forefront in developing strategies to increase employment levels. Different governments have come up with proposals on how the rate of employment can increase through creation of jobs. With the Covid-19 pandemic’s impact on the economy, there was a significant decline in employment levels as more companies and sectors reduced the production levels thus laying off the workers. The need to stimulate the
  • 2. economy through expanding job plans and supporting families resulted into the Infrastructure Investment and Jobs Act (IIJA) which was signed into law on November 15, 2021 (Sharkey, 2022). May Biblical guidelines: The Bible has clearly detailed the role of economic prosperity in the life of a human kind. The economic prosperity of all people is God's will. He wishes for us to be able to meet our basic necessities. Moreover, he wants us to benefit from the plenty (enough) of his kindness. It is under this basis that such policies are implemented in the economy (Fischer, n.d.). Constitutional guidelines: The Federal Government has a duty to ensure there is attainment of economic goals set. This include ensuring there is equitable distribution of resources and presence of a supportive economic environment. It is under this basis that the Federal government through the legislative organ created the IIJA policy (Barile et al, 2021).
  • 3. Can Political Feasibility: The new Biden government outlined promises to aid disadvantaged Americans immediately and invest in infrastructure and families in 2021. The American Rescue Christopher Sharp 143770000000321519 Make sure that you are discussing the specific enumerated powers in the Constitution that allow the government to intervene. If it cannot be found, the power cannot be assumed as anything not belonging to the federal government belongs to the states. Christopher Sharp 143770000000321519 Make sure that you are discussing in detail the application of the Biblical principles of natural law, inalienable rights, sphere sovereignty, sin vs. crime, etc., as they relate to the topic. ECONOMIC POLICY BRIEF 3 Program (ARP) and the Infrastructure Investment and Jobs Act (IIJA) were enacted in 2021. The deployment and growth of expanded assistance programs showed the policymaking potential to alleviate poverty and increase financial security for millions of Americans (Sharkey, 2022).
  • 4. Financial feasibility: Originally, the bill was a $715 billion infrastructure proposal. Before the bill's implementation, Congress negotiated its details. This new measure added $550 billion to the recurring spending Congress had already approved (Sharkey, 2022). This resulted into a total cost of $1265 for the implementation of the policy. Practical Feasibility: After discussions, the bill was renamed the Infrastructure Investment and Jobs Act to include multiple sectors of the economic infrastructure such as electric grid renewal, clean water and broadband access (Goutsmedt, 2021). This gives the policy a strong basis under which it can be implanted and realize the expected goals and outcome. Should The importance of economic success in human life is clearly addressed in the Bible. God's will is for all people to flourish economically. In fulfilment of the goal, the Federal Government is responsible for ensuring that economic goals are met. This includes ensuring
  • 5. equitable resource allocation and the establishment of a supporting economic environment. This is evident through introduction and implementation of the Infrastructure Investment and Jobs Act (IIJA). The federal government needs to ensure there is sufficient public participation in attaining the goals of the policy on the long run (Hills & Nakata, 2018). Christopher Sharp 143770000000321519 Needed to discuss the logistical resources needed to implement the bill - new agencies, new employees to monitor, new buildings, etc. Also, needed to discuss the practical steps for implementation. What will it take to get this going? I often use a cake analogy: What are the ingredients needed and steps needed to successfully bake a cake (or implement a program)? Christopher Sharp 143770000000321519 Make sure to tie this back to the May/Can portion of the paper in clear, concrete points, and clearly identify the Biblical and Constitutional authorities Christopher Sharp 143770000000321519 Make sure that you are discussing the political and public support for the passage off a specific bill in this section. ECONOMIC POLICY BRIEF 4
  • 6. Reference Fischer, K. Biblical principles of government [PDF document]. Retrieved from Lecture Notes Online website: https://learn.liberty.edu/bbcswebdav/pid- 6267706-dt-content-rid Sharkey, J. (2022). Infrastructure Investment and Jobs Act (Iija)/Bipartisan Infrastructure Law (Bil). Barile, S., Ciasullo, M. V., Iandolo, F., & Landi, G. C. (2021). The city role in the sharing economy: Toward an integrated framework of practices and governance models. Cities, 119, 103409. Hills, T. S., & Nakata, T. (2018). Fiscal multipliers at the zero lower bound: the role of policy inertia. Journal of Money, Credit and Banking, 50(1), 155-172. Goutsmedt, A. (2021). From the Stagflation to the Great Inflation: Explaining the US Economy of the 1970s. Revue d'economie politique, 132(3), 557-582. https://learn.liberty.edu/bbcswebdav/pid-6267706-dt-content-rid Christopher Sharp 143770000000321519
  • 7. Make sure to be consistent in APA formatting for your references. Running head: H. R. 312 1 H.R. 312 “The Mars Exploration Act” Kahlib J. Fischer February 11, 2015 PADM 550-B01 Dr. Kahlib Fischer H.R. 312 2 Defining the Problem Space exploration has been limited since the moon landing to space station visits and the
  • 8. deployment of the Hubble telescope and satellites (2015). In 2012, President Obama signed into law H.R. 312, “The Mars Exploration Act” (2012). This bill provides funding for the development and deployment of: 1) the “rovers”; 2) deep space transportation for humans; and 3) laboratory and housing facilities on Mars (Robinson & Smith, 2012). May Biblical guidelines: Of course, the Bible says nothing about space exploration. Government is charged primarily with protecting the inalienable rights of its citizens (Fischer). HR 312 does not violate these rights. The Biblical notion of “sphere sovereignty” implies that there are other spheres of society, such as non-profits and industry, which might be considered as participants in space exploration (Monsma, 2008). In the past, space exploration has been linked to national defense, for fear that other nations would gain the upper -hand in space and use that advantage against American citizens (Neuhaus, 2012). Since government has a divine mandate to protect
  • 9. its citizens, space exploration might be supported. Constitutional guidelines: The “common defense” portion of the preamble supports passage of this bill. Article 1 section 8 provides further points of support: the promotion of science and progress, the development of a sound military, and the regulation of commerce with foreign nations. Can Political Feasibility: Generally, the public favors further mars exploration and colonization (Smith, 2014). The passage of the bill was largely bi -partisan, but a significant Republican minority tried to block passage arguing that the funding was not present for the bill and that the H.R. 312 3 President was merely doing this to distract from criticism of his health care legislation and other scandals (Neuhaus, 2012). Since passage, some experts have argued that Mars colonization is not obtainable as NASA is currently constructed and has argued
  • 10. for either repeal of HR 312 or significant modification (Richards, 2015). Financial feasibility: Total cost of the bill was estimated at $20.5 billion, according to the Congressional Budget Office (“H.R. 312”). At the time of passage, Democrats and Republicans were grappling with the debt ceiling crisis (Barnes, 2011). Practical feasibility: The bill was set up to fund NASA efforts for Mars exploration over 20 years. The major challenge was the development of sufficiently fast and safe space travel for humans (Geyer, 2012). Rovers have been sent to Mars, so, in effect, Phase 1 has been achieved. Significant challenges exist for phases 2 and 3, however, as NASA grapples with developing the proper technology for long-term space exploration and colonization (Richards, 2015). Should HR 312 passes the May portion of the analysis, with the caveat that government should allow for business and non-profit participation. The Can portion of the analysis is more challenging, simply because of current levels of deficit spending in the
  • 11. federal government as well as the technological challenges. Nevertheless, HR 312 represents a legitimate area for government involvement. Space exploration, if not simply for the sake of military defense, should continue and thus government must be involved. We are not able to choose ideal times for something as lofty and abstract as space exploration; yet it must remain a national priority. H.R. 312 4 References Barnes, A. (2011). The Debt ceiling crisis. National Review Online. Retrieved from http://www.nro.com/dc_13 Fischer, K. Biblical principles of government [PDF document]. Retrieved from Lecture Notes Online website: https://learn.liberty.edu/bbcswebdav/pid- 6267706-dt-content-rid- 43218699_1/courses/PADM550_B01_201520/Biblical%20Princi ples%20of%20Govern
  • 12. ment%281%29.pdf Geyer, A. (2012). To mars and beyond. Space. 15(1), 52-56. doi:10.1108/03090560710821161 H.R. 312 (2012). The Mars Exploration Act. Congressional Budget Office. Retrieved from www.cbo.gov.HR312. Monsma, S. (2008). Healing for a broken world. Wheaton, IL: Crossway Books. Neuhaus, J. (2012). Mars madness. Space Exploration. Retrieved from http://www.spaceex.com/mmhr312 Richards, D. (2015). The Mars question. Journal of Science and Politics, 10(2), 38-42. Retrieved from http://www.jsp.org Robinson, J. & Smith, B. (2012). What does HR 312 mean for the future of space exploration? Journal of Science and Politics, 4(2), 3-12. doi:10.1108/988890560710821161 Sires, D. (2015, October 9). Has NASA lost its way? Popular Science, 8, 27-29. Smith, R. (2014). Does the public even care? Space Exploration. Retrieved from
  • 14. Your Paper Title Your Name Date Class Name and Section Dr. Christopher Sharp Defining the Problem One paragraph that discusses the problem, and introduces the policy that was written or passed to address the problem. May One brief paragraph for each: Biblical guidelines and principles Application of the Biblical principles - when discussing the topic of the week, make sure to apply the Biblical principles discussed in question 1 of the Synthesis paper to the specific policy that you're discussing. How does it meet natural law, inalienable rights, federalism, etc.? Constitutional guidelines for federal and state involvement Constitutional authority - what is the Constitutional authority for the federal government to get involved? Avoid the use of the General Welfare clause as it becomes a catch-all for anything that a politician wants to get passed. Can One brief paragraph for each area: Political Feasibility Political feasibility - what is the likelihood that the policy will become law? What is the political and social support for the policy? Financial feasibility Financial feasibility - what is the policy expected to do to the national debt or spending? For example, the new COVID stimulus just put us another $2 trillion in debt but was widely
  • 15. supported by both politicians and the public. Practical feasibility Practical feasibility - what are the logistical resources needed for implementation (buildings, personnel, new programs, etc.) and what are the steps for implementation (ex; the Affordable Care Act needed functional websites in order to be implemented, the lack of these created severe problems with implementation). Should Provide a summary of the key ideas of your analysis in support of your position. Must be based on the “May” and “Can” analysis. Offer a recommendation based upon the analysis. Relate this back to specific Biblical and Constitutional authorities and discuss whether or not the policy should be supported based on this and the feasibility of implementation. References Make sure to cite quotes in APA format with author, year, and page number or paragraph number if a web page. Also, make sure that your references are in APA format. A link to the Liberty University Writing Center is included in your assignment resources. CAN: "Feasibility"
  • 16. SHOULD: "Making the Case" Persuasive summary of the key issues supporting your decision to support or reject the legislation. This is where you as a political leader speak to the heart. Explaining why this is worthy of being focused on by your party (in light of what the party is trying to accomplish in Congress) Make the case knowing that you might be making enemies for supporting (or opposing) this piece of legislation Politics is a battle of ideas and agendas—how are you going to make the case knowing that you might make enemies, and knowing that if your party leadership focuses on your legislation, it might mean that someone else's agenda will be stymied? MAY: “Authority” supported by Biblical principles? keeping with the enumerated powers listed in the Constitution?
  • 17. Political Feasibility: Does the bill have a chance of passing the House and Senate and being signed by the President? What public opinion polls are relevant? Financial Feasibility: How much would the legislation cost, particularly in light of current budget constraints? What impact would there be on the economy? Practical Feasibility: what are the key hurdles for implementing this legislation in terms of timing, logistics, resources, and technology? As a lawmaker, you have to anticipate those challenges in order to weigh the merits of the legislation. Read: Monsma: Chapters 8 8: Poverty “Be Open-Handed toward the Poor and Needy” (Deuteronomy 15 : 11)
  • 18. PATTI IS A FRIEND OF MINE who dropped out of college to marry the man she loved. They soon had two little boys. She was a full-time mom, while her husband worked as a teacher. Theirs was an all-American, even idyllic, family. Or so it seemed. Then suddenly Patti’s husband left, moved to another state, and sued for divorce. Patti soon discovered that her husband had left her with back rent owed on their house, as well as other unpaid bills. She had never held a full-time job and, having left college early, had few marketable skills. Her husband made only sporadic child-support payments; because he had moved to a different state, a cumbersome, inefficient child- support system was unable to collect the financial support that was due her and her two little boys. Patti was at the end of her rope. She struggled to feed her children and faced the very real prospect of being homeless. Not knowing where else to turn, she obtained welfare through the Aid to Families of Dependent Children (now called Temporary Assistance for Needy Families [TANF]). With the help of her caseworker who was willing to bend a few rules, she returned to college, completed her degree, obtained full-time employment, and was able to leave the welfare rolls. There is much we can learn from Patti’s story. Poverty can strike suddenly and through no fault of one’s own. Government- sponsored welfare programs can work as intended, providing desperately needed temporary help while someone obtains skills needed to obtain a job and become a self-supporting, contributing member of society.
  • 19. But not all stories are like Patti’s. Some people are poor because they made wrong, sinful choices and are unwilling or unable to work hard to obtain the training that will lead to employment. Still others are poor due to ill health or deeply embedded psychological problems. Their family backgrounds may never have taught them the attitudes and values needed to compete successfully in the world of work. The Bible repeatedly calls us to be concerned and to offer help to the poor. That much is clear. Exactly how to translate our concern and offers of help into concrete, practical acts is less clear. And when it comes to the public policies of government, what ought they to do and not do? How ought we as Christian citizens apply the biblical principles discussed earlier in this book to the problem of poverty?These are the questions this chapter explores. Poverty Today The poor are still very much with us. The United States Census Bureau has judged that a family of three with an annual income of less than about $15,000 is living in poverty. Based on this standard, it estimates that as of 2005 there were 37 million people, or 13 percent of the American population, living in poverty. Of these 37 million people, 13 million were children under eighteen years of age. Poverty varies by racial and ethnic groups. It was almost three times higher among African Americans (25 percent) than among non-Hispanic white Americans (8 percent). Among Hispanic Americans the poverty rate was 22 percent.1
  • 20. To understand poverty and its negative effects, two additional perspectives need to be understood. First, in the United States poverty exists among unparalleled affluence. While 37 million people live in poverty, 20 million households have incomes of over $100,000 a year. The average annual family income in the United States is $63,000. We are an enormously wealthy country, and most of us are blessed with material goods that others cannot even imagine. The combination of great wealth and poverty existing side-by-side in the same country and even in the same communities raises crucial and challenging questions—even while it does not suggest quick, simple answers for the thoughtful Christian seeking God’s will. A second key perspective is that poverty is more than a simple lack of money to buy the necessities of life. It is that. But it is more. A job that pays decent wages not only pays the rent, puts bread on the table, and keeps the lights on, but it also tells people and their families that they are doing useful, worthwhile work that society values. It daily affirms that they are useful individuals who contribute to society and support those who depend on them. In contrast, the unemployed or sporadically employed, along with those employed at such low wages that they cannot support their dependents, receive the daily message—even if falsely—that they are failures. The implication is that they have nothing of real value to contribute to society, and that those who are depending on them are looking to them in vain. How does one go home and tell one’s children that there will not be enough food for them that evening?Or as winter approaches, that there will be no warm jackets or Christmas gifts this year?
  • 21. “We live in a country rich beyond measure, yet one with unconscionable ghettoes. We live in a country where anyone can make it; yet generation after generation, some families don’t.”2 —JASON DEPARLE, SENIOR WRITER, NEW YORK TIMES Poverty, with its attending physical and psychological consequences, severely limits people in their ability to live the creative, productive lives God intends for all human bei ngs. God intends that all of us—in joy and thankfulness—be able to develop the abilities he has given us, support and care for our families, and contribute to the broader society. All these are aspects of being God’s image bearers. They may not be impossible for the poor to accomplish, but they are certainly made difficult. The Bible Speaks I have been told that in the Bible there are more than two thousand references to the poor. I have never tried to count them, but both the Old and New Testaments time and time again insist that as believers we must be concerned for the poor. It is a requirement. “There will always be poor people in the land. Therefore I command you to be open-handed toward your brothers and toward the poor and needy in your land” (Deut.15:11). “Religion that God our Father accepts as pure and fault-less is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world” (James 1:27).I could fill the rest of this chapter, in fact the rest
  • 22. of this book, with biblical commands to care for the poor and needy. Of all people, we evangelicals—who take the Word of God authoritatively and seek to pattern our lives after it— should take these repeated commands seriously. If we ignore them, we deny the authority of Scripture. There is no way to escape this conclusion. Here the Christian principle of solidarity, discussed earlier, and the many biblical supports for it come front and center. The poor are not somehow “others,”separate from us and with no ties of mutual responsibility. They are our brothers and sisters; we are to see Christ in them. “Our band of eager young first-year seminary students did a thorough study to find every verse in the Bible that dealt with the poor. . . . We found several thousand verses in the Bible on the poor and God’s response to injustice. . . . [Then] one member of our group took an old Bible and a new pair of scissors and began the long process of cutting out every single biblical text about the poor. . . . When the zealous seminarian was done with all his editorial cuts, that old Bible would hardly hold together, it was so sliced up. It was literally falling apart in our hands.”3 —JIM WALLIS, PASTOR AND POLITICAL ACTIVIST
  • 23. While studying welfare-to-work programs in Dallas, I once interviewed the assistant director of a deeply Christian program that was working with the homeless. She described the philosophy of her agency in these words: “We are faith- based— we strive to be the hands of Christ for the homeless. Our desire is to touch them as if they are Christ himself.” Her agency had not only read but was living out Matthew 25:40: “Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me”(TNIV). This is solidarity with the poor. Our Lord demands nothing less from us. Clearly we should live in solidarity with the poor; our attitude must be one of concern, not indifference. But this is the beginning of our consideration of the Christian’s duty toward the poor, not the end. How are we to live out this concern in the twenty-first century, in a modern, urbanized society such as ours? And what roles ought individual Christians, nonprofit agencies, and the public policies of government play? The rest of the chapter seeks to give some guidance in answering these questions. Careful thinking and important distinctions are needed. The Causes of Poverty I vividly recall one day back when I was active in Michigan politics and attended a picnic put on by the United Auto Workers for its members. I met a man who had worked for an auto supply firm that specialized in making chrome-plated bumpers for large Lincoln Continentals. His layoff was due to a dwindling demand for these bumpers. He looked thoroughly
  • 24. depressed and plaintively asked me when I thought the economy would pick up, so he would be called back to work. I mumbled something about not knowing but certainly hoping it would be soon. What I could not bring myself to tell him was that deep in my heart I suspected he would never be called back. He was caught in two trends: a movement to obtain cheaper car parts from overseas and a style change away from chrome-plated bumpers. “Is not this the kind of fasting I have chosen: . . . ? Is it not to share your food with the hungry and to provide the poor wanderer with shelter—when you see the naked, to clothe him, and not to turn away from your own flesh and blood?” —ISAIAH, OLD TESTAMENT PROPHET (ISA. 58: 6–7) “Suppose a brother or sister is without clothes and daily food. If one of you says to them, ‘Go in peace; keep warm and well fed,’
  • 25. but does nothing about their physical needs, what good is it? In the same way, faith by itself, if it is not accompanied by action, is dead.” —JAMES, APOSTLE AND BROTHER OF JESUS (JAMES 2: 15–17 TNIV) We need to recognize that many are poor or threatened with poverty because of forces they cannot control. The man I met at the United Auto Workers picnic was affected by forces that were not of his making. As in the case of my friend Patti, noted earlier in this chapter, women may find themselves with young children and no husband or father in the house due to unfaithful, irresponsible husbands. Or incapacitating illnesses or accidents can strike a family, leaving it with huge debts and no one able to work. But honesty also forces me to acknowledge that poverty is often due to certain self-defeating actions and decisions. Numbers tell a powerful story. Of all American families headed by a married couple, only 5 percent live below the poverty line. Of those headed by a man without a wife, 13 percent live below the poverty line; of those headed by a woman without a husband, the number jumps to 29 percent. Of those who have not completed high school, 24 percent live in poverty, while of those who have completed high school, even without any college, the number drops to 11 percent. These numbers demonstrate that certain patterns of behavior often lie at the root of poverty.4 In the United States today, one who completes
  • 26. high school, does not have a child out of wedlock, marries, and remains married is very unlikely to be poor. I hesitated to write the previous sentence because there is a danger I will be misunderstood. But honesty compelled me to write it. The fact is that many who are poor in the United States today are poor because of their own self-defeating, sometimes sinful choices. Many people—including many evangelicals—use this basic fact to conclude that the poor suffer poverty due to their own short- comings. Thus they have no responsibility to help them. The old slogan, “I fight poverty, I work,” sums up this attitude. It implies that if only the poor would exercise some gumption and get out and work, they would no longer be poor. Surely the Bible doesn’t demand that we be concerned for those who are poor due to their dropping out of high school, having children out of wedlock, using drugs, lacking ambition, or engaging in other forms of irresponsible, sinful behavior, does it? They are only reaping what they have sown. Admittedly, many are poor because of sinful or ill advised choices they have made. They may have been sexually promiscuous. They may have dabbled with illicit drugs or shoplifted and have a criminal record. Or they may have given up and left high school when things became difficult. “There but for the grace of God, go I,” however is the appropriate response. Who of us is to say that, given different circumstances, a different family situation, a different neighborhood, or a different set of friends, we might not have
  • 27. made the same choices? Our God is a forgiving God, whose grace can cover the worst sins. People who have acknowledged they did wrong, are now trying to make up for past mistakes, and are seeking to do what is right deserve our support and help. Even people who out of discouragement left high school or who out of anger and frustration have given up on trying to find a job and to move ahead are still image bearers of almighty God. If we—perhaps through a tough, demanding love—can encourage and challenge them to become the productive people God desires of all his image bearers, we are indeed doing God’s work. We are truly modeling our Savior who has done as much for all of us. It is also important to recall that in today’s world any woman who bears a child outside of marriage had another decision she could have made: She could have aborted that child. Every unmarried mother—even though she made a wrong choice about sex outside of marriage—made the right choice in choosing life over abortion. Surely—as I wrote in the previous chapter—we who as Christians oppose abortion ought to be standing first in line to offer help to those girls and women who chose life; we ought to support public policies that will offer them help. In the face of poverty, what response does the Bible demand of us? Concern and proffered help. But this does not yet tell us how we are to respond. This is what I consider in the next two sections. First, we will look at some basic insights that can guide us as we seek to live out a truly biblical concern for the poor and needy among us. Then we will consider some more concrete applications of those principles. The Bible, Poverty, and Public Policy: Insights
  • 28. In the 1960s President Lyndon B. Johnson declared a War on Poverty and, as some commentators put it at the time, “Poverty won.” They had a point. Poverty rates barely budged. Discouragement quickly set in. How ought we as Christians to react? Does our faith speak to what public policies our government should pursue in relation to the 37 million of our fellow Americans living in poverty today?What guidance can the Bible give us as we seek to work against the destructive forces of poverty? There are no simple answers to these questions. The Old Testament Israelites were given many detailed instructions concerning the poor. But theirs was a rural, tribal society, and we live in a largely urban, industrial society that is shifting into a knowledge-based society. We cannot in wooden fashion apply the specific instructions given by God to the Israelites to our society today. But from the principles we considered in earlier chapters, we can uncover some basic insights to apply in our efforts to respond to the needs of the poor among us. Government Is a Partial, but Not a Complete Answer Some people think government is the complete answer to the problem of poverty; others think government is never the answer. Both are wrong . . . and both are right. This is a case where a response rooted in Scripture leads us to a both-and, not an either-or, response. While the political right has not looked to government for help quickly enough, the political left has too
  • 29. quickly looked to government for help. It is wrong for Christians who seek to respond to the Bible’s call to care for the poor to shove off all responsibility onto government—or to ignore government as a God-instituted means to obtain greater justice for the poor. There is much that we as individuals and as members of our churches and of a variety of nongovernmental agencies can— and should—do to help the poor. As I will explain shortly, I have stood in awe of dedicated Christian saints who minister to the homeless, the drug-dependent, the poor, the incarcerated, and others of the least of these who live in great need. In doing so, they are ministering to Jesus Christ himself. However, government and its public policies also have a role to play in alleviating poverty. Often individual and other private efforts to help the poor, as important as they are, can have only a limited impact on poverty. We live in an urbanized, industrialized society—which also means we live in an interdependent society. Indeed, with globalization we live in an interdependent world. People lose their jobs when a manufacturer moves its factory overseas to take advantage of cheaper labor costs. Interest rates go up, and suddenly what had been a struggle to make house payments or keep up with credit- card debt becomes a seemingly impossible task. Or individuals suddenly learn the pensions for which they had worked for more than thirty years are no longer available due to the bankruptcy of their company. We no longer live on largely self-sufficient farms where we could grow most of our own food and spin and sew most of our own clothes. We live in an interdependent world. This means we are vulnerable. We all need government to protect us from economic adversities that can come with interdependence.
  • 30. “Lord, we know that you’ll be comin’ through this line today. So help us to treat you well.”5 —PRAYER OF A FOOD-LINE VOLUNTEER In addition, with its taxing powers, government has money available that dwarfs that of individuals and all but a few nongovernmental agencies. When seeking to help 37 million people living in poverty and millions more living on the edge of poverty, government often is the only institution with the financial resources to make a difference in millions of lives. Also, sometimes public policies themselves have added to the problem of poverty. Policies may encourage out-of-wedlock births, fail effectively to enforce fathers’ support payments for their children, or encourage easy divorce. When public policies are a part of the problem, changing those policies must be a part of the solution. Antipoverty Programs as Justice The consistent call of the Bible is that the poor be treated with
  • 31. justice—not that money simply be taken from those with more and given to those with less. As seen in chapter 3, justice can best be defined in terms of giving all people their due. the poor are not treated justly, government is not fulfilling its God-given task. All people deserve an opportunity through work to provide for themselves and their families, to honor their Creator, and to develop and use their gifts and abilities. This is their due. When people wish to contribute to society and support themselves and their families by working but no work is available, or when even full-time wages are so low that they cannot be self- supporting, then justice is not being done. In a just society, public policies ought to protect the poor from those who would prey upon them and take advantage of them. One thinks of unscrupulous landlords who charge exorbitant rents for dilapidated housing that is as unsafe as it is depressing—simply because the poor have no other choice or have little bargaining power. But justice also requires that public policies designed to help the poor ought not to degenerate into paternalism, where one person is made so dependent on another that he or she is no longer the willing, contributing, creative person God intends all of his image bearers to be. To give help to the poor without any expectation that they live up to their responsibilities is not the biblical way. It is not just. In Leviticus 19: 9–10 and 23:22, God commanded the Israelites not to harvest their fields to the very edge or to go through their vineyards a second time to pick all the grapes. Instead, they were to leave for the poor the grain on the edges of their fields and any grapes remaining after their first harvest. There are two principles we can gain from this. First, we must, in solidarity
  • 32. with the poor, make provision for them, so that they too can live. Second, the poor have a responsibility to help themselves. The command was not to give a portion of one’s harvest to the poor. No, the poor needed to go out in the fields and work hard to glean that which had been left for them. Similarly both our private actions and public policies should aim to help the poor, but those efforts should normally aim to enable the poor to provide for themselves, not to give handouts with no corresponding responsibilities. Justice speaks the language of opportunities and empowerment. It knows little of handouts with no corresponding responsibilities. Using Civil Society’s Organizations Several years ago I conducted a thorough study of welfare-to- work programs in four large cities. What started out as an academic research project ended up touching me deeply. I met many dedicated Christians who had given up more promising careers to offer help to the most needy: the homeless, the school dropouts, the unmarried mothers, the drug abusers, and those simply caught up in the confusing competition for gainful employment. I interviewed a young man who had left seminary to work among homeless men in Chicago, for an evangelical agency. I asked him what motivated him to do this work. He responded simply, “God has called me to do this work; this is what I’m supposed to be doing.” Then he added that his work also gave him joy: “But there are also challenging aspects of the job I enjoy. These are good folks;they will be good employees. I enjoy working with them.”
  • 33. I also interviewed several people to whom the Christian agencies had offered help. They often recognized the Christian motivations of the staff and volunteers. One said, “It was a Christian program; it was encouraging. It helped get me back on my feet and on the right track. It helped turn me into the mature woman that I am now. They helped a lot.” Another testified: “They behaved like Christ. They were gentle, kind, giving, did not discriminate. They gave me a mentor;they taught me spiritually.” I repeatedly found myself standing in awe of present-day saints who were doing God’s work among the poor and dispossessed of our society. This brings us straight back to civil society and the principle of subsidiarity first discussed in chapter 5. Public policies ought never to undercut or displace the work being done by civil - society organizations:community-based, nonprofit, and faith- based programs working to help the poor. Public policies should recognize and build upon the work they are already doing. Often the most effective approach for government to take is to work in partnership with local agencies that make up civil society, offering them referrals, financial help, and other supports. The Bible, Poverty, and Public Policy: Applications At many points in this book I have stressed that applying even clear biblical principles to concrete situations is a challenge. This is also the case in combating poverty. Even so, in this section I consider two concrete areas as examples of how we can think through specific poverty-related issues in light of biblical principles.
  • 34. Working for a Stable, Jobs-Producing Economy The most effective antipoverty public policies may very well be those aimed at creating a healthy, jobs-producing economy. Often people do not see such policies as being “antipoverty” at all. It is true that such policies—when effective—provide economic opportunities and even wealth for the middle class and the affluent. But they also lift many households out of poverty and prevent many people on the economic fringes from sinking into poverty. During the 1990s, generally marked by high employment and low inflation, many people were able to move out of poverty. From 1994 to 2000 the percent-age of households under the poverty line dropped from 15 percent to 11 percent. This means there were 7 million fewer people living in poverty in 2000 than in 1993.6 But what public policies lead to economic prosperity? Here one quickly gets into very technical, complex issues of taxes, spending, and interest rates that only a bureaucrat at the Federal Reserve Board can love! This is not the place to delve into them. Most of us will always have a difficult time fully understanding them and applying our Christian principles to them. But one thing is clear: These technical, esoteric issues and the economic results that flow from them are vitally important to the opportunities and challenges the poor face. When we as
  • 35. Christian citizens evaluate the president, Congress, and other national leaders and when we decide how to cast our votes, we ought to ask ourselves how well our leaders are handling the national economy. And we should not first of all ask how well we personally are doing economically. Rather, we should ask how well the economy is doing in offering greater economic opportunities to those near the bottom of the ladder. Welfare When it comes to antipoverty public policies, the most frequently debated topic is cash welfare payments to the poor. Many, including many evangelicals, have harshly criticized them. Here again we need to do some clear thinking. The major program in this category today is Temporary Assistance for Needy Families (TANF), enacted by the federal government. TANF seeks to provide cash assistance to families (usually, but not always, mothers with children) that are economically destitute. Most of the money comes from the federal government, which the states supplement with their own funds. State governments administer the program and set its standards and practices. Thus they vary from one state to another. The TANF program also has certain work and training requirements designed to move those receiving its benefits to full-time employment. In this effort the program provides some supportive help, such as provisions for transportation to jobs and child care. There is a lifetime five-year (or less in some states) limit on being able to receive TANF benefits. This program continues to be controversial. Some are convinced
  • 36. that the cash payments are too low to maintain families with even minimal necessities, that the five-year time limit is arbitrary and harsh for those who simply cannot find employment, that supportive child care and transportation services are inadequate, and that the training programs are often poorly run and do not lead to jobs. These advocates want higher payments and more work-training programs with generous child-care and transportation provisions. Others, however, are convinced that the program wastes money on people who manipulate the system to avoid work and encourages out-of- wedlock births. They work to cut the levels of cash payments, impose stricter qualifications for help, and compel all recipients to take part in work and training programs. They think a five- year limit on help is too long, encouraging an unhealthy dependency. Where ought we as Christians to come down in this debate? As I’ve said, our Lord requires us to show mercy and offer help to those in need. This would lead us to offer more generous help to those in need. But our faith also speaks to a sense of responsibility and of there being consequences for the moral choices we make. Thus some Christians fear that more financial assistance with fewer time limits or work requirements may reward and encourage irresponsible behavior—and, in comparison, penalize those who come from equally trying circumstances but stayed in school, avoided premarital sex, and other ways acted responsibly. As with many specific, concrete public-policy issues, there is no one obviously Christian answer. Almost all rightly agree that government sometimes needs to provide financial assistance to the poor. When it does so, there are, from a Christian
  • 37. perspective, two important considerations. As we saw earlier, justice should be at the heart of government’s efforts to help the poor. This means it should do all it can to avoid creating an unhealthy dependence and rewarding ongoing self-defeating behavior. Instead, it should aim to enable the poor to support themselves through gainful employment. Thus the welfare system—when it is working within the bounds set by Christian principles—is a two-way street of fulfilled obligations. Society has an obligation to help and support those who are in desperate need. Justice and solidarity demand this. The help given, however, should not consist simply of financial handouts; this creates a dependency and encourages a passivity that undercuts what God has created us to be. The help should enable the poor to overcome the challenges they face, obtain the training and employment they need, and avoid self-defeating attitudes and behavior. But the street runs both ways. The poor who receive help also have obligations. They have an obligation to take advantage of the offered training. They need to work to change the patterns of behavior and the attitudes that are holding them back. They need to accept employment that is offered, even when it is far from an ideal job. Public policy should insist on this sort of mutual, complementary obligation. To offer help to the poor without expecting anything from them in return is wrong. But it is equally wrong to expect the poor to strengthen their behaviors, attitudes, and work skills without offering them desperately needed assistance.
  • 38. Does this mean that public policy should offer the poor a year of work-skills training or limit such training to only six weeks? Should the poor be limited to five years of assistance or should it be only three years—or should it be for unlimited years as long as there are needs? When considering such questions, equally sincere Christians searching the Bible and their God- directed consciences with equal fervor may draw somewhat different conclusions. The important thing is that all Christians act out of a genuine, heartfelt solidarity with the poor, seeking their good as God’s image bearers with something to contribute to society. We ought not simply look for a way to save on taxes or to feel superior because we are not like “one of them.” A second important consideration for Christian citizens to keep in mind as they seek conscientiously to influence welfare policies is to work with and build upon civil-society institutions. Government policies ought not to undercut or take over for entities that are already working to help the poor. Instead, government ought to affirm, help, and strengthen them in their efforts. This means, first of all, that welfare policies should do all they can to encourage and strengthen stable, two- parent families. Stable, faithful marriages are one of the best antipoverty devices available, as demonstrated by the numbers I cited earlier in this chapter. Public policies that appropriately encourage such marriages and discourage divorce and out-of- wedlock births are effective weapons in efforts to overcome poverty. One also needs to appreciate the value of non financial assistance—working toward changed attitudes and patterns of behavior, working out difficult child-care or transportation problems, or convincing people that they are individuals of
  • 39. value and with something important to offer to their children and to society. Government agencies are not very good at offering this sort of assistance, while Christian agencies are. The importance of civil society and the principle of subsidiarity suggest that government ought to turn to Christian and other faith-based and nonprofit agencies to provide much of the actual, hands-on service to the poor. Many are already doing a fine job. The greatest need often is to support and strengthen them in their efforts—and surely not to try to take over for them. Conclusion “Be open-handed toward the poor and needy.” I chose this phrase from Deuteronomy 15:11 as the subtitle of this chapter. I have not tried to present neat, simple answers that define exactly what this command means for us today. But Scripture and the principles it teaches—when combined with what we know about poverty in the United States today—set down guideposts that point to answers. Through careful thinking, discussion with fellow believers, and much prayer we can find answers that will honor this charge our Lord has given us. Read: Kraft & Furlong: Chapters 9 Chapter 9 Welfare and Social Security Policy Struggling to make ends meet. Kansas City chef Howard Hanna speaks during an event to introduce the Raise the Wage Act in
  • 40. the Rayburn Reception Room at the U.S. Capitol on January 16, 2019, in Washington, D.C. Hanna pays the employees in his restaurants $15 an hour. The proposed legislation, which would gradually raise the minimum wage to $15 by 2024, is unlikely to pass in the Republican-controlled Senate. Poverty The United States has always had different viewpoints regarding poverty. The American cultural and social perspective that encourages individualism and promotes equality of opportunity leads to a tendency to blame the poor for their own circumstances. On the other hand, some say there really is inequality of opportunity that prevents many from increasing their standard of living. Hurricane Katrina and its aftermath, the recent economic recessions and slow recovery, and stories regarding college students going hungry highlight persistent poverty and inequality and often draw America’s attentio n. This may be particularly problematic for those considered to be in extreme or deep poverty. Deep poverty is defined as a household case income less than half of the federal poverty amount. Over 6 percent of the population lives under these conditions.3 There are a number of different ways to examine poverty in the United States, starting with the official definition. As we noted in chapter 5, for 2018, the federal government placed a family of four below the poverty line if its annual income was less than $25,100 in the forty-eight contiguous states. This rate is adjusted based on factors such as the number of people in a family, the composition of a family, and inflation from year to year. As we stated earlier, in 2017, nearly forty million people were considered to be impoverished; however, this was down from forty-six million in 2012.4 Others look at poverty from an income distribution perspective: the more unequal the
  • 41. distribution of income, the greater the potential poverty problem. Still others examine poverty in terms of demographic characteristics such as race, gender, and age (see Figure 9-1). As an issue, poverty in the United States came to a head during the mid-1960s when President Lyndon Johnson declared the War on Poverty. The government initiated a number of programs to deal with the problem. Between 1965 and 1973, the poverty rate fell from 17.3 percent to 11.1 percent, and it appeared that the nation was winning the war. Unfortunately, the United States has not achieved a poverty rate this low since 1973. The rate has improved significantly in certain demographic categories; for example, the elderly and intact minority families have made definite advances. Single mothers, children, and poorly educated young people, however, still have a hard time rising out of poverty. Some statistics concerning children in poverty help to drive this point home. In 2007, 18 percent of all children in the United States were poor, and this percentage increased to 21.8 in 2012, and decreased to 17.5 percent in 2017. Children make up only 25 percent of the population, but they comprise 33 percent of the nation’s poor. Moreover, minority populations in the United States also suffer higher poverty rates than whites,5 which may indicate something about the weaknesses of government programs to reduce poverty as well as those aimed at improving the status of minorities. Figure 9-2 shows the United States’ poverty rate by age over the past fifty years. Many look at poverty as an income distribution problem. In other words, a large number of people are living on limited resources, while a smaller percentage of people earn a large proportion of the nation’s combined income. Economists often
  • 42. use the Gini coefficient (see Figure 9-3) as a way of demonstrating a nation’s income equality and inequality. Income equality is represented by a forty-five-degree line, on which each percentage of the population is making the same percentage of the income. As a curve deviates away from the forty-five-degree line, it shows an increase in income inequality. The implicit interpretation of the curve is that if a few people are making a large percentage of the income, more people are put at risk of poverty. Based on 2017 data from the U.S. Census Bureau, the richest 20 percent of the population makes 51.5 percent of all of the income in the United States, and the poorest 20 percent makes only 3.5 percent. Another way to state this is that the top quintile is making more than the other 80 percent of the population (see Table 9-1). This gap is even more pronounced when you look at the top 5 percent, which earns more than 22 percent of all income. Some analysts and policymakers have begun to look at the poverty problem in a way they believe will change the debate on the issue. Although levels of poverty, as defined by the Census Bureau, have been decreasing, as we noted earlier, in 2010 they reached the highest level in over fifty years, in part because of the prolonged economic downturn and high levels of unemployment or underemployment (working only part-time or for low wages). a The distribution of income in the United States is even more unequal than the data in the table suggest. If one examines the gain in income over the past thirty years of the top 10 percent of Americans, one discovers that most of the gain went to the top 1 percent of taxpayers, and 60 percent of the gains of the top 1 percent went to the top 0.1 percent. The disparity between the very rich and the average American has been growing significantly in recent years. For a commentary about the erosion of equality in income distribution over the past several decades, see Paul Krugman, “We Are the 99.9%,” New York Times, November 24, 2011.
  • 43. Even before these recent changes, some data can indicate that the poor increasingly face real challenges. For example, during the slow economic recovery, the U.S. Conference of Mayors announced in 2013 that almost all cities reported an increase in emergency food assistance over the past year. Similar findings were reported for homelessness.6 While the Census Bureau has considered revising its definition of poverty, no real changes occurred until 2011, when the bureau introduced a supplementary measure of poverty. While the bureau will continue to use the “official” measure, it will also publish this supplementary measure that draws upon the recommendations of the 1995 National Academy of Sciences report.7 In essence, the new measure takes into account a fuller range of variables related to both revenue and expenditures. Changing definitions can dramatically affect poverty statistics, which is probably why this supplemental measure will not be used to determine eligibility for programs. The new measure of poverty also could significantly affect the political stakes. As an example, based on analyses using some different definitions of poverty, the income threshold in 2017 would be $27,085, or nearly $2,500 greater than the stated rate. Thus use of a different definition of poverty could increase the poverty rate substantially.8 Such changes in the poverty-line calculations may be necessary because the original poverty line is based on a number of assumptions made in the mid-1960s that may no longer be valid. In addition, the poverty level is the same for the lower forty-eight states and does not take into consideration what are often substantial cost-of-living differentials across the country. The supplemental measure discussed earlier represents the first major effort to reconsider this measure. It is probably safe to say that even the proposed increase in the income threshold and the resulting additional assistance may not be sufficient to cover a family’s expenses —
  • 44. housing, food, clothing, child and medical care, and everything else.9 On the other hand, a number of pundits and politicians, particularly conservatives, have argued that perhaps poverty may not be what it once was, and that even the poor enjoy a better quality of life than was the case decades ago. For example, they say that a large proportion of the population may not be paying any income taxes at all. Their claim is that everyone, even the poor, should be helping the nation address its fiscal challenges, and that they can afford to do so because they are living with what might be called luxury items in comparison to how many families lived in the 1960s.10 Another way to examine poverty is from an ideological perspective, or what some might say are the root causes of poverty. Is poverty due to broad economic circumstances or to individual behavior and choices not to work? Liberals and conservatives have different ideas about why poverty exists and consequently make different proposals for addressing the problem. Conservatives see poverty in part as a personal choice; they believe that little poverty exists in the United States that is involuntary. Some may also believe in the culture of poverty, meaning that those brought up in poverty learn how to be poor and work the current system to their benefit, and that they choose to remain poor as adults. In addition, conservatives tend to blame government programs for encouraging people to remain poor, in part by not requiring any kind of responsibility in exchange for received benefits. Liberals, on the other hand, see poverty as a problem brought on by economic and social conditions over which individuals have little or no control. Liberals recognize that not everyone has the same opportunity for quality education or job training, and they favor government intervention to help equalize the playing field. They believe as well that the high number of minorities who are poor indicates
  • 45. that discrimination also contributes to poverty. As discussed in chapter 6, equity is one of the criteria used to analyze problems or policies, but the word can have multiple meanings. In the case of poverty, should the concern be whether the processes by which people gain an education and jobs, and thus a certain income, are fair, and thus whether the nation’s overall distribution of income is fair? Conservatives tend to think this way about income distribution and poverty. On the other hand, liberals would ask whether equity means moving toward a more equal distribution of resources in the nation. In 2011 and 2012, the Occupy Wall Street and related movements tended to emphasize the latter perspective. That is, supporters viewed the current income distribution between the top 1 percent of the population and the remaining 99 percent as unfair or inequitable. The strong support for Senator Bernie Sanders during the Democratic primaries, particularly among college students, was built in part on the continuing level of inequality in the U.S. economy. Moreover, analysts pointed to new studies that showed significant constraints on social mobility—that is, on the ability of people to rise from the lower income levels. Recent research indicates that the United States now provides less mobility of this kind than do comparable nations. For example, 42 percent of American men raised in the bottom fifth of the income distribution remain there in adulthood. This persistent disadvantage is higher than in Denmark (where it is 25 percent) and Britain (where it is 30 percent).11 Some saw the rise and eventual victory of the Trump candidacy in 2016 as linked strongly to the perception and perhaps the reality of economic stagnation and the “left behind” white working class.12 Even with such data, of course,
  • 46. liberals and conservatives might disagree about whether inequality of this kind is acceptable or not. As we have argued throughout the book, students of public policy know that, depending on how one sees the causes of a problem and defines the evaluative criteria, various alternatives to address it will seem more or less appealing. Some will conclude that the United States continues to offer a reasonable degree of social and income mobility and thus the situation is fair, while others will interpret it as showing an unacceptable degree of inequality. Many of the social programs developed throughout U.S. history have attempted to deal with the poverty issue from different perspectives. Social Security, for example, was developed specifically to address poverty among the elderly. By this measure, the program has been somewhat successful. According to an analysis conducted by the Center on Budget and Policy Priorities using U.S. Census Bureau data, 39.2 percent of the elderly would be in poverty without Social Security benefits. With these benefits, the number in poverty drops to 9.2 percent.13 One of the goals of the food stamp program is at least to address issues of severe hunger that could occur as a result of poverty. The Earned Income Tax Credit (discussed later in this chapter) supplements wages of the working poor to lift recipients out of poverty. Programs such as AFDC and the newer TANF have attempted to deal with the poverty of all individuals who happen to fall below a certain income level or who have no income at all. Social Security
  • 47. Social Security is the single largest federal government program today, providing money for retired workers, their beneficiaries, and workers with disabilities. While almost everyone these days is covered by Social Security, some federal, state, and local government employees and certain agricultural and domestic workers are not. For beneficiaries over the age of sixty-five, Social Security provides the largest component of their total income. The presidential budget request for Social Security for fiscal year 2019 was $1.047 trillion,14 which provides some idea of the size and budgetary impact of the program. Social Security was enacted in 1935 during the New Deal period as a way to ensure that certain segments of society were guaranteed an income after their working years. The perception of Social Security both at its birth and today is that it is a social insurance program. Other examples of such programs are unemployment insurance and workers’ compensation. With these programs, citizens pay into a fund from which they expect to receive money back when they are eligible. Because of this designation, the public has always looked upon Social Security as more acceptable than other government welfare programs. Social Security is regarded not as a government handout but as money returned based on an individual’s contribution or investment. It should be noted, however, that in most cases a Social Security recipient eventually receives more money than he or she contributed as a worker. Social Security is typically classified as a redistributive policy program. Money is being redistributed across generations —that is, from workers to nonworkers or young to old—rather than between economic classes. Many people believe that their personal contributions are going into a benefits account to be paid out upon retirement, but that is a misconception. Social Security is a pay-as-you-go program; someone’s current contributions are paying for someone else’s current benefits.
  • 48. The program is also considered an entitlement. That is, if a person meets any of the eligibility requirements for Social Security, he or she is entitled to its benefits. The program is typically associated with payments to the elderly, and in fact this is the system’s largest outlay, but other people are eligible as well. Who is entitled to Social Security? Qualifying for the program is based partially on the number of years one has worked and contributed to the program. As individuals work, they earn “credits” toward Social Security. They can earn a maximum of four credits a year, and most people need forty credits to be eligible for benefits. Benefits fall into five major categor ies: Retirement: Full benefits are currently provided at age sixty- six plus a few months. The minimum age will gradually increase to sixty-seven for those born in 1960 or later. Disability: Benefits are provided to people who have enough credits and have a physical or mental condition that prevents them from doing “substantial” work for a year or more. Family: If an individual is receiving benefits, certain family members such as a spouse or children may also be eligible for benefits. Survivor: When individuals who have accumulated enough credits die, certain family members—for example, a spouse aged sixty or older—may be eligible for benefits. Medicare: Part A (hospital insurance) is paid through part of the Social Security tax. Typically, if individuals are eligible for Social Security, they also qualify for Medicare.
  • 49. The Social Security Administration also administers the Supplemental Security Income benefits program for low -income individuals who are at least sixty-five years old or disabled. The program is not financed through Social Security taxes. The Social Security program has two major goals, and in some ways, these goals conflict with each other. First, the level of benefits individuals receive is related to the amount they put into the system. In other words, the greater their contributions, the higher their benefits. Second, the program was supposed to ensure that lower-income individuals had at least minimal financial protection (Derthick 1979; Light 1995). Both goals are included in the benefits formula, and although the rich receive higher total benefits, the amounts are not proportionally higher. The poor, on the other hand, get a much greater return on their investment. Most of Social Security is financed by a specific tax on income. The rate of this tax has remained stable since 1990, with no significant increases since 1985. Currently, the government taxes individuals and their employers 6.2 percent for Social Security and an additional 1.45 percent for Medicare, for a total of 7.65 percent of their income. Theoretically, this tax is earmarked, meaning the money collected goes specifically toward the benefits; these taxes also are the only source for these benefits. In reality, the federal government collects more revenue through Social Security taxes than it is currently spending to pay benefits. The government uses the excess dollars for various purposes—most commonly to reduce the size of the federal deficit. The Social Security tax is capped at an annual income of
  • 50. $132,900 (the 2019 amount, which normally increases each year based on inflation) for a maximum contribution total of $8,240 per year. If an individual’s income is greater than $132,900, he or she pays the maximum tax and no more for that year. In other words, a person making $1 million or $10 million pays the same amount of Social Security taxes as a person making $132,900. And everyone is paying the same rate of tax, although self- employed individuals pay twice the 6.2 percent rate since they must contribute as both employees and employers. As discussed in chapter 7, this formula makes the Social Security tax regressive. Is the Social Security tax fair in light of some of the considerations on tax policy that we introduced in chapter 7? Keep in mind that limits are also imposed on the amount of money that each person can receive each month from the program. Some progressives have argued that one way to better ensure the long-term stability of Social Security is to raise the maximum income level or to not put a cap on it at all. This would represent a Social Security tax increase on upper-income individuals, but it would generate additional revenue. Social Security is often referred to as the political “third rail” because of the potential political danger associated with attempts to reform it, a reference to the subway that receives its power from this rail. Politicians foolish enough to touch the issue of Social Security reform will likely find themselves voted out of office—in other words, “fried.” Whenever policymakers suggest changes, intense debate arises, and the proposals often anger the people who are currently benefiting from the program or expect to benefit in the near future. From a political standpoint, there are two closely related reasons for the controversial nature of any proposal to change the Social Security system. First, the majority of the recipients are senior citizens, who are demographically the people most likely to vote in the United States. Politicians are necessarily wary about
  • 51. crossing such a politically active group. Second, the power of AARP, the major interest group representing the concerns of seniors, is formidable. AARP claims a membership of more than thirty-seven million people, and it is one of the most influential interest groups in the nation. It also has a large professional staff involved in lobbying. With these political resources, it should be clear why efforts to make major reforms to Social Security can be challenging. The box “Steps to Analysis: AARP as an Advocacy Group” suggests some ways to become familiar with the group’s activities. Nevertheless, almost everyone believes that something must be done to reform Social Security, because it is not sustainable under its current model. Social Security’s Changing Demographics The Social Security program, and the number of people eligible for it, has changed dramatically since its inception in 1935. In 1945, the program had fewer than five million beneficiaries, but by 2019, the number had grown to more than sixty-eight million.15 The reason for this increase is simple: life expectancy is higher today than it was fifty years ago. As more people live beyond the age of sixty-five, larger numbers are entitled to Social Security benefits. What this has meant is that Social Security, as a program, has grown enormously since the New Deal years and, by all estimates, will continue to grow well into the future. Analysts are especially worried about the impending retirement of the baby boom generation. The first wave of Americans born between 1946 and 1964 started retiring in 2011. Social Security is obviously larger now in terms of total dollars. But it also makes up a larger percentage of government expenditures; it grew from about 14 percent of the federal
  • 52. budget in 1969 to a projected 24 percent in 2019.16 More problematic for Social Security is that while the number of beneficiaries is growing larger, the number of workers contributing to the program is becoming smaller, leaving fewer workers per beneficiary. In 2017, the ratio of workers to retirees was approximately 2.8:1; that is, 2.8 workers were supporting each recipient. Compare this to 1960, when the ratio was 5.1:1, or to 1950, when the ratio was 16.5:1, and the problem becomes apparent. Projected estimates indicate that with no change to Social Security, by 2033 each recipient will be supported by only 2.2 workers,17 when the typical 2019 college graduate will be only in midcareer. The graying of the U.S. population is actually quite staggering when examined over time. Figure 9-4 shows the ratio of workers to Social Security beneficiaries since 1955 and the dramatic decrease in that ratio. Because of these changing demographics, projections suggest that the amount of revenue coming into the Social Security system will finance only 75 percent of the benefits. For younger workers today to receive full benefits, it might be necessary to increase the withholding tax. This issue will affect people not only in the long term upon their retirement but also in the short term if Social Security taxes go up. Another option that has been proposed primarily by Republicans would be to continue to raise the retirement age up to seventy years. Would these moves be fair and equitable? If not, what are the alternatives to increasing the Social Security tax? Problems with Social Security Beneficiaries and policymakers have acknowledged for years that even though the government has addressed some of its problems, Social Security as it currently exists has a number of flaws. In 2000, Congress and the president changed the rule regarding the employment of retired workers and how it affects
  • 53. their Social Security benefits. Under the old rules, beneficiaries who chose to work to supplement their income would lose part of their Social Security benefits if they made more than a certain amount of money during the year. With the change, all workers sixty-six and over (the full-benefit or normal retirement age for those born between 1943 and 1954) can earn as much as they want without forfeiting part of their Social Security benefits. Naturally, this change in the law benefits only those senior citizens who continue to work. Another Social Security issue the government addressed is the fixed retirement age. Historically, the official age for collecting Social Security benefits was sixty-five, but changes to the law have gradually raised the age of eligibility to between sixty-six and sixty-seven, depending on the year of birth, in recognition of the population’s longer life expectancy and people’s tendency to continue to work.18 Raising the age provides two major benefits for Social Security’s solvency. First, if people cannot receive full benefits until sixty-seven, they will not receive as much money over their lifetimes. Second, if they continue to work, they will also continue to contribute to the program. Increasing the retirement age raises other issues, however, such as equity. Is it fair to the members of the current working generation to demand that they work until age sixty-seven when their parents or grandparents could retire at sixty-five? What about quality of life? If people cannot retire until relatively late in life, they may be less able to enjoy their retirement years because of illness or physical limitations. Some social commentators have already raised concerns about the amount of time people spend working in American society, compared to
  • 54. most European countries. In addition, a policy that encourages later retirement may exacerbate problems affecting family life and employment opportunities for younger people. A third major problem with Social Security is the potential gender inequity built into the system. When Social Security was enacted, few married women worked outside the home, but labor statistics have changed dramatically: in 2016, nearly 70 percent did.19 Why is this a concern? First, women generally earn about 19.5 percent less money than men,20 which will affect their benefits upon retirement. Second, women tend to stay at home for parts of their career to raise families, which again will affect benefits. Women also tend to outlive men by a few years, which can be a further financial disadvantage. Financing Social Security Obviously, the biggest problem with Social Security and the one that gets the most attention is the financing of the program and the projections showing the system running out of money. The strong economy during the 1990s partially improved the situation of Social Security by increasing its solvency. Recent projections by the Social Security Administration, however, show that benefits and expenses are more than the taxes collected by the program. In 2018, Social Security began to draw down on the trust fund reserves in order to pay some of the benefits.21 By 2033, the trust funds, which are in reality a promise to pay, will be depleted, and the revenue coming into the program will pay only about 75 percent of the benefits that are due to retirees and other recipients.22 These kinds of numbers spark concern among many younger Americans, who say they do not believe that Social Security will be around when they are eligible to collect it after they paid a lifetime of taxes into the system.
  • 55. Solution s to financing Social Security are particularly problematic from a political perspective. Like any other budget problem, the “simple” solution to deal with the coming deficit in Social Security would be to increase revenues flowing into the program or to cut expenditures. In the context of Social Security, how might that be done? To bring in more money, policymakers could increase the tax on individuals and employers by raising either the withholding percentage or the maximum income that can be taxed, or both. If, however, the government made a subsequent change in the benefits to which retirees are entitled, then the additional revenues would be partially offset. As discussed in other chapters, Congress always finds it politically difficult to raise taxes even to protect a popular program such as Social Security. The other course of action is to reduce expenditures, which can be done in a number of ways. As discussed earlier, the age of eligibility for benefits has already gone up, which postpones the outlay of funds for a number of years. Another idea, which has been used in the past, is to delay the cost of living adjustment (COLA). Social
  • 56. Security benefits go up annually, and the amount is linked to changes in inflation, as measured by the Consumer Price Index (CPI). By not implementing the COLA for a period of time, the Social Security Administration could save billions of dollars. Another solution would be to decrease the COLA outright. In other words, it might only be a partial, not a full, inflationary adjustment. The reasons for exploring the COLA option are worth considering. First, many workers in the United States do not receive inflationary adjustments in their wages. Is it fair that retirees get regular increases in their income while those who are working do not? Second, as discussed in chapter 7, many policy analysts believe the government’s current indicators, such as the CPI, overstate inflation. There is not uniform agreement regarding this, though. For example, some prices for goods purchased by the elderly in areas such as health care and drugs rise faster than the CPI. If the CPI is overstated, the COLAs are actually higher than the true rate of inflation. For the sake of illustration, if Social Security paid out $400 billion in benefits this year and the inflation rate was determined to be 3 percent, it would mean an automatic increase in benefit payments the following year (disregarding new beneficiaries or
  • 57. deaths) to $412 billion. Delaying the payment of the COLA increase for six months would save $6 billion a year. Adjusting the COLA down by 1 percent would save $4 billion a year. If either of these proposals were adopted for a number of years, significant savings in the program would materialize. Some have advocated for a different, and more generous, COLA for seniors since their “basket of goods” is quite a bit different from others. For example, seniors may be spending more on prescription drugs, but may drive less and therefore use less gasoline. Privatization is another approach to Social Security financing. The idea here is that individuals would be allowed to invest some of their withholding tax in mutual funds of their choosing, or the government might be permitted to invest Social Security funds in the stock market or other private instruments to generate a higher rate of return than is now possible. Currently, the money collected for Social Security is invested in government bonds with a relatively low yield (albeit with little risk). Many people believe that a partially privatized system would increase the return and extend the financial life of the system. Privatization has been proposed by a number of people and organizations. President George W. Bush proposed the idea of
  • 58. personal accounts that would allow workers to contribute up to four percentage points of their payroll taxes into a larger range of account options that potentially would have provided them with a greater return upon their retirement. President Bush’s proposal would have partially changed the structure of Social Security from pay-as-you-go to more of a 401(k) plan; it sets up a private account for each person from which he or she can draw upon retirement. The Social Security Advisory Council (1997) included it as one of its proposals, although not all of the committee members supported it.23 In addition, the National Commission on Retirement Policy (1999), which addressed a number of issues on how to fund retirement, included a plan to allow for private investment of a portion of the withholding tax.24 Much of the Bush plan was based on the commission’s proposal, which would direct approximately one-quarter (or two percentage points) of the current 7.65 percent payroll tax into individual savings accounts for which people could make choices about investment strategies for their money. There are some things to consider with this kind of Social Security reform. A system that permits individual retirement accounts and siphons off a portion of the Social Security withholding tax changes the investment picture. These accounts
  • 59. would be specifically earmarked for the individual retiree. In other words, the four percentage points withheld, plus interest, would be dedicated directly to each worker, who would want to get the largest return possible on these investments. Doing so would likely mean investing outside of government securities, particularly in the stock market. Is this a good idea? Related to this, in the absence of other policy changes, and with four percentage points of the withholding tax going into individual accounts, the solvency of the current Social Security funds becomes even more fragile. The funds would be depleted earlier than under current projections. The Center on Budget and Policy Priorities estimated that such a change would deplete the reserves in 2030 rather than 2041.25 On the positive side, if individuals make good investment choices, they will receive a higher rate of return from Social Security and subsequently a higher standard of living upon retirement. The negative effects are equally obvious, and the most important of these is the impact on financial markets of a prolonged economic downturn. For example, the markets suffered some of the steepest losses in 2008 when the economy soured in the United States and abroad. The losses demonstrated that there are large potential risks associated with these kinds of investments. This situation raises new questions: Will people be able to manage their investments? How many will make poor choices on where to invest their money? Will financial advisers pressure people to
  • 60. make unwise decisions? Under this proposal, the investment part of people’s Social Security donations will not be protected, and retirees could receive less money than they would under the current plan. Would society be willing to redirect money into programs to ensure that people can make ends meet? Will action be taken to provide any protection for these self-invested funds? If the answer is yes to either of these questions, it may require so much money from the federal budget that the purpose of the legislation is defeated.26 The politics of Social Security reform also merits attention. We have already mentioned the sensitive politics associated with Social Security and potential reform efforts. Senior citizens are an attractive target for politicians because, as a group, they turn out to vote in large numbers. Not surprisingly, seniors and the interest groups representing them, such as AARP, have been wary of Social Security reform efforts that may decrease their benefits. According to AARP, its members should be concerned about privatization reform plans for two reasons: the potential unpredictability of the stock market and fears that such accounts will take money out of the Social Security account and pass the bill along to future generations.27 It seems clear that any reform option that includes a form of privatization will need to
  • 61. proceed cautiously, assuring the current beneficiaries and people close to retirement that their benefits will continue at the same rate. Privatization programs tend to be more popular with younger voters who have the time to take advantage of these investments, are more likely to invest in the market, and are concerned about the current pay-as-you-go system and its future solvency. But there is one problem with this analysis. While the young should be more supportive of such a plan, they are l ikely to be the least engaged in the political debate because it is a program from which they will not see benefits for decades.28 Each of the numerous and conflicting perspectives on proposals to privatize Social Security comes with plenty of supporting data and reports, but the debate is not only about personal retirement and investment but is also, perhaps more important, about how the program will continue to survive for future generations. Social Security has been, and will continue to be, a highly politicized issue, which makes major reforms exceedingly difficult. Any reform effort, whether it is privatization or less drastic changes such as increasing the withholding tax or changing the benefit structure, also has multiple economic implications for individuals and for the nation as a whole. In addition, the perceived success of the
  • 62. program in providing for the elderly and those who cannot work raises important equity issues. All of these problems will become even more significant both to individuals and to the nation as more and more baby boomers retire. We will return to this issue in the “Focused Discussion” section later in the chapter. Welfare Welfare policies, as most Americans think about them, concern means-tested programs. To qualify for a means-tested program, a potential recipient usually must meet an income test—perhaps better described as a lack-of-income test. These programs include food stamps, job training, housing benefits, and direct cash payments to the poor. Means-tested programs differ from social insurance programs such as Social Security: eligibility for these programs is based on need rather than contributions made to the program. Because of this distinction, welfare programs do not engender the same level of public support as Social Security. Most people see welfare not as a social insurance program but as a government handout or charity, which has different
  • 63. connotations for many. Welfare programs are also redistributive, but in this case funds are being transferred to the poor from those who are paying taxes. The Supplemental Nutrition Assistance Program One of the largest federal programs for the poor is the Supplemental Nutrition Assistance Program (SNAP), formerly known as the food stamp program and administered by the United States Department of Agriculture (USDA). The plan provides low-income households with financial resources to purchase food. Eligible recipients, who need to meet certain resource and income requirements, are allotted a dollar amount based on the size of their household. In 2018, SNAP served over forty million people at a cost of nearly $65 billion.29 One of the changes made to the welfare program is that SNAP recipients are expected to register for work and take available employment. There have been recent reductions in the SNAP program including some passed in 2014, which cut food stamps by $800 million over the next decade (about 1 percent per year). These cuts, along with proposals to require that certain beneficiaries be required to work more, reflect conservative criticism of the program, including concerns critics raised about
  • 64. overreliance on the program by beneficiaries as well as numerous accusations of fraud in the way benefits are sought and distributed under the program. On the other hand, many potential beneficiaries do not seek benefits to which they are entitled because of complex bureaucratic rules associated with the program; therefore, they either do not get adequate nutrition or turn to other sources for help.30 Federal Assistance for Food. SNAP is only one of many public programs geared to meet the nutritional requirements of individuals. The USDA also administers the federally assisted national school lunch and school breakfast programs, which provide well-balanced, nutritional meals at either no cost or reduced cost to children from low-income households. The school lunch program was first aimed at assisting schools to purchase food for nutritious lunches. The passage of the National School Lunch Act in 1946 gave the program a permanent funding basis and stipulated how funds would be apportioned to the states. The purpose of the law was to ensure the “safety and well-being of the nation’s children” through a program that encouraged consumption of nutritious commodities and assisted states to provide such food
  • 65. and necessary facilities.31 The program, as it is currently conceived, started in 1971, when subsidized meals were tied directly to the poverty guidelines. Today, children in a family at or below 130 percent of the poverty level ($25,100 for a family of four in fiscal year 2018) are eligible for free meals. Nearly thirty million lunches were provided or subsidized by the program in 2018.32 This program is clearly directed at children living below or near the the poverty line, but it is also part of the government’s larger effort to provide valuable nutrition education to all Americans, including yet another revamping of the food pyramid in 2005 and again in 2011 with the introduction of the MyPlate campaign.33 Providing information and education is one tool policymakers use to address public problems. The federal government has even set up a centralized website (www.nutrition.gov) where anyone can access nutrition information. Aid to Families with Dependent Children For years, the nation’s major means-tested program was AFDC, which was what most people referred to as “welfare.” AFDC was intended to provide financial aid to low-income mothers and children. The program benefited about fourteen million people in its last year in existence and cost about $14 billion
  • 66. annually (Peters 2000). Critics denigrated the AFDC program for years on numerous grounds. First, AFDC provided funds to individuals but expected little in return. Welfare programs are not popular with voters in the first place, because they believe the recipients are getting something for nothing. Widespread media accounts of people taking advantage of the system in various ways made the public angry. Although little systematic evidence existed to prove that these practices were common, the stories persisted and helped lead to the program’s elimination. Other critics disapproved of several of the program’s practices. In particular, they said AFDC stigmatized the beneficiaries by requiring them to respond to personal questions, home inspections, and other administrative intrusions to qualify for the benefits (Cochran et al. 1999; Peters 2000). Another frequently raised issue was that AFDC seemed to provide a disincentive to work. Under AFDC, beneficiaries could work only so many hours a month. If they earned more than the specified amount, they would lose a part of their benefits. The incentive therefore was to work only up to the point of losing benefits. A related problem was that attempts to move off welfare by taking a job were not necessarily a rational solution for beneficiaries. By the time individuals paid
  • 67. for child care, transportation, and perhaps health care, they often had little money left, especially if they were being paid minimum wage. The smart financial decision, therefore, was to remain in the government welfare program. The Earned Income Tax Credit The Earned Income Tax Credit (EITC) is a refundable federal income tax for low-income working individuals and families. For those who qualify, if the EITC is greater than the amount owed in taxes, the beneficiary receives a tax refund. The government implemented the EITC over forty years ago as a way to encourage work and to provide recipients with some tax relief and in some cases even a tax refund. In 2018, the maximum tax credit was $6,431 for a family with three or more qualifying children. For those in deep poverty, the tax credit is probably not significant enough to provide much improvement to living conditions, but it could make a difference for low - wage workers. Some have argued for an expansion in the EITC, and President Obama’s 2015 budget request did just that. Such an increase could protect families from short-term monetary problems. It could also decrease the number of people who need other government support programs.
  • 68. Increases in the EITC would raise budgetary concerns that the government would need to take into consideration, particularly in times with large deficits. While the program encourages work and is generally supported, an expansion of it could have budgetary effects. In the current political climate, some also raise the question of how much of a role government should play in ensuring that people do not live in poverty. These issues are also obviously tied to the ethical questions associated with poverty. All of the welfare programs discussed in this chapter have raised difficult questions for the United States throughout its history. Should we be comfortable with a segment of the population living in poverty? What role should government play, if any, to address this? What are the most appropriate or effective programs to address this problem? This brings us to one of the major changes in welfare that occurred in 1996. Welfare Reform Options
  • 69. The concerns with AFDC led to calls for reform from many ideological perspectives. Liberals saw the program as inadequate to provide enough benefits to ensure an adequate standard of living and protect the children who were supposed to be the primary beneficiaries. Conservatives, on the other hand, were more interested in correcting the disincentives for adult beneficiaries to work and try to become self-sufficient. R. Kent Weaver (2000) discussed this conflict as the “dual clientele trap” associated with calls for welfare reform: Policymakers usually cannot take the politically popular step of helping poor children without the politically unpopular step of helping their custodial parents; they cannot take the politically popular steps such as increasing penalties for refusal to work or for out-of-wedlock childbearing that may hurt parents without also risking the politically unpopular result that poor children will be made worse off. (45) During the 1990s, major forces came together to get welfare reform onto the government agenda, and the result was a new policy. As Randall B. Ripley and Grace A. Franklin (1986) state, in the U.S. system of government, presidential leadership is often needed to propose any major changes to redistributive programs. The
  • 70. election of President Bill Clinton in 1992 and the subsequent Republican victories in the 1994 congressional elections set the stage for change. On the issue of public support for the poor, Clinton said he wanted to “end welfare as we know it” (Clinton and Gore 1992). His ideas to require work to receive benefits and “demand responsibility” (Clinton and Gore 1992, 164) were in some ways more in line with Republicans than with traditional Democratic constituencies. The Republicans had made welfare reform a tenet of their Contract with Ameri ca, a set of proposals that formed the basis of their campaign. Their version of welfare reform emphasized work even more firmly than the Clinton proposals (Weaver 2000). The ideological changes in Congress likely also forced some movement in Clinton’s position. The eventual outcome, after much negotiation, political posturing, and strong opposition by many liberal interest groups, was PRWORA. Welfare Reform Law PRWORA ended the old AFDC program and welfare as most people know it, replacing it with the block grant program TANF, which provided state governments with additional flexibility to run their welfare programs. The law also imposed
  • 71. work requirements for beneficiaries and put lifetime limits on receiving benefits (Weaver 2000). The law included the following new rules: Teenage parents are required to live with their parents or in an adult-supervised setting. States are required to ensure people are moving off the welfare rolls and into work. For example, 50 percent of the families were to be working thirty hours a week by 2002. States not meeting the requirements are penalized by reductions in their TANF block grant funds. Adult recipients are limited to a total of five years of receiving federal TANF funds, and states can either impose additional limits or use their own money to fund recipients beyond the five-year period. The entitlement structure would change from a system in which individuals who meet the eligibility requirements are entitled to AFDC funds to one in which the states receive the entitlement based on a federal block grant formula (Weaver 2000). As part of the Deficit Reduction Act of 2005, which became law
  • 72. in 2006, Congress reauthorized TANF and approved changes that made the program stricter, made it more difficult for states to meet the established goals, and took away some state flexibility. These changes included the following: Work participation rates are based on caseload declines after 2005 rather than 1995. Since significant case reductions occurred particularly in the late 1990s, the result was that it was more difficult for states to meet the goals. Work participation rates are based on both TANF and state- funded programs. In the past, state-funded programs did not count toward the work rate. Uniform methods for reporting hours, type of work accepted, and other issues are adopted. A new penalty of up to 5 percent is established for states that do not implement internal procedures and controls consistent with Department of Health and Human Services (HHS) regulations.34
  • 73. In 2018, more than 2.2 million people were receiving TANF benefits according to the HHS Administration for Children and Families.35 The box “Working with Sources: Welfare and Its Ability to Meet Needs” presents opportunities to examine this issue in more depth. Working with Sources Welfare and Its Ability to Meet Needs The economy can have major implications for the general population, particularly as it relates to people eligible for welfare. High levels of unemployment and underemployment can lead to more people qualifying for welfare programs such as Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program. Oftentimes, it is left up to state governments to implement such programs, and this may occur differently across the country. Go to the following sites and see what they are saying about welfare and the economy and how states may be reacting: Center on Budget and Policy Priorities (www.cbpp.org/research/index.cfm?fa=topic&id=42)
  • 74. National Conference of State Legislatures (www.ncsl.org/research/human-services/welfare-and- poverty.aspx) Urban Institute (www.urbaninstitute.org/welfare/index.cfm) Consider the following questions: What are these organizations saying about the effectiveness of welfare programs to address the needs of those populations most affected by poverty? Are these programs addressing the needs of the poor? How is this affecting states and their populations differently? What concerns are being raised by these organizations? What is your assessment of what should happen? What improvements might you recommend, and why?