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CHAPTER 15
Domestic Policy
Debates Over Public Purposes
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
Domestic policy is a public policy that is comprised of
decisions on matters affecting individuals within a political
system.
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Domestic policy is affected by the self-interest of various groups
and individuals.
Self-interest is frequently cloaked in the mantle of national
interest.
Social welfare policies: governmental programs that are
directed specifically toward promoting the well being of
individuals and families (for example, social insurance
programs)
Social entitlements: programs whereby eligible individuals
receive benefits according to law (for example, Social
Security)
Gross Domestic Product
and Social Welfare
Expenditures 1929-2000
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In 1929, government at all
levels spent less than 4
percent of GNP on social
welfare programs. By the
mid-1960s, government
social welfare spending
accounted for more than
10 percent of GDP. The
largest category of social
welfare spending is
comprised of federal
social insurance programs,
followed by health and
medical programs. Social
welfare spending as a
percentage of GDP gives
an indication of how much
society’s total output of
goods and services is
devoted to these
programs.
The Development of Federal Social
Welfare Policy
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The domestic activities of the national government before
the twentieth century were very limited.
Social Darwinism is a set of ideas applying Charles
Darwin’s theory of biological evolution to society and
holding that societal relationships occur within a struggle
for survival in which only the fittest survive.
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The theory offered intellectual justification for limited government
and unfettered growth of industry.
According to this theory, government should not assume the role
of providing for social welfare because such action would
interfere with the natural forces acting to improve society as a
whole.
The Development of Federal Social
Welfare Policy (continued)
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The Progressive Era was an urban reform movement that
called for direct primaries, restriction on corporations, and
improved public services. It replaced corrupt politics with
the civil service system.
The New Deal encompasses the policy initiatives enacted
during the first two terms of President Franklin D. Roosevelt
in an effort to relieve suffering of those touched by the
Great Depression.
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Revolutionary policy initiatives included the FDIC, Social
Security, and unemployment compensation.
It established a pervasive and active role for the national
government.
Public expectations that the government “do something” about
social and economic problems arose during the Roosevelt
presidency.
The Development of Federal Social
Welfare Policy (continued)
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The Great Society was Lyndon B. Johnson’s term for the
egalitarian society that was created by aggressive
governmental action to help the poor and disadvantaged
during the 1960s.
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The Civil Rights Act of 1964 and the Voting Rights Act of 1965
finally provided, by law, the rights long denied to African
Americans.
The Equal Opportunity Act and the Food Stamp Act of 1964
explicitly dealt with the plight of the poor.
The Elementary and Secondary Education Act of 1964 provided
federal aid for the nation’s disadvantaged schools.
Perhaps the most important was the Social Security Act
amendment in 1965 that provided health care for the aged
(Medicare) and the poor (Medicaid).
The National Government as Social
Insurer
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Social insurance programs are welfare programs
that provide cash or services to the aged,
disabled, and the unemployed, regardless of
income level.
 The
Social Security Act of 1935 was landmark
legislation that firmly established, for the first time, a
social welfare role for the national government by
providing old age insurance, unemployment
compensation, and grants to the states to provide cash
assistance to dependent children and to the blind,
disabled and aged.
The National Government as Social
Insurer (continued)
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 In
terms of expenditures, numbers of people, and
intensity of political support, Social Security is the
national government’s largest and single most
important domestic policy.
 By the late 1970s and early 1980s, it had become
clear that with a declining birth rate and longer life
expectancies the expenditures would soon exceed
revenues. As a result, the future of Social Security
has been an almost constant topic on the American
political scene.
Shares of Income for the Older
Population, 2008
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Older
Americans
rely heavily
on Social
Security
income.
Social
Security
benefits
are the
principle
source of
income for
Americans
over age
65.
The National Government as Social
Insurer
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Medicare is a two-part public health insurance
program in which government pays the providers
of health care for medical services given to
patients who are aged or disabled.
 Hospital
Insurance (HI) is funded by a portion of the
Social Security tax paid into a hospital trust fund.
 After
a patient pays a deductible, Medicare covers
hospital costs for two months.
 The patient shares costs after that period.
The National Government as Social
Insurer (continued)
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Supplemental Medical Insurance (SMI) is a program that,
after a patient pays a deductible amount, funds physician
and outpatient services.
SMI is voluntary.
 It is funded by premiums paid by enrollees and general
revenues from the federal treasury.
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Unemployment compensation is a social insurance
policy that grants temporary financial assistance to
the unemployed.
It is not designed for the chronically unemployed.
 It is for those who need financial assistance to keep afloat
between jobs.
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Public Policy and Economic Inequality
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A means-tested programs is a type of social welfare
program in which the government provides cash or in-kind
benefits to individuals who qualify by having little or no
income.
Measures of Economic Inequality
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Quintile: five groups each comprising a fifth of the population,
divided according to the proportion of the total money each
group receives
Perfect income equality would mean that each fifth of the
population of families receives 20 percent of all the money
income—that each quintile receives an equal slice of the
money pie.
However, great income inequality persists as the lowest group
receives only 3.4 percent of the money pie while the highest
group receives 50 percent of the money pie.
Public Policy and Economic Inequality
(continued)
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Another measure of economic inequality is the
proportion of the total population classified as poor
in the United States.
The term poverty is a human construct and does not have
the same meaning in all societies.
 Relative deprivation is one way to define poverty. This
means that individuals with less, regardless of their
absolute income level, will feel poor or deprived relative
to those who have more.
 The poverty threshold is an income level, different
according to family size and adjusted annually for
inflation, below which individuals are defined as being
poor.
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Major Social Welfare Programs
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Social insurance and
means-tested
programs are major
categories of social
welfare programs.
Social insurance
programs are
generally funded by
specific taxes and
have the retired, the
aged, individuals
with disabilities, and
the unemployed as
their beneficiaries.
Means-tested
programs are
designed for needy
individuals, are
funded by general
revenues, and
usually involve the
states in their
administration.
Aggregate Family Income by
Quintiles
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In the years between 1968 and 2008, the bottom four quintiles of families received
a declining share of aggregate income, while the top quintile increased their share
of aggregate income.
Number and Proportion of Poor People in the
United States, Selected years, 1960-2008
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Although the absolute number of poor people remains high, the percentage of poor in the
population has been below 14 percent in recent years.
Poverty Rates for Selected Groups,
Selected Years, 1959-2008
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Although poverty rates are lower than they were in 1959, substantial differences among groups
remain.
Poverty as a Political and Social
Problem
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Social scientists have generally offered two sets of
explanations for why people are poor.
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The first holds that people are poor because they lack
personal qualities, such as ambition or intelligence.
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The second explanation centers on the kind of social,
economic, and cultural environment that is likely to be fertile
ground for poverty.
The working poor are individuals who, despite being
employed or seeking employment, are still defined as
poor because their low earnings are not enough to put
them above the poverty threshold.
Poverty as a Political and Social
Problem (continued)
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The underclass is defined as a proportion of the poor
comprised of individuals isolated from the rest of society and
for whom poverty is a continuing way of life.
Curative strategies are policy strategies designed to reach the
fundamental causes of poverty and to enable individuals to get out
of poverty and lead productive, self-sufficient lives.
Alleviative strategies are policy strategies designed to make
poverty more bearable for individuals rather than being designed
to prevent poverty by reaching its fundamental causes.
 Aid to Families with Dependent Children (AFDC) was one of the
oldest alleviate strategies that provided cash assistance to needy
children and an adult relative or, in participating states, an
unemployed parent.
Poverty as a Political and Social
Problem (continued)
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Welfare programs were among the most controversial
poverty programs because of the perception that it
creates a “welfare dependency” that is passed from one
generation of families to the next, with little hope of
breaking out of the vicious cycle.
Welfare Reform Act
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This act changed the name from Aid to Families with
Dependent Children (AFDC) to Temporary Assistance for
Needy Families (TANF), emphasizing the temporary nature of
the program and placing a two-year limit on the receipt of
benefits.
It also required recipients to work at least part-time while
receiving benefits and provided some exemptions for
education and job training.
Public Policies to Address Economic
Inequality
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Supplemental Security Income (SSI) is a social welfare
program administered by the Social Security
Administration whereby the national government
guarantees a certain level of income for the needy,
aged, blind, and disabled.
Medicaid is a means-tested medical care program
providing in-kind medical benefits for the poor.
Supplemental Nutrition Assistance Program is a meanstested program that provides the eligible needy with
cards that can be used to purchase food.
Environmental Policy
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Environmental protection policies are designed to
regulate various types of pollution.
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The Environmental Protection Agency (EPA) is an
independent agency that controls and abates air and water
pollution and protects the environment from pollution from
solid wastes, pesticides, radiation, and toxic substances.
Risk assessment is the process of estimating the
potentially dangerous consequences or damage that
might result from a particular activity.
Risk management is the process of making decisions that
try to reduce or contain identified risks.