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Chapter 19 DOMESTIC POLICY Providing Affordable Health Care for All Health care a central theme of Barack Obama's presidential campaign About 16 percent of U.S. 2007 GDP spent on health care ($8,000 per person/$4,000 per person in the second highest nation) Health care costs doubled every decade for the last 30 years Over 60 percent of all personal bankruptcies due to medical costs 2012 50 million Americans lacked insurance Many denied due to arbitrary definition of pre-existing condition 47,000 deaths per year due to consequences of lack of insurance Ranked 37th in the world in outcomes 2 Health Care U.S. only major industrialized nation without universal health care (Germany first in 1870s) Many programs exist, providing a patchwork quilt of care Medicare-elderly 1960s Medicaid-poor 1960s Children’s Health Insurance Program (SCHIP) And now, President Obama’s health care bill 3 Many parts of the program founded in Republican ideas Teddy Roosevelt calls for major reform Richard Nixon Comprehensive Health Care Program Individual mandate-Newt Gingrich and the Heritage Foundation Medicare Part D-Prescription medication George W. Bush 4 Domestic Policy Making More than half of government expenditures made on Social Security, health care, education, and immigration Many designed to address economic inequality To evaluate, must address questions involving conflicts between freedom and order and freedom and equality State and local governments must also have capacity to carry out national programs 5 The Development of the American Welfare State Most controversial purpose of government promotion of social and economic equality Conflict between freedom and equality Most modern nations welfare states Social welfare policy based on concept governments should provide for basic needs of members 6 A Human Tragedy 7 The Great Depression Initiatives related to the New Deal and the Great Society dominated national policy until reforms in 1980s and 1990s Extended protective role of government The Great Depression longest and deepest setback of U.S. economy in history Began with stock market crash Oct. 24th, 1929 and ended with start of WWII One in four workers unemployed; more underemployed 8 The New Deal Franklin Delano Roosevelt, accepting nomination at Democratic Presidential Convention: “I pledge you, I pledge myself to a new deal for the American people.” Were programs imaginative public policy or source of massive government growth without matching benefits? 9 The New Deal’s Two Phases First phase aimed at boosting prices and lowering unemployment Civilian Conservation Corps (CCC) Second phase aimed at aiding “forgotten people” Social Security program Despite programs, poverty and unemployment persisted until WWII 10 The Great Society President Lyndon B. Johnson reelected in 1964 with landslide Used support to promote Great Society programs to combat political, social, and economic inequalities Vital element was War on Poverty Economic Opportunity Act (1964) designed to end poverty in 10 years A hand up, not a handout 11 Retrenchment and Reform Despite Great Society’s programs, poverty declined but did not disappear Ronald Reagan used presidency in early to mid 1980s to re-examine social welfare policy Shifted focus from economic equality to economic freedom Questioned whether government alone should look after less fortunate 12 Retrenchment and Reform President Bill Clinton’s proposals aimed at reforming system while protecting basic fabric of safety net President George W. Bush’s administration greatly expanded welfare benefits for seniors with Medicare drug program 13 Social Security Government social insurance programs protect individuals from various kinds of loss, regardless of need First example was workers’ compensation Social security and Medicare also social insurance programs These programs examples of entitlements 14 Origins of Social Security Social insurance programs began in Europe as early as 1883 In U.S., needs of elderly and unemployed left to private organizations and individuals until Great Depression In 1935, President Roosevelt signed Social Security Act 15 Social Security Act Act had three approaches: Social insurance for elderly and disabled, and unemployment benefits Grants-in-aid to the states to help destitute Federal aid to the states to provide health and welfare services 16 How Social Security Works Most people think of retirement benefits when thinking of Social Security Program provides other services Contributions not set aside for individuals but used to fund “pay as you go” system Program began with more paying into fund than taking out (nine workers to one beneficiary) Today’s program closer to three workers for each beneficiary 17 Will Social Security Remain Solvent? Baby boomers begin to retire in 2010 Current projections show fund exhausted by 2037 Politicians face dilemma: lower benefits or raise taxes to fund program? Current workers’ benefits will be paid by future participants Solvency depends on growth of base What happens when birthrate falls, unemployment rises, mortality declines, and/or economy falters? 18 Figure 19.1 Day of Reckoning 19 Census Data 49.9 million, or 16.2 percent, of Americans live in poverty 15 million children live in poverty 9.4 percent of people over 65 live in poverty (1954 35% lived in poverty, reduction largely due to Social Security benefits. One in two poor Americans live in a family with a woman head of household 20 Figure 19.2 The Feminization of Poverty 21 Welfare Reform Original poverty programs lacked work incentives A 1994 poll showed 59 percent of Americans believed welfare recipients taking advantage of system Personal Responsibility and Opportunity to Work Act reforms enacted in 1996 Designed to “end welfare as we know it” Abolished Aid to Families with Dependent Children (AFDC) Replaced AFDC with Temporary Assistance to Needy Families (TANF) 22 Figure 19.3 Families on Welfare, 1955-2008 23 Figure 19.4 Poverty in the States 24 Medicare Social Security Act amended in 1965 to include Medicare for those over 65 National health insurance first proposed by President Truman in 1945 Medicare program had Four components: Part A for hospitalization Part B for physician’s fees Medicare + Choice Part C Part D-Prescription drug plan 25 Medicaid Participants fall into four groups: Children under age 21 (29.8 million, or 48 percent in 2008) Adults (5 million) Blind and disabled (6 million) Aged who are also poor (6.1 million) Last two categories account for over half of Medicaid expenditures 26 Health Care Reform President Obama signed Patient Protection and Affordable Care Act March 23, 2010 Compromises required to balance goal of equality of access with desire for freedom from government intervention Notable provisions in bill include protections for coverage despite pre-existing conditions and mandatory participation Bill includes subsidies and tax credits to help individuals and small businesses pay for coverage 27 Health Care Reform Critics of bill concerned about cost – an estimated $940 billion over 10 years Some, including Congressional Budget Office, believe bill will pay for itself Those wary of “big government” troubled by additional regulations and bureaucracy Is mandating individual coverage Constitutional? Others anxious about effect of reforms on Medicare 28