Download Domestic Policy - Newberry

Domestic Policy
Social Welfare and Health
The Evolution of Social
Welfare Policies
 Most of our major
federal social welfare
programs were
developed in the
1930s as part of the
New Deal’s response
to the
Great Depression.
 Others added in the
1960s.
Library of Congress
3
Health Care
• Should all be entitled to health care-regardless of income?
• Two fundamental problems
– Rising costs due to increased hospital costs,
doctors fees, and drugs and modern medical
technology
• For business
• For individuals
– Uninsured Americans
• 46 million (estimated)
Problem 1: The Uninsured
Who Is Uninsured (percent)?
Problem 2: Increasing Health Care
Costs (billions of dollars)
(in billions)
Centers for Medicare and Medicaid Services, 2010
Health Care Reform: Solutions
• 2010
– Those with pre-existing conditions can get insurance
– Insurers can’t drop a person because of illness
– Young adults can stay on parent’s policy until 26
• 2011
– Insurance plans must pay 80% of premiums on health
expenses
Health Care Reform: Basics
•
2013
– Medicare tax increases for those making $200,000+ a year (1.45%
to 2.35%)
•
2014
– Employer mandate
• Employers required to have health care plan for employees
• Federal subsidies to small firms
– Individual mandate
• Individuals required to have health care plan or pay penalty
• Federal subsidies to families up to $80K
– Medicare expansion to families making from $19K to $29K
– Health Care Exchanges (markets) for individuals/small
businesses to find the cheapest health care policies
Financing
• Other taxes to raise money
– Pharmaceutical (drug) companies
– Medical device companies
– Private insurance companies
Impact on Deficit
(Billions of Dollars)
$500b Savings From:
Medicare Advantage Plans
Payments to Hospitals
Payments to Doctors
CBO Scoring
Government Health Care
 Medicare (1965)
 Coverage: Parts A, B, and D
 Who is eligible; who pays?
 Problems
 Medicaid (1965): Medical Care
for the Poor
•
Who is eligible?
•
Medicaid and the States
•
State Childrens’ Health Insurance
Program
 Problem: Medicare going
“bankrupt” by 2013
Economic Policy
National Business Activity, 1880–Present
40
Trends in Family Income
Census Bureau
Why is there a growing gap between the highest income and lower
income families?
Income Mobility
• Lowest: 65% moved into higher quintile
• Middle: 50% moved into higher quintile
The Politics of Taxes
 Currently, Americans pay taxes that total
somewhat less than 30 percent of the GDP.
 Federal Income Tax Rates
• Loopholes and lowered taxes
• Progressive and regressive taxation
 Who Pays?
• Liberals tend to favor progressive taxes.
• Conservatives either favor taxes that are less
progressive, or even flat or regressive.
56
Who Pays What in Taxes?
Spreading the Wealth. . . .
Sharing the Wealth. . .
What should we do about taxes?
• Nothing
– System we have is pretty fair and progressive enough
59
What should we do about taxes?
• Flat tax
• National sales tax
• Make tax code more progressive