Current Issues and Programs in Social Welfare. Current Issues and Programs in Social Welfareby Dr. Jerry Marx, Social Work Department, University of New Hampshire. Social Insurance Programs. Social Security. American social welfare, thanks to Franklin Delano Roosevelt and the Social Security Act of 1. Social insurances are based on the prior earnings and payroll contributions of an individual, while public assistance, commonly known as “welfare,” is based on the financial need of an individual. The primary social insurance programs today in America are Old Age, Survivors, and Disability Insurance, Unemployment Insurance, and Workers Compensation. Let’s begin with ((Old Age, Survivors, and Disability Insurance)), commonly referred to as “social security.” Social security, like other social insurances, is an example of a “universal” program, because American citizens are entitled to participate in the program as a social right. In other words, program participation in not based on financial need. Social security constituted one- fifth of all federal government spending in 1. In that year, a total of $3. The Western White House. Ronald Reagan said of his beloved Santa Barbara, California ranch, “No place before or since has ever given Nancy and me the joy and serenity it does.”. Electronic Journal of Sociology (1998) ISSN: 1198 3655 Ronald Reagan and the Commitment of the Mentally Ill: Capital, Interest Groups, and the Eclipse of Social Policy. What was the Reagan Revolution in domestic policy and how did Reagan's domestic programs reflect concervative values? 6, 2011, was the 100 th anniversary of the birth of Ronald Reagan and brought forth predictable tributes from conservatives eager to wrap themselves in the mantle of their hero. Many declared Reagan’s 1981 tax cut to. Now he finds himself among the 11 million Americans who could see their monthly checks slashed by 19 percent next year, unless federal lawmakers address a looming shortfall in the Social Security fund that pays. In the United States, Social Security is primarily the Old-Age, Survivors, and Disability Insurance (OASDI) federal program. The original Social Security Act was signed into law by President Franklin Roosevelt in 1935, and the. Ronald Reagan was a man who fought for what he believed in, and he changed the world more than probably any American in the twentieth century. He changed not only the conservative movement, the Republican party, his country. I love Social Security. Social Security was signed into law by President Franklin Roosevelt in 1935 and over time has evolved into America’s most successful pension and insurance program. Funding for social security actually comes from a payroll tax, which is shared in an equal proportion by the employer and employee. A practice begun during the Nixon Administration, social security benefits are adjusted when the cost of living increases. To receive benefits, a person must contribute payroll taxes during their working years. Those individuals contributing payroll taxes for a minimum of 1. Individual benefit levels are determined by the level of covered earnings (i. The “disability insurance” part of social security assists adults between the ages of 1. When the individual turns 6. To receive disability benefits, an individual must show medical proof of a disability and proof that the disability prevents “gainful employment.” “Survivors insurance” covers children under 1. These categories of recipients receive benefits when an insured worker dies. A fundamental point to remember is that social security is a very effective anti- poverty program! Most recipients are raised above the poverty line by social security. In 1. 99. 2, only 1. United States – thanks in large part to social security benefits! Unemployment Insurance. Unemployment insurance is a second major social insurance program. Like social security, unemployment insurance is an effective poverty prevention program, although it is a temporary aid. That is, unemployment benefits normally last a maximum of 2. In 1. 99. 4, a total of $2. United States on unemployment insurance. Although governed by federal standards, individual states determine eligibility for unemployment benefits, the amount and duration of the benefits, and the amount that employers must contribute. In addition to state administered programs, there are three federal unemployment insurance programs. These three federal programs cover veterans, railroad workers, and federal employees, respectively. Funding for unemployment insurance is derived from an employer payroll tax. About 8. 5% of the total American labor force is covered by unemployment insurance. Farmers, domestic workers, and self- employed workers are not eligible for unemployment benefits. In addition, few of the poor receive unemployment insurance. To illustrate, in 1. The poor can be excluded from benefits for several reasons. For example, a poor individual can be excluded if that person worked less than two of four quarters in the qualifying year or if the person earned less than a minimum level of dollars. Depending on the state, this minimum level of income can range from $1. A poor person can also be excluded from unemployment benefits if the individual was terminated from a job for misconduct or quit voluntarily. Furthermore, in most states, time spent in job training can prevent an individual from qualifying for unemployment benefits, because the individual is not immediately available and looking for work. Workers’ Compensation. The third major social insurance program in the United States is workers compensation? In fact, it is the oldest major social insurance program in the nation, dating back to the Progressive Era at the beginning of the 1. Spending on workers’ compensation (in 1. Each state oversees its own workers’ compensation program (with no federal standards). The program provides victims of work- related injuries with cash, medical care, and to a limited extent, rehabilitation services. It also compensates survivors if an injury is fatal. Like unemployment insurance, workers’ compensation does not cover all workers. Farm and domestic workers are not covered in many states. That said, worker’s compensation does reach about 8. United States. State laws generally specify a payment rate of two- thirds of the injured worker’s previous pay. In contrast to injuries, coverage for occupational illnesses is a weak part of workers’ compensation. Most states only pay benefits for illnesses that appear within “several” years after the worker leaves a company. In other words, the worker has a relatively short amount of time to prove their case. Contributions of American Business to Retirement Planning. Employers, as previously stated, contribute to the current U. However, many older Americans rely on both social security and private pension plans after they retire. To illustrate, in 1. In that year, about three- quarters of workers in corporations employing over a thousand people were covered by such plans, while almost 8. Many corporations (and other employers) offer “4. These plans often include an employer contribution as well. In addition, “profit- sharing plans” are frequently offered to employees in major American corporations. In 1. 98. 4, there were close to a half- million profit- sharing programs in the American business sector. Another retirement- related corporate benefit is the “employee stock ownership plan.”1. The number of these plans in the American business sector grew dramatically starting in the mid- 1. By 2. 00. 0, there were 1. In an employee stock ownership plan, the employee invests some of their wages or salary in their company’s stock and receives dividends regularly like other company investors. Upon retirement, the employee can either take the company stock from the fund or sell the shares back to the corporation. The American government sector has played an important role in the development of these private plans. They are not just a good idea promoted by the business sector alone. Both the federal government and state governments have passed legislation to encourage business to offer these plans. For instance, between 1. Congress passed sixteen pieces of legislation encouraging the development of employee stock ownership plans, while thirteen states passed similar laws. The American government has also encouraged the use of another private retirement option, “individual retirement accounts” (IRAs). Tax legislation passed during the Clinton Administration greatly increased opportunities for Americans to use IRAs. The 1. 99. 7 Tax Act, by increasing the income limits of those eligible to make tax deductible IRA contributions, will increase the number of individuals and couples using traditional IRAs. The law also created a new nondeductible IRA that accumulates income tax- free. In addition, the 1. IRAs to pay for higher education expenses and first- time homes. Critical Analysis: What About Enron? In 2. 00. 2, Americans were shocked by the news of several major cases of corporate accounting fraud. Corporations such as Enron, a major energy company, and Worla long distance and data systems company, purposely misled investors and employees to appear more profitable than they actually were. When such companies file for bankruptcy, employees can lose all or most of their retirement savings. Can corporations be trusted as a major source of retirement savings? Are Enron and World. Com exceptions in the corporate world or are they indicative of widespread corporate corruption? Are they clear examples of why some government regulation of the business sector is needed? Current Issues in Social Insurance: The Viability of Social Security. The American social security system is considered by many observers to be seriously flawed. Some of the key issues include sustainability, the influence of the system on economic growth, and the equity of the system for various participants. With respect to the sustainability issue, the U. S. The sustainability of the system can become an issue when the ratio of retirees to workers becomes too large to finance. In 1. 95. 0, there were 0. United States. By 2. U. S., and by 2. 04. Thus, policymakers are concerned about the long- term financial viability of the currently structured social security system. As discussed earlier in this book, the Reagan Administration raised the age for receiving social security retirement benefits to 6. Policy alternatives considered in 2. President George W. Bush to address the sustainability of social security include raising payroll taxes, lowering social security benefits, tying future retirement benefits to inflation instead of wage growth, and privately- managed retirement savings accounts (also called “private- investment accounts). The last option, the private- investment accounts, would establish personal retirement accounts, managed by private pension and investment companies, with part of the social security tax currently paid by workers. Private- investment accounts would make America’s social security system more of a “public- private partnership” than it is today. Proponents of this policy option state the potential for a higher rate of return on retirement savings, thereby addressing the sustainability issue. Opponents of this policy proposal warn of the market risks and relatively high administrative costs of private- investment accounts. Public Assistance Programs.
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