PO 241 - Midterm 2

PO 241 - Midterm 2 - PO 241 Midterm 2 Social Welfare (Goal:...

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PO 241 Midterm 2 Social Welfare (Goal: Eliminate Poverty) 1. 3 kinds of income support policies – Social insurance programs (least controversial), work/employment programs, public assistance programs (most controversial because lazy people collect welfare for doing nothing) 2. Absolute Poverty – Social Security Administration (Most widely used measure) Tells how person’s standard of life is. Poverty standard for family of 4 (one adult, 3 kids) = 19,223. Abs. pov. Measure not sued because it’s too difficult. Specifies min level of well being n nutrition, shelter, clothing, health, and development, what income is sufficient to maintaining level. Min level fluctuates with inflation and general standard of living. 3. Critics of Absolute Poverty – SSA definition is too low. Ignores variation in cost of living. Dept of Agriculture: poverty threshold $4,000 higher. 4. Relative Poverty – Measures income. Poor = Earns less than half of US median income. No specific level of material well being. Compares poor to other members in society. 5. Social Security ≠ Welfare because you pay into SS. 6. Who are the poor? (5) – Aged, Women, Less Educated, Rural, Working poor (Min. Wage) 7. 2004 Federal Min Wage - $5.15 per hr, $10,712 per year 8. 2004 Mass. Min Wage - $6.75 per hr, $14,040 per year 9. Preventative Strategy – Social Insurance 10. Social Security Act 1935 - $ to old age, survivors, disability and health insurance. (OASDHI). Single largest item of federal spending. 11. SSA Eligibility – Those who pay into it. 90% of working population. 12. Survivor’s Benefits 1939 – Must be less than 18 to collect. 13. Medicare 1965 – Health care for 65+ 14. Reform Proposals to Prevent SSA bankruptcy (5) – Increase tax revenues, Raise full retirement age, Gradually reduce benefits, Diversify social security investment, privatize part of social security. 15. Increase tax revenues (2) – Raise tax rate from 6.2% to 7%, Increase salary cap from current $90,000 16. Retirement Age – Raise to 70. (By 2027 full retirement age = 67 for people after 1995). Current = 62 17. Benefits Reduction – But. Increase min. benefit for lower income workers, divorced, or surviving spouses. 18. Diversify SS investment – Invest part in private stock and bond market = higher yield than government bonds. 19. Privatize SS – 1-2% managed by workers/board. Production of nest egg for survivors. 20. Alleviative Strategy – Public Assistance/Welfare (Means/Needs tested) 21. Public Assistance/Welfare (3) 22. Supplemental Security Income (SSI) – Aged, Blind, Disabled. 1 st guaranteed min. income program. Used to supplement SS. Av recipient = $430. state and fed.
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23. Earned Income Tax Credit (EITC) – Taxpayer receives a tax credit (Max 2004 = $4300) from the govt for each dollar earned. Phased out as income goes up. Credit disappeared at $35,458 in 2004. Most effective in moving people out of poverty. Raise approx 5 mil from below to above poverty line.
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This note was uploaded on 09/03/2011 for the course CAS PO 241 taught by Professor Rossell during the Spring '06 term at BU.

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PO 241 - Midterm 2 - PO 241 Midterm 2 Social Welfare (Goal:...

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