national debt, or entitlement programs such as Social Security. Two thirds of what the government spends is mandatory, the money goes to people who are entitled to it. Examples include Social Security and Medicare. In theory the government could change the entitlements by cutting Social Security payments, but that would be political disaster. So in reality, the government can only changeone third of federal spending in any year. 9.What was in the Gramm-Rudman Act or Balanced Budget Act of 1985? Define sequester. What strategy was adopted when sequestration didn’t work? (p. 506) The Gramm-Rudman Balanced Budget Act of 1985 called for a target cap on the deficit each year, leading to a balanced budget, a spending plan within those targets, and if there was a lack of agreement on a spending plan exists, automatic across-the-board percentage budget cuts, or sequester, would occur. A sequester is automatic, across the board cuts in certain federal programs when Congress and the president cannot agree on a spending plan. When sequestration did not work they adopted a new strategy that had two parts. First, congress voted for a tax increase and then it passed the Budget Enforcement Act of 1990 that set limits on discretionary spending. Increases in such spending had to be accompanied by cuts elsewhere or an increase in taxes. Handout on Welfare and Education Policy1.What is the difference between social insurance programs and public assistance plans? What isthe difference in how eligibility is determined for each? List the various programs that fall intoeach category. In the United States, social insurance programs, such as social security or Medicare, are more dominant than public assistance programs, such as food stamps or rent vouchers. This is because welfare programs are made to push people to self-reliance. As a result, the neediest Americans receive less government assistance than others. Social security, Medicare, and unemployment benefits are examples of social insurance programs. They are available only to people who pay into the programs through payroll taxes. Eligibility for social insurance programs is determined by individual contributions through payroll taxes and benefits are based on the amount paid in by the recipient. A means test is used to determine eligibility for public assistance plans, meaning that applicants must prove their financial need of assistance. An early example of a public assistance program is the Supplemental Security Income program. It was enacted as part of the Social Security Act of 1935 to give assistance to the blind and to poor older Americans. Other examples include AFDC and TANF.
2.How was welfare reformed by the 1996 Welfare Reform Act? How Was AFDC different from TANF? The 1996 Welfare Reform Act changed how federal welfare assistance was provided. It required recipients to find jobs within two years and limited the total time that people could receive welfare to five years. Federal money was given to states in block grants, states determined how to distribute money and train recipients, to fund this. The goal was to reduce dependency on