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Excellent work on the week 4 assignment. Your research on the welfare system and budgetary implications is well done and well written.
Influences Within Public Programs
Low-Income Assistance Programs
Professor P. May
August 10, 2020
Low-income assistance programs, better known as the welfare system of the United States, began back in 1935, in the era of the great depression. Unemployment, starvation, and poverty was widespread among the population, and with the purpose of enabling Americans to put a plate of food on their table a welfare system was born to help in men and women in supporting their families.
Political, Economic, Social, and Cultural Influences in Budget Changes
Low-income assistance programs have been negatively affected for continuously excessive budget cuts due to the lack in influential political supporters. One of the reasons that is said to be is that low-income adults do not actively participate in politics.
Political support is vital in preserving funding to low-income assistance programs. Dependable research, programs evaluation and the effect this may have is progressively more important the public debate and in building political alliances in supporting effective programs in the middle of budget-cutting discussions.
The United States revives the difference within low-income family groups highlighting the statistic of the elderly receiving more support than the working age population . Elderly individuals receive far more support than families with working-age adults which has been a dissatisfaction for the public assistance system.
The public assistance programs are mostly subject of debate on the requirements and limits of assistance to families with children, where advocates argue that adults need to take more responsibility when it comes to economic security; while opponents debate that the children would be mostly affected if parents are not able to offer this security to their children. However, legislative amendments strongly support work obligation to those adults, although reliable research on the subject reveal the negative effect of single-parent mothers required to work on a full-time basis.
The discussion on work obligation for adults with children receiving aid from these programs continues to be a legislative topic in reducing funding for low-income assistance programs while other conflicts arise in the reform of the programs. It is debated that job training and placement programs for low-income assistance beneficiaries would represent an increase in expenditure; having to add the expense as part of the programs. Legislation faces the dilemma in maintaining public assistance programs at the actual level of funding while some states are wanting to use their broader authority in experimenting with innovated and improved programs by cutting their welfare budget to introduce job search and training programs for the public assistance beneficiaries; a move that can have a negative effect when trying to find a job in the labor market for less skilled workers. For these programs to continue funding and political backing, government funding will shift from providing cash assistance payments to low-income families to a system that will closely assist certain groups where behavioral and income qualifications are met (Trends in the Welfare System – Welfare, The Family, And…)
Interaction of Federal, State, and Municipal levels in Low-Income Families programs
Federal funds aid in financing critical low-income assistance programs and services by means of grants to state and local governments and are at risk of being eliminated or reduced. These programs are considered of utmost importance for low- and moderate-income assistance to be reduced or eliminated in a budget cut. Federal grants account for substantial contribution to state and local government revenues, providing approximately 31% of state budgets. These grants sustain health care, public education, housing, community development, childcare, among other programs. Without the federal grants, states and municipalities will be unable to deal with budget cuts without reducing low-income assistance services.
The major federal discretionary grant involves funding for low-income students and those with special needs, as subsidizing housing and fostering community development for low-income families and the elderly. Other mandatory grants are used in funding for low- and moderate-income households, including children, seniors, and people with disabilities, and other programs such as: Medicaid, CHIP, child support enforcement and family support programs, Adoption and Foster Care Programs, the Child Care and Development Block Grant, which funds states to finance superior child care for working parents or student parents with very low incomes and children with special needs, TANF, Social Services Block Grant in which funds are invested in programs critical to children and families’ security.
Among the programs discretionary grants support are: Education – High poverty schools (Title I), special education in the schools (Individuals With Disabilities Education Act, or IDEA), Head Start, programs to improve teacher quality, Impact Aid; Health – Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Mental health and substance abuse services, and community health centers (Top Government Benefits for Low-Income Families).
With the budget cuts on low-income assistance programs, states will face revenue deficits in supporting these services. By transferring funding obligations from the federal government to states and municipalities, can result in liabilities on low-income people who would be at risk of suffering the loss of services.
Limitations of Agency budget office and efforts to compensate for Low-Income Assistance Programs Budget Cuts
Economists opine that families under low-income assistance programs are inclined to spend all the aids received, and that by reducing programs that support income and essential services will reduce spending and state economic activity, having a reduction in expenditures. Programs known as “automatic economic stabilizers” that serve low income households increase economic decline and expenditures inevitably increase when participants of these programs lose their income. Based on recent data, automatic stabilizers are effective and can aid in supporting consumer expenses by affording resources to those inclined in immediate spending financial assistance received. At present various states are working on budget balancing to avoid cutting low-income programs or weaken the automatic stabilizers and policy options have recently been used as an element of state budget balancing measures.
Strategies used to justify increasing or decreasing the budget for Low-Income Assistance Programs
Various states have shielded low-income programs for budget cuts by using balancing methods in budgeting. Colorado and Ohio excluded Medicaid funding due to reduction in budget but protecting other vital programs. Other states have pulled on state savings, adding money to the economy, and improving economic activity. Some states have shielded low-income programs from budget reductions. Due to budget cuts in Colorado and Ohio, Medicaid funding was excluded protecting other programs. The lawmakers of the states of Massachusetts and Arizona elected to use “rainy day” funds and other economic funds to prevent larger program reductions, while other states have studied the revenue side of the budget. Increase in new taxes in the Alabama, Ohio, and North Carolina have served in balancing their budgets.
Tax increases can be designed to have a reduced negative impact on a state’s economy. Economists Peter Orszag and Nobel Prize Winner Joseph Stiglitz,( States Are Cutting Low-Income Programs in Response to ..) observed that increasing taxes on families of high income is a mechanism for closing the states’ financial deficits rather than transferring payments to low income families would be more damaging to the economy.
Most states have the ability to oversee their finances under a balanced budget requirement. Borrowing is not an option, as the federal government can borrow to maintain services. Therefore, states policy options involve a blend of cutting back in spending and/or increasing taxes, measures that in contrasting degree, reduces overall economic activity and aggravating the economic decline that will possibly result in a financial crisis.
Reconsidering Culture and Poverty – Research Publications … Retrieved from:
States Are Cutting Low-Income Programs in Response to … Retrieved from: https://www.cbpp.org/research/states-are-cutting-low-income-programs-in-response-to-fiscal-crisis
Trends in the Welfare System – Welfare, The Family, And … Retrieved from:
Top Government Benefits for Low-Income Families Retrieved from: