文档介绍：Chapter 8 – Expenditure Programs for the Poor
Public Economics
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Quick Look at Welfare Spending
“Welfare” in the United States is a patchwork of dozens of different programs.
All welfare programs are means-tested – only individuals with sufficiently low e are eligible.
Programs often have other requirements related to family structure and assets.
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Quick Look at Welfare Spending
Spending on welfare programs, as a fraction of GDP, has more than double in the past 30 years.
The role of direct cash assistance has diminished, however. Subsidized health care has grown enormously.
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Table
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Quick Look at Welfare Spending
Table shows that welfare spending is a shared expense between the federal and state/local governments.
Subsidized medical care (mainly Medicaid) exceeded $215 billion in 2000.
Cash assistance (including the Earned e Tax Credit) exceeded $91 billion in 2000.
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TANF
1935-1996: AFDC
Aid to Families with Dependent Children
1996-present: TANF
Temporary Assistance for Needy Families
Programs are largely targeted toward single parent households with children under 18.
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AFDC/TANF differences
AFDC
Open-ended entitlement – anyone who qualifies gets AFDC.
No time limits – could be on program indefinitely
No work requirements
Cost sharing by federal and state governments – open ended costs.
State determines benefit levels subject to broad federal guidelines
High tax rates on earned e
TANF
No “entitlement”– limited funding.
Time limited for at most 5 years
Work requirements
Block grant to states – costs to federal government are not open ended.
States have even more control of the design of the program
States have option to lower tax rates on earned e
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TANF
Benefit reduction rates (also known as tax rates) vary from 33% to 100%.
100% tax rate means that if a welfare recipient earns $1 in the labor market, her welfare benefit is reduced by exactly $1.
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TANF
Welfare grant levels vary tremendously
More than cost-of-living differences a