17.2: Social Policies

17.2.1: Education Policy

Learning Objective

Identify the main issues and institutions behind education policy

Key Points

• Towards the 20th century, states started passing laws to make schooling compulsory, and by 1910, 72 percent of children were attending school. Private schools continued to spread during this time, as well as colleges and—in the rural centers—land grant colleges.
• The landmark Supreme Court case Brown v. Board of Education made the desegregation of elementary and high schools a national priority, while the Pell Grant program helped poor minorities gain access to college.
• The resulting No Child Left Behind Act of 2001 was controversial and its goals proved to be unrealistic. A commission established in 2006 evaluated higher education, but its recommendations are yet to be fully implemented.
• School districts are usually separate from other local jurisdictions, with independent officials and budgets. State governments usually make educational standards and standardized testing decisions.
• The reliance on local funding sources has led to a long history of court challenges about how states fund their schools. These challenges have relied on interpretations of state constitutions after a U.S. Supreme Court ruling that school funding was not a matter of the U.S. Constitution.
• At the college and university level, student loan funding is split in half; half is managed by the Department of Education directly, called the Federal Direct Student Loan Program (FDSLP).

Key Terms

standardized

A designed or constructed in a standard manner or according to an official standard

compulsory

Required; obligatory; mandatory

Background

Government supported, free public schools was introduced after the revolution, and expanded in the 19^th century as a result of the efforts of men like Horace Mann and Booker T. Washington. By 1870, all states had free elementary schools, but only in urban centers. Towards the 20^th century, states started passing laws that made schooling compulsory. By 1910, 72 percent of children were attending school. Private schools continued to spread during this time, as well as colleges and—in the rural centers—land grant colleges. The year of 1910 also saw the first true high schools.

During the rest of the 20^th century, educational efforts were centered on reducing the inequality in the school system. The landmark Supreme Court case Brown v. Board of Education made the desegregation of elementary and high schools a national priority, while the Pell Grant program helped poor minorities gain access to college. Special education was made into federal law in 1975.

The Elementary and Secondary Education Act of 1965 made standardized testing a requirement, and in 1983, a commission was established to evaluate their results and propose a course of action. The resulting No Child Left Behind Act of 2001 was controversial and its goals proved to be unrealistic. A commission established in 2006 evaluated higher education, but its recommendations are yet to be fully implemented.

Education in the United States is mainly provided by the public sector, with control and funding coming from three levels: local, state, and federal, in that order. Child education is compulsory. There are also a large number and wide variety of higher education institutions throughout the country that one can choose to attend, both publicly and privately administered.

Public education is universally available. School curricula, funding, teaching, employment, and other policies are set through locally elected school boards with jurisdiction over the school districts. The districts receive many directives from the state government. School districts are usually separate from other local jurisdictions, with independent officials and budgets. State governments usually set educational standards and standardized testing decisions.

Statistics in Education

Among the country’s adult population, over 85 percent have completed high school and 27 percent have received a bachelor’s degree or higher. According to a 2005 study by the U.S. Census Bureau, the average salary for college or university graduates is greater than $51,000, exceeding the national average of those without a high school diploma by more than $23,000. The 2010 unemployment rate for high school graduates was 10.8%; the rate for college graduates was 4.9%. The country has a reading literacy rate at 99% of the population over age 15, while ranking below average in science and mathematics proficiency compared to other developed countries. In 2008, the high school graduation rate was 77%, below that of most developed countries.

The poor performance has pushed public and private efforts such as the No Child Left Behind Act. In addition, the ratio of college-educated adults entering the workforce to general population (33%) is slightly below the mean of other developed countries (35%) and rate of participation of the labor force in continuing education is high.

Funding for Education

The reliance on local funding sources has led to a long history of court challenges about how states fund their schools. These challenges have relied on interpretations of state constitutions after a U.S. Supreme Court ruling that school funding was not a matter of the U.S. Constitution (San Antonio Independent School District v. Rodriguez, 411 U.S. 1 (1973)). The state court cases, beginning with the California case of Serrano v. Priest, 5 Cal.3d 584 (1971), were initially concerned with equity in funding, which was defined in terms of variations in spending across local school districts. More recently, state court cases have begun to consider what has been called ‘adequacy. ‘ These cases have questioned whether the total amount of spending was sufficient to meet state constitutional requirements.

At the college and university level student loan funding is split in half; half is managed by the Department of Education directly, called the Federal Direct Student Loan Program (FDSLP). The other half is managed by commercial entities such as banks, credit unions, and financial services firms such as Sallie Mae, under the Federal Family Education Loan Program (FFELP). Some schools accept only FFELP loans; others accept only FDSLP. Still others accept both, and a few schools will accept neither, in which case students must seek out private alternatives for student loans. The federal Pell Grant program provides funding for students who demonstrate financial need.

17.2.2: Employment Policy

Learning Objective

Illustrate how employment policy is driven by federal, state and local law

Key Points

• Federal law not only sets the standards that govern workers’ rights to organize in the private sector, but also overrides most state and local laws that attempt to regulate this area.
• Federal and state laws protect workers from employment discrimination. In most areas these two bodies of law overlap. Federal law permits states to enact their own statutes barring discrimination on the basis of race, gender, religion, national origin and age.
• The NLRA and RLA displace state laws that attempt to regulate the right to organize, to strike and to engage in collective bargaining. The NLRB has exclusive jurisdiction to determine whether an employer has engaged in an unfair labor practice and to decide what remedies should be provided.
• US private-sector employees thus do not have the indefinite contracts traditionally common in many European countries, Canada and New Zealand.
• Public employees in both federal and state government are also typically covered by civil service systems that protect them from unjust discharge.
• The Fair Labor Standards Act of 1938 (FLSA) establishes minimum wage and overtime rights for most private sector workers, with a number of exemptions and exceptions. The FLSA does not preempt state and local governments from providing greater protections under their own laws.

Key Terms

statutory protections

Protections received by the statue of law set by the legislature.

safety standards

Providing state regulations to set the standards of a safe work environment.

minimum wage

The lowest rate at which an employer can legally pay an employee; usually expressed as pay per hour.

Background

United States labor law is a heterogeneous collection of state and federal laws. Federal law not only sets the standards that govern workers’ rights to organize in the private sector, but also overrides most state and local laws that attempt to regulate this area. Federal law also provides more limited rights for employees of the federal government. These federal laws do not apply to employees of state and local governments, agricultural workers and domestic employees; any statutory protections these workers have derived from state law.

Federal law establishes minimum wages and overtime rights for most workers in the private and public sectors; state and local laws may provide more expansive rights. Federal law provides minimum workplace safety standards, but allows the states to take over those responsibilities and to provide more stringent standards.

Federal and state laws protect workers from employment discrimination. In most aspects, these two bodies of law overlap. Federal law permits states to enact their own statutes barring discrimination on the basis of race, gender, religion, national origin and age, so long as the state law does not provide less protections than federal law would. Federal law, on the other hand, preempts most state statutes that would bar employers from discriminating against employees to prevent them from obtaining pensions or other benefits or retaliating against them for asserting those rights.

Regulation of Unions and Organizing

The Taft-Hartley Act (also known as the “Labor-Management Relations Act”), passed in 1947, loosened some of the restrictions on employers, changed NLRB election procedures, and added a number of limitations on unions. The Act, among other things, prohibits jurisdictional strikes and secondary boycotts by unions, and authorizes individual states to pass “right-to-work laws”, regulates pension and other benefit plans established by unions and provides that federal courts have jurisdiction to enforce collective bargaining agreements.

For the most part, the NLRA and RLA displace state laws that attempt to regulate the right to organize, to strike and to engage in collective bargaining. The NLRB has exclusive jurisdiction to determine whether an employer has engaged in an unfair labor practice and to decide what remedies should be provided. States and local governments can, on the other hand, impose requirements when acting as market participants, such as requiring that all contractors sign a project labor agreement to avoid strikes when building a public works project, that they could not if they were attempting to regulate those employers’ labor relations directly.

Regulation of Wages, Benefits and Working Conditions

The Fair Labor Standards Act of 1938 (FLSA) establishes minimum wage and overtime rights for most private sector workers, with a number of exemptions and exceptions. The FLSA does not preempt state and local governments from providing greater protections under their own laws. A number of states have enacted higher minimum wages and extended their laws to cover workers who are excluded under the FLSA or to provide rights that federal law ignores. Local governments have also adopted a number of “living wage” laws that require those employers that contract with them to pay higher minimum wages and benefits to their employees. The federal government, along with many state governments, also requires employers to pay the prevailing wage to workers on public works projects, a practice which typically reflects the standards established by unions’ collective bargaining agreements in the area.

Job Security

While most state and federal laws start from the presumption that workers who are not covered by a collective bargaining agreement or an individual employment agreement are “at will” employees who can be fired without notice and for no stated reason, state and federal laws prohibiting discrimination or protecting the right to organize or engage in whistleblowing activities modify that rule by providing that discharge or other forms of discrimination are illegal if undertaken on grounds specifically prohibited by law. In addition, a number of states have modified the general rule that employment is at will by holding that employees may, under that state’s common law, have implied contract rights to fair treatment by their employers. US private-sector employees thus do not have the indefinite contracts traditionally common in many European countries, Canada and New Zealand.

Public employees in both federal and state government are also typically covered by civil service systems that protect them from unjust discharge. Public employees who have enough rights against unjustified discharge by their employers may also acquire a property right in their jobs, which entitles them in turn to additional protections under the due process clause of the Fourteenth Amendment to the United States Constitution.

The Worker Adjustment and Retraining Notification Act, better known by its acronym, the WARN Act, requires private sector employers to give sixty days’ notice of large-scale layoffs and plant closures; it allows a number of exceptions for unforeseen emergencies and other cases.

17.2.3: Health Care Policy

Learning Objective

Compare and contrast the provision of healthcare by private and public providers

Key Points

• The government primarily provides health insurance for public sector employees. 60-65% of healthcare provision and spending comes from programs such as Medicare, Medicaid, TRICARE, the Children’s Health Insurance Program, and the Veterans Health Administration.
• In May of 2011, the state of Vermont became the first state to pass legislation establishing a single-payer health care system.
• The Patient Protection and Affordable Care Act (PPACA), commonly called Obamacare (or the federal health care law), is a United States federal statute signed into law by President Barack Obama on March 23, 2010.
• According to the World Health Organization (WHO), total health care spending in the U.S. was 15.2% of its GDP in 2008, the highest in the world.
• Most Americans under age 65 (59.3%) receive their health insurance coverage through an employer (which includes both private as well as civilian public-sector employers) under group coverage, although this percentage is declining.
• Public spending accounts for 45% to 56.1% of U.S. health care spending.

Key Terms

Medicare

Guarantees healthcare for people older than 65 and younger people with disabilities and other physical ailments.

Medicaid

Guarantees healthcare for low income families.

TRICARE

A public healthcare program for the U.S. military.

Background

Health care in the United States is provided by many distinct organizations. Health care facilities are largely owned and operated by private sector businesses. The government primarily provides health insurance for public sector employees. 60-65% of healthcare provision and spending comes from programs such as Medicare, Medicaid, TRICARE, the Children’s Health Insurance Program, and the Veterans Health Administration. Their family member’s employer insures most of the population under 65, some buy health insurance on their own, and the remainder is uninsured.

In May of 2011, the state of Vermont became the first state to pass legislation creating a single-payer health care system. The legislation, known as Act 48, establishes health care in the state as a “human right” and lays the responsibility on the state to provide a health care system which best meets the needs of the citizens of Vermont. The state is currently in the studying phase of how best to implement this system.

The Patient Protection and Affordable Care Act (PPACA), commonly called Obamacare (or the federal health care law), is a United States federal statute signed into law by President Barack Obama on March 23, 2010. Together with the Health Care and Education Reconciliation Act, Obamacare represents the most significant regulatory overhaul of the U.S. healthcare system since the passage of Medicare and Medicaid in 1965.

PPACA is aimed primarily at decreasing the number of uninsured Americans and reducing the overall costs of health care. It provides a number of mechanisms—including mandates, subsidies, and tax credits—to employers and individuals in order to increase the coverage rate.

Spending

According to the World Health Organization (WHO), total health care spending in the U.S. was 15.2% of its GDP in 2008, the highest in the world . The Health and Human Services Department expects that the health share of GDP will continue its historical upward trend, reaching 19.5% of GDP by 2017. Of each dollar spent on health care in the United States, 31% goes to hospital care, 21% goes to physician/clinical services, 10% to pharmaceuticals, 4% to dental, 6% to nursing homes and 3% to home health care, 3% for other retail products, 3% for government public health activities, 7% to administrative costs, 7% to investment, and 6% to other professional services (physical therapists, optometrists, etc.).

Increased spending on disease prevention is often suggested as a way of reducing health care spending. Whether prevention saves or costs money depends on the intervention. Childhood vaccinations, or contraceptives save much more than they cost. Research suggests that in many cases prevention does not produce significant long-term cost savings. Some interventions may be cost-effective by providing health benefits, while others are not cost-effective. Preventive care is typically provided to many people who would never become ill, and for those who would have become ill, it is partially offset by the health care costs during additional years of life.

Private Healthcare

Most Americans under age 65 (59.3%) receive their health insurance coverage through an employer (which includes both private as well as civilian public-sector employers) under group coverage, although this percentage is declining. Costs for employer-paid health insurance are rising rapidly: since 2001, premiums for family coverage have increased 78%, while wages have risen 19% and inflation has risen 17%, according to a 2007 study by the Kaiser Family Foundation. Workers with employer-sponsored insurance also contribute; in 2007, the average percentage of premium paid by covered workers is 16% for single coverage and 28% for family coverage. In addition to their premium contributions, most covered workers face additional payments when they use health care services, in the form of deductibles and copayments.

Public Healthcare

Government programs directly cover 27.8% of the population (83 million), including the elderly, disabled, children, veterans, and some of the poor, and federal law mandates public access to emergency services regardless of ability to pay. Public spending accounts for 45% to 56.1% of U.S. health care spending.

There are also various state and local programs for the poor. In 2007, Medicaid provided health care coverage for 39.6 million low-income Americans (although Medicaid covers approximately 40% of America’s poor). Also in 2007, Medicare provided health care coverage for 41.4 million elderly and disabled Americans. Enrollment in Medicare is expected to reach 77 million by 2031, when the baby boom generation is fully enrolled.

It has been reported that the number of physicians accepting Medicaid has decreased in recent years due to relatively high administrative costs and low reimbursements. In 1997, the federal government also created the State Children’s Health Insurance Program (SCHIP), a joint federal-state program to insure children in families that earn too much to qualify for Medicaid but cannot afford health insurance.

17.2.4: Health Care Reform

Learning Objective

Explain the elements and provisions of the Patient Protection and Affordable Act and discuss the history of health-care reform in the 20th century

Key Points

• Health care reform was a major concern of the Bill Clinton administration, headed by First Lady Hillary Clinton; however, the 1993 Clinton health care plan was not enacted into law.
• The Health Security Express was a bus tour that started in late July of 1994. It involved supporters of President Clinton’s national health care reform.
• Barack Obama called for universal health care and the creation of a National Health Insurance Exchange that would include both private insurance plans and a Medicare-like government run option.
• In 2010, the Patient Protection and Affordable Care Act was enacted by President Obama, providing for the introduction, over four years, of a comprehensive system of mandated health insurance with reforms designed to eliminate some of the least-desirable practices of the insurance companies.

Key Term

pilot

Something serving as a test or trial.

Background

The issue of health insurance reform in the United States has been the subject of political debate since the early part of the 20^th century. Recent reforms remain an active political issue. Alternative reform proposals were offered by both of the two major candidates in the 2008 presidential election and President Obama’s plan for universal health care was challenged in the 2012 presidential election.

Clinton Initiative

Health care reform was a major concern of the Bill Clinton administration, headed by First Lady Hillary Clinton; however, the 1993 Clinton health care plan was not enacted into law.

The Health Security Express was a bus tour that started in late July of 1994. It involved supporters of President Clinton’s national health care reform. Several buses leaving from different points in the United States stopped in many cities along the way to the final destination of the White House. During these stops, each of the bus riders would talk about personal experiences, health care disasters, and why they felt it was important for all Americans to have health insurance. When the bus tour ended on August 3^rd, the riders were greeted by President Clinton and the First Lady on the White House South lawn for a rally that was broadcast all over the world.

Changes under George W. Bush

In 2003 Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act , which President George W. Bush signed into law on December 8, 2003. Part of this legislation included filling gaps in prescription-drug coverage left by the Medicare Secondary Payer Act that was enacted in 1980. The 2003 bill strengthened the Workers’ Compensation Medicare Set-Aside Program (WCMSA) that is monitored and administered by CMS.

Debate in the 2008 Presidential Election

Barack Obama called for universal health care and the creation of a National Health Insurance Exchange that would include both private insurance plans and a Medicare-like government run option. Coverage would be guaranteed regardless of health status and premiums would not vary based on health status. Obama’s plan required that parents cover their children, but did not require that adults buy insurance.

In 2010, the Patient Protection and Affordable Care Act (PPACA) was enacted by President Obama, providing for the introduction, over four years, of a comprehensive system of mandated health insurance with reforms designed to eliminate some of the least-desirable practices of the insurance companies (such as precondition screenings, rescinding policies when illness seemed imminent, and annual and lifetime coverage caps). The PPACA also set a minimum ratio of direct health care spending to premium income, created price competition bolstered by the creation of three standard insurance coverage levels to enable like-for-like comparisons by consumers, and also created a web-based health insurance exchange where consumers can compare prices and purchase plans. The system preserves private insurance and private health care providers and provides more subsidies to enable the poor to buy insurance.

Effective as of 2013

• A national pilot program is established for Medicare on payment bundling to encourage doctors, hospitals, and other care providers to better coordinate patient care. The threshold for claiming medical expenses on itemized tax returns is raised from 7.5% to 10% of adjusted gross income. The threshold remains at 7.5% for the elderly through 2016.
• The Federal Insurance Contributions Act tax (FICA) is raised to 2.35% from 1.45% for individuals earning more than $200,000 and married couples with incomes over $250,000. The tax is imposed on some investment income for that income group.
• A 2.9% excise tax is imposed on the sale of medical devices. Anything generally purchased at the retail level by the public is excluded from the tax

Effective as of 2014

• State health insurance exchanges open for small businesses and individuals.
• Individuals with income up to 133% of the federal poverty level qualify for Medicaid coverage.
• Healthcare tax credits become available to help people with incomes up to 400 percent of poverty purchase coverage on the exchange.
• Premium cap for maximum “out-of-pocket” pay will be established for people with incomes up to 400 percent of the Federal Poverty Line.
• Most people will be required to obtain health insurance or pay a tax.
• Health plans can no longer exclude people from coverage due to preexisting conditions.
• Employers with 50 or more workers who do not offer coverage face a fine of $2,000 for each employee if any worker receives subsidized insurance on the exchange. The first 30 employees are not counted for the fine.
• Effects on insurance premiums
• The Associated Press reported that, as a result of PPACA’s provisions concerning the Medicare Part D coverage gap (between the initial coverage limit and the catastrophic coverage threshold in the Medicare Part D prescription drug program), individuals falling in this “donut hole” would save about 40 percent. Almost all of the savings came because, with regard to brand-name drugs, PPACA secured a discount from pharmaceutical companies. The change benefited more than two million people, most of them in the middle class

17.2.5: Housing Policy

Learning Objective

Explain the implications of national and local housing policy

Key Points

• Originally, public housing in the U.S. consisted of one or more blocks of low-rise and/or high-rise apartment buildings operated by a government agency.
• Subsidized apartment buildings in the U.S. are usually called housing projects, and the slang term for a group of these buildings is “the projects”.
• In 1937, the Wagner-Stegall Housing Act established the United States Housing Authority Housing Act of 1937.
• In the 1960s, across the nation, housing authorities became key partners in urban renewal efforts, constructing new homes for those displaced by highway, hospital, and other public efforts.
• The Housing and Community Development Act of 1974 created the Section 8 Housing Program to encourage the private sector to construct affordable homes.
• The city housing authorities or local governments generally run scattered-site housing programs. They are intended to increase the availability of affordable housing and improve the quality of low-income housing, while avoiding problems associated with concentrated subsidized housing.

Key Terms

middle-class

occupying a position between the upper class and the working class.

retail price

A price given to any item influenced by the behaviors of the market demand.

subsidized housing

A form of housing that is subsidized by the government for people with low-incomes.

Background

Public housing in the United States has been administered by federal, state, and local agencies to provide subsidized assistance for low-income people and those living in poverty. Now increasingly provided in a variety of settings and formats, originally public housing in the U.S. consisted of one or more blocks of low-rise and/or high-rise apartment buildings operated by a government agency. Subsidized apartment buildings in the U.S. are usually called housing projects, and the slang term for a group of these buildings is “the projects”.

Public Housing

In 1937, the Wagner-Stegall Housing Act established the United States Housing Authority Housing Act (USHA) of 1937. Building on the Housing Division’s organizational and architectural precedent, the USHA built housing in the build-up to World War II, supported war-production efforts, and battled the housing shortage that occurred after the end of the war. In the 1960s, across the nation, housing authorities became key partners in urban renewal efforts, constructing new homes for those displaced by highway, hospital, and other public efforts.

One of the most unique U.S. public housing initiatives was the development of subsidized middle-class housing during the late New Deal (1940–42) under the auspices of the Mutual Ownership Defense Housing Division of the Federal Works Agency under the direction of Colonel Lawrence Westbrook. The residents purchased these eight projects after the Second World War and as of 2009 seven of the projects continue to operate as mutual housing corporations owned by their residents. These projects are among the very few definitive success stories in the history of the U.S. public housing effort.

Public housing in its earliest decades was usually much more working-class and middle-class and white than it was by the 1970s. Many Americans associate large, multi-story towers with public housing, but early projects, like the Ida B. Wells projects in Chicago, were actually low-rise towers. Le Corbusier superblocks caught on before World War II, as seen in the (union built) Penn South houses in New York.

The Housing and Community Development Act of 1974 created the Section 8 Housing Program to encourage the private sector to construct affordable homes. This kind of housing assistance helps poor tenants by giving a monthly subsidy to their landlords. This assistance can be ‘project based,’ which applies to specific properties, or ‘tenant based,’ which provides tenants with a voucher they can use anywhere vouchers are accepted. Virtually no new project based Section 8 housing has been produced since 1983. Effective October 1, 1999, existing tenant based voucher programs were merged into the Housing Choice Voucher Program, which is today the primary means of providing subsidies to low-income renters.

Public Policy and Implications

The city housing authorities or local governments generally run scattered-site housing programs. They are intended to increase the availability of affordable housing and improve the quality of low-income housing, while avoiding problems associated with concentrated subsidized housing. Many scattered-site units are built to be similar in appearance to other homes in the neighborhood to somewhat mask the financial stature of tenants and reduce the stigma associated with public housing.

Where to construct these housing units and how to gain the support of the community are issues of concern when it comes to public housing. Frequent concerns of community members include potential decreases in the retail price of their home, and a decline in neighborhood safety due to elevated levels of crime. Thus, one of the major concerns with the relocation of scattered-site tenants into white, middle-class neighborhoods is that residents will move elsewhere – a phenomenon known as white flight. To counter this phenomenon, some programs place tenants in private apartments that do not appear outwardly different. Despite these efforts, many members of middle-class, predominantly white neighborhoods have fought hard to keep public housing out of their communities.

There are also concerns associated with the financial burden that these programs have on the state. Scattered-site housing provides no better living conditions for its tenants than traditional concentrated housing if the units are not properly maintained. There are questions as to whether or not scattered-site public facilities are more expensive to manage because dispersal throughout the city makes maintenance more difficult.