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Poverty

The Rise of the Dynamic Welfare State

April 24, 2013
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Earlier this month, President Obama released his budget for the next fiscal year. The budget can be thought of as a large set of “asks” for Congress to consider, including funding levels for existing programs and proposed changes to tax policies. It’s incumbent upon the executive branch to justify each of its proposals and make the case for reform. But the release of the President’s budget is also an opportunity to think holistically about how all of the proposals and current policies fit together as well as how they have changed over time.

In this spirit, we are publishing a paper by David Stoesz which examines the recent evolution of the policies which collectively comprise the welfare state. His 2005 book, Quixote's Ghost, offered a groundbreaking critique of how emerging philosophical battles fought between the left and right transformed the delivery of social policy, epitomized by the welfare reform efforts of the 1990s. In the subsequent years, he observes how the private sector has continued to increased its influence over welfare policy but has created new opportunities for policy reform in the process. Stoesz describes the emergence of what he calls the dynamic welfare state, which (in contrast to its more bureaucratic predecessor) is more open to policy innovations and places a greater emphasis on mobility and empowerment.

Many recent policy innovations have emanated from the nonprofit sector, which has increasingly incubated and directed demonstration projects and real world policy experiments designed to create an evidence base for policymaking. In the process, the responsibility for policy development has shifted so that it is no long an exclusive task of government. The paper explores the implications of these developments. It potentially creates a more dynamic space where multiple actors and institutions can explore alternative interventions which in turn can inform new policy efforts. The emergence of the asset-building field can be viewed in this context. Not only is this arrangement more reflective of the American experience, which historically has assigned a larger role for the private sector in the delivery of social policy than its European counterparts, but there may be a significant upside to these trends if government can be responsive to these learning and innovations. On the flip side, Stoesz introduces us to a host of new challenges, including the high-bar of an evidence-based policy standard and outsized corporate influence in the public sphere.

Beyond its excellent review of the evolution in social policy efforts, the paper argues sounds a cautious but hopeful note.

Undoubtedly, the dynamic welfare state will discomfit liberal social activists who have advocated benefits without attending to taxpayer concerns about the cost of open ended entitlements or the pernicious effects of social programs on recipients of services. But a dynamic welfare state will provide the justification for increasing investments in social capital to which conservatives have reflexively objected. Continual experimentation of social programs will prove of substantial public benefit in the long run as harmful programs are replaced by more effective interventions. Ultimately, the dynamic welfare state, which values consumer preference, optimizes program investments, and incorporates continual renewal will be more congruent with the requirements of 21st century America.

Asset Building News Week, April 15-19

April 19, 2013
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include housing, unemployment, financial products, taxes, and inequality.

Two Ideas on How to Improve Retirement Security for All Americans

April 9, 2013

Editor's note: This post was originally published on Zócalo Public Square. In Washington, President Obama is expected to present his plans for changes in entitlements, including Social Security. Congress is taking up the debate. But when Social Security is discussed these days, it’s often in the context of the budget–even though the program’s purpose is to provide retirement security. So we asked: Given the country’s fiscal realities, is there a better way to enhance Americans’ retirement security? Below are two ideas.

Event Summary: The New Suburban Homeless

April 8, 2013
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The Asset Building Program hosted an event last week to examine the rise of suburban homelessness and the broader impact of the Great Recession on homeownership and the American middle class. We invited Monica Potts, senior writer for The American Prospect, to discuss her new piece “The Weeklies,” which takes an intimate look at a cohort of newly homeless families living in hotels in suburban areas. Janis Bowdler, Economic Policy Director with the National Council of La Raza, weighed in on the interplay of the foreclosure and housing crisis with family wealth, community resilience, and the social safety net. Reid Cramer framed and moderated the conversation.

Expanded Social Security

  • By
  • Michael Lind,
  • Joshua Freedman,
  • Steven Hill,
  • New America Foundation
  • and Robert Hiltonsmith, Demos
April 3, 2013

Executive Summary
The conventional wisdom about Social Security is profoundly misguided. According to today’s mistaken consensus, the U.S. as a society cannot afford to allocate the money to pay for the present level of Social Security benefits for retirees in future generations. The solution, it is widely argued, is to cut benefits – either directly by means-testing or indirectly by raising the retirement age or allowing inflation to erode their real value over time. In this narrative, tax-favored private savings vehicles like 401(k)s and IRAs should be expanded in order to compensate for the allegedly necessary cuts in Social Security.

New Podcast: How to Sidestep the Double-Whammy

March 28, 2013
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As I mentioned in a blog post a couple of weeks ago, families are facing a double-whammy to college affordability: costs are up and savings are down. The good news? As Rachel Fishman with the Education Policy Program and I discuss, there are a lot of things that the federal and state governments, educational institutions, and families can do to maintain access to higher education. To have a listen, click below.

The New Suburban Homeless

March 26, 2013
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A new article by Monica Potts in the most recent issue of The American Prospect, The Weeklies, explores an impact of the Great Recession that has thus far received sparse attention: the rise of suburban homelessness. Across the country, as foreclosures persist, many formerly stable families are finding themselves moving from one budget hotel to the next, permanently in transition. As the article notes, the recession has jeopardized “a defining characteristic of what it means to be middle-class” for many families—and in the process, called their very identities into question.

Warning: Solutions to non-Existent Problems Ahead

March 13, 2013
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Or, so should have been labeled the justification to cut SNAP in the budget proposal from House Budget Chair Rep. Paul Ryan (R-WI) yesterday. Underlying this move was the need to increase integrity in the program. In its own words: “These programs also have little incentive to root out waste, fraud, and abuse…"

And the compelling example of why this is necessary?

“In Michigan, two lottery winners received SNAP benefits.”

Double Whammy to College Affordability: New Reports Show College Costs Up but College Savings Down

March 8, 2013
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Fresh off the presses are two reports highlighting the dismal state of college affordability: the first was released Wednesday by the State Higher Education Executive Officer's Association showing that college costs rose 8.3 percent last year and the second from Sallie Mae released last Tuesday (slightly less fresh) showing that less families are savings for college and thos

Guest Post: Illinois Automatic IRA Bill (98th General Assembly)

March 7, 2013

Editor's note: This blog post was authored by Karen Harris, Director of Asset Opportunities at the Shriver Center.

For many retired Americans, the potential for financial insecurity is great. Although our government provides a modest monthly Social Security check ($1,152 on average) to retirees, Social Security was never meant to be the sole source of an individual’s retirement income. While $1,152 might be just barely enough money for a young healthy individual, being elderly is much more expensive. Among people who reach the age of 65, 70% will eventually require long-term health care and 30% will eventually receive nursing home care. The average cost of a semi-private nursing home room is $215 per day or $78,000 per year. Yet, according to the Social Security Administration, Social Security benefits constitute 50-90% of income for more than 33% of Social Security Recipients, and 90 to 100% for more than 31% of recipients. This means that about two out of three Social Security recipients over-rely on Social Security.

In order for retirees to avoid over-relying on Social Security, they must prepare during their working years. However, 49% of Americans say they are not saving any money for retirement. A 2012 Woodstock Institute Report shows that the lack of savings is primarily a problem of access to savings mechanisms. The report finds that across all Illinois state legislative districts at least 50% of full-time workers are not offered an employer sponsored retirement savings plan. As the Assets Report infographic shows, lower-income workers are much less likely to have access to these plans.

In order to address this widespread retirement problem, the Illinois Asset Building Group (IABG), along with the Shriver Center, AARP, SEIU and many other organizations are working to pass S.B. 2400/H.B. 2461 The Automatic IRA Program Act. This bill, sponsored by Senator Daniel Biss and Rep. Deborah Mell, would provide all full time workers in Illinois access to retirement savings accounts.

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