Current Issues and Programs in Social Welfare
From George W. Bush to Donald J. Trump
by Dr. Jerry Marx, Social Work Department, University of New Hampshire
Note: This entry is an update to Dr. Marx’s previous article, “Current Issues and Programs in Social Welfare.”
George W. Bush and the War on Terror
George W. Bush took office as the 43rd President of the United States in 2001. It was only the second time that the son of an American president had later also become president. Bush, a Republican like his father, had defeated Democratic candidate Al Gore from Tennessee in one of the closest and most contested presidential elections in U.S. history. Gore actually won the popular vote, while Bush received more electoral votes. Because Gore contested the election results, asking for a recount of votes in the state of Florida, the election winner was finally decided by the U.S. Supreme Court.
Bush had campaigned with the theme of “compassionate conservatism,” looking to capture votes among moderate Republicans and Democrats, while securing his base of support among conservative Republican voters. The terrorist attacks on September 11, 2001 – just nine months into his presidency – refocused much of his presidency on the “War on Terror.” To this end, his administration passed the Patriot Act of 2001 on October 26, 2001. The act was essentially an anti-terrorist law, giving the federal government increased and broad power to investigate individuals suspected of terrorist activity. Less than two weeks after the attacks, the Office of Homeland Security was created in the White House to develop, implement, and oversee a comprehensive strategy for keeping the United States safe from future terrorists attacks. This office later became a cabinet-level department with the passage of the Homeland Security Act in 2002. (Department of Homeland Security, History, Retrieved September 3, 2013).
While the Bush Administration remained focused on the “War on Terror” (including the Iraq War) through much of his two-term presidency, it did pass important legislation dealing with education and Medicare reform. With respect to education reform, Bush passed the “No Child Left Behind Act of 2001.” This legislation, intended to be a cornerstone of the Bush domestic policy agenda, addressed the public concern that America’s public elementary and secondary schools were too often failing to provide adequate educations to their students. The legislation reformed the educational system by (1) demanding increased school accountability, (2) providing more school choices for parents and students, (3) giving greater flexibility to states in the use of federal education funding, and (4) and prioritizing early reading skill development (U.S. Department of Education, September 3, 2013).
In addition, in 2003, the administration of George W. Bush passed the Medicare Prescription Drug, Improvement and Modernization Act. This legislation included the Medicare Part D prescription drug benefit program. The aim of the program was to make prescription drug coverage available to all Medicare recipients, thus addressing a critical need of senior citizens in the United States. Critics of Medicare Part D complained that the program contained too little incentives for the pharmaceutical industry to contain price increases and too many options for seniors attempting to choose the best prescription drug plan for their needs. (Thaler, R.H. & Sunstein, C.R., 2009, pp. 161-176) Yet, the legislation held promise for America’s growing population of senior citizens.
Bush also increased emphasis on “faith-based initiatives” while in office. The seeds for this initiative could be originally found in the “charitable choice” clause of the welfare reform legislation passed by the Clinton Administration in 1996. This legislation, entitled the Personal Responsibility and Work Opportunity Act, replaced “Aid to Families with Dependent Children” with a more cost conscious alternative public assistance program, Temporary Assistance for Needy Families (TANF). The new legislation ended “entitlement” to public assistance, while encouraging states to increase the involvement of religious organizations in federally funded social service programs such as TANF. Bush, who had been helped by his personal religious faith with problems involving alcohol, was a firm believer in the power of faith-based organizations to help others. Consequently, he created a White House office to oversee faith-based initiatives.
The Great Recession
As the second presidential term of George W. Bush came to a close, the United States was engaged in anti-terrorist wars in Iraq and Afghanistan, while facing a mounting crisis in its economy. On June 5th, 2007 the Bear Stearns Hedge Fund collapsed, sending a shock wave through the global financial market system. By August of 2007, it was clear that banks had stopped lending to each other, thereby cutting off the financial circulation of the economy. By December of 2007, although not officially recognized, the economy had fallen into recession. In March of 2008, Bear Stearns, the fifth largest investment bank in the United States collapsed. That same month, 80,000 jobs were cut in the U.S. By September of 2008, unemployment was at its highest rate since 2003 with housing values falling and home foreclosures rising. Trying to stem the tide, President Bush signed a $700 billion bank bailout bill. The legislation created the Troubled Asset Relief Program (TARP) to support weak U.S. financial institutions. The use of the term, “relief,” ominously reminded older Americans of the New Deal programs during the Great Depression. Also in September of 2008, the U.S. Treasury took over the two large mortgage buyers, Fannie Mae and Freddie Mac in an effort to stabilize the housing market. Despite these efforts, stock prices continued to swing wildly between highs and lows during the fall of 2008. By the time Barack Obama was elected in November of 2008, unemployment had reached a 14 year high; the economy lost close to a quarter million jobs in the month of October 2008 alone! (NPR, November 7, 2008; Timetoast, 2013)
Barack Obama, a U.S. Senator from Illinois, was elected in 2008 – the nation’s first black president. At that time, the United States had had presidents for 232 years. During only 1000 days of that period had there not been a white Protestant male in the White House, and that was when John F. Kennedy, a white Catholic male was president. When Obama was sworn into office, he faced the worst economy since the Great Depression. Over 3 million jobs had been lost in 2008; over 3 million households had received foreclosure notices on their homes in that year (Kantor, 2012).
Many factors contributed to the Great Recession. Investment banks in the U.S. were not regulated as closely as commercial banks, yet investment banks such as Morgan Stanley and Goldman Sachs were allowed to issue public stocks for the first time starting around 1980. Investment banks began creating investment products called “collateralized debt obligations” or CDOs, which based in large part on “derivatives.” Derivatives, in turn, were securities whose income and value derived from a pool of residential mortgages, which had been sold by mortgage lenders to investment banks. These residential mortgages included “subprime mortgages,” a term referring to high interest rate mortgages made by lenders to home buyers considered to be in riskier financial positions. In practical terms, derivatives essentially linked risky home buyers with investment banks and their investors (including retirement funds). To make matters worse, investment banks borrowed heavily against these securities. When financially precarious home buyers started to miss mortgage payments, investment banks were left vulnerable and started to collapse. Many investors and business executives did not understand how risky these mortgage-based investment products were; rating agencies such as Moody’s and Standard & Poor’s did not alert the public; the Federal Reserve under the leadership of Alan Greenspan did not grasp the risk. In any case, previous presidential administrations under Reagan, Bush, and Clinton had refused to increase government regulation of the investment banks. The economic damage spread worldwide, while negatively impacting other U.S. industries such as the automobile industry. (Wessel, 2009; Lewis, 2010; Sorkin, 2009)
The Political Response
The Obama Administration moved quickly to save America from another Great Depression. In February of 2009, Obama signed the American Recovery and Reinvestment Act, which pumped $787 billion of federal government funds into the economy in an attempt to provide a stimulus. Included in the “stimulus package” was a combination of government spending and tax cuts as well as government loans to failing industries. This included the automobile industry, which had been hard hit by rising energy costs, reductions in lending, and the recession in general. Further, the legislation helped provide unemployment benefits to the millions of Americans who had lost their jobs. The Great Recession ended in 2009, but the economic recovery proved to be slow.
While a giant economic stimulus bill had not been part of Obama’s agenda when campaigning for president, health care reform was a major theme. Obama and many others felt that rising health care costs were not only a burden for individuals, but a drag on the economy as well. Since the New Deal, there had been discussion, proposed bills, but ultimately failure when it came to national universal health care. Activist presidents such as Lyndon Johnson and Bill Clinton had to settle for passing health care programs that covered a portion of the American population. In 2010, Obama succeeded in pushing through Congress the “Patient Protection and Affordable Care Act.”
Better known as the “Affordable Care Act,” the legislation mandated that Americans obtain health insurance coverage. While this turned out to be a controversial part of the new law, the Supreme Court later upheld its constitutionality. That said, the act addressed the needs of various citizens, while aiming to better control rising health care costs. More specifically, the act ensured that people with a preexisting condition could not be denied health insurance. For young adults, the law ensured that they could stay covered by their parents’ health plans until age 26. Elder Americans were to receive free preventive services under Medicare. By 2017, small business owners would be able to purchase insurance for their employees through “exchanges” set up in each state. Small business owners (and other individuals) would select an insurance plan from a list of competing insurance companies, thereby resulting in lower costs and more affordable plans for these groups. Larger companies with more than 50 employees would be required to provide insurance to their employees or be fined. In order to fulfill the mandate that every citizen obtain coverage, the lowest income workers would be eligible for Medicaid coverage, while families earning less than 400% of the poverty line would receive subsidies to assist in purchasing insurance.
Obama, in another move to protect the economy, also acted on the student debt crisis. College costs had been soaring for many years, resulting in greater and greater debt for middle class and low-income students – most of whom believed they had no choice but to assume heavy college debt in order to secure a decent job. The privatization of “Sallie Mae,” formerly a government sponsored entity and now a financial services company specializing in education, as well as the emergence of for-profit online universities had exacerbated the student debt crisis. Some private lenders charged relatively high interest rates with significant financial penalties for late payments. For students dropping out of school or failing to find a good-paying job after graduation, the loan debt, high interest rates, and penalties threatened their financial future before it had begun. Political and business leaders worried that this crisis could further drag down the U.S. economy. Consequently, starting in 2010, as part of the Health Care and Education Reconciliation Act of 2010, all new federal student education loans were made through the government Direct Loan program with increased involvement by college financial aid offices. In the process, interest rates were lowered and loan acceptance rates raised. Further, Obama improved the “Income-based Repayment Program.” The improved program, which links loan repayments to the graduate’s discretionary income, lowered required monthly loan payments while reducing the loan forgiveness period from 25 to 20 years for graduates.
The Social Response
A populist movement called the “Tea Party Movement” sprang up in 2009. The cost of the War on Terror, the Bush Administration bank bailout, the Obama Administration economic stimulus package, along with the potential cost of proposed health care reform left many people concerned about rising government spending and budget deficits. The Tea Party Movement, which reflected both conservative and libertarian values, got its name from the famed Boston Tea Party, a protest against high taxes by American colonists in Boston. The movement sponsored protests and rallies demanding a rollback in government spending. It also supported political candidates promising to cut government taxes and spending (Tea Party, 2013).
Two years later another populist protest group formed in the New York City financial district. On September 17th, 2011, a group of citizens decided to demonstrate in the Lower Manhattan section of New York City and remain camped overnight in Zuccotti Park near Wall Street. This was the start of a leaderless protest movement called “Occupy Wall Street,” a populist movement that quickly spread to other cities such as Boston and Chicago – and eventually worldwide. The movement was a nonviolent protest against the perceived excessive greed of corporate leaders, especially in the financial industry. Rallies and marches were typically conducted daily. As such, the movement drew increased attention to the enormous salaries and bonuses in the industry – even within failing and failed companies. It also manifested the increasing gap in income and wealth between the “haves and have-nots.” City police departments began to evict these demonstrators in the name of public safety, eventually eroding the movement. Yet, the protest did much to express the public anger and resentment concerning the causes of the Great Recession and the social and economic damage it created for average citizens (Muskal, 2011).
The Obama Administration and Social Justice
After taking office, President Obama signed into law on January 29, 2009 the “Lilly Ledbetter Fair Pay Restoration Act.” This law promoted women’s rights by extending the time period in which an employee can file a claim of discrimination and recover lost wages. In October of that year, Congress passed and Obama signed the “Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act,” which extended coverage to violent attacks based on the victim’s actual or perceived sexual orientation or gender identity. Then in December of 2010, Obama signed the “Don’t Ask Don’t Tell Repeal Act.” “Don’t Ask Don’t Tell” was a discriminatory policy had required that gay and lesbian soldiers conceal their sexual orientation in order to pursue a career in the U.S. military. The new law allowed gays and lesbians to serve openly in the military. Finally, the “Violence Against Women Act,” originally passed as part of the 1994 crime bill during the Clinton Administration, was reauthorized in 2013. The original 1994 law strengthened federal penalties against repeat sex offenders; improved training for police officers, prosecutors, judges; and created a federal “rape shield law” preventing the use of victims’ past sexual history as a defense during a rape trial (LegalMatch, 2013; The White House, 2013).
Obama and the Supreme Court
The Supreme Court handed down several important rulings during the Obama Administration, some directly impacting social justice and social welfare. As mentioned earlier, the Supreme Court upheld the Obama Administration’s Affordable Care Act, thus providing greater access to quality health care for Americans (New York Times, June 25, 2013). In June of 2013, the Defense of Marriage Act (DOMA) was overturned. DOMA was a law passed by Congress in 1996 during the Clinton Administration barring the federal government from recognizing same-sex marriages legalized by individual states. DOMA had prevented same-sex couples from receiving benefits provided to other married couples under federal law. The Supreme Court found this unconstitutional (United States v. Windsor).
The Supreme Court in 2013 also ruled that part of the Civil Rights Act of 1965, better known as the “Voting Rights Act,” were unconstitutional. Sections of the law had required certain states to receive clearance from the federal government before making changes to their state voting procedures. The court felt the formula for deciding which states needed preclearance was based on outdated data, and thus, unconstitutional (Shelby County, Alabama v. Holder).
Congressional Cutbacks in Spending: The Sequester
Reacting to public concern about rising government budget deficits, Congress passed the Budget Control Act of 2011, an act that actually went into effect in 2013 during Obama’s second term in office. The original act in 2011 mandated across-the-board cuts in the federal budget if specified budget deficit reduction goals (about $4 trillion) were not met by Congress. Because Congress failed to agree on the entire $4 trillion in cuts, the act – commonly referred to as “the sequester” – took effect in 2013. Both defense and domestic spending were targeted. While Social Security and Medicaid were exempt, other domestic programs such as Head Start and Meals on Wheels were projected to be cut by $294 billion dollars over the period of 2013 to 2021. Medicare faced cuts of 2% per year over the eight year period (White House, 2013).
The Trump Administration
Economic Sector: The Aftermath of the Great Recession
The Obama Administration deserves much credit for bolstering the U.S. economy in the aftermath of the home mortgage crisis and subsequent Great Recession. Particularly well-educated and upper-income Americans escaped with minor losses. However, lower income groups, especially the working poor and those with only a high school education suffered much more from the recession. An increasingly global U.S. economic sector had benefited the well-educated, but left many blue collar workers either jobless or underemployed. States in the “heartland” of America had been hard hit by the outsourcing of manufacturing jobs to China, Mexico, and other low wage nations. The increasing use of robots and other new technologies in industries such as auto-making also contributed to job loss. Those lucky enough to keep a job resented the Obama Administration’s bailout of the financial industry and Democratic policies on immigration, health care, and public assistance, believing these government policies increased their taxes while primarily benefitting undeserving groups. As a result of globalization, new technologies, and the Great Recession, many Americans found themselves falling out of the middle class, losing manufacturing jobs and homes, and forced to take relatively low wage jobs in service industries.
The Political Response
Donald Trump, a billionaire real estate developer from Queens, N.Y. and Republican Party nominee, defeated Democratic nominee Hillary Clinton in the 2016 Presidential election. Clinton, who was a former First Lady and Secretary of State, was the first woman nominee for President in a major political party in U.S. history. Other female presidential nominees had headed minor political parties with relatively small support. Initially a moderate Republican from the east, Trump adapted his campaign positions to appeal more directly to blue collar workers who resented the Obama Administration’s policies on free trade and immigration, believing both to be at the root of blue collar unemployment. Central to his campaign theme to “make America great again” was Trump’s pledge to bring back manufacturing jobs. Trump promised to end trade deals such as the Clinton Administration’s North American Free Trade Agreement (N.A.F.T.A.) and the Obama Administration’s Trans-Pacific Partnership. Trump also promised to “build a wall” along the Mexican border with the U.S. in order to prevent illegal immigrants from entering the country. To Trump and his supporters, illegal immigrants were taking low wage jobs from legal workers, and for those illegal immigrants not working, driving up welfare costs, something the U.S. could no longer afford (Judis, 2016).
In short, Trump appealed to frustrated white low-income voters who felt the system was “rigged against them.” Corporate executives forced union wage concessions or shipped jobs overseas and congratulated themselves with exorbitant raises and bonuses; Wall Street brokers badly invested their retirement funds while producing nothing of concrete value to society; politicians catered to the interest of wealthy donors and growing minority voter groups.
Trump increasingly hardened his positions on such issues by threatening huge tariffs on foreign imported goods and promising to deport illegal immigrants who his supporters felt contributed to rape, drug dealing, and other crimes. He also became an opponent of a woman’s right to abortion and promised to ban further immigration of Muslims to the U.S., believing they presented an increased risk of terrorism. While many voters were repulsed by Trump’s demeaning statements about women and minorities, his campaign tapped into a populist anger against upper class elites.
In the end, Trump pulled off a shocking election victory given most polls in the days after the presidential debates showed Clinton with a comfortable lead. Although Hillary Clinton won the popular vote, Trump gained the needed 270 Electoral College votes to win the election. His electoral victory map showed a broad swath of support through the middle of the nation including the Midwest, Far West, and South – regions particularly hard hit by the Great Recession. More specifically, according to exit polls, the Trump campaign won the votes of 52% of white women and 60% of white men. Trump’s margin of victory over Clinton among all voters with little or no college education was 39% (Fisher, 2016).
Trump campaigned on a promise to repeal the Affordable Care Act and replace it with a program based more on free market principles. In so doing, Trump pledged to do away with the mandate that all individuals must buy health insurance, a requirement of the Affordable Care Act that felt like an unfair imposition of “Big Government” in the eyes of many Trump supporters. The Trump replacement policy proposal also emphasized the interstate sale of health insurance and the use of tax-free Health Savings Accounts in which individuals could build up health care funds to use in the future as needed. Trump predicted the Health Savings Accounts would be attractive to young, relatively healthy adults who could opt for high deductible plans with low monthly costs. Unused funds would be allowed to accumulate for use in the future when needed. Furthermore, individuals under the Trump proposal would benefit from greater transparency in the cost of health care procedures and be allowed to shop for lower cost providers. And Trump promised greater competition in the pharmaceutical industry by allowing consumers to purchase drugs imported from overseas companies (Trump, 2016a).
Donald Trump, recognizing the increasing participation of women in the labor market, also pledged to make child care more affordable for working families. His plan promised to reduce child care costs by offering tax deductions for the average cost of child care in the family’s state of residence. The deduction would apply to up to four children per household. In the case of the working poor, Trump planned to offer child care spending rebates using the Earned Income Tax Credit (Trump, 2016b). Such child care policies would facilitate the workplace participation of women, thereby reducing child poverty and public assistance spending.
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