450 CHAPTER 14|ECONOMIC AND SOCIAL POLICY
scale, most of its other programs became the cornerstone of social
policy for subsequent generations.
The next major expansion of social policy occurred during the
Great Society of President Lyndon Johnson in the mid-1960s. We
discussed part of this social agenda in Chapter 13: the civil rights
movement, which culminated with the passage of the Civil Rights
Act in 1964 and the Voting Rights Act in 1965. The other important
aspect of Johnson’s Great Society included the War on Poverty and
programs concerning health, education, and housing. Perhaps
most signifi cant was the creation of Medicare, the national pro-
gram that funds medical care for the elderly, and Medicaid, which
funds health care for the poor.^30 By the late 1960s the mounting
costs of the Vietnam War created a trade-off : it wasn’t possible to
continue funding ambitious social programs and the war without causing infl a-
tion. Over the following decades conservative backlash against the “welfare
state” especially during the Reagan years (1981–89), led to cuts in spending on
social programs.
President George W. Bush continued this general direction for social policy,
maintaining most programs with some cuts and one major expansion—the addi-
tion of a prescription benefi t to Medicare. Bush attempted to place his stamp on
social policy as a “compassionate conservative” with his idea of an ownership
society, in which people take more responsibility for their own social welfare.
He proposed privatizing part of Social Security and creating private savings
accounts to cover more out-of-pocket medical expenses, in combination with
more free market forces and a bigger role for private charity. President Obama
has favored an approach that emphasizes the market and community, while pre-
serving an important role for government. Obama’s social policies in his fi rst
term focused on enacting comprehensive health care reform, while maintaining
and expanding the social safety net for those devastated by the recent recession.POVERTY AND INCOME INEQUALITY TODAY
The persistence of poverty remains the primary motivator for most social pol-
icy today. In 2012 the poverty line for a family of four was an annual income of
$23,050; for a single person it was $11,170. In 2009 fully 43.6 million Americans
lived in poverty—14.3 percent of the population. In 2011, 46.2 million Americans
were in poverty—15 percent of the population. Even the social programs that do
not directly help the poor and disadvantaged, such as Social Security and Medi-
care, have an impact on poverty. As Figure 14.6 shows, the percentage of the
elderly population living in pover ty plummeted from more tha n 35 percent in 1959
to 8.7 percent in 2011.^31
Another source of concern is the growing income and wealth inequality in the
United States. Since 1980, 80 percent of the net income gains have gone to the top 1
percent of the income distribution.^32 From 1979 to 2009 the average income of the
top 1 percent grew by $700,000 to $1,220,100 (a 133 percent gain), compared to a
$2,600 gain to $18,900 (16 percent) for the bottom fi fth of the income levels.^33 The
wealth gap is even greater: the median (half are above this level and half are below)
net worth of U.S. households in 2007 was $120,300, but the median wealth for the
top 10 percent was $1.89 million, and this group held 73 percent of the nation’s
wealth.PRESIDENT GEORGE W. BUSH
emphasized the idea of an
"ownership society," in which
people would take more
responsibility for their own
social welfare. For example,
Bush proposed privatizing Social
Security to allow people to invest
the money themselves.
ownership society The term
used to describe the social policy
vision of President George W. Bush,
in which citizens take responsibility
for their own social welfare and the
free market plays a greater role in
social policy.
Great Society The wide- ranging
social agenda promoted by
President Lyndon Johnson in the
mid-1960s that aimed to improve
Americans’ quality of life through
governmental social programs.