The Microeconomic Impact of Implementing Welfare Drug Testing in Marion County

The Microeconomic Impact of Implementing Welfare Drug Testing in Marion County

Will Welfare Drug Tests Save Money? The Microeconomic Impact of Implementing Welfare Drug Testing in Marion County For as long as humans have lived on this earth, we have found a need to help other humans that are less fortunate than us. From the reign of Augustus in the Roman Empire, to todays controversial welfare policies in the United States, history has recorded the charitable actions of society to provide for those that cannot provide for themselves. The United States has always practiced some sort of welfare policy since the beginning of colonial times.

When the colonists migrated to the uture United States from England, they brought with them a set of welfare policies known as the British Poor Laws. Under these laws, citizens who had health problems that prevented work were given cash or alternative forms of assistance from the government. Citizens who were healthy but out of work were given public service work. Today those “poor laws” with the help of policies introduced during the tragedy of the Great Depression, have evolved into a highly contended social welfare policy that consists of social security, Medicaid, Medicare, unemployment insurance,

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Temporary Assistance for Needy Families (TANF), Child Care and Development Fund (CCDF), Home Energy Assistance Program (HEAP), Section 8 – which helps provide housing for needy families, Pell Grants for college students, and food stamps. These welfare policies are used to assist families at or below the national poverty level in an attempt to support our rights as United States citizens to have equal access to a good, healthy life. The United States currently has a very large debt. The United States national debt is estimated to be over $16 trillion.

In 2011, the Congressional Research Service eported that state and federal spending on welfare programs reached $1. 03 trillion. This number did not include the amount spent on Social Security and Medicare. This astronomical amount of money spent made welfare allocations the largest budget item in the fiscal year of 2011. This amount is expected to grow in the years The same is true for the governments of the separate states in the US. to come. Here in Indiana the debt is over $48 billion. With the debts of the country and its states at such a large amount and steadily increasing many are desperate for ways to lower the deficit.

Much of the deficit both in Indiana and the United States has been attributed to the high costs of welfare. According to STATS Indiana, in Marion County Indiana, for the month of October 2012 alone, reported over $33 million spent on welfare costs alone. This number does not even include Medicaid costs. When the costs of land, labor, and technology are added, it becomes clear that welfare policy contributes greatly to the total costs of the state. One of the options some people have proposed as a way to reduce the costs of welfare is to introduce drug testing for all welfare applicants. There is much debate regarding this issue.

Supporters of requiring drug tests for welfare applicants believe that there will be believe that some will fail the drug tests. These supporters believe this number of people will be so large that there will be a significant decrease in welfare spending. Other supporters have said “substance abuse is a prominent barrier preventing people from making the necessary transition from governmental dependence to self- reliance. “(Targeted News Service) Opponents have said this is a direct violation of our constitutional rights as American citizens. Some have even said it is not right to assume that Just because people are poor, they drug users.

Other opposers of welfare drug testing have argued that it will not save money at all. What are the economic implications of requiring drug tests for welfare applicants? Both sides of the argument produced good research that shows how welfare drug tests can have a positive or negative effect on the economy. But what are the quantitative effects? Can they be measured? Each state is responsible for implementing its own welfare procedures and policies so we will attempt to measure the effects the implementation of drug testing for welfare applicants will have on the State of Indiana, specifically Indianapolis and Marion County.

Welfare in our society is a public good. This means that the government is responsible for allocating resources to provide welfare for its citizens. One of the main resources and sources of income for the government is taxes. Many people do not support raising taxes especially not to support welfare policy. Because one of the reasons for implementing this policy is supposed to be based on saving money, we will assume taxes will remain constant. This means that by implementing this new program, the government will not raise taxes and is operating under the assumption this program will eventually be self- sufficient.

In other words, the amount of money saved by conducting drug tests on these applicants will pay for the amount of money it costs to implement this program. Also because Social Security, Medicare, and unemployment insurance is paid for in the form of employment taxes, we will assume that recipients of these benefits will not have to participate in the drug tests. This means only applicants for extended unemployment benefits, food stamps, TANF, CCDF, HEAP, and Section 8 would have to take part in the drug tests.

Considering that taxes are to remain constant, the government will have to decide how to pay for these drug tests. It is fair to assume that the Family and Social Services Administration do not have drug testing capabilities. This means that the government will have to find the resources to administer drug tests without costing the taxpayers too much money. In Florida and Michigan, where drug tests for welfare applicants has already been tested, the drug tests were outsourced to an independent drug testing company.

The applicants had to pay for their drug tests, and if the results came back negative, the government would reimburse the applicant the cost of the drug test. Many estimate that the rug tests will cost around $30 per applicant. If an applicant’s drug test results come back positive, the cost of the drug test remains their responsibility, they are unable to receive benefits for a specified amount of time, and the government will save the amount of money it would have spent on providing benefits for that person for that specified amount of time.

Because the cost of living is has risen, the amount of benefits has risen as well. Therefore, if there is a significant amount of people who would have otherwise received welfare benefits that cannot due to having a positive However, if the drug test results are negative, the government will then have to reimburse that $30 per applicant that passed the drug test in addition to providing the benefits that for which that applicant is eligible. This cost can add up quickly if many of the applicants pass the drug test.

Many believe that this extra money spent can actually negate the savings seen from drug users not being able to use welfare. In addition, the government risks diminishing returns. As drug users reap the consequences of using drugs and not being able to benefit from welfare, they realize the opportunity cost they are missing by using drugs. A large number of denied applicants for this reason may reapply again drug free and get benefits once approved. The government would then have to start reimbursing drug test fees for applicants that it had previously denied and then award them benefits as well.

In other words, there may be a decrease in costs at the introduction of this new welfare policy, but as welfare applicants are acquainted with the process and decide benefits are more important, they make sure they can pass the test to receive the benefits and costs will go back up. On the other hand, these applicants may also become inspired o find Jobs in order to be able to take care of themselves. The government must also decide what to do for children of applicants that may not pass the drug test.

Some of the welfare policies already in place provide benefits for children even if for some reason their parents or guardians or not eligible. If these policies stay in place, this would mean that the government might still pay benefits to applicants that have positive drug test results if they have eligible children. Additionally there may be drug addicts who are functioning only due to the medical and monetary support iven by receiving welfare benefits and it is impossible to gauge what would occur economically if these citizens did not have access to healthcare and other welfare benefits.

In addition, if there are waiting periods, the additional time required to wait before applying again will cause a needy family to wait longer to get help getting back on their feet. It is very difficult to nail down a quantitative estimate of whether drug testing will save the welfare program and Marion County money. In other states around the country where this program is implemented, the program is on hold to due an ACLU challenge of constitutionality. The period of time for which the program was running was so short that it is impossible to use the results as a tool of measurement in other states but in Florida, only 2. % of those tested were positive for drug use. (ACLU) Despite this, “Legislatures in at least 28 states are considering drug testing applicants. ” (World Socialist) The basis of welfare policy is still to assist families with financial issues, and the high costs of living, healthcare and education; nevertheless, once our governments get into financial trouble it is up to us to find a solution that benefits everyone. It is not sure whether implementing drug tests for welfare applicants is the solution, but it is possible that this may need to be implemented with other changes to make a significant impact.

One sure thing is that costs continue to rise and we are running out of money to cover them. References American Civil Liberties Union. (2012, April 18) Just as We Suspected: Florida Saved Nothing by Drug Testing Welfare Applicants. Retrieved November 27, 2012, from saved- nothing-drug-testing-welfare Spencer, Naomi. (2012, May 18). World Socialist Web Site. More US States pursuing drug testing for welfare recipients. Retrieved November 27, 2012, from www. wsws. org/articles/2012/may2012/welf-m18. html STATS Indiana. Family and Social Services Data for Marion County in October 2012. Retrieved November 27, 2012, from www. stats. indiana. edu/fssa_m/index. html Targeted News Service (2012, June 8). Michigan proposal requiring drug tests for welfare recipients hailed by black conservatives. Retrieved November 27, 2012, from http://search. proquest. com/docview/1022756147? accountid=41074 Welfare Information. Welfare Reform – Social Welfare Change. Retrieved November 27, 2012, from www. welfareinfo. org/reform

Jesse
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