Transcript Slide 1

Copyright © 2011 Pearson Education, Inc. Publishing as Longman
Copyright © 2011 Pearson Education, Inc. Publishing as Longman
Chapter 18: Social Welfare
Policymaking
• Types of Social Welfare Policies
• Income, Poverty, and Public Policy
• Helping the Poor? Social Policy and the
Needy
• Social Security: Living on Borrowed Time
• Social Welfare Policy Elsewhere
• Understanding Social Welfare Policy
• Summary
Copyright © 2011 Pearson Education, Inc. Publishing as Longman
Chapter Outline and Learning
Objectives
• Types of Social Welfare Policies
• LO 18.1: Compare and contrast entitlement
and means-tested social welfare programs.
• Income, Poverty, and Public Policy
• LO 18.2: Assess the extent of economic
inequality in America and the role of
government in lessening it.
Copyright © 2011 Pearson Education, Inc. Publishing as Longman
Chapter Outline and Learning
Objectives
• Helping the Poor? Social Policy and the
Needy
• LO 18.3: Trace the changes over time in
major federal welfare programs.
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Chapter Outline and Learning
Objectives
• Social Security: Living on Borrowed
Time
• LO 18.4: Outline how America’s Social
Security program works and the challenge
of keeping it financially solvent in the
coming years.
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Chapter Outline and Learning
Objectives
• Social Welfare Policy Elsewhere
• LO 18.5: Distinguish American social
welfare policy from that of other
established democracies.
• Understanding Social Welfare Policy
• LO 18.6: Assess the impact of social
welfare policies on democracy and the
scope of government in America.
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Types of Social Welfare Policies
LO 18.1: Compare and contrast entitlement
and means-tested social welfare programs.
• Social Welfare Policies
• Policies that provide benefits, cash or inkind, to individuals, based on either
entitlement or means testing.
To Learning Objectives
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Types of Social Welfare Policies
LO 18.1
• Entitlement Programs
• Government programs providing benefits
to qualified individuals regardless of need.
• Means-Tested Programs
• Government programs providing benefits
only to individuals who qualify based on
specific needs.
To Learning Objectives
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LO 18.1
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2: Assess the extent of economic
inequality in America and the role of
government in lessening it.
• U.S. has one of the world’s highest
per capita incomes.
• According to Census Bureau in 2009,
the median U.S. household income
was $49,777.
• No industrialized country has wider
extremes of income than the United
States.
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• Who’s Getting What?
• Who’s Poor in America?
• How Public Policy Affects Income
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• Who’s Getting What?
• Income distribution – The way the
national income is divided into “shares”
ranging from the poor to the rich.
• In 2008, people whose income placed
them in the lowest 20% of households got
3.4% of nation’s income and those in the
highest 20% got half of nation’s income.
To Learning Objectives
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LO 18.2
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• Who’s Getting What? (cont.)
• In recent decades, the share of the highest
fifth has grown while those of the lowest
fifths have gotten smaller.
• Relative deprivation – A person perceives
that he or she is not doing well
economically in comparison to others.
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• Who’s Getting What? (cont.)
• Income – The amount of money collected
between any two points in time.
• Wealth – Value of assets owned, such as
stocks, bonds, bank accounts, cars, and
houses.
• ⅓ of wealth is held by 1% of the
population, ⅓ is held by 9%, and ⅓ is held
by 90%.
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• Who’s Poor in America?
• Poverty line – Income below this amount
means people are poor, based on what a
family must spend for an “austere”
standard of living, set at three times the
cost of a subsistence diet.
• 43.6 million people, or 14.3% of population,
were poor in 2009, according to Census
Bureau.
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• Who’s Poor in America? (cont.)
• In 2009, the poverty threshold for a single
adult was $11,161, for two adults it was
$14,366, and for a single parent with two
children it was $17,268.
• Poverty rates are higher for African
Americans, Hispanics, unmarried women,
children, and inner-city residents.
To Learning Objectives
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LO 18.2
To Learning Objectives
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LO 18.2
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• Who’s Poor in America? (cont.)
• Feminization of poverty – The increasing
concentration of poverty among women,
especially unmarried women and their
children.
• Poverty rate for female-headed families is
almost 30%, as opposed to less than 6%
for families with two parents.
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• How Public Policy Affects Income
• Progressive tax – A tax by which the
government takes a greater share of the
income of the rich than of the poor.
• For example, when a rich family pays 50%
of its income in taxes, and a poor family
pays 5%.
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• How Public Policy Affects Income
(cont.)
• Proportional tax – A tax takes the same
share of income from everyone, rich and
poor alike.
• Regressive tax – A tax in which the
burden falls relatively more heavily on lowincome groups than on wealthy taxpayers.
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• How Public Policy Affects Income
(cont.)
• Earned Income Tax Credit – A refundable
federal income tax credit for low income
working individuals and families.
• In 2010, workers raising 1 child with
incomes less than $16,420 could get up to
$3,043 in EITC.
To Learning Objectives
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Income, Poverty, and Public Policy
LO 18.2
• How Public Policy Affects Income
(cont.)
• Transfer payments – Benefits given by
the government directly to individuals
either cash transfers, such as Social
Security payments, or in-kind transfers,
such as food stamps and low-interest
college loans.
To Learning Objectives
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LO 18.2
To Learning Objectives
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LO 18.2
To Learning Objectives
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Helping the Poor? Social Policy and
the Needy
LO 18.3: Trace the changes over time in
major federal welfare programs.
• “Welfare” As We Knew It
• Ending Welfare As We Knew It: The
Welfare Reform of 1996
To Learning Objectives
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LO 18.3
Helping the Poor? Social Policy and
the Needy
• “Welfare” As We Knew It
• Social Security Act of 1935 created the
Social Security program and the Aid to
Families with Dependent Children
program.
• In 1964 President Lyndon Johnson
declared a War on Poverty, and added
welfare programs to the policies that fight
poverty.
To Learning Objectives
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LO 18.3
Helping the Poor? Social Policy and
the Needy
• “Welfare” As We Knew It (cont.)
• In 1981, President Ronald Reagan
declared war on antipoverty programs, and
persuaded Congress to cut welfare
benefits and lower the number of
Americans on the welfare rolls by arguing
that welfare had proved to be a failure.
To Learning Objectives
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LO 18.3
Helping the Poor? Social Policy and
the Needy
• Ending Welfare As We Knew It: The
Welfare Reform of 1996
• Personal Responsibility and Work
Opportunity Reconciliation Act is the
welfare reform law of 1996, which
implemented the Temporary Assistance
for Needy Families (TANF) program.
To Learning Objectives
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LO 18.3
Helping the Poor? Social Policy and
the Needy
• Ending Welfare As We Knew It: The
Welfare Reform of 1996 (cont.)
• TANF replaced Aid to Families with
Dependent Children as the program for
public assistance to needy families.
• TANF requires people on welfare to find
work in 2 years and sets a lifetime
maximum of 5 years.
To Learning Objectives
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LO 18.3
To Learning Objectives
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LO 18.3
To Learning Objectives
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Social Security: Living on Borrowed
Time
LO 18.4: Outline how America’s Social
Security program works and the challenge
of keeping it financially solvent in the
coming years.
• The Growth of Social Security
• Reforming Social Security
To Learning Objectives
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LO 18.4
Social Security: Living on Borrowed
Time
• The Growth of Social Security
• In 2010, average monthly check for retired
workers was $1,100.
• 1st check was $22.54 in 1936 to Ida Fuller
of Brattleboro, VT.
• Social Security Trust Fund – The
account that Social Security contributions
are put into and used to pay eligible
recipients.
To Learning Objectives
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LO 18.4
Social Security: Living on Borrowed
Time
• The Growth of Social Security (cont.)
• Current payroll taxes are 12.4%.
• Workers contribute 6.2% of their wages up
to $102,000, and their employers match it.
• Trust Fund must invest money in U.S.
Treasury bonds, which has been earning
about 6% a year.
To Learning Objectives
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LO 18.4
Social Security: Living on Borrowed
Time
• The Growth of Social Security (cont.)
• Social Security – Most expensive public
policy in the U.S.A.!
• A recipient’s benefits require a Social
Security payroll tax of 10.3% per worker
(31/3 = 10.3).
• Cost to each worker may rise to 15.5% of
earnings (31/2 = 15.5).
To Learning Objectives
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LO 18.4
To Learning Objectives
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LO 18.4
Social Security: Living on Borrowed
Time
• Reforming Social Security
• President Bush – Proposed diverting ⅓ of
individuals’ Social Security contribution to
private retirement funds, such as a private
account, a stock, a bond, or another
investment.
• President Obama – More likely to propose
raising payroll taxes.
To Learning Objectives
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LO 18.4
To Learning Objectives
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Social Welfare Policy Elsewhere
LO 18.5: Distinguish American social
welfare policy from that of other established
democracies.
• Most industrial nations tend to be far
more generous with social welfare
programs than the United States.
• Greater generosity is evident in programs
related to health, child care, unemployment
compensation, and the elderly.
To Learning Objectives
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LO 18.5
Social Welfare Policy Elsewhere
• We see poverty and welfare as
individual concerns, and Europeans
support greater governmental
responsibility for these problems.
• 71% of Americans believe that the poor
could escape poverty if they worked hard
enough, compared to 40% of Europeans.
To Learning Objectives
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LO 18.5
Social Welfare Policy Elsewhere
• Europeans often have a more positive
attitude toward government.
• Americans are more likely to distrust
government action in areas such as
social welfare policy.
To Learning Objectives
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LO 18.5
Social Welfare Policy Elsewhere
• Europeans pay a high price for
generous benefits.
• Tax rates in Western European nations far
exceed those in the United States; in some
cases top tax rates exceed 50% of income.
• Funding problems are greater in Europe
due to level of benefits and shrinking
populations.
To Learning Objectives
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Understanding Social Welfare Policy
LO 18.6: Assess the impact of social welfare
policies on democracy and the scope of
government in America.
• Democracy and Social Welfare
• Social Welfare Policy and the Scope
of Government
To Learning Objectives
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LO 18.6
Understanding Social Welfare Policy
• Democracy and Social Welfare
• In the social welfare policy arena, the
competing groups are often quite unequal
in terms of political resources.
• The elderly are relatively well organized
and often have the resources needed to
wield significant influence in support of
programs they desire.
To Learning Objectives
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LO 18.6
Understanding Social Welfare Policy
• Democracy and Social Welfare (cont.)
• The elderly are usually successful in
protecting and expanding their programs.
• Influencing political decisions is more
difficult for the poor because they vote less
frequently and lack strong, focused
organizations and money.
To Learning Objectives
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LO 18.6
Understanding Social Welfare Policy
• Social Welfare Policy and the Scope
of Government
• Nothing more clearly accounts for the
growth of government than social welfare
spending.
• Growth of government is driven by the
growth of social welfare.
• American social welfare system grows
generation by generation.
To Learning Objectives
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LO 18.1
Summary
• Types of Social Welfare Policies
• Means-tested social welfare programs
provide benefits only to people who qualify
for them based on specific needs.
• In contrast, entitlement programs provide
benefits to individuals without regard to
need.
To Learning Objectives
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LO 18.1
Summary
• Types of Social Welfare Policies
(cont.)
• Because entitlement programs can provide
benefits to everyone, they are generally
more popular with the public than meanstested programs.
To Learning Objectives
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LO 18.1
Which of the following is characterized as
an entitlement program?
A.
B.
C.
D.
Medicaid
Medicare
Supplemental Security Income
Children’s Health Insurance
Program
To Learning Objectives
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LO 18.1
Which of the following is characterized as
an entitlement program?
A.
B.
C.
D.
Medicaid
Medicare
Supplemental Security Income
Children’s Health Insurance
Program
To Learning Objectives
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LO 18.2
Summary
• Income, Poverty, and Public Policy
• Despite America’s affluence, the disparity
between incomes is quite substantial and
has been increasing in recent decades.
• America’s means-tested social welfare
programs help to reduce inequality by
helping the poorest individuals.
To Learning Objectives
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LO 18.2
Summary
• Income, Poverty, and Public Policy
(cont.)
• Progressive taxes, such as the federal
income tax, also alleviate inequality by
taking a bigger bite out of the rich than the
middle class.
To Learning Objectives
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Among which of the following groups
is poverty most common?
A.
B.
C.
D.
LO 18.2
Unmarried women with children
Inner-city residents
African Americans
Hispanics
To Learning Objectives
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Among which of the following groups
is poverty most common?
A.
B.
C.
D.
LO 18.2
Unmarried women with children
Inner-city residents
African Americans
Hispanics
To Learning Objectives
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LO 18.3
Summary
• Helping the Poor? Social Policy and
the Needy
• The Aid to Families with Dependent
Children (AFDC) program was begun
during FDR’s New Deal, greatly expanded
during the period of LBJ’s Great Society,
and then reduced in scope by the Reagan
administration.
To Learning Objectives
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LO 18.3
Summary
• Helping the Poor? Social Policy and
the Needy (cont.)
• In 1992, when Bill Clinton ran for president
he promised to end welfare as we know it,
and it happened in 1996 when the AFDC
program was replaced by TANF.
• Under the new law recipients of aid can
only be on welfare rolls for 2 consecutive
years and 5 years during their lifetime.
To Learning Objectives
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LO 18.3
One consequence of the welfare reform
legislation passed in 1996 is that
A. benefits for the poor have
increased.
B. the number of families receiving aid
has increased.
C. the role of state governments in
welfare has increased.
D. the number of years for which
families are eligible for benefits has
increased.
To Learning Objectives
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LO 18.3
One consequence of the welfare reform
legislation passed in 1996 is that
A. benefits for the poor have
increased.
B. the number of families receiving aid
has increased.
C. the role of state governments in
welfare has increased.
D. the number of years for which
families are eligible for benefits has
increased.
To Learning Objectives
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LO 18.4
Summary
• Social Security: Living on Borrowed
Time
• The Social Security program collects a
payroll tax from workers and their
employers each month and pays out
monthly benefits to retirees.
• It has proved to be a highly successful and
popular program.
To Learning Objectives
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LO 18.4
Summary
• Social Security: Living on Borrowed
Time (cont.)
• Demographic trends have Social Security
in danger, soon there will not be enough
workers per beneficiary to keep the
program solvent, and the government will
soon face the painful choice between
raising taxes or cutting benefits to senior
citizens.
To Learning Objectives
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is currently the
most expensive social welfare policy
in the United States.
A.
B.
C.
D.
LO 18.4
Social Security
Food Stamps
Unemployment Compensation
Temporary Aid To Needy Families
To Learning Objectives
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is currently the
most expensive social welfare policy
in the United States.
A.
B.
C.
D.
LO 18.4
Social Security
Food Stamps
Unemployment Compensation
Temporary Aid To Needy Families
To Learning Objectives
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LO 18.5
Summary
• Social Welfare Policy Elsewhere
• Most established democracies have more
expensive and generous social welfare
programs than does the United States.
• European governments provide citizens
with benefits, such as paid parental leave
upon the birth of a child, that are unheard
of in the United States.
To Learning Objectives
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LO 18.5
Summary
• Social Welfare Policy Elsewhere
(cont.)
• Taxes in Europe have to be higher than
taxes in the United States in order to pay
for these benefits.
To Learning Objectives
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LO 18.5
Most
nations tend to be much
more generous with social welfare
programs than the United States is.
A.
B.
C.
D.
African
American
Middle East
European
To Learning Objectives
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LO 18.5
Most
nations tend to be much
more generous with social welfare
programs than the United States is.
A.
B.
C.
D.
African
American
Middle East
European
To Learning Objectives
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LO 18.6
Summary
• Understanding Social Welfare Policy
• Groups with ample political resources tend
to get more of what they want in the battle
over social welfare policies.
• The elderly have been very successful in
preserving their Social Security and
Medicare benefits.
To Learning Objectives
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LO 18.6
Summary
• Understanding Social Welfare Policy
(cont.)
• The poor have faced difficulties getting
more funding for TANF.
• Overall, the growth in social welfare
spending, particularly for Social Security
and Medicare, accounts for much of the
increase in the scope of government in
recent decades.
To Learning Objectives
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Political participation affects the
distribution of
in the United States.
A.
B.
C.
D.
LO 18.6
income and poverty
social welfare benefits
wealth and property
all of the above
To Learning Objectives
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Political participation affects the
distribution of
in the United States.
A.
B.
C.
D.
LO 18.6
income and poverty
social welfare benefits
wealth and property
all of the above
To Learning Objectives
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Text Credits
•
•
•
U.S. Census Bureau. The 2008 data can be found in the Census
Bureau’s report entitled “Income, Poverty, and Health Insurance
Coverage in the United States: 2008,” p. 10. This report is posted
online at: http://www.census.gov/prod/2009pubs/p60-236.pdf. U.S.
Census Bureau, “Income, Poverty, and Health Insurance Coverage in
the United States: 2008,” p. 14. “Indicators of Welfare Dependence.”
U.S. Department of Health and Human Services. Annual Report to
Congress, 2008; updated by authors based on caseload data reported
by the U.S. Department of Health and Human Services’ Administration
for Children and Families.
Rebecca Ray et al., “Parental Leave Policies: Assessing Generosity
and Gender Equality,” Report of the Center for Economic and Policy
Research, p. 6. June 2009. Used with permission. Updated by the
authors for Australia, which implemented their first paid leave in 2011.
Copyright © 2011 Pearson Education, Inc. Publishing as Longman
Photo Credits
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524: AP Photos
525T: Getty Images;
525TC: Mario Thoma/Getty Images
525TB: Carmel Zucka/Getty Images
525B: Alex Wong/Getty Images
526: Getty Images
529T: Mario Thoma/Getty Images
529B: Varley Charlie/Sipa
531: Andy Singer
534: Carmel Zucka/The New York Times/Redux
538: Alex Wong/Getty Images
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