Transcript Supreme Court - Lower Dauphin School District

Policy Process
Laws are like sausages, it is
better not to see them being
made.
Otto Von Bismarck
Five Steps: 1
• Problem Recognition or Agenda
Setting
– An issue can be brought to the government’s
attention through citizens, interest group activities,
or court cases
– An issue could be related to a party’s position or a
campaign promise
* When the parties don’t agree about what issues are
important, it can be difficult to get government
action
Five Steps: 2
• Policy Formulation
– If people agree to act on a problem, one or
more plans must be developed
– Plans are commonly generated by politicians
or involved interest groups
– When the proposed actions are very different,
compromise becomes vital
Five Steps: 3
• Policy Adoption
– The proposed policy becomes official
– This is commonly legislation, an executive or
bureaucratic order, or a court decision
– Policies are often created through a series of
small actions taken over time
Five Steps: 4
• Policy Implementation
– The policy must be put into practice
•
•
•
•
The public must be informed
There must be a means of monitoring compliance
The must be a means of enforcement
There must be consequences for non-compliance
Five Steps: 5
• Policy Evaluation
– Evaluation of the policy takes place over time
• Some policies have a rough start and recover
• Some policies seem great, then experience
unforeseen difficulties or high costs
– Changes or corrections start with recognition
that a problem exists, and usually starts the
whole cycle over again
– Policy making is a continuous process
Monetary Policy
• Monetary policy – Affects supply of money,
interest rates, and control of inflation
• Federal Reserve System – Makes monetary
policy and regulates the lending practices of
banks
• The Fed is intended to be beyond the control of either
the president or Congress
• Its seven-member Board of Governors is appointed by
the president (and confirmed by the Senate) for 14year terms—a length of the time designed to insulate
them from political pressures
Tools of the Fed
• The Federal Open Market Committee (FOMC)
• sets a target for the “federal funds rate,” the interest
rate banks can charge each other for overnight loans
• The Fed also buys and sells government bonds,
which determines whether banks have more or
less money to lend out.
• The more money banks have to lend, the
cheaper borrowing is; if banks have less to lend,
borrowing becomes more expensive, and
interest rates rise.
Fiscal Policy
• Controlled by the executive and legislative
branches through the budget process
• Fiscal policy deals with tax policy and
government spending programs
• Laissez-faire economics dominated til FDR,
then the government became more active
Keynesian vs. SupplySide Economics
voodoo
On our left…
• Keynesian economic theory –
Government spending (and resulting
deficits) can help the economy deal
with its ups and downs
• Results in big government
• Favored by Democrats
• Government must stimulate greater demand,
when necessary, with bigger government and
higher spending (such as federal job programs)
…and to our right…
• Supply-Side Economics – Cutting tax rates
will stimulate the supply of goods and
creates jobs; greater spending power will
increase demand
– a.k.a. Reaganomics, Trickle-down
Economics, J-Lo-nomics
• Favored by Republicans
• Leads to smaller government
Does it matter?
• Most policies must be decided a year or more before
their full impact will be felt on economy
• Budgetary process is dominated by uncontrollable
expenditures mandated by law, and many benefits
automatically increase with the cost of living
• The American free enterprise system imposes the biggest restraint on
controlling the economy
• The billions of economic choices made by consumers and businesses
are more important in their impact than are government policies
• The federal government only spends 25% of our GDP
• Consumers and businesses make the vast majority of our economic
decisions because the private sector is much larger than the public
sector
Revenue I
• Personal and Corporate Income Tax –
Shares of individual wages and corporate
revenues collected by the government
(progressive tax)
• Today corporate taxes yield only about 12 cents of
every federal revenue dollar, compared with 44 cents
coming from individual income taxes
• Sixteenth Amendment – Explicitly authorized
Congress to levy a tax on income
• Capital Gains Tax – on profits derived from
sales of real estate or stock
Revenue II
• Social Insurance Taxes
– Both employers and employees pay Social
Security and Medicare taxes (regressive tax)
• Unlike other taxes, these payments are specifically
earmarked for the Social Security Trust Fund to pay
benefits.
• Social Security taxes have grown faster than any
other source of federal revenue (1957 -12 percent of
federal revenues; today about 36 percent)
Revenue III
• Excise Tax – tax on the manufacture, sale, or
consumption of a good or service
• Estate and Gift Tax – imposed on the assets
of someone who dies or gifts over $14,000
• Custom Duties – tariffs on goods brought
into the U.S. from abroad
• Borrowing
– Treasury Department sells bonds when the
federal government wants to borrow money
– Today the federal debt is about $17.5 trillion
Spending I
• Discretionary Spending
– Programs not required by law
– Government can choose to cut spending
•
•
•
•
•
Defense
Education
Agriculture
Transportation
Research Grants
Spending II
• Mandatory Spending (Entitlements)
– Congress and the president cannot change
spending
– Over 60% of federal spending falls into this area
– Entitlement programs guarantee a level of benefits
to persons who meet the legal requirements
•
•
•
•
•
Social Security
Medicare and Medicaid
Food Stamps
Unemployment insurance
Veteran’s pensions
Social Security
• The Social Security Act of 1935
– Put in place a social safety net to help those in need
(private charities and local relief overwhelmed)
– Workers contribute to a fund while employed
– Workers receive benefits from the fund upon
retirement
– Originally 25 workers for each beneficiary
– Currently ~ 3 workers for each beneficiary
>>>>>>Solutions????
Medicare
• Medicare Act of 1965
– Originally only covered hospital bills for citizens 65 and
older
– Currently four parts
• Part A – hospitalization
• Part B – out patient, doctor visits
• Part C – Medicare Advantage (better coverage, higher cost to
participant)
• Part D – Prescriptions (closed the “donut hole”)
– Patients often have deductibles, co-pays and other out of
pocket costs including premiums
• Supplemental programs (Medigap), Medicaid
Medicaid
• Social Security Amendments of 1965
– Medical coverage for low income families
– Means tested, income based
– Co-funded by federal and state
– Administered by the states
– Affordable Care Act (2010) attempted to force
states to expand Medicaid, deemed
unconstitutional by SCOTUS
Domestic Policy
•
•
•
•
•
•
•
•
•
Agriculture
Drug
Education
Energy
Environmental
Health
Housing
Immigration
Social
Foreign Policy
•
•
•
•
•
•
•
International relations
Trade
Defense
Military
Terrorism
Human rights
War on Drugs