Transcript Ch. 17-21 PowerPoint - Jessamine County Schools

Chapter 17
The Policy-Making Process
Reasons why the government adds
new issues to the political agenda
• Small groups demand that a new policy be
introduced into the agenda
– Organized labor
– Black riots in the 1960s
• The Courts
– Make decisions that force the hand of other branches
of government
– Desegregation of schools
– Roe v. Wade
– Courts are used when there is no popular majority for
an unpopular cause.
Reasons why the government adds
new issues to the political agenda
• The Bureaucracy
– So large with many experts and advocates, that the
bureaucracy has become proactive in policy rather
than just reactive.
– The New Deal vs. The Great Society
• The Senate
– Used to move slowly, debate endlessly, and seemed
to resist movements
– Since the 1960s it has become a place where new
policy is developed. Liberal in 1960s, Conservative in
1980s.
Reasons why the government adds
new issues to the political agenda
• Media
– Their coverage helps put new matters on the agenda
and publicize matters already on the agenda
– Can sway public opinion
• Action By States
– The national government can adopt ideas that states
came up with originally
– Lawsuits brought by state attorney general can settle
in a way that binds the company throughout the
country.
Government Decision-Making
• Cost-Benefit Analysis
– Cost is the burden, monetary or nonmonetary,
that people must bear if a policy is adopted.
• Perception is big here too. People may perceive a
cost that doesn’t exist or is much smaller than the
perception.
• Taxes, increased risk of war, etc.
– Benefit is the satisfaction, monetary or
nonmonetary, that people believe they will
enjoy if a policy is adopted.
• Payments, subsidies, contracts, security
Perception in Cost-Benefit Analysis
• Perception of costs and benefits is what
affects politics
– People think that the cost of auto emissions
control is paid by the manufacturer, but it is
actually passed on to the consumer through
higher prices and lower performance.
– Other examples?
Legitimacy in Cost-Benefit Analysis
• Is it legitimate for the group that receives
the benefits of a policy to gain that benefit
– Federal aid to single women with children
seen in the early part of the century as going
to widows and orphans
– Later on seen as more controversial because
it was women who had kids and never got
married.
– Other examples?
Simple theory of politics
• The costs and benefits of a policy may be widely
distributed or narrowly concentrated.
– Widely distributed cost is something like an income
tax, a Social Security tax, high crime rates
– Widely distributed benefits are clean air, national
security, low crime rates
– Narrowly concentrated costs- factory reducing
pollution, regulations on doctors and hospitals
participating in Medicare
– Narrowly concentrated benefits- subsidies to farmers,
protection against competition for companies
Four Kinds of Policies
•
•
•
•
Majoritarian Politics
Interest Group Politics
Client Politics
Entrepreneurial Politics
Majoritarian Politics
• Both the perceived costs and benefits are
widely distributed to a large number of
people.
• Goal is to make appeals to a large bloc of
voters to find a majority
• “Free-rider” problem- No one wants to join
an interest group that will help everyone
out.
Interest Group Politics
• Proposed policies will give costs and
benefits to a small, identifiable group.
• Tends to be seen among highly organized
interest groups
• Public is many times uninformed about
these decisions.
Client Politics
• One small group benefits, but almost everyone
pays
• Ex. Price supports for farmers, airline regulations
and restrictions
• Pork-barrel legislation
• Logrolling- A legislator supports proposals
favored by other legislators in return for support
of their own proposal. If you put enough pieces
of “pork” into a piece of legislation, you can get a
majority that will pass it.
Entrepreneurial Politics
• Policy where almost everyone benefits and a small
group pays the cost
• Ex. Brady bill, safety requirements for automobile
manufacturers
• Why are these the least common type of policy created?
– Organized groups who fear the loss of a privilege or
having some burden put on them will become
determined to stop the policy. The majority that
would benefit is unconvinced of the benefit or think it
is too small to fight for.
• Policy entrepreneurs- Activists in or out of government
who pull together a political majority on behalf of
unorganized interests.
Economic Policymaking
Chapter 18
Important Terms to Know

Deficit- When the government spends more in one
year than it takes in from taxes and other revenue
sources
 National Debt- The total deficit across time
 Gross Domestic Product- The total of all goods
and services produced in the economy during a
given year
 Gross National Product = GDP + Foreign Trade
Government, Politics, and the
Economy

Introduction
– Capitalism:

An economic system in which individuals and corporations,
not the government, own the principle means of productions
and seek profits.
– Mixed Economy:

An economic system in which the government is deeply
involved in economic decisions through it role as regulator,
consumer, subsidizer, taxer, employer and borrower.
– Multinational Corporations:

Businesses with vast holdings in many countries.
Government, Politics, and the
Economy

“It’s the Economy, Stupid”: Voters,
Politicians, and Economic Policy
– Economic trends affect who the voters vote for.
– Economic conditions are the best predictor of
voters’ evaluation of the president.
– Republicans worry about inflation.
– Democrats stress importance of unemployment.
Government, Politics, and the
Economy

Two Major Worries: Unemployment and
Inflation
– Unemployment rate: Measured by the BLS, the
proportion of the labor force actively seeking
work, but unable to find jobs.
– Inflation: The rise in prices for consumer
goods.
– Consumer Price Index: The key measure of
inflation that relates the rise in prices over time.
Policies for Controlling the
Economy

Monetary Policy and “the Fed”
– The manipulation of the supply of money in
private hands – too much cash and credit
produces inflation.
– Money supply affects the rate of interest paid.
– Main policymaker is the Board of Governors of
the Federal Reserve System – the “Fed.”
Policies for Controlling the
Economy

Monetary Policy and “the Fed” continued
– The Feds instruments to influence the supply of
money in circulation:


Sets the federal funds rate
Buys and sells government bonds
– Through the use of these actions, the Fed can
affect the economy.
Policies for Controlling the
Economy

Fiscal Policy of Presidents and Parties
– Fiscal Policy: The policy that describes the impact of
the federal budget on the economy.
– Keynesian Economic Theory: Government spending
and deficits help the economy weather its normal ups
and downs.
 When demand is low, the government should pump
more money into the economy.
 When demand is too great, the government should
take money out of the economy.
– Government’s job is to increase demand of goods.
Instruments for Controlling the
Economy

Fiscal Policy of Presidents and Parties,
continued
– Supply-Side economics: The policy that says
there is too much taxation and not enough
money to purchase goods and services.
– Reduce taxation and government regulation
then people will work harder, and thus create a
greater supply of goods.
Reaganomics

Combined monetarism (inflation occurs when too
much money is chasing too few goods), supplyside tax cuts, and domestic budget cutting.
 Goals were to reduce the size of the federal
government, stimulate economic growth, and
increase American military strength.
 Ran up a huge deficit while lowering the
unemployment rate and increasing business
activity.
Why it is Hard to Control the
Economy

Some think politicians manipulate the economy to
win reelection.
 But there are problems with that:
– Things like the budget are prepared in advance of when
they go into effect.
– Some benefits are indexed.
– Capitalism can also affect the economy.

Government is more important in setting the rules
of the game.
Politics, Politics, and the
International Economy

Protectionism: The economic policy of
shielding an economy from imports.
 World Trade Organization (WTO): The
international organization that regulates
international trade.
 Free trade is controversial as jobs have
increasingly been outsourced.
Arenas of Economic
Policymaking

Business and Public Policy
– Corporate Corruption and Concentration
 Increased incidence of bankruptcy and scandals.
 Increased number of corporate mergers
 Antitrust policy: A policy designed to ensure
competition and prevent monopoly.
Arenas of Economic
Policymaking

Business and Public Policy, continued
– Regulating and Benefiting Business
 Congress has taken steps to regulate accounting
industry practices.
 The Securities and Exchange Commission regulates
stock fraud
 Government may loan businesses money.
 Government collects data that business use.
Arenas of Economic
Policymaking

Consumer Policy: The Rise of the
Consumer Lobby
– Consumers historically have had little
government protection.
– FDA: Created in 1913; approves foods and
drugs sold in the U.S.
– FTC: Responsible for regulating false and
misleading trade practices, which now includes
consumer lending practices.
Arenas of Economic
Policymaking

Labor and Government
– Government historically sided with business over labor
unions.
– NLRB: regulates labor-management relations
– The Taft-Hartley Act (1947) continued to guarantee
unions the right of collective bargaining, but prohibited
various unfair practices by unions.
– Government now provides unemployment
compensation and a minimum wage.
Understanding Economic
Policymaking

Democracy and Economic Policymaking
– Voters expect more of politicians that they can control.
– Sometimes economic theory and democratic theory may
be at cross purposes.
– It is difficult to make decisions that hurt groups or
involve short-term pain for long-term gain.

Economic Policymaking and the Scope of
Government
– Liberals tend to favor more government involvement in
the economy.
– Conservatives tend to favor less government
involvement in the economy.
The Budget

Budget states what the government will
collect in taxes and spend in revenues.
– Also tells how expenditures will be allocated to
various programs.

Each budget covers a fiscal year (in our
government from October 1st through the
following September 30th.
How is the federal budget
created?


No federal budget existed before 1921.
The Congressional Budget Act of 1974
– President submits budget in February
– House and Senate budget committees study the overall
package and the Congressional Budget Office (CBO)
provides an analysis
– Each committee then submits a budget resolution to its
full house that proposes a budget ceiling as well as a
ceiling for each of the spending areas
– Congress is supposed to adopt budget resolutions, with
modifications in May.
What happens once the budget is
created?




During the summer, Congress takes up appropriations
bills, and informs its members whether the spending
conforms to the May budget resolutions
Almost 2/3 of what the government spends is mandatory
spending. (Anybody else scared?)
Entitlements- Claims for government funds that cannot be
changed without violating the rights of the person claiming
the funds.
– Social Security, Medicare, veterans benefits, food
stamps, money the government owes to people who
invest in bonds.
What does this mean?
Reducing Spending

Balanced Budget Act of 1985 (GrammRudman Act)
– Required that each year from 1986-1991, the
budget would automatically be cut until the
federal deficit had disappeared.
– Required sequesters (automatic spending cuts)
that would cut a percentage from all federal
programs except for entitlements
– Failed miserably
Reducing Spending



Two-fold plan in 1990
First, Congress voted for a tax increase
Second, Congress passed the Budget Enforcement
Act of 1990.
– Set limits on discretionary spending (spending
not required to pay contracts, interest on the
national debt, or for entitlement programs
– According to the act, if Congress were to spend
more on a discretionary program, they would
have to cut spending on another discretionary
program or raise taxes.
Taxation
Congress proposed and states ratified the 16th
Amendment in 1913 (Authorization of the income
tax)
 For the next 40 years, tax rates tended to go up
during wartime and down during peacetime.
 During World War II, incomes in the highest
bracket were taxed at a rate of 94 percent.

– How is this misleading?

Compromise was that high marginal rates would
be combined with a large number of loopholes.
Taxation

Tax Reform Act of 1986
– Instead of high rates with big deductions, there would
now be lower tax rates with smaller deductions.
– Soon after this, the old system began to come back.
– Tax rates started going up again, but this time with far
fewer deductions for affluent citizens
– In 1990, President Bush signed a tax increase to raise
the top rate to 31 percent
– In 1993, President Clinton proposed a tax increase that
would raise the top rate to over 39% (had been 28% in
1986). Also made Social Security benefits taxable for
upper-income retirees. Passed 218-216 in the House
and 51-50 in the Senate with Al Gore casting the
deciding vote. First time since 1945 the majority party
in Congress had passed a bill without one vote from the
minority party.
Social Welfare Policymaking
Chapter 19
What is Social Policy and Why is
it so Controversial?

Social welfare policies provide benefits to
individuals, either through entitlements or
means-testing.
– Entitlement programs: Government benefits
that certain qualified individuals are entitled to
by law, regardless of need.
– Means-tested programs: Government programs
only available to individuals below a poverty
line.
Income, Poverty, and Public
Policy
 Who’s
Getting What?
– Income: amount of funds collected
between any two points in time.
– Wealth: amount of funds already owned.
Income, Poverty, and
Public Policy

Who’s Poor in America?
– Poverty Line: considers what a family must spend for
an “austere” standard of living.
– In 2011, the poverty rate in the United States was just
over 16%. (49.7 million people in poverty)
– Many people move in and out of poverty in a year’s
time.
– Feminization of poverty: high rates of poverty among
unmarried women
Income, Poverty, and
Public Policy

What Part Does Government Play?
– Taxation.
 Progressive tax: people with higher incomes pay a
greater share.
 Proportional tax: all people pay the same share of
their income.
 Regressive tax: opposite of a progressive tax
 Earned Income Tax Credit: “negative income tax”
that provided income to very poor people.
(Essentially, a cash grant to poor parents who are
working.)
Income, Poverty, and
Public Policy

What Part Does Government Play?
– Government Expenditures.
 Transfer payments: benefits given by the
government directly to individuals.
 Some transfer benefits are actual money.
 Other transfer benefits are “in kind” benefits where
recipients get a benefit without getting actual
money, such as food stamps.
 Some are entitlement programs, others are meanstested.
Income, Poverty, and Public
Policy
Helping the Poor? Social
Policy and Poverty

“Welfare” as We Knew it
– Social Security Act of 1935 was the first major step by
the federal government to help protect people against
absolute poverty.

Two major parts- insurance program for the unemployed and
elderly and an assistance program for the blind, dependent
children, and the elderly.
– The Social Security Act set up AFDC (Aid to Families
with Dependent Children), a national assistance
program for poor children.
– President Johnson declared a “war on poverty” and
created many new social welfare programs.
Helping the Poor? Social
Policy and Poverty

“Welfare” as We Knew it (continued)
– President Reagan cut welfare benefits and
removed people from benefit rolls.
– Conservatives argued that welfare programs
discouraged the poor from solving their
problems.
– Attitudes toward welfare became “race coded”,
the belief that most people on welfare were
African Americans.
Helping the Poor? Social
Policy and Poverty

Ending Welfare as we Knew it: The Welfare
Reforms of 1996
– Personal Responsibility and Work Opportunity Act




Each state to receive a fixed amount of money to run its own
welfare programs
People on welfare would have to find work within two years.
Lifetime limit of five years placed on welfare.
AFDC changed to Temporary Assistance for Needy Families
(TANF)
Living on Borrowed Time:
Social Security

The New Deal, the Elderly, and the Growth
of Social Security
– Social Security has grown rapidly since 1935,
adding Medicare in 1965.
– Employers and employees contribute to the
Social Security Trust Fund.
– The Trust Fund is used to pay benefits.
– The ratio of workers to beneficiaries is
narrowing. The Trust Fund will soon be in the
red.
Living on Borrowed Time:
Social Security

The Future of Social Security
– The number of Social Security contributors (workers) is
growing slowly, the number of recipients (retired) is
growing rapidly.
– By 2020, fewer than 4 workers for every retiree, so
payroll taxes on those workers would have to double to
pay a retiree’s Social Security.
– Solutions of cutting benefits or raising taxes are hard
choices.
– Republicans tend to favor privatizing Social Security.
National Security
Policymaking
Chapter 20
American Foreign Policy:
Instruments, Actors, and
Policymakers

Instruments of Foreign Policy
– Three types of tools:
 Military
 Economic
 Diplomatic
– Military is the oldest and still used
– Economic is becoming more powerful
– Diplomatic is the quietest of the tools
American Foreign Policy:
Instruments, Actors, and
Policymakers

Actors on the World Stage
– International Organizations (UN)
– Regional Organizations (NATO, EU)
– Multinational Corporations
– Nongovernmental Organizations
– Individuals
American Foreign Policy:
Instruments, Actors, and
Policymakers

The Policymakers
– The President
– The Diplomats (secretary of state)
– The National Security Establishment (secretary
of defense, Joint Chiefs of Staff, NSC, CIA)
– Congress
American Foreign Policy:
An Overview

Isolationism:
– Foreign policy where the U.S. tries to stay out
of other nation’s conflicts, particularly in
Europe.

Monroe Doctrine:
– U.S. official statement of isolationism

World War I:
– Basically ended the policy of isolationism
American Foreign Policy:
An Overview

The Cold War
– Containment Abroad and Anti-Communism at
Home
– The Swelling of the Pentagon (arms race)
– The Vietnam War
American Foreign Policy:
An Overview

The Era of Détente
– Détente: a slow transformation from conflict to
cooperation
– Strategic Arms Limitations Talks: effort to
limit the growth of nuclear arms
– Originally applied to the Soviet Union, and
then to China
– Not favored by everyone
American Foreign Policy:
An Overview

The Reagan Rearmament
– Defense budget had been declining since the
mid-1950’s.
– Reagan added some $32 billion to the defense
budget in his first term in office to oppose the
Soviet buildup.
– Strategic Defense Initiative: using computers
and other equipment to defend against Soviet
missiles from space (“Star Wars”).
American Foreign Policy:
An Overview

The Final Thaw in the Cold War.
– George H.W. Bush proposed to move beyond
containment to integrate the Soviet Union into
the community of nations.
– Leadership of the Soviet Union supported the
ending of communism and split into separate
nations.
– East and West Germany united.
American Foreign Policy: An
Overview

The War on Terrorism
– War on terrorism became highest priority of
George W. Bush administration after 9/11.
– Bush supported preemptive strikes against
terrorists and hostile states.
– International relations has entered an era of
improvisation.
The Politics of Defense Policy

Defense Spending
– Currently takes up about one-fifth of the federal
budget.
– Conservatives argue against budget cuts that
would leave the military unprepared.
– Liberals argue for budget cuts to provide more
money for programs here in the U.S.
– Military spending is hard to cut since it means a
loss of jobs in congressional districts.
The Politics of Defense Policy

Personnel
– 2.2 million active and reserve troops
– More reliance on National Guard and reserve troops.

Weapons
– Reliance on nuclear triad (ICBMs, SLBMs, and
strategic bombers) is expensive.
– Treaties (START) were signed to reduce some nuclear
missiles.
– High-tech non-nuclear weapons are becoming more
important.
The Politics of Defense Policy
The New Global Agenda

The Decreasing Role of Military Power
– Military power is losing much of its utility in
resolving many international issues.
– Economic Sanctions



Nonmilitary penalties imposed on foreign countries
as an attempt to modify their behavior.
Generally the first “shot” in a crisis.
Can be effective, but critics argue they only hurt
U.S. businesses and provoke a nationalist backlash.
The New Global Agenda

Nuclear Proliferation
– Only a few countries have known nuclear
weapon capabilities.
– Fear is that other “rogue” countries will have
nuclear weapons capabilities and use them
against their neighbors or the U.S.
– U.S. will focus on discouraging the deployment
of developed nuclear weapons.
The New Global Agenda

The Spread of Nuclear Weapons (Figure 20.3)
The New Global Agenda

The International Economy
– Interdependency: Mutual dependency, in which the
actions of nations reverberate and affect one another’s
economic lifelines.
– International Trade


Tariffs (a tax on imported goods) are used to protect American
business.
NAFTA and GATT are ways to lower tariffs and increase
trade.
– Balance of Trade: The ratio of what is paid for imports
to what is earned for exports.
The New Global Agenda

The International Economy (continued)
– Energy
 America depends on imported oil, but not as much
as other nations.
 Much of the recoverable oil is in the Middle East
which is often the site of military & economic
conflicts.
 OPEC controls the price of oil and amount its
members produce and sell.
The New Global Agenda

The International Economy (continued)
– Foreign Aid
 Foreign aid is used to stabilize nations friendly to
the United States.
 A substantial percentage of foreign aid is military.
 Foreign aid has never been very popular with
Americans
Understanding National
Security Policymaking

National Security Policymaking and
Democracy
– Americans are more interested in domestic than
foreign policy.
– The opinions of the people are rarely ignored.
– Pluralism is pervasive in foreign policymaking.

Foreign and Defense Policymaking and the
Scope of Government
Policymaking for Health Care
and the Environment
Chapter 21
Health Care Policy

The Health of Americans
– Americans generally lag behind in some key health
statistics
– Specifically a lower life expectancy and higher infant
mortality rate.

The Cost of Health Care
– Americans spend more than any other country.
– Reasons for high costs: private insurance pays much of
the cost, emphasis on new and expensive technology,
increase in malpractice suits results in “defensive
medicine.”
Health Care Policy

Uneven Coverage, Uneven Care
– Health Insurance
 About 43 million Americans have no health
insurance.
 Often linked to having a job - lose the job, lose the
health insurance.
 Health insurance is closely tied to race and income.
Health Care Policy

Uneven Coverage, Uneven Care
– Managed Care
 HMO: provide health care for a yearly fee through
contracts or insurance companies. Covers about 60
percent of Americans.
 Designed to reduce costs through oversight and
limiting patient choices.
 Patients’ bill of rights would give patients rights
against medical providers, including right to sue.
Health Care Policy

The Role of Government in Health Care
– Government in the United States has the
smallest role.
– Medicare: provides hospitalization insurance
for elderly and optional coverage for other
medical expenses.
– Medicaid: public assistance program to provide
health care for the poor. Paid for by national
and state governments.
Health Care Policy

Policymaking for Health Care
– The Politics of Health Care
 Equality of care and cost containment take a back
seat to technological advance.
 Interest groups (medical profession, elderly,
business, insurance companies) play a major role in
health care policy making.
Health Care Policy

Policymaking for Health Care
– The Clinton Heath Care Reform Plan.





Main concern guaranteeing health care coverage for all
Paid for by requirement for employer insurance and tax
increases
Health alliances would collect premiums, bargain with health
plans, and handle payments.
Interest groups lobbied hard against this bureaucratic and
complicated plan.
Eventually died in Congress.
Health Care Policy

Policymaking for Health Care
– The Health Policy Issues ahead
 Polls show Americans are fairly satisfied but want
reform.
 Main concerns are access and cost.
 Remains complex, confusing and expensive with all
the providers and governments involved.
Environmental Policy

Environmental Policies in America
– Environmental Impacts.
 Environmental Impact Statements: report that
specifies likely environmental impact of a proposed
action - filed with the EPA.
 Used by environmental groups to challenge and
delay projects they object to.
– Clean Air.
 Clean Air Act of 1970: reduce auto pollution.
 1990 amendments allowed emissions trading.
Environmental Policy

Environmental Policies in America
– Clean Water.
 Water Pollution Control Act of 1972: intended to
clean up the nation’s rivers and lakes requiring the
use of pollution control technology.
 Has helped reclaim numerous rivers and lakes since
its passage.
 But it misses “runoff” pollution from city streets and
other areas.
Environmental Policy

Environmental Policies in America
– Wilderness Preservation
 The U.S. is a world leader in wilderness
preservation.
 The national parks and national forests may be
restricted to keep them for future generations.
– Endangered Species
 Government protects those species listed as
endangered - regardless of costs (Endangered
Species Act).
 Exceptions may be made in some instances.
Environmental Policy

Environmental Policies in America
– Toxic Wastes
 Superfund was created by Congress in 1980 to clean
up hazardous waste sites.
 Has virtually eliminated haphazard dumping of toxic
waste, but less successful in cleaning up existing
waste.
 Nuclear waste presents a serious challenge.
Energy Policy

Sources of America’s Energy (Figure 19.2)
Figure 19.3
Energy Policy

Energy Sources and Energy Politics
– 87% of the nation’s energy comes from coal,
oil and natural gas.
– Coal is the most abundant fuel, but also the
dirtiest.
– Oil accounts for 40% of our energy, but creates
a dependence on foreign (especially Middle
East) sources.
– Most controversial energy source is nuclear.
Energy Policy
Energy Policy

The Global Warming Debate Heats Up
– Scientists argue about the effects of
accumulations of carbon dioxide in the
atmosphere.
– The only way to reduce the problem is to
reduce the amount produced.
– The costs to do this are immediate, but the
effects won’t be visible for decades, if ever.
Understanding Health Care
and Environmental Policy

The Scope of Government and Health Care
and Environmental Policy
– As citizens want more health care reform, the
size of government will increase.
– Increased environmental protection will also
cause the size of government to go up.
– With party divisions, incremental change is
most likely.