Policy Review Chapter 17, 18, 19. Difficulties in solving public problems Competing ideas about what constitutes a problem Solutions are expensive Solutions.

Policy Review

Chapter 17, 18, 19

Difficulties in solving public problems

• Competing ideas about what constitutes a problem

• Solutions are expensive

• Solutions generate new problems

• Solutions are complex

Types of public policy

• Redistributive policy

– Shifts resources from the “haves” to the “have-nots”

– E.g., Medicaid

– Usually controversial

– Highlights differences between how Democrats and Republicans view the role of government

Types of public policy, cont’d.

• Distributive policy

– Funded by the whole taxpayer base to address the needs of a particular group

– E.g., homeowner’s tax deductions

– Popular because benefits go to specific group while costs are spread so widely that no one notices them

– Pork barrel projects, in which legislators try to secure federal dollars to support programs in their home districts, are often associated with distributive policies

Types of public policy, cont’d.

• Regulatory policy

– Designed to change or restrict the behavior of certain groups or individuals

– E.g., environmental policy – Goal is to protect citizens– Politics surrounding the creation of regulatory

policy is highly confrontational

Who makes public policy?

• Legislatures

• Executive

• Bureaucracy (federal, state, local)

• Courts

Steps of the policymaking process

1. Agenda setting

– Triggering event

2. Policy formulation

3. Policy adoption4. Policy implementation

5. Policy evaluation

1. Agenda setting: public attention focuses on a public problem or issue

– Triggering event: an external event that puts an issue on to the policy agenda

2. Policy formulation: policymakers take up the issue.

3. Policy adoption: policymakers formally adopt a policy solution, usually in the form of law or laws

4. Policy implementation: staffs in government agencies are given responsibility for making the policy work

5. Policy evaluation: policy analysts inside and outside the government determine whether the policy is addressing the problem and whether implementation is proceeding well, and recommend changes

Social welfare vs. social insurance

Social welfare policy: Public policies that seek to meet basic needs of people who are unable to provide for themselves

• E.g., Medicaid• Means-tested: beneficiaries qualify by demonstrating need• Designed to fix short-term problems

Social insurance: offers benefits in exchange for contributions made by citizens to offset future economic needs

• E.g., Medicare • Applies to all people• Usually popular

Social Security

• How it works: a social insurance program to which people pay during their working lives in order to receive benefits when they retire

• Is Social Security going broke?– In 2017 benefit payments will begin to exceed

taxes collected– In 2041 trust fund will run out of money

• The politics of Social Security today

Welfare policy

• The New Deal and the creation of AFDC

• Controversy over AFDC in the 1990s– Aid to Families With Dependent Children

• TANF and welfare today – Temporary Assistance to needy Families (TANF)

Other welfare programs

• Food Assistance– Food Stamps; national school lunch and school

breakfast programs; Special Supplemental Nutrition Program for Women, Infants, and Children

• Head Start– Preschool education for low-income children

Health care

Medicare

• Created as an amendment to Social Security Act in 1965

• Provides health insurance for the elderly and disabled

• Hospital insurance funded by tax and other services paid for by premium

• Costs are rising rapidly, so program is unsustainable in current form

Medicaid

• Created as an amendment to Social Security Act in 1965

• Provides medical care to the poor

• Jointly funded by national and state governments

• Costs have been rising, leading to concerns about states’ ability to pay for program

Middle class and corporate welfare

• Subsidy: financial incentive given by the government to corporations, individuals, or other governments

• Middle class subsidies– Education subsidies, such as student loan

programs– Homeownership subsidies, such as mortgage

interest tax deductions and loans to veterans

• Corporate subsidies

Environmental policy

• Environmental policy: distributive, redistributive, and regulatory policies that seek to improve the quality of the physical world in which we live

• Rising concern over the environment– Rachel Carson’s Silent Spring (1962)– Land mined for coal and not reclaimed– Pollution on Cuyahoga River catches fire (1969)– Bald Eagle threatened with extinction– Numerous other events suggest environment is threatened

America’s first environmental decade: the 1970s

• National Environmental Policy Act (1969)– required environmental impact statement for any new federal

regulations

• Creation of the Environmental Protection Agency (1970)– created by executive order of President Richard Nixon

• Clean Air Act (1970)• Clean Water Act (1972)• Endangered Species Act (1973)• Safe Drinking Water Act (1974)

Environmental policy issues on the horizon

• Environmental justice: requiring that all Americans be afforded same protection from environmental hazards

• Regulatory takings: the ability of the government to prevent property owners from using their land

• Fossil fuel use: concern for environmental damage and reliance on foreign sources of energy– Proposed solutions

• Increase the gas tax• Alternative sources of energy• Drilling for domestic sources of oil

Fiscal vs. monetary policy

Fiscal policy

• Government regulates the economy through its powers to tax and spend

• President and Congress play the major roles

Monetary policy

• Government regulates the economy by manipulating interest rates

• The Federal Reserve Board plays the major role

The politics of monetary policy

• Determined by the Federal Reserve Board of Governors

• Tight monetary policy: keeping money in short supply to hold back inflationary pressures

• Loose monetary policy: getting more money into the economy to avoid a recession

The politics of fiscal policy

• Made by Congress and the president through the budget process

• Budget deficits used to stimulate economy during recession

• Balanced budgets should be run when economy is doing well