Review Project Unit 6: Public Policy. Chapter 15: The Policy-Making Process.

Review ProjectUnit 6: Public Policy

Chapter 15: The Policy-Making Process

Political Agenda

● Definition: a set of issues thought by the public or those in power to merit action by the government

● Who/what affects issues covered?○ Groups○ Institutions○ Media

Groups

● organized(corporations/unions) and unorganized(urban minorities) promote their cause

● many groups react to “intolerable” conditions of life● can change political agenda if governing body and

society is not convinced of the rightness of the status quo

Institutions

● The Courts○ can force other branches of government○ Example: desegregation of schools lead to President Eisenhower

escorting the Little Rock Nine○ method for advocates of unpopular causes

● The Bureaucracy○ source of policy proposals○ implementer of policies that become law

● The Senate○ become a source of political change○ Founders had envisioned it as a moderator of change

The Media

● can place new issues on the agenda● publicize issues already on the agenda

Evaluating the effects of an Issue

● Cost: any burden, monetary or nonmonetary, that some people must bear, or think that they must bear, if a policy is adopted

● Benefit: any satisfaction, monetary or nonmonetary that people believe they will enjoy if the policy is adopted

Majoritarian Politics

● Distributed Cost and Distributed Benefit

● Interest Groups are uninvolved○ free rider problem

● Arguments are over ideology

● Example: laws to reduce drug trafficking

Interest Group Politics

● Concentrated Benefits and Concentrated Costs

● Fought out by individual groups

● Public is uninformed● Example: television

broadcasters vs. cable companies

Client Politics

● Concentrated Benefits and Distributed Costs

● The benefiting group is motivated to organize

● costs are spread out so to be hardly noticeable

● Example: farmers and agricultural price supports

● pork-barrel projects-projects that benefit localities

● legitimacy is huge○ homeless people ○ welfare

Entrepreneurial Politics

● Distributed Benefits and Concentrated Costs

● Example: anti pollution and safety requirements for automobiles

● very rare● policy entrepreneurs: people

who act on behalf of the unorganized or indifferent majority○ in and out of government○ represent interests not well

represented in government

Example: Business Regulation

● Majoritarian Politics○ antitrust legislation○ strong aniti-monopoly sentiments

toward all industries○ few industries fought against

antitrust legislation● Interest Group Politics

○ labor unions vs. business firms ○ unions won with Wagner Act--

National Labor Relations Board(NLRB)

○ businesses fought back with Taft-Hartley Act

○ business won again with the Landrum-Griffin Act

Example: Business Regulation

● Client Politics○ at the national level: the dairy

industry in the 1930s○ declining milk prices○ Agricultural Adjustment Act-

authorized Department of Agriculture to regulate milk prices

○ consumers ended up paying more for milk

● Entrepreneurial Politics○ 1960s and 70s consumer and

environmental protection laws

Perceptions, Beliefs, Interests and Values

● Deregulation○ prices went down○ some companies went bankrupt

● Reducing Tobacco Subsidies ○ tobacco is good for business,

but bad for health○ deregulation is controversial

■ some like the prices controlled

■ process regulation: rules aimed at improving consumer or worker safety and reducing environmental damage

Chapter 16: Economic Policy-Americans don’t want the government spending more than it receives-Politicians agree, but do little about it-Conservatives-cut spending-Liberals-raise taxes

Politics of Economy● Restrictions by Congress: increasing in spending for one

program means decrease in another● Congress has tried to appease both Republicans and

Democrat: --Economic Growth and Tax Relief Reconciliation Act (2001) --requiring tax cuts end on December 31, 2010/passing laws to increase spending on federal programs

-Office of Management and Budget & Congressional Budget Office estimate what economy will look like in the future-predictions change based on events (9/11 attacks)

Politicians

economy=majoritarian politicshold politicians accountable for state of country, not just individual benefits-pocketbook issues not singular; will vote against incumbent if unemployment has increased regardless of whether it affects them (sociotropic behavior)

Taxing/Spending

-economy can greatly affect elections, especially for incumbents-Republicans worry more about inflation-Democrats more about unemployment

Taxing/Spending

-voters want lower taxes, less debt, new programs-can only do this by cutting existing programs, go deeper in debt, or raise taxes-raise taxes on a minority of voters (i.e. raise taxes on cigarettes)-many politicians believe the rich should have higher tax rates, everyone elses’ should go down-more backup from the majority of middle/lower class, upper class is a minority-increasing spending is more popular than cutting taxes

Monetarism

-too much money chasing too few goods-too much money printedinflationcut back on money in circulationrecession (slow economic growth and unemployment)

monetarism: government should steadily increase money supply at rate equal to growth in economic productivity; uninvolved in everything else (free market)

Keynesianism

-create right level of demand-government needs to get involved-pump money through spending more than it collects in taxes (demand too little)-take money out by increasing taxes (demand is too great)-activist government

Planning

-price and wage controls-government gets involved in maximum prices companies can impose

-industrial policy-government directs or plans investments so that falling industries recover or better industries take their place

Steel manufacturing indsutry

Supply-Side Tax Cuts

-less government interference-cut taxes,more investments, more jobs, less likely to take advantage of tax loopholes-tax rates lower, income higher

Ideology and Theory

-support for theories based on political beliefs -monetarism or supply----side tax cuts-government smaller, less involved (conservatives)-Keynesian----social welfare programs (liberals)-economic planning- (socialists)

“Reaganomics”-combo of monetarism, supply-side tax cuts, domestic budget cutting-reduce size of federal government, stimulate economic growth, increase American military strength

-increase spending while lowering taxes led to drop in unemployment rate and rise in business activity

Key terms

Fiscal policy-an attempt to use taxes and expenditures to affect the economy-budget deficit (spends more than it takes in) -budget surplus (takes in more than it spends)-Fiscal Year (FY)-October 1 to September 30, time when federal government appropriations are made and federal books are kept

Troika

-Council of Economic Advisers-made up three professional economists plus a small staff-looks at trends, issues, and makes report that President submits to Congress each year-often biasedd-Office of Management and Budget -estimates amount spent by agencies, negotiate departments over the size of their budgets, make sure proposals of these departments match with president’s goals-secretary of the treasury-argues POV of financial community-provides estimates

Other agencies

board of governors of the Federal Reserve System (the “Fed”)-7 members appointed by the president with consent of Senate for 14 years-regulate supply of money and price of money-Fed can have power on reelections

Congress

-most important part of the economic policy making machinery-president needs help from agencies in executive branch and committees in Congress-when Congress passes laws, it is often responding to interest group poltiics (i.e. foreign trade with NAFTA)

Dual Votes for Voters

-Voters often want two things: a balanced budget/lower government spending and more spending on education, homelessness, childcare, and crime control-contradictory; politicians often hone in on one goal

The Budget

a document that announces how much the government will collect in taxes and spend in revenue and how these expenditures will be distributed among programs-list of everything government wants is made up before checking how much money is available

-Congressional Budget Act of 1974:-President submits budget in Feb.-2 budget committees: in House and Senate study budget, gather analysis from Congressional Budget Office (CBO), then submit a budget resolution that has a proposed total budget ceiling and ceiling for different spending areas-In May, Congress adopts resolutions and makes appropriation bills-committees approve, Congress passes it, and President signs

The Budget

-there are entitlements however, meaning that regardless of appropriations bills, ⅔ of what the government spends is mandatory (i.e. Social Security, Medicare, veterans’ benefits, food stamps)-Congress represents public opinion: less total spending, but more spent on specific programs-thus when Congress votes first on programs, the spending goes up, butwhen Congress must vote first on a budget ceiling, then spending goes down

Reducing Spending

Congress Budget Act did not lead to spending cuts-Gramm-Rudman Act (formerly known as Balanced Budget Act) came into place that required that from 1896 to 1991, each year, the budget would be cut until the deficit disappeared-through sequester, which cut a percentage of the budget for each program-failed as Congress and president food loopholes

Reducing Spending

Solution: -tax increase as voted by Congress-Budget Enforcement Act of 1990: cap on spending; as long as Congress stays underneath the cap they can rearrange spending as they’d like (increasing spending in one program but then decreasing in another)

Rise of Taxes

with the income tax came fear by the rich that they would always be outvoted and therefore taxed much moreto offset these high rates came loopholes in the form of deductions,exemptions, and exclusions by which people could compromise was made: the well-off would no longer oppose high marginal rates if the less-well-off supporters more loopholes

-went from high rates/big deductions to low rates/smaller deductions in 1986, but then afterwards rates went back up

Chapter 17: Social Welfare

Types of welfare programs:Majoritarian Politics-everyone benefits, everyone paysClient Politics-Few benefit, everyone pays

Problems: who will pay and how much?Legitimacy- who should benefit?

About the programs● The type of program influences how the

government acts in response to them. ● Changes to the programs are risky if

they could lower the benefits. ● Goal = maintain benefits without dealing

with rising costs● The appeal of client based programs

change as popular opinion about them changes.

● Success of client politics depends on if the beneficiaries are thought of as legitimate.

How the U.S. Differs from others Welfare policy in the United States differs from other countries in three ways:● They have a more restrictive opinion

on who should receive benefits and assistance

● They have taken longer to develop and adopt the welfare state

● They have given the states a bigger role in their involvement to run welfare programs

Other information

● Americans tend to base welfare policy helping the deserving poor instead of assisting to make everyone equal

● Federalism has shaped national welfare policy -any state could experiment with social welfare programs -the federal government's involvement (and soending

their money) encouraged a strong welfare beuraucracy

Major Social Welfare Programs● Medicare● Unemployment Insurance● Temporary Assistance for Needy

Families● Food Stamps● Medicaid● Earned Income Tax Credit● Supplemental Security Income● Old Age, Suvivors, and Disibility

Insurance

Vocabulary

● Insurance program- workers would contribute and later benefit when they became unemployed or retired

● Assistance program- giving help to the blind, dependent children, and the aged

● Means test- a measure to determine who is eligible for assistance programs

Debate

● The idea for a national health care plan was both favored and opposed

-Congress was divided -the democratic majority after the 1964 election changed committee opinion (now in favor) -a Medicare plan was created

Reforming Welfare ProgramsProblem with social security: with the growing population there will not be enough paying to provide benefits for all retired peopleHow to solve this:1. Raise retirement age to 70, don't increase

the amount of benefits, and raise social security taxes

2. Privatize social security by requiring investments for social security taxes to be in the stock market

3. Allow citizens to to invest some taxes in mutual funds

Welfare politics

Earned income tax credit- a cash grant to poor parents who are working

A proposal about a program will be adopted if: -the benefits of the beneficiaries will exceed the costs -it is considered a legitimate cause for the government to adopt

Chapter 20: Foreign and Military Policy

-people blame American presidents for problems with foreign policy system-believe Congress should be more involved

Kinds of Foreign Policy

majoritarian politics-wide benefits, wide costs (decision to go to war)

interest group politics- tariff decisions, benefits/costs for companies (increasing tariffs on Japanese steel, helps American industries, hurts those buying Japanese steel)client politics-aid to American corporations doing business abroad, help firms directly without a cost to a distinct group in society

President deals with majoritarian politicsCongress plays a role in interest group/client politics

Split Roles-President is commander in chief of armed forces, Congress authorizes and appropiates money for the forces-President appoints ambassadors, confirmed by Senate-President can negotiate treaties, ratified by ⅔ vote of Senate-Only Congress can regulate commerce with nations and “declare” war.-President usually act on own decisions though: have sent troops abroad in more than 125 instancesonly 5 of 13 major wars have followed formal declaration of war-leaders of other democratic nations have more freedom, can make decisions faster

Supreme Court

Supreme Court holds view that the federal government has powers in the foreign policy beyond those stated in the Constitution (i.e. when Franklin Roosevelt ordered 100,000 Japanese Americans to be relocated to the West in “relocation centers”, violated Constitution but Supreme Court upheld it)

Supreme Court does not like to get involved in President and Congress’s disputes

Checks on Presidential Power-Congress’ control of the purse stringsLimitations on the President’s ability to give military or economic aid to other countries

-The War Powers Act (1973): report in writing to Congress within 48 hours after introducing troops to areas

-within 60 days, Congress needs to approve of action by US troops; if Congress fails to authorize ot passes a concurrent resolution, troops must be withdrawn

-Presidents haven’t complied with Act and no president has acknowledged it is unconstitutional

-CIA must notify congressional committees about covert action

Foreign Policy-before World War II, secretary of state was in charge of foreign policy-then the president and agencies began to take the reigns-agencies spread out to overseas (Defense Department, CIA)-President hires staff to assist; staff is part of the National Security Council-is growing in influence

-executive branch rivalries leads to rivalries bvetwen the branch and Congress as Congress has a lot of influence on foreign policy decisions-interests of organizations affect what positions they take

Public Support● Most Americans are cautious of overseas

military expeditions ● The public is usually uninformed about foreign

affairs but believes we should be involved in them

-political elites differ because they have more insight and consequently have rapidly changing opinions

Worldviews● Isolationism- not getting involved in

the affairs of other countries● Disengagement- withdrawing from

previous involvement● Containment- preventing the

expansion of another aggressive idea/country

● Human rights- offer support to improve the lives of people in other countries

The Defense Budget● no large peacetime forces● great increase in military spending

during the Cold War● after that there were ups and downs in

spending due to the Korean War, the Vietnam War, and the Soviet Union invading Afghanistan

● after fall of the Soviet Union, spending was cut

● arguments over defense spending now

○ liberals-cuts in defense to fund domestic programs

○ conservatives-cuts, but still maintain a strong and well funded military

What are we buying?● Personnel

○ draft-unpopular○ women since 1994○ homosexuals-”don’t ask, don’t tell”--

now are allowed to serve openly● Big Ticket Items

○ cost overruns: actual costs that are greater than estimated costs

■ don’t know price■ underestimation to persuade

congress■ gold plating■ sole-sourcing■ stretching out payment

What are we buying?● Small Ticket Items

○ coffee maker on a plane● Readiness

○ peacetime○ low priority

■ client politics■ no constituencies

● Bases○ was client politics○ Commission on Base

Realignment and Closure

Defense Decision Making● Joint Chiefs of Staff

○ heads of each of the military services, chairman, vice chairman and military officers appointed by the President and confirmed by the Senate

○ creates plans for military contingencies

● The Services○ head by a civilian secretary and

a senior military officer● The Chain of Command

○ President--Secretary of Defense--various people

The War on Terror

● rely on special forces● services working

together● alliances with guerilla

fighters● debates about new

weapons and MAD