Chapter 17: Domestic Policy
America at Odds
Mr. Barclay
May 11, 2000
The Policymaking Process
Public Policy
    Is a government plan or course of action taken in response to a political issue or to enhance the social or political well-being of a society.
The stages of Pubic Policy
(1)  Agenda Setting:
    Consists of getting an issue on the political agenda.  A political agenda is a list of issues to be addressed thru govt. action.

The Stages of Public Policy
(2) Policy Formulation and Adoption:
    The President, members of Congress, Admin. Agencies, and interest group leaders typically are the key participant (or "stakeholders") in developing proposed legislation.
(3) Policy Implementation:
    Usually requires the cooperation of the federal government and state and local governments.  Also requires outside support (the courts, administrative agencies)
The Stages of Public Policy
(4) Policy Evaluation:
    Groups both inside and outside the government evaluate the policy.  
Feedback can sometimes reveal a failed policy.
This may lead to a modified or even completely new policy.
Social Welfare Policy
    Consists of all government actions that are undertaken to give assistance to specific groups, such as the aged, the ill, or the poor.
Social Welfare policy is often implemented through income redistribution.
Examples of Social Welfare Policy:
Social Security and Medicare:
    Programs that are essentially compulsory savings financed from payroll taxes levied on both employers and employees.
Medicare is paid for by the federal government for part of the cost of medical care for retired persons or persons with disabilities.
Today Social Security is not really an insurance program…No guarantees….
Public Assistance Programs
Social Security Problem #2:
    The number of people working relative to the number of people who are retiring is declining….
Social Security Problem #3:
Social Security benefit payments are not based on recipient's needs.
SSI (Supplemental Security Income)--
    Establishes nationwide minimum income for the aged, the blind and the disabled.
Public Assistance Programs
Temporary Assistance to Needy Families (TANIF)
    1996 Welfare Reform Act replaced AFDC.
    TANIF gives states more discretion in establishing welfare rules…2 year cutoff.
    -Limits lifetime welfare benefits to 5 years.
     -Also allows states to deny welfare benefits to unmarried teenage mothers.
Policies on Crime and Drugs
Crime as a public policy issue traditionally has been considered a state issue--localized problem.
Crime issue has increasingly become a national agenda item.
Cost of crime currently: $450 billion dollars a year!
--this includes spending on criminal justice system, private protection, urban decay, property loss, medical care….
Crime and Drug Policy
National "Remedies?"
    "Three Strikes and You are Out."
    Allows judges to put away for life any individual who is convicted of a third felony crime.
    Successful Impact?:
    Statistics not complete.  Some crime has been reduced.  The vote is not in on the deterrence factor.
Rehabilitation vs. "Throwing Away the Key"--The debate is ongoing….
Economic Policy
Economic Policy Definition:
    Consists of all actions taken by government to smooth out the ups and downs in the nation's overall business activity.  Economic policy is solely the responsibility of the national government.
Monetary Policy:
    Involves manipulating money in circulation so as to affect interest rates, credit markets, rates of inflation, rates of economic growth, and unemployment.
    Federal Reserve controls "M.P."
Economic Policy
The Federal Reserve under leadership of Alan Greenspan makes decisions about monetary policy several times a year.
Remedies for Periods of Recession and High Unemployment: = expand the money supply.
Remedies for Periods of Rising Inflation = reduce the money supply.
The Economy is Cyclical:
    It goes through booms and recessions.
    A specific Monetary policy generally takes about 14 months to be effective
Economic Policy
Fiscal Policy Defined:
    The use of changes in government expenditures and taxes to alter national economic variables.
Example: When unemployment rises and economy goes into recession….
The government will try to stimulate the economy through increasing government spending, decreasing taxes, and etc.
Example:  When unemployment decreases and prices rise…
The govt. reduces spending, increases taxes.

One Problem with Fiscal Policy:
    There is a lag between the government's decision to institute a fiscal policy and the actual implementation of that policy.
   A number of players slow down the process: (ie. President, OMB, Council of Economic Advisors, Treasury)
    Ultimately Congress must enact necessary legislation to implement fiscal policy.
Economic Policy
The Federal Tax System:  
    Always has been plagued by "action-reaction" syndrome (ie. for every government action, there will be a reaction by the public).
    Individuals and corporations facing high tax rates will react by making concerted attempts to get Congress involved in lowering tax base…
Economic Policy
The Tax Reform Act of 1986:    
    Intended to lower taxes and simplify the tax code.
    It was successful until large federal deficits forced Congress to to choose between cutting spending and raising taxes.
    It did the latter…
    Some loopholes created for big corporations (ie. Capital Gains).
    The tax code today is more compicated than ever.
Contemporary Domestic Policy Issues
Privatization of Social Security?   
    People given the choice to stay on current government-financed system or place their savings into private pension plans.
Gore favors the former, Bush the latter.
New Welfare Policy:
    Did not include input from the poor.
    Is that democratic?

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