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Public Policy, Economic Policy, and Social Welfare Policy


Includes Social Security, Income Security, Medicare, Debt Interest, ... including the Social Security Act of 1935, the Medicare Act of 1965, ... – PowerPoint PPT presentation

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Title: Public Policy, Economic Policy, and Social Welfare Policy

Public Policy, Economic Policy, and Social
Welfare Policy
  • Michael R. Baysdell
  • PS 123 U.S. Government
  • Saginaw Valley State University

The Policy Making Process
  • The most important decision affecting
    policy-making is deciding what belongs on the
    political agenda.
  • Shared beliefs determine what is legitimate for
    the government to do.
  • Legitimacy is affected by
  • a) Shared political values
  • b) Weight of custom and tradition
  • c) Impact of events
  • d) Changes in the way that political elites think
    and talk about politics

Increasing Govt Sphere
  • People believe that government should continue
    to do what it is doing now.
  • Changes in attitudes and events tend to increase
    government activities.
  • Government growth cannot be attributed to one
    political party.
  • May also be enlarged without public demand and
    even when conditions are improving (Medicare Part
  • Groups are a motivating force in adding new
  • (1) May be organized (e.g., corporations) or
    disorganized (urban minorities)
  • (2) May react to a sense of relative
    deprivation--peoples feeling that they are worse
    off than they expected to be Examples unions
    and factory regulation the black riots of the
  • (3) May change the values and beliefs of others
    example the white response to urban riots

Institutions Add New Issues.
  • Courts make decisions that force action by other
    branches school desegregation, abortion
  • (ii). Change the political agenda and rearrange
    political forces
  • (iii). Courts facilitate change when there is no
    popular majority.
  • Bureaucracy is a source of political innovation
  • (ii). Professionalization of reform
  • (iii). Forms alliances, especially with senators
    and their staffs
  • Senate
  • (i). More activists than ever
  • (ii). Source of presidential candidates with new
  • Media
  • (i). Helps place issues on political agenda
  • (ii). Publicizes issues placed there by others,
    e.g., safety standards proposed by Senate
  • c) Summarize public opinion dynamics

Summary of Public Opinion Dynamics
  • Popular attitudes chance slowly, unless they are
    spurred by critical events.
  • Elite attitudes are more volatile and more
    interdependent with government actions.

Costs and Benefits
  • Costs and benefits of a proposed policy provide a
    way to understand how an issue affects political
  • 1. Cost any burden, monetary or nonmonetary that
    some people must, or expect, to bear from the
  • 2. Benefit any satisfaction, monetary or
    nonmonetary that some people must, or expect, to
    receive from the policy
  • 3. Two aspects of costs and benefits are
  • a) Perception of costs and benefits affects
  • b) People consider whether it is legitimate for
    a group to benefit.
  • 4. Politics is a process of settling disputes
    over who benefits/pays and who ought to
    benefit/payso ideas and values are as important
    as interests.
  • 5. People prefer programs that provide benefits
    to them at low cost.
  • 6. Perceived distribution of costs and benefits
    shapes the kinds of political coalitions that
    form, but does not necessarily determine who wins.

Case Study Business Regulation
  • Majoritarian politics
  • 1. Antitrust legislation in 1890s
  • a) Public indignation strong but unfocused
  • b) Legislation vague no specific enforcement
  • c) Sherman Act (1890)
  • 2. Antitrust legislation was strengthened in the
    twentieth century.
  • a) Presidents took the initiative in encouraging
    its enforcement.
  • b) Politicians, business leaders were committed
    to a strong antitrust policy.
  • c) Federal Trade Commission (created in 1914)
  • d) Clayton Act (1914)
  • e) Enforcement was determined primarily by the
    ideology and personal convictions of the current
    presidential administration, not by interest
    group activism.
  • Entrepreneurial Politics 1906 Pure Food and Drug
    Act, 1970s Clean Air Act

Business Regulation Contd
  • Interest group politics Labor-management
  • a) 1935 labor unions seek government protection
    for their rights business firms in opposition
  • (1) Unions win.
  • (2) Wagner Act creates National Labor Relations
    Board (NLRB).
  • b) 1947 Taft-Hartley Act a victory for
    management permits states to pass right-to-work
  • c) 1959 Landrum-Griffin Act another victory for
    management requires secret ballot union
    elections, union financial reports
  • Client Politics Licensing of doctors, lawyers,
    barbersrestricts entry and allows members to
    charge higher rates

  • Idea governmental regulation was bad in
    industries that could be competitive
  • Example airline fares, long distance
    telephoning, trucking
  • A challenge to iron triangles and client politics

Economic Policy (Ch. 16)
  • Both the deficit and the balanced budget have led
    to policy debates.
  • 1. Republicans wanted to return the 1999 surplus
    to the public, while Democrats wanted to use it
    for new programs.
  • 2. Both goals were served
  • a) Republicans Economic Growth and Tax Relief
    Reconciliation Act of 2001, one of only three
    large tax cuts since WWII
  • b) Democrats Tax cuts end on 2010 and spending
    was increased to many federal programs
  • 3. Economic forecasts are always uncertain see
    that September 11th attacks and subsequent
    military actions had significant economic
  • 4. In recession --according to Keynesian theory
  • a) Tax revenues decrease.
  • b) Spending on social programs needs to increase.
  • C) This aggravates Supply-Siders and

Government Spending (Ugh!)
  • 2006 Government spending at all levels 3
  • 10,000 for each American
  • Government spending increased because of 3
    events The Great Depression, World War II, and
    LBJs Great Society
  • Governments buy everything from F-22s to toilet
    paper for government buildings
  • Government spending creates competition within
    the private sector. EX Lockheed Skunk Works
  • The National government gives money to local and
    regional governments to spend. See next slide.

Cooperative Federalism
  • Ways of Distributing to states
  • Grants-in-Aid grants of federal mone to cities
    (land-grant colleges too)allows Congress to
    become enmeshed in public ed. And mental health
  • Block grantsfewer strings. EX TANF
  • Revenue Sharingno strings, done away with in
    1986 by Reagan
  • Federal Agency Aid--FBI aid, other agency aid,
    FEMA, Census Bureau

Establishing the Federal BudgetThe President
proposes, and Congress disposes
  • The governments fiscal year is Oct. 1- Sept. 30.
  • 1st step President confers with his advisors and
    drafts a budget to submit to Congress
  • Second step Congress accepts, rejects, or
    modifies. House sets budget targets and bills
    are referred to committees and subcommittees.
    Full house must vote, and this process must be
    completed by September 15. Process is repeated in
    the Senate.
  • President may approve or veto the budget
  • Different political parties distribute
    discretionary funds VERY differently.
    RepublicansMilitary spending Democrats--Welfare
  • Now, lets look at the results.

Mandatory and Discretionary Spending
  • Mandatory spending refers to money that lawmakers
    are required by law to spend on certain programs
    or to use for interest payments on the national
    debt. Includes Social Security, Income Security,
    Medicare, Debt Interest, Veterans benefits
  • Discretionary spending is spending about which
    government planners can make choices. VERY
    small!! (Education, Employment, Social Services,
    Transportation, Justice, Environment

  • An entitlement program is a social welfare
    program that people must receive to if they meet
    certain eligibility requirements.
  • Social Security
  • Social Security is the largest category of
    government spending.
  • Medicare
  • Medicare pays for certain health benefits for
    people over 65 or people who have certain
    disabilities and diseases.
  • Medicaid
  • Medicaid benefits low-income families, some
    people with disabilities, and elderly people in
    nursing homes. Medicaid costs are shared by the
    federal and state governments.

Discretionary Spending
  • Defense Spending
  • Spending on defense accounts for about half of
    the federal governments discretionary spending.
  • Defense spending pays military personnel
    salaries, buys military equipment, and covers
    operating costs of military bases.
  • Other Discretionary Spending
  • Other discretionary spending categories include
  • education
  • training
  • environmental cleanup
  • national parks and monuments
  • scientific research
  • land management
  • farm subsidies
  • foreign aid

The Budget Process
  • 1. President submits budget.
  • 2. House and Senate budget committees analyze the
    budget, with the Congressional Budget Office.
  • 3. Each committee proposes to its house a budget
    resolution that sets a total budget ceiling and
    ceilings for each of several spending areas.
  • 4. Congress is supposed to adopt these
    resolutions, to guide its budget debates.
  • 5. Congress considers appropriations bills and
    sees whether they are congruent with the budget
  • 6. Appropriations bills cannot make big changes
    in the budget because approximately two-thirds of
    government spending in on entitlements.
  • 7. Nothing requires Congress to make cuts, but
    the process has made some links between spending
    and revenues.
  • 8. Reagan secured large cuts in 1981, but was
    unsuccessful in subsequent years.

Section ReviewFederal Govt Spending
  • 1. All of the following are examples of
    mandatory spending except
  • (a) defense spending.
  • (b) Medicare.
  • (c) Social Security.
  • (d) Medicaid.
  • 2. An entitlement program is
  • (a) a program to provide benefits paid to
  • (b) a program to provide benefits paid to
    government employees only.
  • (c) a program to provide benefits to people who
    meet certain requirements.
  • (d) a program to provide benefits to illegal

Case Study Social Security
  • Passed by liberals in 1935 as OASDIConstitutional
    by 5-4 decision
  • Funded by a payroll tax paid by all workers
    (deduction on paycheck). Only workers with enough
    credits are eligible.
  • 6.2 tax on salary up to 90,000 limit
  • 1.45 Medicare tax on all earned income
  • Medicare and Medicaid added in 1965 (health
    insurance--Medicare 65 Medicaid poor)

Problems with Social Security
  • Problem there will soon be insufficient people
    paying Social Security taxes to provide benefits
    for every retired person. Baby boomers aging,
    will retire soon and require more health care.
    AARP strong influence demands policy favorable to
  • Solutions opposed by the public include
  • a) Raising the retirement age to 70, freezing
    retirement benefits, and raising Social Security
  • Privatizing Social Security
  • Combine the first two reforms, and allow citizens
    to invest a portion of their Social Security
    taxes into mutual funds
  • And now, Medicare Part B (Prescription Drug
    coverage) makes the problem even worse.

Foreign, Defense, and Military Policy
  • President is the commander-in-chief but Congress
    appropriates the money
  • President appoints ambassadors but Senate
    confirms them.
  • President negotiates treaties but the Senate must
    ratify them with a two-thirds vote.
  • Only Congress can regulate commerce with other
    nations and declare war.
  • But Americans think that the president in charge
    and history confirms that belief.
  • National Security Council led by Natl Security
    Advisor, also contains Veep, Sec of State, Sec of
    Defense, CIA director, Chairman JCS, Atty General

Presidential Deployments
  • (1) 1801, Jefferson sends the Navy to deal with
    the Barbary pirates.
  • (2) 1845, Polk sends troops to Mexico.
  • (3) 1861, Lincoln blockades southern ports and
    declares martial law.
  • (4) 1940, FDR sends destroyers to Britain to be
    used against Germany (Germany was then our ally).
  • (5) 1950, Truman sends troops to Korea.
  • (6) 1960s, Kennedy, Johnson send advisors and
    then troops to Vietnam.
  • (7) 1983, Reagan sends troops to Grenada to
    overthrow a pro-Castro regime.
  • (8) 1987, Reagan sends the Navy to protect
    tankers in Persian Gulf.
  • (9) 1989, George H.W. Bush orders the invasion of
  • (10) 1990, George H.W. Bush sends forces into
    Saudi Arabia when Iraq invades Kuwait.
  • (11) 1999, Clinton orders attacks against Serbs
    in Kosovo.
  • (12) 2001, George W. Bush sends troops to

Times When Presidents were Unable to Act
  • (1) Wilson and FDR were unable to ally with
    Britain before World War I and World War II.
  • (2) Wilson was unable to lead United States into
    League of Nations.
  • (3) Ford could not intervene in Angola, to
    support an anti-Marxist regime.
  • (4) Reagan was criticized on his commitments to
    El Salvador and Lebanon.
  • (5) Congressional debate on Bushs waging of Gulf
    War was extended
  • (6) SC struck down Trumans 1952 seizure of steel
  • War Powers Act makes Presidents less likely to
    deploy troops

  • 1973 All volunteer force
  • National Security Act of 1947 Created Defense
    Department, unified command but separate
    services. Secretary of Defense, Army, Navy
  • Goldwater-Nichols Act of 1986 Joint Chiefs of
    Staff created (uniformed head of each service,
    chair and vice chair appointed by President and
    confirmed by Senate).
  • Current JCSGen. Peter Pace (Marines)
  • Civilian secretary is responsible for purchasing
    and public affars.

Environmental Policy
  • Controversial because it creates winners and
  • Scientific uncertainty (global warming farce)
  • Difficult to impose nationally because of
    different considerationsso left to states,
    subject to federal control

Legislative successes
  • 1969. NEPA requires impact statements
  • 1970, Environmental Protection Agency established
  • 1970, Clean Air Act passed. 90 reduction in
    hydrocarbons, CO, NOx, led to catalytic
    converters, elimination of lead in fuel
  • 1972, clean water legislation passed, EPA given
    mandate to examine pesticides
  • 1973, Endangered Species Act passed.
  • 1997 Kyoto Protocol (US a signatory but not
  • Now Pollution allowances and credits serve as a
    compromise between two extremes

Learning Objectives
  • After reading and reviewing the material in this
    chapter, the student should be able to do each of
    the following
  • Explain how certain issues at certain times are
    placed on the political agenda for action.
  • Define the terms costs, benefits, and
    perceived as used in this chapter.
  • Use the above terms to explain the four types of
    politics presented in the text majoritarian,
    client, interest group, and entrepreneurial,
    giving examples of each.
  • Discuss the roles played in the process of public
    policy formation by peoples perceptions,
    beliefs, interests, and values.
  • Show how voters have contradictory attitudes
    regarding their own and others economic
  • List and briefly explain four competing economic
    theories. Assess the nature and impact of
  • List the four major executive branch agencies
    involved in setting economic policy and explain
    the role of each.
  • Analyze federal fiscal policy in terms of the
    texts four categories of policy-making politics.
  • Trace the history of federal government budgeting
  • Discuss how the September 11th attacks, as well
    as the subsequent economic developments and
    government actions, have changed economic policy

Learning Objectives (Contd)
  • Describe the goals of the social welfare system,
    and contrast its programs with those of the
    British in terms of centralization.
  • Describe the major elements of the system,
    including the Social Security Act of 1935, the
    Medicare Act of 1965, and the abolition of the
    Aid to Families with Dependent Children (AFDC)
  • Explain why some welfare policies involve
    majoritarian politics, while others involve
    client politics. Give examples and indicate the
    political consequences of each.
  • Discuss the politics of welfare reform.
  • List the constitutional powers of the president
    and compare them with the authority of Congress
    in foreign affairs. Explain why the president now
    has a larger role than the Framers necessarily
  • Explain why checks on the powers of the national
    government in foreign affairs are primarily
    political rather than constitutional.
  • Give reasons for the volatility of public opinion
    on foreign affairs. Describe the problems that
    the president may face, using public opinion on
    the Vietnam War as an example.
  • Explain the worldview concept and describe the
    containment strategy of George Kennan. Summarize
    essential elements of the anti-appeasement,
    disengagement, and human rights worldviews.
  • Analyze the key allocative decisions about the
    defense budget. Explain how the congressional
    role in deciding on weapons systems has changed
    in recent years.
  • Explain why the 1947 and 1949 Defense
    Reorganization Acts did not merge the armed
    services. Review the present structure of the
    department, and explain how it contributes to
    inter-service rivalries. Discuss the reforms
    adopted in 1986 and the challenges the services
    confront in fighting the war on terrorism.
  • Explain why the cost overrun problem is due to
    bureaucratic and political factors, and describe
    proposed reforms of the system.

Final Objectives
  • List three reasons why environmental policy tends
    to be so controversial and provide examples of
  • 2. Describe the role of (a) the United States
    political system and (b) local politics in
    shaping environmental policy. Contrast these with
    environmental policy making in Britain.
  • 3. Describe the role of entrepreneurial politics
    in the governments response to global warming.
  • 4. Describe the role of majoritarian politics in
    the governments efforts to reduce automobile
    emissions. Explain why majoritarian politics has
    worked in some cases and not others.
  • 5. Describe the role of interest group politics
    in the governments efforts to resolve the acid
    rain controversy. List proposed alternative
    solutions and outline the terms of the compromise
    reached by Congress and the Bush administration.
  • 6. Describe the role of client politics in the
    governments efforts to regulate the use of
    agricultural pesticides and logging in U.S.