AP US Government &
Politics Review Part V
Public Policy
Public Policy (5-15%)
Wilson Chapters 15, 16, 17, 20, 21
1. Policy making in a federal system
2. The formation of the policy agenda
3. The role of institutions in the enactment of
policy
4. The role of the bureaucracy and the courts
in policy implementation and
interpretation
Public policy, continued
5. Linkages between policy processes and the following:
A. Political institutions and federalism
B. Political parties
C. Interest groups
D. Public opinion
E. Elections
F. Policy networks
I. The Policymaking Process
1. Most important decision: what belongs on
agenda
A. Shared beliefs determine what is legitimate
B. Legitimate scope of government action always
getting larger
C. In a crisis, people expect government to take action
2. Second step: Making a decision
A. Costs and benefits of proposed policy provide way to
understand how an issue affects political power
B. Cost: any burden (money or not) that people must, or
expect to, bear
C. Benefit: any satisfaction (money or not) that some
people must, or expect to, receive
D. Important to remember:
1. Perception of costs and benefits affects
politics, whether it is accurate or not
2. People consider whether it is legitimate for
a group to benefit
E. Politics is a process of settling disputes over
who benefits/pays and who ought to benefit/pay
F. People prefer programs that benefit them at low
cost
Four Types of Politics
1. Majoritarian Politics: distributed benefits,
distributed costs
A. Benefits large numbers
B. Distributes costs to large numbers
C. Example: Antitrust legislation in 1890s
1.
2.
Public indignation strong but unfocused
Legislation vague; no specific enforcement agency
2. Interest Group Politics: concentrated benefits,
concentrated costs
A. Benefits a relatively small and identifiable group
B. Costs imposed on another small identifiable group
C. Debate carried on with little public knowledge (i.e.,
labor unions vs. business)
D. Example: Labor-management conflict of 1930s
1.
2.
Unions won because of support of FDR (first president to
support unions)
Economic conditions (Depression) other key factor
3. Client politics: concentrated benefits, distributed
costs
A. Small group receives benefits; costs are widely
distributed—little incentive to motivate opposition
B. Those receiving benefits become “clients” of the
government
C. Example: Regulation of milk industry, sugar
production
1.
2.
Prevents price competition, keeps prices high
Public unaware of increased cost
4. Entrepreneurial politics: distributed benefits,
concentrated costs
A. Benefits large numbers
B. Costs imposed on small identifiable group
C. Success depends on people working on behalf of
unorganized majorities—Ralph Nader
D. Examples: Consumer protection laws
1.
2.
Pure Food and Drug Act 1906
1960s and 1970s consumer and environmental laws passed
A. EPA
B. Auto Safety
C. Clean Air Act
3.
Danger: Agency may be captured by regulated industry
Deregulation
1. Examples: airfares, telephone service,
trucking
2. Deregulation represents a challenge to
iron triangles and client politics
A Way of Classifying and Explaining the Politics of Different
Policy Issues
II. Economic Policy
1. Economic Health
A. Deficit and balanced budget both lead to policy
debates
1.
2.
3.
4.
In 1999, Republicans wanted to cut taxes to return the
surplus to the voters; Democrats wanted to use it for new
programs and pay down the debt
In 2001, Bush got Congress to pass huge tax cut using the
rationale that surpluses represented the government taking
too much money from the taxpayers
In 2003, Bush is asking for more tax cuts, even though the
surplus is now gone. New rationale: tax cuts will stimulate
the economy
Republicans have given up on the balanced budget issue in
favor of tax cuts
B. Economic Prosperity Issues
1.
Disputes about economic prosperity produce
majoritarian politics
2. Voters see connections between national economy
and personal situation
3. People do not always vote their “pocketbooks”—they
frequently vote based on current condition of national
economy, even if their own situation is better—they
see indirect or future effect
C. Politics of Taxing and Spending (fiscal policy)
1. Majoritarian politics leads to conflicting goals: lower
taxes, balanced budget, new programs—taxpayers
want things which are in conflict with each other
2. Economic theories:
A. Monetarism: inflation comes from too much money
chasing too few goods—you should increase the
money supply at the same rate as economy is growing
B. Keynesianism: government should create right level
of demand—if demand is too low, government should
spend more money, even if deficit spending results
C. Planning: free market too unreliable; government
should plan parts of country’s economic activity—
wage and price controls, for example
D. Supply-side: less government interference, tax cuts
which will result in stimulated economy and therefore
MORE government revenue instead of less
3. Reaganomics: combination of
monetarism, supply-side tax cuts, and
domestic budget cutting (1980s)
1. Eventually economy was stimulated but there
were huge deficits
2. Reagan agreed to raise taxes 3 times after his
initial supply-side tax cuts
3. Budget was never balanced under Reagan or
GHW Bush
4. Machinery of Economic Policymaking
A. Council of Economic Advisers: forecast
economic trends, prepares annual economic
report for President
B. OMB: prepares annual budget
C. Secretary of Treasury: represents financial
community’s point of view
D. Federal Reserve Board: Independent of both President
and Congress
1.
2.
Members nominated by President, confirmed by Senate,
serve 14-year term
Regulates supply and price of money (Monetary Policy)
A. Can raise and lower interest rates paid by banks to each other
(federal funds rate) and to the Fed (discount rate), and reserve
requirement (percentage of deposits banks may not loan out)
B. Raising these three things reduces the size of the money
supply; lowering them increases the size of the money supply
C. When the economy is growing too fast, the Fed tries to reduce
the size of the money supply; when it is growing too slowly or
shrinking (RECESSION), it tries to increase the size of the
money supply.
E. Congress important in economic policy
(Fiscal Policy)
1. Approves all taxes and expenditures
2. Must consent to wage and price controls
3. Spending money: Politicians have incentives to
make two kinds of appeals to voters:
A. Keep spending down and cut deficit
B. Support the programs the voters like
F. The Budget
1.
Congressional Budget Act of 1974 established process
A. President submits budget
B. House and Senate budget committees analyze
C. Each committee proposes to its house a budget resolution
setting a total budget ceiling
D. Congress adopts budget resolutions to guide its decisions
E. Congress considers appropriations bills and tries to reconcile
them with budget resolution
F. Most (2/3) of government spending is outside the budget
process (mandatory spending: entitlements, interest on the
debt)
G. Reagan got large cuts in domestic spending in 1981, but not
thereafter
2. Reducing spending
A. Gramm-Rudman Balanced Budget Act (1985) called for
automatic across-the-board cuts (sequestration) until the budget
was balanced in 1991—did not work because President and
Congress still found ways to increase spending
B. Budget Enforcement Act of 1990 and tax increase under GHW
Bush (read my lips, no new taxes)—still no balanced budget
C. Clinton budget 1993 passed with no Republican votes—
increased taxes, cut some spending
D. Budget balanced in 1999 mostly as a result of continued
economic growth from 1993-1999 and through end of 2000,
when brief recession started
G. Taxes
1. What is a fair tax law? (majoritarian politics)
A. Tax burden is low—Americans pay a less than citizens
of most other democracies
B. Taxes are progressive—wealthier Americans pay a
higher percentage
C. Client politics makes tax reform difficult
D. Tax Reform Act of 1986 resulted in fewer loopholes and
lower top marginal rates (28%, down from 70%)
E. Earlier part of century, rates were higher, but there were
many more loopholes
F. Taxes varied with war and peace until after WWII
III. Social Welfare
I. Social welfare in the United States
A. Who deserves to benefit?
1. Americans believe it should be only those who cannot help
themselves
2. Preference is to give services, not money to help deserving
poor
B. National welfare policy came after 22 European nations—Great
Britain established welfare and health care in 1908
C. Federal involvement in national welfare laws "illegal" until
1930s when Supreme Court changed its mind about New Deal
2. Experiments by state governments
a. Argued against federal involvement because state already
providing welfare
b. Lobbied for federal involvement to help states
D. Majoritarian welfare programs
1. Social Security Act of 1935 because state and local relief
programs were overwhelmed; two-part plan
(1) "Insurance" for unemployed and elderly
(2) "Assistance" for dependent children, blind, aged
(AFDC)
(3) Federally funded, state-administered program
under means test
2. Medicare Act of 1965
a. Medical benefits had been omitted in 1935: controversial but
done to make sure it passed
b. Broadened by Ways and Means to include Medicaid for
poor, pay doctors' bills for elderly
E. Reforming majoritarian welfare programs
1. Social Security
a. Not enough people paying into Social Security to pay the
benefits of current recipients
b. Three possible solutions:
(1) Raise the retirement age to 70/freeze the size of
retirement benefits/raise Social Security taxes
(2) Privatize Social Security
(3) Some combination of the first two methods
2. Medicare
a. Problems: huge costs and waste/fraud
b. Possible solutions
(1) Get rid of Medicare and have doctors and hospitals
work for government
(2) Elderly take Medicare money and buy health
insurance or join HMOs
F. Client welfare policy: AFDC
A. Part of Social Security Act (1935)
B. First, federal aid to state programs, with states establishing rules
C. Programs added (food stamps, Earned Income Credit)
D. Progressively lost legitimacy over the years and was abolished in
favor of TANF in 1996.
E. TANF no longer an entitlement; 2-year consecutive limit, 5-year
lifetime limit on benefits
II. Two kinds of welfare programs
A. Majoritarian politics: almost everybody pays and benefits, for
example, the Social Security Act and the Medicare Act; beneficiaries
must believe benefits will exceed costs; political elites must believe in
legitimacy of program.
B. Client politics: everybody pays, relatively few people benefit, for
example, the TANF program
C. Majoritarian politics
1. Programs with widely distributed benefits and costs
a. Beneficiaries must believe they will come out ahead
b. Political elites must believe in legitimacy of program
2. Social Security and Medicare looked like "free lunch"
D. Client politics
1. Programs pass if cost to public not perceived as great and
client considered deserving
2. Today, Americans believe today that able-bodied people
should work for welfare benefits
3. Americans prefer service strategy to income strategy
SSI, TANF, and Food Stamp Recipients, 1980-1998
Source: U.S. Census Bureau, Statistical Abstract of the United States, 1999, 382.
When Will the Crunch Come? Projections of the Growth in Federal Spending
Source: Congressional Budget Office, The Economic and Budget Outlook: An Update (July 1, 1999).
IV. Foreign Policy
I. The constitutional and legal context
A. The Constitution creates an "invitation to struggle"
1. President commander in chief but Congress
appropriates money
2. President appoints ambassadors, but Senate
confirms
3. President negotiates treaties, but Senate ratifies
4. But Americans think president in charge, which
history confirms
B. Presidential box score
1. Presidents relatively strong in foreign affairs
a. More successes in Congress on foreign than on
domestic affairs
2. Presidents weaker in foreign affairs than
other heads of state
a. Wilson and Franklin Roosevelt unable to
ally with Great Britain before WWI and WWII
b. Wilson unable to lead U.S. into the
League of Nations
c. Reagan criticized on commitments to El
Salvador and Lebanon
d. Bush debated Congress on authorization
to fight Gulf War in 1991
C. Evaluating the power of the president
1. Depends on one's agreement/disagreement
with policies
2. Supreme Court gives federal government
wide powers; reluctant to intervene in Congresspresident disputes
D. Checks on presidential power: political
rather than constitutional
1. Congress: control of purse strings
2. Limitations on the president's ability to
give military or economic aid to other countries
3. War Powers Act of 1973
(1) Only sixty-day commitment of troops
without authorization by Congress
(2) All commitments reported within fortyeight hours
(3) no president has acknowledged
constitutionality
(4) Ford, Carter, Reagan, Bush, and Clinton
sent troops without explicit congressional
authorization
IV. Foreign policy and public opinion
1. Before WWII, public opposed U.S.
involvement; WWII shifted popular opinion -universally popular and successful war, US
emerged as world’s dominant power
2. Support for active involvement persisted
until Vietnam
3.Backing the president--public's tendency
to support president in crises
4. Presidential support does not decrease
with increase in casualities; support winning war
instead
V. Four worldviews
1. Isolationism: opposed involvement in
European wars
2. Containment paradigm: reaction to
appeasement of Hitler; Pearl Harbor ended
isolationism in United States; postwar policy to
resist Soviet expansionism
3. Disengagement (Post-Vietnam): reaction to
military defeat and political disaster of Vietnam
4. Human rights: liberal opponents of Gulf War
supported military intervention in Kosovo and
equated situation to genocide
VI. What do we get for our money?
1.
2.
3.
4.
Personnel: from draft to all-volunteer force in 1973
More women today; “don’t ask, don’t tell” policy on
gays in Clinton administration
Big-ticket hardware: cost overruns common;
contractors have incentives to underestimate costs;
also sole-sourcing and gold-plating
Closing of military bases: base-closing commission
created list of bases to close, which Congress had to
accept in whole; therefore no dealmaking on which
bases to close
Trends in Military Spending (in constant dollars)
Office of the Under Secretary of Defense (Comptroller), “National Defense Budget Estimates for FY 2000.”
Public Sentiment on Defense Spending, 1960-1998
Updated from The Public Perspective (August/September 1997), 19.
V. Environmental Policy
I. Entrepreneurial politics: global warming
A. Entrepreneurial politics gave rise to environmental
movement
1. Santa Barbara oil spill, Earth Day in 1970
2. Led to the formation of EPA and passage of the Water
Quality Improvement Act and tougher Clean Air Act in
1970
3. Two years later Congress passed laws designed to
clean up water
4. Three years later Congress adopted the Endangered
Species Act
5. Public opinion rallied behind environmental slogans
II. Majoritarian politics: pollution from automobiles
A. Clean Air Act imposed tough restrictions
1. Public demanded improvements
2. Required catalytic converters
B. Emergence of majoritarian politics in auto pollution
1. States were required to restrict public use of cars, but
effort failed: opposition too great
c. Congress and the EPA backed down, postponed
deadlines
2. Consumers, auto industry, and unions objected
3. The Clean Air Act was weakened in 1977 but revived
in 1990 with tougher standards
C. Public will support tough laws
1. If costs are hidden (catalytic converters)
2. But not if they have to change habits (car pools)
D. Majoritarian politics when people believe the costs are high
1. Increased gasoline taxes
a. Would discourage driving, save fuel, and reduce smog
b. Most would pay, most would benefit
c. But costs come long before benefits
d. And benefits may not be obvious
2. Easier to raise gas tax if benefits are concrete, for example,
highways, bridges, and so forth
III. The environmental uncertainties
A. Why is it so difficult to have a sane environmental
policy?
1. Many environmental problems are not clear-cut
2. Goals are often unclear; public opinion can shift
3. Means of achieving goals are complicated by
technological problems, economics
B. How do we achieve our goals?
a. Rules have been replaced by incentives
(1) Offsets
(2) Bubble standards
(3) Pollution allowances
Government Regulation
Source: Congressional Quarterly Weekly Report (January 20, 1990), 185, updated with Wirthlin Worldwide Survey.