Domestic Policy
Chapter 18
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Types of Public Policy
• Public policy is a term applied to all
government programs and regulations.
• Domestic policy
– Consists of all government programs and
regulations that directly affect those living
within a country.
– Includes everything from education and health
care to transportation and garbage collection.
– Economic policies generally most important.
Here we focus on other domestic policies.
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Stages of Policy Making
1. Agenda setting
Making an issue so visible that important political leaders take it seriously.
2. Policy deliberation
Debate and discussion by groups and political leaders over issues placed on the
policy agenda.
3. Policy enactment
Passage of law by public officials.
4. Policy implementation
Translation of legislation into set of government programs or regulations.
5. Policy outputs
Provision of services to citizens or regulation of their conduct.
6. Policy outcomes
Effect of policy outputs on individuals and businesses.
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Social Policy
• Social policy is a type of domestic policy
that is designed to help those thought to
be in need of government assistance.
• One of central issues: balance between
government assistance to elderly and to
young.
• While poverty among seniors has
declined, it has not for children.
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Social Insurance for Senior
Citizens
•
1935 Congress enacted the landmark Social Security
Act
– created a broad range of social programs, including a social
insurance program for seniors generally known as social
security..
•
Social security originally cost the government little.
– Those who first retired under the program received minimal
benefits because they had not paid into the program
significantly.
– Moreover, people retiring at age 65 were only expected to live
an average of 12.6 years.
– Today a retiring worker is expected to live at least 17 more
years.
– As program expanded: more people paid in, were covered, and
they lived longer.
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Social Insurance for Senior
Citizens
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In 1965 Congress enacted Medicare, which provides
social security recipients with a broad range of medical
benefits.
1972 (an election year), Congress gave seniors a large
increase in their monthly social security check and
linked future increases to the cost of living index.
Insurance principle rather than need based principle.
But it operates at a loss (unlike private insurance
programs)
Social security has always given more to people than
they have put in.
– Worker puts in $148,300 in taxes and couple may receive about
$290,000 over the remaining years of lives.
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Social Insurance for Senior
Citizens
• How can benefits exceed contributions?
• Reasons
– Workers have grown in number. More people
contributing.
– Workers produce more and earn more than their
predecessors.
– Workers pay a higher percentage of their earnings
into social security than in the past.
• Essentially, younger generations have been
asked to pay more to cover the expenses of
older ones.
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Social Insurance for Senior
Citizens
• BUT…circumstances may be changing
– Experts do not expect the number of workers
to increase much in the next couple of
decades.
– Rate of growth in economic productivity may
not always be as high as in the 1990s.
– Workers may be less willing to pay higher
taxes.
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Politics of Social Insurance
• The risks of change to social security
– Punishment by voters
• Complexities of Medicare
– Cost of the program grew from $34 billion in 1970 to
over $300 billion in 2004.
• Number of elderly growing, increasing demand for medical
services.
• Patients expect error-free medicine. Sue over mistakes
(negligent or not), and this drives up medical insurance
costs.
• Congress made efforts to curb these costs.
• Drug benefit plan supported by Bush and passed by
Congress may add $500 billion to the cost of Medicare from
2005-2015.
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Politics of Social Insurance
• Influence of Senior Citizens
– Seniors are much more likely than young people to
back up their votes with political actions.
– AARP large and influential interest group.
• Broad Support
– People generally support benefits for senior citizens.
• Hope to benefit themselves one day; many have parents
receiving these benefits; believe that because seniors
contributed to the benefit, they should be guaranteed the
benefits promised.
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Public Assistance to Poor Families
• Public Assistance are programs that provide to
low-income households a limited income and
access to essential goods and services.
• Safety net
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Temporary Assistance to Needy Families
Food Stamps
Earned Income Tax Credit
Supplemental Security Income
Rent Subsidies
Medicaid (includes services for low-income elderly)
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Limitations on Public Assistance
Programs
• While the list of programs is long, they spend only about
1/10th as much as is spent on the elderly.
• Federal social programs for the elderly amounted to over
$17,500 per capita in 2000 compared to $1500 per
capital for poor families with children. Why?
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Fewer cash benefits
Less indexation
Assistance, not insurance
State, not national programs
Benefits cannot supplement income
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Politics of Public Assistance
• Programs for poor families with children are
poorly funded and restrictively designed
because, unlike the elderly, children and the
poor do not exercise direct political power.
• What of those working on their behalf?
– Policy analysts offer competing explanations of
persistence of poverty.
– Weak interest groups that fight among themselves.
– A divided public
– Opportunistic political parties
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Education Policy
• Education policy has become a significant
topic of public debate.
• Historically supportive of public school,
now concerned with issues of quality.
• Responsibility for education is divided
– Local school boards
– State departments of education
– Federal Department of Education
• Bulk of control at state and local level.
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Development of Public Education
• Development of public education
– 1785 Congress set aside revenue for the
maintenance of public schools.
– Accessible to immigrants
– Fostered common language
– Open to most citizens
– Created educated workforce that operated the
machines that would make the country an
industrial power.
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Contemporary Issues in
Education Policy
• Financial support for public elementary and
secondary schools has increased only slightly
over the last 15 years.
• Teacher salaries have declined since 1970.
• Many developed countries spend more than the
U.S. on education (Canada, Sweden, and
France).
• And we appear to do less well than other
countries in terms of educational outcomes
relative to expenditures.
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Contemporary Issues in
Education Policy
• Three major sets of proposals that seem to
improve our educational system
– School choice
– Set of national standards
– Provide schools with greater resources
• Each set of proposals has its critics and
advocates.
• What do you think?
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Politics of Education
• Three major sets of proposals that seem to
improve our educational system
– School choice
– Set of national standards
– Provide schools with greater resources
• Each set of proposals has its critics and
advocates.
• Overall, most people, and both political parties
are committed to public education.
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Regulation and Its Rise
• Regulation is the rules and standards that
control economic, social and political activities.
• Although Congress can pass regulations, it
usually gives the responsibility to agencies
within the executive branch.
• Regulation dates back to feudal times.
• Constitution gives Congress power to regulate
commerce.
– Commerce clause has extended regulation from civil
rights to national insurance standards.
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The Rise of Federal Regulation
• Three distinct periods of regulator increase
– Progressive era
• Muckrakers exposed abuses of industrialization, focused on
abuses of large corporations and other abuses
• Sherman Act (1890) and Meat Inspection Act of 1906
– New Deal era
• Prevent practices that were thought to have caused the Great
Depression
– 1960s and 1970s
• Focus on consumer safety, occupational safely, and
environmental protection.
• Environmental Protection Agency
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Justification for Regulation
• Government now regulates many business and
social activities.
• Why have the regulatory responsibilities of
government expanded so dramatically over the last
50 years?
• Three broad types of circumstances in which they
find government regulation most easily justified.
– Natural monopoly
– Negative externalities
– Protecting the uninformed
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Politics of Regulation
• When and how regulations are imposed
are political decisions.
– Shaped by election pressures.
• Congress:
– create regulatory agencies in order to escape
criticism when things go wrong.
– Also to avoid being blamed by not directly
imposing the regulations but handing the job
off to a regulatory agency.
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Politics of Regulation
• Agency Discretion
– Because Congress can pays ambiguous
legislation, agencies may have considerable
freedom in deciding how to execute their
mandates.
– Not limitless: Zone of acceptance is the range
within which Congress allows agencies to
interpret and apply statutes.
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Politics of Regulation
• Courts
– Interpret the meaning of congressional
statutes and decide whether their application
in specific cases conforms to congressional
intent.
– Have considerable discretion because they
often must interpret vague and contradictory
laws passed by Congress.
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Deregulation
• Deregulation involves the removal of
government rules that once controlled an
industry.
• Address concerns that stem from the
negative impact of regulation.
• Ex. The airline industry
– Airline fares were regulated by the
government in order to prevent price gouging.
Analysts said the outcome was opposite its
intent.
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