Unit 5 Guide
March 4- March 28
Essential Questions
What are the political implications of big government and who benefits from it?
What public policy problems or issues do taxation and government borrowing raise?
How do uncontrollable expenditures contribute to incremental budget making?
How are politics and economics related?
What policies has government used to try to control American business? Has the government been successful?
How has government policy toward labor changed in the last century? What public policies have emerged to protect
workers?
How have social welfare programs evolved in the U.S.?
How has the American government been involved in the public’s health? What factors tend to influence policymaking
for health care?
Who are the actors on the world’s foreign policy stage? Who makes foreign policy in the United States?
In what ways is American foreign and defense policymaking a democratic process and in what ways is it not?
Objectives
1. Identify and state the significance of the Federal Reserve and its Chairman.
2. Compare and contrast fiscal versus monetary policy. What is the significance of both?
3. Explain the significance of the Office and Management and Budget.
4. Compare and contrast OMB and CBO.
5. Explain the significance of independent regulatory commissions/agencies.
6. Evaluate the effectiveness of Congressional oversight of the bureaucracy.
7. Explain how Congress, President, bureaucracy, states and interest groups affect welfare policy.
8. Define entitlements.
9. Be able to explain how entitlement spending affects the budget making process.
10. Describe the debate concerning the causes of poverty and whether social welfare policies really work
11. Compare monetarism, Keynesian economic theory, and supply-side economics.
12. Explain the nature of the distribution of income and wealth in the United States.
13. Identify and state the significance of Social Security.
14. Explain the current problems facing Social Security and assess possible solutions.
15. Identify and state the significance of Medicare.
16. Explain the current problems facing Medicare and assess possible solutions.
17. Explain how the budgetary process has been reformed. How successful have the reforms been? Why is it so
difficult to reform the budgetary process?
18. Describe and evaluate American environmental policy. What are the biggest obstacles to a clean environment?
19. Describe the American energy profile. What resources do we have? What resources do we use? What political
and policy issues are involved with each energy resource?
20. Identify and state the significance of No Child Left Behind. What are the greatest hurdles facing educational
policy?
21. Identify and state the significance of Temporary Assistance for Needy Families (TANF). How have attitudes
toward welfare programs changed over time?
22. Be able to discuss current healthcare policy disputes. Who are the main players and what makes completing
public policy so difficult?
23. Describe the changing policy arenas of the new global agenda
24. Describe how liberals and conservatives differ in regard to their view of defense spending
Vocabulary
Bipartisanship
Budget deficit
Deficit spending
Deregulation
Entitlements (uncontrollables)
Fiscal policy
Means testing
Monetary policy
National debt (public debt)
Subsidy
Expenditures
Revenues
Income tax
16th Amendment
Federal debt
Tax expenditures
Social Security Act
Medicare
Congressional Budget Office
Authorization bill
Appropriations bill
Continuing resolution
Budget resolution
Capitalism
Mixed economy
Inflation
Laissez-faire
Monetarism
Federal Reserve System
Keynesian economics
Supply-side economics
Antitrust policy
Collective bargaining
Taft-Hartley Act
Right-to-work laws
National Labor Relations Act
Securities and Exchange
Commission
Social welfare policies
Entitlement programs
Means-tested programs
Poverty line
Feminization of poverty
Progressive tax
Proportional tax
Regressive tax
Earned Income Tax Credit
Transfer payments
Social Security Act of 1935
Social Security Trust Fund
Temporary Assistance to Needy
Families (TANF)
Personal Responsibility and Work
Opportunity Reconciliation Act
Health maintenance organizations
(HMOs)
Patients’ bill of rights
National health insurance
Medicare
Medicaid
National Environmental Policy
Superfund
Environmental impact statement
Clean Air Act of 1970
Water Pollution Control Act of
1972
Endangered Species Act of 1973
Environmental Protection Agency
(EPA)
Foreign policy
United Nations
North Atlantic Treaty Organization
(NATO)
European Union (EU)
Secretary of state
Secretary of defense
Joint Chiefs of Staff
Central Intelligence Agency (CIA)
Isolationism
Containment doctrine
Cold War
Arms race
Detente
Strategic Defense Initiative (SDI)
Interdependency
Tariff
Balance of trade
Organization of Petroleum
Exporting Countries (OPEC)
Terrorism
Assignments and Readings
Budget Assignment
3/7
Chapter 16
3/11
Chapter 17
3/13
Chapter 21
3/15
Chapter 20
3/21
Public Policy Research
3/25
Budget Basics
Deficit-- annual shortage of money (expected to be $2 trillion in 2009)
Debt-- total shortage of money ($12 trillion)
Surplus-- total extra revenue
Monetary policy: the process by which the government, central bank, (i.e. U.S. Federal Reserve appointed govt.
officials) controls (i) the supply of money, (ii) availability of money, and (iii) cost of money or rate of interest, in order
to attain a set of objectives oriented towards the growth and stability of the economy.
Fiscal policy: government attempts to influence the direction of the economy through changes in government
taxes, or through some spending (i.e. budget making ...recommended by the President, made by Congress then
approved by the President)
Social Security
Payroll (FICA) tax rate: • 1/5 widows live alone
3/5 of widows live
alone
• 1 retiree per 16 workers
• 1 retiree per
3 workers
1937 = 2%
1950s-60s = 6%
1970s = 9%
1990s = 15.3%
• originally for just
• expanded to disabled
• mandated COLAs
widows and retirees
Cost of Living hikes
• avg age = 62
Possible changes:
1. Bring more workers into system (i.e. teachers)
3. Raise taxes
Define Entitlement Spending:
2. Invest S.S. funds into stock market
4. Cut benefits
mandatory spending made permanent by law. Does not change from year to year unless
the law changes. (S.S. / Medicare)
Define Discrentionary Spending: non-permanent spending that can change from year to year.
• Federal Revenues
Individual income tax (49%)
Payroll (FICA) tax (33%)
Corporate income tax (10%)
Excise tax (3.3%)
Estate and gift tax (1%)
Custom duties (1%)