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Domestic Policy

Domestic Policy. Ms. Bittman’s AP Government. Models of the Policymaking Process. The Bureaucratic Politics Model Bureaucracies determine the policy agenda. Based on pluralist model. Power Elite Model Economic interest determine outcome of policy struggles. Rich get it done.

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Domestic Policy

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  1. Domestic Policy Ms. Bittman’s AP Government

  2. Models of the Policymaking Process • The Bureaucratic Politics Model • Bureaucracies determine the policy agenda. • Based on pluralist model. • Power Elite Model • Economic interest determine outcome of policy struggles. • Rich get it done. • Decide what makes it onto the agenda. • The Marxist Model • Ruling class institutes public policy. • Usually at the expense of the working class. • Solution is revolution!

  3. Models of the Policymaking Process • The Incrementalist Model • PP evolves through small changes. • Policymakers only look at small changes to solve national problems. • Good when everyone agrees, easy when changes are small. • The Rationalist Model (Textbook only) • Rational policymaker sets out to maximize their self interest • Not what will benefit the public. • Alternative to Incrementalist • AKA Theory of Public Choice

  4. Models of the Policymaking Process • The Systems Model • Product of relationships b/t institutions of gov and socioeconomic political environment. • Inputs from public opinion • Process= legislative hearings, debate, court, polit parties. • Outputs= legislation, appropriations, regs. • Outcomes= more job security, less unemployment, more AIDs research.

  5. Poverty and Welfare • The Low Income Population • CPI (Consumer Price Index) based on average prices for a set of g/s. • 2000, official level for family of 4= $17,000. 2010: $22,541. • Based on pre-taxed income, but not in-kind subsidies: food stamps, housing vouchers etc.

  6. Poverty and Welfare • Personal Responsibility and Work Act of 1996 AKA Welfare Reform Act • States got more responsibilities for rules and managing programs • Temporary Assistance to Needy Families (TANF): block grants for welfare. • States have to meet any increase in welfare spending. • Limited recipients to 2 years. • Lifetime welfare maxed at 5 years.

  7. Poverty and Welfare • Supplemental Security Income (SSI) 1974 to provide minimum income for elderly and disabled ppl • Don’t qualify for Social Security • Food Stamps: coupons for food, gas. AKA EBT. • Earned Income Tax Credit 1975 for low income workers by giving them back all or some of their social security taxes.

  8. Poverty and Welfare • Children Living in Poverty • Young children • Under 6, 22%. 10% at extreme. • 3 times higher than other industrialized W. countries • Effect • Argument- Kids fail in society because of parents. • Therefore, reducing overall poverty rates will lead to • Higher success rates • Homelessness • Some argue the Welfare Reform Act increased #. • Street people vs. sheltered homeless.

  9. Crime in the 21st Century • History • Civil war: mob violence and riots • 1860-1890: crime rate rose 2 times the population rate • 1900-1930s: social violence and crime increased • Labor union battles • Racial violence (Tulsa, OK). • 1930-1960s: stable/declining crimes rates • 1980-1994: steady rise • 1995: violence crimes have decreased every year. • Legalized abortion or lead exposure.

  10. Crime in the 21st Century • Crimes committed by Juveniles • Number of serious crimes is high • Cities have juvenile curfews • Try juveniles as adults • Homicides, rape • Boot camp

  11. Environmental Policy • Government response to Air and Water Pollution • Federal Water Pollution Control Act of 1948: research and assistence to states. • Not much done. • Federal Air Pollution Control Act of 1955: Same thing • National Environmental Policy Act of 1969: Landmark • Council on Environmental Quality • Environmental impact statements • Good for IGs, public.

  12. Environmental Policy • Clean Air Act of 1990: amended the 1963. • Cut auto emissions • Stationary sources more regulated. • Stopped the production of chlorofluorocarbons.

  13. Politics of Economic Decision Making • Each action has a policy trade-offs • Costs borne of one and benefits enjoyed by another • Politics of Subsidies • Type of negative tax • Premise: For every action of the gov, there will be a reaction on the part of the public. • That will lead to more actions on gov, then public= action-reaction syndrome

  14. Politics of Economic Decision Making • Tax Rates and Tax Loopholes • Individuals and business pay based on tax rate. • Individuals will try and get loopholes • Lowering taxable incomes. • Shifting income from one year to another • Avoid taxes entirely • Why can’t it be simple? • Special interests don’t want it

  15. Ida May Fuller, the first recipient

  16. Politics of Economic Decision Making • Social Security: How long will it last? • Created with the Federal Insurance Contribution Act 1935 • 2000, 6.2% rate up to $76,500. 2.9% Medicare tax, no limit. • Regressive tax: poor pay more, rich pay less. • Once income reaches a certain level, they pay no more. • Future? • Pay-as-you-go • As long as Congress increases SS benefits, while the labor force does not, the more they must tap into the trust.

  17. Politics of Economic Decision Making • Social Security • How to fix it? • Privatization: allowing workers to invest in stock market. • How much? • What happens if the stock market crashes.

  18. Politics of Economic Decision Making • Fiscal Policy: use of changes in government spending or taxes to alter the nation’s economy. • Congress and the President control it. • When there is a recessiongov should stimulate economic activity • Increasing government expenditures • Decreasing taxes • Both • When the economy is growing too fast… • Economy should contract: reduce spending, increase taxes (Keynesian)

  19. Politics of Economic Decision Making • Monetary Policy: changes in the amount of money in circulation. • Federal Reserve System (Fed) controls this • Independent agency • Recession & high unemployment • Expand the $ supply-> lower interest rates-> consumers to spend-> producers to invest • With rising inflation… • Reduce $ in circulation-> rise in IR-> reduces consumer spending-> reduces some business spending

  20. Politics of Economic Decision Making • The Federal Reserve System • Established in 1913 • Board of Governors (7), nominated by Prez, approved by Senate. Serve 14 years. • Fed and Federal Open Market Committee make decisions 8 times a year. • Board is seriously independent. • Monetary policy moves WAY faster than fiscal.

  21. The Public Debt and Deficit • Always running a deficit (except Clinton) • When a deficit happens, government issues United States Treasury Bonds • Sold to individuals, corporations, pension plans, countries, ect • Is it a burden? • As long as the interest is paid… will not go bankrupt • When they are due… they issue more • Interest is paid by taxes. • The problem of “crowding out”… public debt financing • When the US sells bonds, buys bonds, that prevents private borrowing an selling. They also lead to higher IR-> reduces growth

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