Carter's Domestic Policies

Elizabeth von HaunalterPeriod 3

Key Terms

“Prime Rate” Fiscal Conservatism “Zero-based” Budgeting PBJI “Double Digit” Inflation NHI

Outline

I. Introduction II. Fiscal Conservatism III. Economic Downfall IV. Political Divisions V. Energy Crisis VI. Other Carter Policies VII. Summary

Introduction

Governor in Georgia previously Much of his cabinet made up of Georgian politicians Elected under premise that he would “Never tell a lie”.

Promoted frugality and was anti-establishment. Economy already in a downturn when elected. Watergate Scandal had just occurred. Many citizens felt

bitter towards government

Fiscal Conservatism

Carter had little congruence to his policies, except regarding his budget.

He was a fiscal conservative, meaning he did not believe in big government spending nor deficits.

Consistently favored fiscal conservatism over social or political justice.

Ex: When agriculture was struggling, Carter chose to keep a balanced budget at price of farmers. Wanted to put in a support on products that was even lower than existing prices.

Fiscal Conservatism

“Zero-based” Budgeting: every fiscal year, budgets rebuilt from zero without expectation of funding increases.

PBJI: Program for Better Jobs and Income. Basically a welfare reform act. Failed to achieve its goals

and repealed within ten months. Carter could not please the people without increasing government spending.

Economic Downfall

Unemployment in 1976: 8%. In 1978: 6%. In 1979: 9% $34 Million tax reduction for corporations Focused on prices and wages to help economy Inflation near 20% in 1980. Throughout Carter's time in

office, inflation was consistently in double digits. Termed “Double-digit” inflation

Housing and automobile markets crashed “Prime Rate”: interest rate of the banks best customers-

rose to nearly 20% during Carter administration

Political Divisions

• Carter was anti-establishment. He criticized the IRS and federal bureaucracy.

• Carter promised to curb federal spending- yet was part of the Democratic party who believed in increased spending to help the economy.

• Much of Congress was newly elected when Carter cameto office. That, combined with Carter's professed dislike of big government and persistent failure to consult with the Congressmen on important issues, created a weak relationship between the legislative and executive branches of government

Political Divisions

• Carter had a hard time getting his many of his bills passed.

• Example: National Health Initiative (NHI) was a national health care bill. It failed to pass after disagreements within Congress

• There were also divisions within the Democratic Party over welfare (Entitlement vs. New Deal policies). One reason why the welfare bill was a failure.

• After receiving advice that he should “rethink his administration” Carter fired five key cabinet members. Began to rely even more heavily on his circle of Georgian officials.

Energy Crisis

• There was a severe energy crisis already brewing when Carter came into office. Shortages and rising oil prices led to energy riots.

• Carter believed conservation and alternative energy was key. Tried to pass bill with gas taxes, incentives for conservation, etc. but only got a “gas guzzler” tax passed.

• Critics saw this as the administration giving in to big oil and increasing inflation while not reducing dependence on foreign oil.

Other Policies

• Carter put $1.6 billion towards cleaning up toxic wastes.

• Signed bill preserving 100 acres of Alaskan land

• Pardoned 10,000+ draft evaders- mixed response

• Rescinded 19 water projects from national budget. Alienated Congressmen and showed Carter was hapless with budget cuts

• Reorganized Social Security to avoid bankruptcy

• Created separate Department of Energy

Summary

• At end of term, Carter's approval rating was lower than that of Nixon's during Watergate Scandal

• Carter had no overarching vision or definition to his policies. The effect was that he pleased no one; he appeared contradictory.

• Created divisions, even within his own government

• Carter's term was marked with inflation, unemployment, and energy crises.

Summary

• Failed to enact his agenda or achieve his promises.

• Promised to curb federal spending, but $60 billion deficit by end of his term

• Alternative perspectives: Hargove- “non-political politician”. Carter was not appreciated in his time. Jones- “trustee president”. Carter was willing to sacrifice his political image for the good of the people.

• “Restored faith in the integrity of American politics”, “failed president” Randall Woods