Chapter 13

Domestic & Domestic & Economic Economic

PolicyPolicy

Domestic Policy Domestic policy = all the laws, government

planning, and government actions that affect the lives of American citizens

Policies = created in response to public problems or public demand for government action

Major policy problems = poverty, welfare, crime, environment, social security

Government response entails policy trade-offs; spending priorities; “you can’t have your cake and eat it too.”

Policy Making Process Agenda building – identifying a problem,

getting it on the agenda Policy formulation – debate that occurs

between government officials, the public, the media, and in campaigns

Policy adoption – selection of a strategy for addressing a problem

Policy implementation – administration of the selected policy (by bureaucrats, the courts, etc.)

Policy evaluation – public, officials and groups determine if the selected policy has the desired impact

Defining Poverty Low-income poverty threshold in 2003

was $18,300 for a family of four Poverty level has changed since then

to account for changes in the consumer price index, enabling government to adjust the poverty level by taking into account changes in prices of goods and services

Official poverty level based on pre-tax income, but does not include in-kind subsidies, like food stamps and subsidized housing

Major Government Assistance Programs

Temporary Assistance to Needy Families (TANF) – replaced AFDC in 1996; uses federal funds which are administered by the states to help needy families; product of Welfare Reform Act of 1996; limited most welfare recipients to two years of assistance; lifetime assistance to five years

Supplemental Security Income (SSI) – provides minimum income to the elderly and disabled who do not qualify for Social Security benefits

Major Government Assistance Programs (cont.)

Food Stamps – coupons that can be used to purchase food are now distributed to more than 28 million Americans with little or no income

Earned Income Tax Credit (EITC) – tax credit used by low income workers who get back part or all of the their Social Security taxes

Crime

Common throughout American history Murder rate nearly doubled between

1964 and 1994 Crime has dropped since the mid-1990s

increased money to fight crime strong economy

Federal drug policy and crime Rising percentage of arrests are drug-related

Terrorism

Environmental Policy Making, 314

1899 – Refuse Act1948 – Federal Water Pollution

Control Act1955 – Air Pollution Control Act1963 – Clean Air Act1965 – Clean Air Act Amendments 1965 – Solid Waste Disposal 1965 – Water Quality Act1967 – Air Quality Act1969 – National Environmental

Policy Act1970 – Clean Air Act Amendments 1972 – Clean Water Act (Federal

Water Pollution Control Act Amendments)

1972 – Federal Environmental Pesticide Control Act

1974 – Clean Water Act1976 – Resource Conservation and

Recovery Act1977 – Clean Air Act Amendments1980 – Comprehensive

Environmental Response, Compensation, and Liability Act

1990 – Clean Air Act Amendments 1990 – Oil Pollution Act1996 – Food Quality and Protection

Act1999 – Chemical Safety

Information, Site Security, and Fuels Regulatory Relief Act

Taxes and Subsidies Action-reaction syndrome = for every

action on the part of government, there is a reaction on the part of the affected public

Tax rates = progressive, for now…the more you earn, the more you pay

Tax loopholes = legal method by which individuals and corporations reduce tax liabilities

2001 tax cuts 2003 tax cuts

Social Security Federal Insurance Contribution Act (FICA) taxes Trust Fund problems Future: fewer workers per retiree Saving Social Security

raise taxes decrease benefits reform immigration policies increase rate of return on Social Security

contributions

Economic Policy Making Fiscal policy = use of changes in

government spending or taxation to change national economic variables, like the unemployment rate

Keynesian economic theory posits that using fiscal policy can alter economic variables (increasing government spending during economic downturns, for example)

Economic Policy Making (cont.) Monetary policy – the use of changes

in the money supply to change credit markets, unemployment, and the inflation rate

Monetary policy determined by the Federal Open Market Committee (FOMC), part of the Federal Reserve System

Budget Deficits and the Public Debt

• Deficit = when government spends more money than it receives in any given year

• Public debt = the total amount of debt carried by the federal government, also called the national debt

Discussion questions Should we be concerned about our high level of

poverty? Should changes be made in federal drug policies? Are there trade-offs between environmental

protection and economic growth? Are Bush’s tax cuts bad for America in the long run? What should be done to ensure the long-term

viability of Social Security? Should we be concerned about increasing national

debt?

Hot Links to Selected Internet Resources: Book’s Companion Site:

http://politicalscience.wadsworth.com/schmidtbrief2004

Wadsworth’s Political Science Site: http://politicalscience.wadsworth.com

Project Vote Smart: http://www.vote-smart.org/ U.S. Census Bureau: http://www.census.gov Social Security Online: http://www.ssa.gov Office of Management and Budget:

http://www.access.gpo.gov/usbudget