Policy Making and Social Welfare

Public Policy Process

• Problem Recognition – identification of an issue that disturbs the people and leads them to call for governmental intervention

• Agenda Setting – government recognition that a problem is worthy of consideration for governmental intervention

• Policy formulation – identification of alternative approaches to addressing the problems placed on government’s agenda.

• Policy adoption – the formal selection of public policies through legislative, executive, judicial, and bureaucratic means

• Budgeting – the allocation of resources to provide for the proper implementation of public policies

• Policy implementation – the actual administration or application of public policies to their targets

• Policy evaluation – the determination of a policy’s accomplishments, consequences, or shortcomings

Policy Process

• Problem Recognition and Definition– Public policy is NOT the answer for ALL

disturbing problems– Hurricanes no, consequences of hurricanes

yes

Policy Process

• Agenda Setting – problem must be brought to the attention of public officials

– agenda – set of issues to be discussed or given attention

– systemic agenda – all issues within jurisdiction of governments

– governmental agenda – issues that will receive active and serious attention

Policy Process

• Policy Formulation– policy formulation – crafting appropriate

courses of action to resolve public problems– Involves both political (what should be done)

and technical (what will be done) aspects

Policy Process

• Policy Adoption– policy adoption – the approval of a policy

proposal by the people with the requisite authority, such as a legislature

Policy Process

• Budgeting– most policies require money to be carried

out– policies can be killed by inadequate funding

or lack of funding

Policy Process

• Policy Implementation– policy implementation – the process of carrying

out public policy through governmental agencies and the courts.

– Authoritative techniques – people must be directed or restrained by government. Product safety, broadcast obscenity, food & health.

– Incentive techniques – encourage people to act in their own best interest by offering payoffs or financial inducements. Tax deductions, credits, subsidies, sanctions by high taxes (tobacco, pollution).

Policy Process

• Policy Implementation (cont.)• Capacity techniques – provide information,

education, training. Assumes people lack the capacity. Job training, interest rate information, nutrition information.

• Hortatory techniques [hawr-tuh-tawr-ee]– appeal to people’s better instincts. Just Say No. Don’t Be a Litter Bug. Don’t Mess with Texas. Only You Can Prevent Forest Fires.

Policy Process

• Policy Evaluation– policy evaluation – the process of

determining whether a course of action is achieving its intended goals.

Social Welfare Policy

Social Welfare

• The Origins of Social Welfare – as society became more urban and industrial, people became less self-sufficient. Great Depression reinforced idea that hard work alone did not guarantee economic security.

Origins of Social Welfare• Income Security

– Social Security Act – 1935 law that established

• old age insurance (Social Security)

• assistance for the needy, children, and others, and

• unemployment insurance.

Origins of Social Welfare

• Health Care– public health

programs – increased life expectancy from 47 in 1900 to 78 in 2008.

– expanding health care coverage – Medicare and Medicaid (1965)

Social Welfare

• Non-Means Based Programs – benefits are provided regardless of income (or “means”) of recipients

Non-Means Based Programs

• Old Age, Survivors, and Disability Insurance

– Social security not a pension fund.– “This year, the system will pay out more in

benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.” New York Times March 15, 2010

Non-Means Based Programs

• Unemployment Insurance

– About ½ of people unemployed receive benefits

– Current unemployment rate 8.8% or 13.5 million people (April 1)

Social Welfare

• Means-Tested Programs – recipients’ incomes (means) must fall below a certain level

• 2011 FPL (Family of four): $22,350

Means Tested Programs

• Supplemental Security Income

– needy aged, blind, disabled

Means Tested Programs

• Family and Child Support

– dependent children without fathers

– AFDC TANF

Means Tested Programs

• Food Stamp Program

– originally designed to increase demand for farm products

– average recipient receives $95/month

Social Welfare

• The Effectiveness of Income Security Programs

– entitlement program – those who meet the criteria are “entitled” to receive benefits

– funds must be provided every year unless the law is changed

Health Care Policy

• Rising cost of health care– people living longer, need more care– more expensive tests and treatments– expansion of private health insurance

(people can afford more)– higher quality, higher labor costs– U.S. focuses on cure, not prevention

(prevention is cheaper)

Health Care Policy

• Medicare – medical care for the elderly– will be stressed by the aging of the

population

Health Care Policy

• Medicaid – medical care for the poor– available to SSI and TANF recipients– 58 million people, $204 billion (2008)– states set eligibility

Economic Policy

Economic Policy

• The Nineteenth Century– Very little regulation (steamboat inspection,

trade with American Indians)– Post-Civil War industrialization brought need

for more regulation– Interstate Commerce Act 1887 to regulate

railroads– Sherman Anti-Trust Act 1890 to prohibit

monopolies

Economic Policy

• The Progressive Era – middle class support for bringing corporate power under the control of government. Regulation, consumer protection. Transition from laissez-faire to the interventionist state.

The Progressive Era

• Financial Reforms– protect consumers in banking (FDIC)– control abuses in the stock market (SEC)

The Progressive Era

• Agriculture and Labor– protection of unions (National Labor

Relations Act)– Fair Labor Standards Act 1938 – shorter

work week, minimum wage, no child labor

The Progressive Era

• Industry Regulations– Communications (FCC), commercial

aviation (Civil Aeronautics Board), trucking (Motor Carrier Act)

Economic and Social Regulations

• economic regulation – government regulation of business practices, industry rates, routes, or areas serviced by particular industries.

• social regulation – quality and safety of products, conditions under which they are produced. Quality of life.

Deregulation

• deregulation – reduction in market controls in favor of market-based competition.

• Regulations affected competition, costs. Economic deregulation continues, social regulation remains

Economic Policy

• Stabilizing the Economy – we desire economic growth, rising national income, high employment and steady prices. We don’t want inflation or recession.

Monetary PolicyControlling the Money Supply

• monetary policy – manage money supply and influence interest rates

• Board of Governors – makes economic decisions

• reserve requirements – portion of deposits that must be retained

• discount rate – interest rate for banks to borrow from Fed

• open market operations – buy/sell government securities

Fiscal PolicyTaxing and Spending

• fiscal policy – deliberate taxing and spending to maintain economic stability