AM GOV 2010 Joseph A. Losco Ralph E. Baker. PUBLIC POLICY Chapter 15

AM GOV 2010AM GOV 2010

Joseph A. Losco Joseph A. Losco

Ralph E. BakerRalph E. Baker

PUBLIC POLICYPUBLIC POLICY

Chapter 15Chapter 15

As You ReadAs You Read

What is public policy, how is it made, and how What is public policy, how is it made, and how can we explain policy outcomes?can we explain policy outcomes?

What is domestic policy and what are some of What is domestic policy and what are some of the problems addressed?the problems addressed?

How is economic policy made and How is economic policy made and implemented?implemented?

3© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

THE NATURE AND SCOPETHE NATURE AND SCOPEOF PUBLIC POLICY OF PUBLIC POLICY

Public policy pervades our lives. Public policy pervades our lives. Public policy is anything the government Public policy is anything the government

chooses to do or not to do.chooses to do or not to do.


POLICY MAKING AND POLICY MAKING AND EVALUATIONEVALUATION

The first step in policymaking is identifying The first step in policymaking is identifying and defining the problem. and defining the problem.

After identifying a problem, it is necessary to After identifying a problem, it is necessary to determine how important it is and how urgent determine how important it is and how urgent it is to act.it is to act.

The next step is to review possible solutions The next step is to review possible solutions and select those most likely to be successful.and select those most likely to be successful.



Elected leaders choose which policy options to Elected leaders choose which policy options to adopt and how to implement them. adopt and how to implement them. Government bureaucracies usually carry out task Government bureaucracies usually carry out task

of executing policyof executing policy Courts play role in policy process as wellCourts play role in policy process as well

Government assesses the impact of policies to Government assesses the impact of policies to determine their continued utility.determine their continued utility. Policies often have unintended consequences that Policies often have unintended consequences that

are not always apparent when adoptedare not always apparent when adopted



Whether government adopts a policy depends Whether government adopts a policy depends largely on the policy’s costs and benefits. largely on the policy’s costs and benefits. Policies that allocate costs and distribute benefits Policies that allocate costs and distribute benefits

widely are easiest to sustain.widely are easiest to sustain. Policies with widely distributed costs but Policies with widely distributed costs but

concentrated benefits tend to raise little opposition.concentrated benefits tend to raise little opposition. When costs and benefits are concentrated, interests When costs and benefits are concentrated, interests

may clash and government must mediate the may clash and government must mediate the disputes.disputes.


DOMESTIC POLICY DOMESTIC POLICY

Domestic policy refers to government action Domestic policy refers to government action that affects citizens within the United States. that affects citizens within the United States.

The government began taking steps to protect The government began taking steps to protect the environment in the twentieth century.the environment in the twentieth century. Theodore Roosevelt established National Park Theodore Roosevelt established National Park

Service in early 1900sService in early 1900s Citizen activism led to expanded environmental Citizen activism led to expanded environmental

protection in 1970sprotection in 1970s Pollution has declined substantially since adoption Pollution has declined substantially since adoption

of environmental regulationsof environmental regulations


DOMESTIC POLICY DOMESTIC POLICY Environmental policies have generated controversy.Environmental policies have generated controversy.

Costs are concentrated on industry; benefits are Costs are concentrated on industry; benefits are distributed to everyonedistributed to everyone

Government initially tried to compel compliance by Government initially tried to compel compliance by threats and finesthreats and fines

Moved to system of regulatory negotiation in which Moved to system of regulatory negotiation in which government and industry forge consensus for acceptable government and industry forge consensus for acceptable actionaction

Regulatory negotiation led to cap and trade: market-Regulatory negotiation led to cap and trade: market-based system in which companies can trade pollution based system in which companies can trade pollution credits with one another for cashcredits with one another for cash

Some states and localities have taken measures on their Some states and localities have taken measures on their own to reduce carbon emissionsown to reduce carbon emissions


DOMESTIC POLICY DOMESTIC POLICY The modern social safety net shows the dramatic The modern social safety net shows the dramatic

change in government policy over time.change in government policy over time. Prior to 1900, few laws protected workers, and private Prior to 1900, few laws protected workers, and private

organizations provided relief to the poor.organizations provided relief to the poor. The Great Depression forced the federal government The Great Depression forced the federal government

to take a larger role in alleviating suffering.to take a larger role in alleviating suffering. The Social Security Act of 1935 established Social The Social Security Act of 1935 established Social

Security, unemployment compensation, and other aid.Security, unemployment compensation, and other aid. The government added health-care coverage The government added health-care coverage

(Medicare/Medicaid) in the 1960s.(Medicare/Medicaid) in the 1960s. These programs have considerably reduced poverty, These programs have considerably reduced poverty,

especially among older citizens.especially among older citizens.


DOMESTIC POLICY DOMESTIC POLICY The cost of social safety net programs is large and The cost of social safety net programs is large and

growing.growing. Entitlements account for about 40 percent of the federal Entitlements account for about 40 percent of the federal

budget.budget. Reform efforts have targeted public assistance programs Reform efforts have targeted public assistance programs

known as welfare.known as welfare. States struggle with the costs of sustaining funding for States struggle with the costs of sustaining funding for

government programs.government programs. The poor lack the political clout to advance programs The poor lack the political clout to advance programs

that aid them.that aid them. Religious groups have recently partnered with Religious groups have recently partnered with

government to administer federal antipoverty programs.government to administer federal antipoverty programs.


DOMESTIC POLICY DOMESTIC POLICY

Health-care costs have become a major threat Health-care costs have become a major threat to the financial security of many Americans.to the financial security of many Americans. In most other industrialized nations, government In most other industrialized nations, government

provides universal coverageprovides universal coverage Some states have taken initiative in providing Some states have taken initiative in providing

government-sponsored health caregovernment-sponsored health care


ECONOMIC POLICY ECONOMIC POLICY

The Federal government became much more The Federal government became much more active in the economy during the Great active in the economy during the Great Depression.Depression.

Fiscal policy is the use of a government’s tax and Fiscal policy is the use of a government’s tax and spending authority to influence the national spending authority to influence the national economy.economy. John Maynard Keynes: Governments can control John Maynard Keynes: Governments can control

overall economic demand by buying more goods and overall economic demand by buying more goods and services or decreasing taxesservices or decreasing taxes

Supply-side economics: Government’s main economic Supply-side economics: Government’s main economic role is keeping prices low by reducing regulations and role is keeping prices low by reducing regulations and taxestaxes



The federal government runs a deficit to pay The federal government runs a deficit to pay for all of its programs.for all of its programs. The government finances the deficit by selling The government finances the deficit by selling

Treasury bonds on which it must pay interest.Treasury bonds on which it must pay interest. Economists worry that large government deficits Economists worry that large government deficits

may slow economic growth.may slow economic growth.



The government can regulate economic activity The government can regulate economic activity by controlling the availability of money.by controlling the availability of money. Federal agency called the Federal Reserve controls the Federal agency called the Federal Reserve controls the

supply of moneysupply of money All nationally chartered banks must belong to Federal All nationally chartered banks must belong to Federal

Reserve SystemReserve System Member banks can borrow money at low rates from Member banks can borrow money at low rates from

the 12 regional Federal Reserve banksthe 12 regional Federal Reserve banks Regional Federal Reserve banks work with board of Regional Federal Reserve banks work with board of

governors to establish and implement monetary policygovernors to establish and implement monetary policy



The Federal Reserve uses several tools to effect The Federal Reserve uses several tools to effect changes in monetary policy.changes in monetary policy. Reserve requirement ratio is amount of money Fed Reserve requirement ratio is amount of money Fed

requires banks to keep on hand to meet liabilitiesrequires banks to keep on hand to meet liabilities Discount rate is short-term interest rate Fed charges to Discount rate is short-term interest rate Fed charges to

membersmembers Open market operations refer to Fed’s role in buying Open market operations refer to Fed’s role in buying

and selling government securities in marketplaceand selling government securities in marketplace Federal Open Market Committee meets eight times a Federal Open Market Committee meets eight times a

year and can adjust rate at which member banks loan year and can adjust rate at which member banks loan each other money to cover short-term needseach other money to cover short-term needs



Protectionism is the use of taxes and tariffs to Protectionism is the use of taxes and tariffs to protect domestic production by limiting protect domestic production by limiting imports.imports.

Free trade policies and treaties such as Free trade policies and treaties such as NAFTA remove barriers to international trade. NAFTA remove barriers to international trade.

The World Trade Organization is the principal The World Trade Organization is the principal world body responsible for negotiating and world body responsible for negotiating and enforcing international trade agreements.enforcing international trade agreements.


CIVIC ENGAGEMENT AND CIVIC ENGAGEMENT AND PUBLIC POLICY TODAYPUBLIC POLICY TODAY

There are many opportunities to influence There are many opportunities to influence policy: run for elective office; work in policy: run for elective office; work in government agencies; work in the media; vote.government agencies; work in the media; vote.

Federal gridlock has state and local Federal gridlock has state and local governments creating environmental and governments creating environmental and health-care policies.health-care policies.

To solve public policy problems, more citizens To solve public policy problems, more citizens need to be involved the political process.need to be involved the political process.


Types of Policy OutcomesTypes of Policy Outcomes


The Top 20 The Top 20 Carbon Dioxide EmittersCarbon Dioxide Emitters


Developing Nations Predicted to Pose Developing Nations Predicted to Pose Greater Threat in Coming YearsGreater Threat in Coming Years


Who Are the Poor?Who Are the Poor?


The Escalating Share ofThe Escalating Share ofMandatory SpendingMandatory Spending


Federal Revenues and OutlaysFederal Revenues and Outlays


Total Deficit or Surplus, Total Deficit or Surplus, 1969 to 20191969 to 2019


Twelve Regions Served by Twelve Regions Served by Fed BanksFed Banks


© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

Hot or Not?Hot or Not?

Should the government enact Should the government enact a carbon tax to protect the a carbon tax to protect the environment?environment?

27

Get InvolvedGet Involved

Research the quality of drinking water in your Research the quality of drinking water in your community by examining Consumer Confidence community by examining Consumer Confidence Reports online. The Environmental Protection Reports online. The Environmental Protection Agency (EPA) post links for easy access at Agency (EPA) post links for easy access at http://www.epa.gov/safewater/index.html. The . The site will also help you understand what levels of site will also help you understand what levels of contaminants are acceptable and who to contact contaminants are acceptable and who to contact at your local water authority if you have at your local water authority if you have questions.questions.


SummarySummary

What is public policy, how is it made, and What is public policy, how is it made, and how can we explain policy outcomes?how can we explain policy outcomes?

Public policy is anything the government Public policy is anything the government chooses to do or not to do. Policy outcomes chooses to do or not to do. Policy outcomes can be explained by considering the can be explained by considering the distribution of costs and benefits to various distribution of costs and benefits to various groups affected by the policies.groups affected by the policies.


SummarySummary

What is domestic policy and what are some What is domestic policy and what are some of the problems addressed?of the problems addressed?

Domestic policy consists of government action Domestic policy consists of government action (and inaction) that affects citizens and (and inaction) that affects citizens and addresses problems ranging from climate addresses problems ranging from climate change to free lunch programs.change to free lunch programs.


SummarySummary

How is economic policy made and How is economic policy made and implemented?implemented?

The major tools of economic policy are fiscal The major tools of economic policy are fiscal and monetary policy. American economic and monetary policy. American economic policy is also affected by global economic policy is also affected by global economic policy that generally divide our political policy that generally divide our political leaders in to protectionism and free trade leaders in to protectionism and free trade camps.camps.


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AM GOV 2010 Joseph A. Losco Ralph E. Baker. PUBLIC POLICY Chapter 15