CHAPTER 14 Domestic Policy and Policymaking CHAPTER OUTLINE I. Making Public Policy A. Stages in the Policymaking Process B. Models of Decision-Making II. Education Policy A. Access to Education B. Funding of Education C. Educational Curriculum D. Educational Quality and Accountability III. Managing the Economy A. Monetary Policy B. Fiscal Policy C. The Debate D. Deficits, Surpluses, and the National Debt IV. Economic Development Policies A. Trade Policies and Globalization B. Tax Incentives C. Industrial and Supply-Side Policies V. Regulatory Policies A. Economic Regulation B. Environmental Regulation C. Social Regulation VI. Social Welfare Policies A. Aiding the Poor B. Social Insurance VII. Conclusion: The Complexity of American Public Policy CHAPTER SUMMARY Public policies are the actions taken by government in response to public needs and desires voiced through the political system. In that sense, policies are the end products of our political system, the outcome of the whole process of government. The final two chapters of this book sample the public policies produced by our political system. This chapter examines domestic policies; Chapter 15 deals with foreign and defense policies. This examination begins by looking at how policy is made. More specifically, what are the stages in the process? Who takes part in the process? How well do the participants make decisions and shape policies to meet the needs of the people? As you consider different models of decision-making, you will be confronting these primary questions about our government: Is the process democratic, or does it merely reflect the power of an elite few? Is it rational or chaotic? In this chapter’s sampling of domestic policies, the focus is on two areas: economic policies concerned with promoting individual and public prosperity, and social policies concerned with meeting the needs of the poor and the general public. Copyright © Cengage Learning. All rights reserved. Chapter 14: Domestic Policy and Policymaking 183 Within these two broad categories are several smaller areas of focus. In the economic arena, four general types of economic policy are considered: monetary, fiscal, developmental, and regulatory. The national debt is a topic of economic policy that generates heated debate, and in this chapter the causes and effects of the deficit are reviewed. The social policies described are the new federal welfare system following 1996 reform legislation, social insurance policies for the general public, and consumer and worker protection policies that have emerged in recent years. Although the laws and regulations described are only a tiny fraction of the enormous number of policies produced by our political system, they do provide a useful glimpse at the type and quality of actions being taken by our federal government in response to concerns raised by the public. According to the authors, these policies are both the cause and the result of two powerful and contradictory myths about the activities of government in the United States. One myth holds that government does too much, and the other maintains that it does too little. How can both myths prevail at the same time? Which is right? Perhaps the crucial question is not, “Which is the accurate view of government activity?” but rather, “Why do these myths exist, and what results do they have?” Certainly these contradictory attitudes create serious challenges for American policymakers, but as you will see, they also create a dynamic context for policy discussions. The consequences may be a healthier, more democratic policymaking system. LEARNING OBJECTIVES After carefully reading and studying the chapter, you should be able to: 1. Describe the myths of too much and too little government in the United States and explain their influence on domestic policymaking. 2. Identify the stages in the policymaking process. 3. Distinguish between monetary and fiscal economic policies and describe the debate over their use. 4. Discuss economic development policies and their effect on the economy. 5. Describe regulatory policies and the debate over their use. 6. Evaluate causes and effects of the national debt. 7. Describe the new federal welfare system created in 1996 and the changes it attempts to make in national policy to assist the poor. 8. Identify and give examples of programs with which the federal government meets the needs of the general public. 9. Evaluate the results of social regulatory policies in the United States. READING TABLES AND GRAPHS 1. What does Figure 14.1 tell you about the importance of framing questions in public opinion polls? 2. According to Figure 14.3, how many members serve on the Federal Reserve Board of Governors? 3. Who appoints members to the Federal Reserve Board? 4. According to Figure 14.2, what is the final stage of policymaking? 5. According to Figure 14.4, during what years did the federal budget have a surplus? Copyright © Cengage Learning. All rights reserved. 184 Chapter 14: Domestic Policy and Policymaking REVIEWING CHAPTER 14 Identifying Key Terms and Ideas Fill in the following terms and definitions in the appropriate blanks: 1. Programs that commit the government to provide funds or a. monetarists services to all citizens who meet established eligibility b. Keynesians requirements are called_____. c. public policies 2. A theory of economic development calling for policies to promote the production of goods by cutting taxes, d. issue identification lifting regulations, and eliminating restraints on private e. pluralist model industry is known as_____. f. incremental model 3. An interpretation of decision-making, which holds that public policies are the result of pressures exerted by a variety g. elite model of different interest groups, is known as the_____. h. rational model 4. The stage in policymaking in which efforts are made to obtain i. monetary policies political support so that a proposal can become government policy is the _____stage. j. economic regulation policies 5. An interpretation of decision-making that sees public policy as the product of decisions made by adding to or k. economic subtracting from existing policies is known as development policies the_____. l. policy 6. Carrying out policy mandates through public programs and implementation actions is called_____. m. fiscal policies 7. An international economic policy that calls for the abolition of n. social security tariffs and other barriers so goods and services may be freely exchanged is called_____. o. social regulation policies 8. Policies and programs that seek to control the economy by manipulating the money supply are called_____. p. supply-side economics 9. In _____, the first stage of policymaking, attention is called to a problem that needs government attention. q. policy adoption 10. When budget revenues exceed expenditures, you have a(n) r. policy formulation _____. s. infrastructure projects 11. The total amount of money the federal government owes is t. policy evaluation called the_____. u. national debt 12. Decisions made and actions taken by government officials in response to problems identified and issues raised are v. budget surplus called_____. w. budget deficit 13. The federal program that provides social insurance covering x. tariffs loss of income due to long-term illness, unemployment, or retirement is called_____. y. entitlement programs 14. Policies and programs that seek to use federal taxing, z. free trade spending, and borrowing to control the economy are called_____. Copyright © Cengage Learning. All rights reserved. Chapter 14: Domestic Policy and Policymaking 185 15. An interpretation of decision-making that assumes policymakers have a clear objective and all the information needed to make a sound and logical decision is known as the_____. 16. An interpretation of decision-making that holds that public policies are made by a relatively small group of influential people sharing common goals and values is known as the_____. 17. The stage in policymaking in which someone or some agency develops a proposal or program to address a political issue or problem is the _____stage. 18. Those who advocate government spending when the economy is sluggish (even if a deficit exists) in order to revive the economy are called_____. 19. When budget expenditures exceed revenues, you have a(n) _____. 20. Programs intended to protect consumers from the hazards of life in a highly industrial economic system are called_____. 21. Economists who oppose extensive governmental intervention in the economy and recommend instead that government supply a consistent growth in the nation’s money supply are called_____. 22. Policies and programs that are intended to protect or promote the growth of American business and industry are called_____. 23. High-cost government building investments, such as highways, bridges, and sewage systems, undertaken to support the economic health of the nation are called_____. 24. Policies and programs through which the government monitors and controls critical industries and sectors of the economy are called_____. 25. Taxes on goods brought into the country from abroad are called_____. 26. The final stage in the policymaking process, assessing the effectiveness and efficiency of governmental programs, is known as_____. Copyright © Cengage Learning. All rights reserved. 186 Chapter 14: Domestic Policy and Policymaking Understanding Facts and Concepts True/False: If any part of the statement is incorrect, mark it False and write in the reason(s) why the statement is