pearson-longman copyright 2005 domestic policy chapter 18

Pearson-Longman copyright 2005

Domestic PolicyChapter 18


Types of Public Policy

• Public policy is a term applied to all government programs and regulations.

• Domestic policy– Consists of all government programs and

regulations that directly affect those living within a country.

– Includes everything from education and health care to transportation and garbage collection.

– Economic policies generally most important. Here we focus on other domestic policies.


Stages of Policy Making

1. Agenda settingMaking an issue so visible that important political leaders take it seriously.

2. Policy deliberationDebate and discussion by groups and political leaders over issues placed on the

policy agenda.

3. Policy enactmentPassage of law by public officials.

4. Policy implementationTranslation of legislation into set of government programs or regulations.

5. Policy outputsProvision of services to citizens or regulation of their conduct.

6. Policy outcomesEffect of policy outputs on individuals and businesses.


Social Policy

• Social policy is a type of domestic policy that is designed to help those thought to be in need of government assistance.

• One of central issues: balance between government assistance to elderly and to young.

• While poverty among seniors has declined, it has not for children.


Social Insurance for Senior Citizens

• 1935 Congress enacted the landmark Social Security Act– created a broad range of social programs, including a social

insurance program for seniors generally known as social security..

• Social security originally cost the government little.– Those who first retired under the program received minimal

benefits because they had not paid into the program significantly.– Moreover, people retiring at age 65 were only expected to live an

average of 12.6 years. – Today a retiring worker is expected to live at least 17 more years.– As program expanded: more people paid in, were covered, and

they lived longer.



• In 1965 Congress enacted Medicare, which provides social security recipients with a broad range of medical benefits.

• 1972 (an election year), Congress gave seniors a large increase in their monthly social security check and linked future increases to the cost of living index.

• Insurance principle rather than need based principle.• But it operates at a loss (unlike private insurance

programs)• Social security has always given more to people than

they have put in.– Worker puts in $148,300 in taxes and couple may receive about

$290,000 over the remaining years of lives.



• How can benefits exceed contributions?• Reasons

– Workers have grown in number. More people contributing.

– Workers produce more and earn more than their predecessors.

– Workers pay a higher percentage of their earnings into social security than in the past.

• Essentially, younger generations have been asked to pay more to cover the expenses of older ones.



• BUT…circumstances may be changing– Experts do not expect the number of workers

to increase much in the next couple of decades.

– Rate of growth in economic productivity may not always be as high as in the 1990s.

– Workers may be less willing to pay higher taxes.


Politics of Social Insurance

• The risks of change to social security– Punishment by voters

• Complexities of Medicare– Cost of the program grew from $34 billion in 1970 to

over $300 billion in 2004.• Number of elderly growing, increasing demand for medical

services.• Patients expect error-free medicine. Sue over mistakes

(negligent or not), and this drives up medical insurance costs.• Congress made efforts to curb these costs.• Drug benefit plan supported by Bush and passed by Congress

may add $500 billion to the cost of Medicare from 2005-2015.


Politics of Social Insurance

• Influence of Senior Citizens– Seniors are much more likely than young people to

back up their votes with political actions.– AARP large and influential interest group.

• Broad Support– People generally support benefits for senior citizens.

• Hope to benefit themselves one day; many have parents receiving these benefits; believe that because seniors contributed to the benefit, they should be guaranteed the benefits promised.


Public Assistance to Poor Families

• Public Assistance are programs that provide to low-income households a limited income and access to essential goods and services.

• Safety net– Temporary Assistance to Needy Families– Food Stamps– Earned Income Tax Credit– Supplemental Security Income– Rent Subsidies– Medicaid (includes services for low-income elderly)


Limitations on Public Assistance Programs

• While the list of programs is long, they spend only about 1/10th as much as is spent on the elderly.

• Federal social programs for the elderly amounted to over $17,500 per capita in 2000 compared to $1500 per capital for poor families with children. Why?– Fewer cash benefits– Less indexation– Assistance, not insurance– State, not national programs– Benefits cannot supplement income


Politics of Public Assistance

• Programs for poor families with children are poorly funded and restrictively designed because, unlike the elderly, children and the poor do not exercise direct political power.

• What of those working on their behalf?– Policy analysts offer competing explanations of

persistence of poverty.– Weak interest groups that fight among themselves.– A divided public– Opportunistic political parties


Education Policy

• Education policy has become a significant topic of public debate.

• Historically supportive of public school, now concerned with issues of quality.

• Responsibility for education is divided– Local school boards– State departments of education– Federal Department of Education

• Bulk of control at state and local level.


Development of Public Education

• Development of public education– 1785 Congress set aside revenue for the

maintenance of public schools.– Accessible to immigrants– Fostered common language– Open to most citizens– Created educated workforce that operated the

machines that would make the country an industrial power.


Contemporary Issues in Education Policy

• Financial support for public elementary and secondary schools has increased only slightly over the last 15 years.

• Teacher salaries have declined since 1970.• Many developed countries spend more than the

U.S. on education (Canada, Sweden, and France).

• And we appear to do less well than other countries in terms of educational outcomes relative to expenditures.


Contemporary Issues in Education Policy

• Three major sets of proposals that seem to improve our educational system– School choice– Set of national standards– Provide schools with greater resources

• Each set of proposals has its critics and advocates.

• What do you think?


Politics of Education

• Three major sets of proposals that seem to improve our educational system– School choice– Set of national standards– Provide schools with greater resources

• Each set of proposals has its critics and advocates.

• Overall, most people, and both political parties are committed to public education.


Regulation and Its Rise

• Regulation is the rules and standards that control economic, social and political activities.

• Although Congress can pass regulations, it usually gives the responsibility to agencies within the executive branch.

• Regulation dates back to feudal times.• Constitution gives Congress power to regulate

commerce.– Commerce clause has extended regulation from civil

rights to national insurance standards.


The Rise of Federal Regulation

• Three distinct periods of regulator increase– Progressive era

• Muckrakers exposed abuses of industrialization, focused on abuses of large corporations and other abuses

• Sherman Act (1890) and Meat Inspection Act of 1906

– New Deal era• Prevent practices that were thought to have caused the Great

Depression

– 1960s and 1970s• Focus on consumer safety, occupational safely, and

environmental protection.• Environmental Protection Agency


Justification for Regulation

• Government now regulates many business and social activities.

• Why have the regulatory responsibilities of government expanded so dramatically over the last 50 years?

• Three broad types of circumstances in which they find government regulation most easily justified.– Natural monopoly– Negative externalities– Protecting the uninformed


Politics of Regulation

• When and how regulations are imposed are political decisions.– Shaped by election pressures.

• Congress: – create regulatory agencies in order to escape

criticism when things go wrong. – Also to avoid being blamed by not directly

imposing the regulations but handing the job off to a regulatory agency.



• Agency Discretion– Because Congress can pays ambiguous

legislation, agencies may have considerable freedom in deciding how to execute their mandates.

– Not limitless: Zone of acceptance is the range within which Congress allows agencies to interpret and apply statutes.



• Courts– Interpret the meaning of congressional

statutes and decide whether their application in specific cases conforms to congressional intent.

– Have considerable discretion because they often must interpret vague and contradictory laws passed by Congress.


Deregulation

• Deregulation involves the removal of government rules that once controlled an industry.

• Address concerns that stem from the negative impact of regulation.

• Ex. The airline industry– Airline fares were regulated by the government

in order to prevent price gouging. Analysts said the outcome was opposite its intent.

pearson-longman copyright 2005 domestic policy chapter 18

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