ECONOMIC, DOMESTIC, AND FOREIGN POLICY Chapter 16

Public Policy under a Constitutional System  The Process of Policy Making  public policy: Intentional actions of government designed to achieve a goal.  problem identification: The first step in the policy-making process, in which a problem in politics, the economy, or society is recognized as warranting government action.  policy agenda: The second step in the policy-making process, in which a problem that has been identified gets the attention of policy makers.  policy formulation: The third step in the policy-making process, in which those with a stake in the policy area propose and develop solutions to the problem.  policy enactment: The fourth step in the policy-making process, in which Congress passes a law that authorizes a specific governmental response to the problem.  policy implementation: The fifth step in the policymaking process, in which the executive branch develops the rules that will put the policy into action.  policy evaluation: The final step in the policy-making process, in which the policy is evaluated for its effectiveness and efficiency; if changes are needed, the issue is placed back on the policy agenda, and the cycle starts again. 2

3 The Public Policy-Making Process

Public Policy under a Constitutional System  The Regulatory Process  regulatory process: System of rules that guide how a law is implemented; also called the rule-making process.  regulations: Guidelines issued by federal agencies for administering federal programs and implementing federal law.  Federal Register: Official published record of all executive branch rules, regulations, and orders  Blocking Implementation  Hobby Lobby v. Kathleen Sebelius Copyright © 2016 Cengage Learning. All rights reserved. 4

Public Policy under a Constitutional System  State Governments and Public Policy  Policy diffusion-- Process by which policy ideas and programs initiated by one state spread to other states.  Positive results  School choice plans  The race to the bottom  Negative results  Reduce taxes to create business incentives Copyright © 2016 Cengage Learning. All rights reserved. 5

Domestic Policy  Entitlement Programs, Income Security, and Health Care Review  Social Security: Federal pension program that makes a monthly payment to retired elderly workers and disabled persons.  Entitlement programs: Federal programs, such as Social Security, Medicare, or Medicaid, that pay out benefits to individuals based on a specified set of eligibility criteria.  Medicare: Federal health insurance program for the elderly and disabled.  Medicaid: Shared Federal and state health insurance program for low-income persons.  Affordable Care Act (ACA)---known as Obamacare 6

Major Federal Programs 7

Domestic Policy  The Affordable Care Act (ACA)  Constitutionality of Act was challenged  Major problems from the start  States vital in implementation process Copyright © 2016 Cengage Learning. All rights reserved. 8

Domestic Policy  Immigration Policy Overview  The legal immigration process  Visa to enter country  Issued green card  Proof of employment  Medical exam  The debate over unauthorized immigration  1986 Immigration Reform and Control Act  DREAM Act Copyright © 2016 Cengage Learning. All rights reserved. 9

Domestic Policy  Immigration Policy Overview  Local and federal action on unauthorized immigration  Mexican border  Arizona’s and Alabama’s negative laws  California, Texas, and New Mexico positive laws Copyright © 2016 Cengage Learning. All rights reserved. 10

Domestic Policy  Energy, Environmental Policy, and Climate Change Overview  Clean Air Act-- Broad federal legislation that expanded the federal government’s ability to monitor and protect the environment against pollution.  Environmental Protection Agency  Energy sources Copyright © 2016 Cengage Learning. All rights reserved. 11

History of Energy Consumption in the United States

Economic Policy  An Overview: Intervention in the Economy  Recession--A period of time marked by successive quarters of lower economic output.  Fiscal Policy  Taxing and spending  Monetary Policy  Federal Reserve Board--Independent regulatory commission that affects the money supply by setting the reserve requirements of member banks, establishing a discount rate for loans to member banks, and buying or selling government securities. 13

Comparison of Fiscal and Monetary Policy 14

Economic Policy  Trade Policy  Protectionism versus Free Trade  protectionist: Policy designed to raise import barriers for goods that are domestically produced.  free trade: Policy designed to lower import barriers to encourage trade across nations.  fair trade: Policy designed to make sure that the working conditions are relatively equal in nations that trade with each other.  NAFTA: Comprehensive multi-nation trade agreement ratified in 1994 that knocked down trade barriers among Canada, the United States, and Mexico. 15

U.S. Balance of Trade

Economic Policy  Trade Policy  Trade and international economic organizations  World Trade Organization (WTO): International organization that considers and resolves trade disputes among member nations.  U.S. relinquished right to act unilaterally in trade disputes  European Union (EU): Association of European nations formed in order to facilitate economic and political interactions across their borders. 17

Foreign Policy  An Overview: International Relations and U.S. Foreign Policy Goals  globalization: The interconnectedness of nations around the world on economic, political, cultural, social, and military dimensions.  Communist: Government management and ownership of key elements of a nation’s economy.  United Nations (UN): Organization formed after World War II to mediate disputes among nations around the world.  Cold War: An era in history marked by conflict and distrust between the United States and Communist nations.  multipolar: A world system where there are distinct centers of political and military power. 18

Foreign Policy  Foreign Policy Tools  Military action  rally-around-the flag effect: Surge of public support for the president in times of international crisis.  nonstate actors: Individuals or groups that do not represent any specific national government and may take action across borders.  Anti-nuclear proliferation measures  United Nations treaties 19

Foreign Policy  Foreign Policy Tools  Diplomacy and humanitarian assistance  U.S. embassies  World Bank: International organization that distributes grants and low-income loans in developing countries.  International Monetary Fund (IMF): International organization that works to stabilize currency values and government debt for nations in economic difficulty.  Peace Corps: U.S. government-funded organization that sends individuals on educational and cultural missions around the world. Copyright © 2016 Cengage Learning. All rights reserved. 20

Public Policy and International Relations: The Promotion of Democracy  Domestic policy has expanded  Economic policy affected by government but business has strong impact  Foreign policy has to be balanced Copyright © 2016 Cengage Learning. All rights reserved. 21