AP Government Policy Unit Social Welfare Policy Domestic Policy Foreign Policy

Social Welfare Policy is the intent of the government to improve the quality of life for its citizens. There are 4 different types of public policy theories: 1. Elite Theory (unequal distribution is normal) 2. Bureaucratic Theory (gov’t so big bureaucrats are the dominant power) 3. Interest Group Theory (gov’t is equilibrium between all competing groups at all levels) 4. Pluralist Theory (no single elite group)

1. Problem recognition and definition 2. Agenda Setting Public Policy is determined in stages: 1. Problem recognition and definition 2. Agenda Setting 3. Policy Formation 4. Policy Adoption 5. Budgeting 6. Policy Implementation 7. Policy Evaluation

The stages of public policy

pluralist elite bureaucratic interest group democratic ______ theory assumes that no single group could ever gain monopoly control over any substantial area of policy. pluralist elite bureaucratic interest group democratic

pluralist elite bureaucratic interest group democratic ______ theory assumes that no single group could ever gain monopoly control over any substantial area of policy. pluralist elite bureaucratic interest group democratic 6

SOCIAL WELFARE POLICY Panic of 1893 makes America 1st start to think gov”t has responsibility to help those in need. Depression of 1930s greatly expanded upon this belief and led to the formation of the permanent welfare state in America. It’s highlighted by the Social Security Act of 1935.

SOCIAL SECURITY HAS THREE PARTS: 1. Old Age Protection 2. Aid for the blind, needy, injured, families w/kids 3. Unemployment insurance/compensation Old Age Protection is a “pay as you go system” meaning you are paying now for others who are receiving it and that in the future others will pay for you when you are receiving it. (“good luck”)

Old Age Protection (con’t): In 1940 maximum pension was $85 per month In 2012 maximum pension was $2,513 per month In 2013 a social security tax is imposed upon the first $113k of an employees wages. The employer and the employee are normally each required to contribute 6.2% of the tax amount due. If self-employed you need to pay the entire 12.4% yourself.

Aid for Blind, Needy, Families with dependent children and disabled (SSI) This is supplemental money provided by the federal government as a “safety net” to prevent disaster In 2012 poverty line in America for a family of 4 was established at $22,350 up to $41, 348 Unemployment Insurance was initially set up by the federal government but it was “assumed” by the states. Employers pay 3% of a worker’s salary into an insurance fund. The amount received by each worker varies by state and there is a cap.

EXPANSION OF GOVERNMENT’S ROLE IN SOCIETY 1. Education (vouchers and charter schools) Supreme Ct. has ruled that issue of inequality of spending on education is a state matter since education is NOT a fundamental right 2. Health Insurance Medicare (older citizens) Medicaid (poorer citizens) 3. Food Programs (ex: food stamps aka “snap”) 4. Earned Income Credit (encourage work even if earning low wages)

Energy policy Environmental policy By 1970s, U.S. dependent on foreign oil Oil embargo crisis (OPEC) Government set conservation and efficiency standards; creates DOE Environmental policy National Environmental Policy Act of 1970 Clean Air Act of 1970 Clean Water Act of 1970 Safe Drinking Water Act of 1974

Where do U.S. oil imports come from?

The Kyoto Protocol, which committed countries to reducing greenhouse gas emissions, was ratified by the U.S. in ________. It was never ratified. 1997 1998 2000 2008

The Kyoto Protocol, which committed countries to reducing greenhouse gas emissions, was ratified by the U.S. in ________. It was never ratified. 1997 1998 2000 2008 16

Today, most of the electricity in the United States is generated by wind farms. hydroelectric dams. nuclear power plants. natural gas. coal burning plants.

Today, most of the electricity in the United States is generated by wind farms. hydroelectric dams. nuclear power plants. natural gas. coal burning plants. 18

NCLB intends to promote all of the following EXCEPT privatization of education school choice success educational methods flexible use of national funding results-oriented accountability

NCLB intends to promote all of the following EXCEPT privatization of education school choice success educational methods flexible use of national funding results-oriented accountability 20

A National insurance was first seriously considered in ________. the 1930s the Reagan administration the 1960s 1912 under President Wilson 2008

A National insurance was first seriously considered in ________. the 1930s the Reagan administration the 1960s 1912 under President Wilson 2008 22

MEANS TEST = No aid given unless the recipient qualifies based on income. NON-MEANS TEST = A program which gives the aid regardless of the income of the recipient. ENTITLEMENT PROGRAM= If you meet the eligibility criteria you are to receive the benefit and spending on the program is mandatory

RISING COST OF ENTITLEMENT PROGRAMS Amounts Spent in Billions of Dollars: (FEDERAL) 2003 2005 2011(est.) S.S. 470 519 722 Defense 404 473 499 Means-Test 306 356 454 (entitlements)

WHAT SHOULD GOVERNMENTS ROLE IN THE ECONOMY BE? Business Cycles Laissez-Faire Adam Smith and the Invisible Hand Theory of the Marketplace John Maynard Keynes and the Theory of Deficit Spending Ronald Reagan and the Theory of Deregulation

Question: Keynesian economic contends that: the market works best when left to the invisible hand government spending is necessary to reduce the deficit governments work best when they work the least government intervention is always an obstacle to efficiently functioning economies. government intervention is often necessary to resolve the inefficiencies of the private sector. 26

Question: Keynesian economic contends that: the market works best when left to the invisible hand government spending is necessary to reduce the deficit governments work best when they work the least government intervention is always an obstacle to efficiently functioning economies. government intervention is often necessary to resolve the inefficiencies of the private sector. 27

the Great Depression and the New Deal the 1960s the 1980s During which era did the U.S. government first adopt interventionist policies? the 19th century the Progressive era the Great Depression and the New Deal the 1960s the 1980s 28

the Great Depression and the New Deal the 1960s the 1980s During which era did the U.S. government first adopt interventionist policies? the 19th century the Progressive era the Great Depression and the New Deal the 1960s the 1980s 29

FDR CHANGES EVERYTHING The Depression of the 1930s required drastic action and the following was done: 1. Glass-Steagall Act (FDIC) 2. SEC 3. AAA 4. Wagner Act (collective bargaining and right to organize) THE NEW DEAL MEANS THAT GOVERNMENT WOULD NOW BE PRIMARY SOURCE OF ECONOMIC SOLUTIONS INSTEAD OF THE MARKETPLACE

Economic Regulation is government regulation of business practices Social Regulation is government regulation of safety of products and conditions of production Four Reasons for surge of these regulations: 1. 1960s/70s increase in activism 2. More public awareness of dangers and safety 3. Congress wants visibility and prominence 4. Presidents support them BUT IN THE 1980S A REVERSE TREND WILL TAKE PLACE (Deregulation)

Income Security Programs Today Many income security programs are entitlement programs Non-means-tested programs Social security Unemployment insurance Means-tested programs Supplemental security income (SSI) TANF and SNAP Earned Income tax credit program

How many Americans benefit from income security programs?

Which of the following is a non-means-tested program? TANF SSI SNAP unemployment insurance earned income tax credit program 34

Which of the following is a non-means-tested program? TANF SSI SNAP unemployment insurance earned income tax credit program 35

Fiscal Policy in a Global Context Globalization and income minimum wage v. wages abroad Increasing interdependence 2008 economic crisis spread swiftly abroad

Growth (economic stability) Inflation Recession Depression THE BUSINESS CYCLES Growth (economic stability) Inflation Recession Depression THE TOOLS USED TO COMBAT OR ASSIST THESE ARE: MONETARY POLICY (Federal Reserve Bank) FISCAL POLICY (Executive Branch)

Monetary and Fiscal Policy Gross Domestic Production (GDP) is the total market value of all goods and services produced in one year in a country (a negative GDP is an indication of no economic growth) Revenue is how much the government has taken in Expenditures is how much the government has spent

How does the federal government raise and spend money?

MONETARY POLICY The Federal Reserve System 12 Regional Banks (private but leaders appointed by government and stock owned by large commercial banks) ---These are the bankers bank Establish monetary policy by: Setting Reserve Requirements for Banks; Controlling the Discount and FOMC rates for lending; Open Market Operations (buying and selling of government securities-bonds) Controlling supply of money (paper) existing

Question: The discount rate is? the rate at which discounts are given to Federal Reserve member banks when purchasing goods and services. the interest rate at which the Federal Reserve lends money to member banks. the discount given to citizens on welfare when they purchase goods and services. the normal discount given to U.S. banks over foreign banks when borrowing money from the Federal Reserve the reserve requirements for Federal Reserve member banks. 41

Question: The discount rate is the rate at which discounts are given to Federal Reserve member banks when purchasing goods and services. the interest rate at which the Federal Reserve lends money to member banks. the discount given to citizens on welfare when they purchase goods and services. the normal discount given to U.S. banks over foreign banks when borrowing money from the Federal Reserve the reserve requirements for Federal Reserve member banks. 42

Seeking to Repair the Economy in 2009

Where did the economic stimulus funds go?

Question: The purpose of TARP was to: stimulate the economy. reduce the federal debt. help families unable to make their mortgage payments. buy “clunker” cars to trade for newer, more fuel efficient cars. set limits on CEO pay 45

Question: The purpose of TARP was to: stimulate the economy. reduce the federal debt. help families unable to make their mortgage payments. buy “clunker” cars to trade for newer, more fuel efficient cars. set limits on CEO pay 46

The Key Players in Fiscal Policy OMB= Office of Management and Budget works for the executive branch CBO= Congressional Budget Office works for legislative branch Entitlement Spending has grown at a much faster pace than discretionary spending Balanced Budget- Probably will no longer see it in your lifetime

Who holds U.S. debt as of 2010?

ENVIRONMENTAL REGULATION Used to be controlled by states but now controlled by Federal Government Change began with creation of EPA in 1970 and the power of this agency has grown so large that it now is directly involved in almost all matters of potential governmental spending for construction or production

HISTORY Isolationism Unilateralism (act w/o talking to others) Washington’s Farewell Address Isolationism Unilateralism (act w/o talking to others) Moralism (Democracy and belief in “right” ) Pragmatism (taking advantage for nationalistic gain)

The Doctrines Monroe Roosevelt Corollary Truman (containment) Nixon ($ not troops and deterrence theory) Carter (“strategic and vital interests will be militarily protected”) Reagan (military assistance to fight pro-Soviet governments) Bush (preemptive strikes against potentially dangerous nations)

Key Terms Protective Tariffs and Most Favored Nation Status (MFN) Smoot-Hawley (1930) Tariff of Abominations Embargo Act of 1807 NAFTA Globalization and Free Trade WTO

Spanish-American War and the rise of Imperialism (1898) Bretton-Woods Agreement (1945) IMF World Bank US Dollar replaces gold as the world’s currency Internationalism/Multilateralism GATT (general agreement on trade & tariffs)

The United States’ growing interest in Asian affairs was the result of: the attack on Pearl Harbor in 1941. the Spanish American War of 1898. the Monroe Doctrine. the League of Nations. the Paris Peace Conference.

The United States’ growing interest in Asian affairs was the result of: the attack on Pearl Harbor in 1941. the Spanish American War of 1898. the Monroe Doctrine. the League of Nations. the Paris Peace Conference. 55

NATO and the end to isolationism forever Deterrence Theory (Nixon) First Strike Capability and Nuclear Weapons Cuban Missile Crisis (1962) SALT TREATIES (Nixon) ANTI-BALLISTIC TREATY (Nixon) STAR WARS (Reagan) WAR POWERS ACT (“Consequence of Vietnam”)

Iron Curtain (falls in 1989) USSR (falls in 1991) CIA and NSC (created in 1947 in response to the growing Soviet threat) EXECUTIVE AGREEMENTS (no Senate needed) IKE and the Military-Industrial Complex UNITED NATIONS (and the use of “peace keepers”)

Enlargement was a foreign policy objective of ___________. Clinton Reagan Carter Nixon Bush II

Enlargement was a foreign policy objective of ___________. Clinton Reagan Carter Nixon Bush II 59

The Department of State The Supreme Court The intelligence community All of the following officials or bodies tend to play a decisive role in foreign policy EXCEPT Congress The president The Department of State The Supreme Court The intelligence community

The Department of State The Supreme Court The intelligence community All of the following officials or bodies tend to play a decisive role in foreign policy EXCEPT Congress The president The Department of State The Supreme Court The intelligence community 61

Defensive weapons systems Covert operations Border blockades Which of the following is a foreign policy strategy to deal with nuclear proliferation? The open door policy Free trade agreements Defensive weapons systems Covert operations Border blockades

Defensive weapons systems Covert operations Border blockades Which of the following is a foreign policy strategy to deal with nuclear proliferation? The open door policy Free trade agreements Defensive weapons systems Covert operations Border blockades 63

How defense spending changed over time

Who are the United States’ major trading partners?

The U.S. became the world’s primary superpower after ___________. WWII Vietnam WWI 9/11 the end of the Cold War

The U.S. became the world’s primary superpower after ___________. WWII Vietnam WWI 9/11 the end of the Cold War 67