Economic, domestic, and foreign policy

Economic, domestic, and foreign policy
Chapter 16

Copyright © 2018 Cengage Learning. All rights reserved.
Learning Objectives 16.1 Outline the steps in the policy-making process 16.2 Identify the key federal programs that make up domestic policy 16.3 Explain how the federal government intervenes in the economy 16.4 Evaluate the effectiveness of U.S. foreign policy Copyright © 2018 Cengage Learning. All rights reserved.

Public Policy under a Constitutional System 1 of 3
The Process of Policy Making Problem identification Policy agenda Policy formulation Policy enactment Policy implementation Policy evaluation LO 16.1 Outline the steps in the policy-making process 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. Key Questions What is the definition of public policy? How does the government balance the cost and benefits of a policy? Copyright © 2018 Cengage Learning. All rights reserved.

Stakeholders in the Policy-Making Process
Figure 16.1 The U.S. policy-making process includes people and groups with a wide range of different interests, ranging from the president to average citizens. Copyright © 2018 Cengage Learning. All rights reserved.

The Public Policy-Making Process
Figure 16.2 The process by which policy is made has six major steps: identification, agenda, formulation, enactment, implementation, and evaluation. Copyright © 2018 Cengage Learning. All rights reserved.

The Regulatory Process Administrative Procedures Act Regulations Federal Register Blocking Implementation Zubik v. Burwell 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 Key Question What role can citizens play in the regulatory process? Copyright © 2018 Cengage Learning. All rights reserved.

The Regulatory Process
Figure 16.3 After policies are enacted, they need to be implemented and regulated under a structure that is overseen by the Office of Management and Budget (OMB). This figure outlines the regulatory process from start to finish. Copyright © 2018 Cengage Learning. All rights reserved.

State Governments and Public Policy Policy diffusion Positive results States can copy each other The race to the bottom Negative results Reduce taxes to create business incentives policy diffusion: Process by which policy ideas and programs initiated by one state spread to other states. Key Question How does policy diffusion serve as an example of policy making in a federal system? Copyright © 2018 Cengage Learning. All rights reserved.

Domestic Policy 1 of 6 Entitlement Programs, Income Security, and Health Care Social Security Medicare Medicaid L.O. 16.2: Identify the key federal programs that comprise domestic policy. 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. Key Questions What policy goals do entitlement programs address? Copyright © 2018 Cengage Learning. All rights reserved.

Major Federal Programs
Names Year Description Social Security 1935 Old age retirement insurance program pays a monthly amount to retired workers Unemployment Insurance Temporary replacement income for job loss Social Security Disability Insurance Payments to individuals who can no longer work due to disability Medicare 1972 Health care insurance for elderly and disabled Medicaid 1965 Health care insurance for low-income individuals Temporary Aid to Needy Families Subsidy for low-income individuals with children; originally known as Aid to Families with Dependent Children but replaced in 1996 by TANF Food Stamps 1964 Subsidy for low-income individuals for food purchase Public Housing Assistance 1937 Subsidy for low-income individuals for housing Immigration /Nationality Act 1952 Laws governing documenting entry and citizenship into the United States Clean Air Act 1963/ 1970 Laws requiring minimum standards for air quality; amended in 1970 to create the Environmental Protection Agency Clean Water Act Regulations for the discharge of potential contaminants into water sources Affordable Care Act 2010 Mandate requiring every individual to have health insurance coverage and providing access and subsidies through exchanges and expanded Medicaid Table 16.1 © Cengage Learning Copyright © 2018 Cengage Learning. All rights reserved.

Domestic Policy 2 of 6 The Affordable Care Act (ACA) Constitutionality of Act was challenged Major problems from the start States vital in implementation process Copyright © 2018 Cengage Learning. All rights reserved.

Domestic Policy 3 of 6 Immigration Policy The legal immigration process Visa to enter country Issued green card Proof of employment Medical exam Key Questions How do immigrants become naturalized citizens? Copyright © 2018 Cengage Learning. All rights reserved.

Domestic Policy 4 of 6 Immigration Policy continued The debate over unauthorized immigration 1986 Immigration Reform and Control Act DREAM Act Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) Key Questions Why is immigration the responsibility of the federal government? Should that change—why or why not? Copyright © 2018 Cengage Learning. All rights reserved.

Domestic Policy 5 of 6 Immigration Policy continued Local and federal action on unauthorized immigration Mexican border Arizona’s and Alabama’s negative laws California, Texas, and New Mexico positive laws One factor that might affect the future of immigration reform is the growing number of Latinos in the United States, who typically express strong opposition to punitive measures on unauthorized immigration. As the number of Latino voters grows, the United States may see more convergence on a single policy position by the parties in an effort to win this increasingly important voting bloc. Copyright © 2018 Cengage Learning. All rights reserved.

Domestic Policy 6 of 6 Energy, Environmental Policy, and Climate Change Overview Silent Spring Clean Air Act Clean Water Act Environmental Protection Agency Energy sources Flint, Michigan water crisis Rachel Carson’s epic study of the effects of pesticides on the bird population, called Silent Spring, provoked an intense debate between large chemical companies and the scientific community and created national concern that gave rise to the environmental movement. Clean Air Act: Broad federal legislation that expanded the federal government’s ability to monitor and protect the environment against pollution. Clean Water Act: Broad federal legislation that expanded the federal government’s ability to monitor and protect the saf Key Question What is the federal government’s role in protecting the environment? Copyright © 2018 Cengage Learning. All rights reserved.

Economic Policy 1 of 3 Intervention in the Economy Recession Fiscal Policy Taxing and spending Monetary Policy Federal Reserve Board L.O. 16.3: Explain how the federal government intervenes in the economy. recession: A period of time marked by successive quarters of lower economic output. 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. Key Question How can the federal government intervene in the economy during periods of economic recession? What roles do fiscal and monetary policy play in the economy? Copyright © 2018 Cengage Learning. All rights reserved.

Stakeholders in Federal Economic Policy
Figure 16.7 A diverse set of public and private organizations and individuals impact economic policy. Copyright © 2018 Cengage Learning. All rights reserved.

Comparison of Fiscal and Monetary Policy
Type of Policy Policy Maker Action Direct Effect Effect on Money Supply Fiscal Congress, President Increase spending or cut taxes Consumers have more money to spend. Increases Decrease spending or increase taxes Consumers have less money to spend. Decreases Monetary Federal Reserve Board Increase reserve requirement Banks have less money to loan. Decrease reserve requirement Banks have more money to loan. Increase the discount rate Loans are more expensive. Decrease the discount rate Loans are less expensive. Table 16.2 Actions by Congress and the president affect fiscal policy, while actions by the Federal Reserve Board affect monetary policy. Copyright © 2018 Cengage Learning. All rights reserved.

Economic Policy 2 of 3 Trade Policy Protectionism versus Free Trade Protectionist Free trade Fair trade NAFTA 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. Key Questions What are the advantages and disadvantages of free trade over protectionism? Copyright © 2018 Cengage Learning. All rights reserved.

U.S. National Debt Figure 16.8 Over the past four decades, the national debt has grown much larger. In 1980 it was less than $2 trillion, but by 2016 it had risen to more than $18 trillion. Source: The White House, Office of Management and Budget, Table 7.1, Federal Debt at the End of Year: 1940–2021, U.S. budget for FY 2017, Copyright © 2018 Cengage Learning. All rights reserved.

U.S. Balance of Trade Figure 16.9 The balance of trade is the difference between how much the United States imports from other countries and how much it exports to other countries. This graph shows the dollar value of all goods and services that the United States trades; negative numbers indicate that the country imports more than it exports. Source: Copyright © 2018 Cengage Learning. All rights reserved.

Economic Policy 3 of 3 Trade Policy continued Trade and international economic organizations World Trade Organization U.S. relinquished right to act unilaterally in trade disputes European Union Two-year time frame to negotiate Great Britain’s exit World Trade Organization (WTO): International organization that considers and resolves trade disputes among member nations. European Union (EU): Association of European nations formed in order to facilitate economic and political interactions across their borders. Copyright © 2018 Cengage Learning. All rights reserved.

Foreign Policy 1 of 3 International Relations and U.S. Foreign Policy Goals Globalization The origins of U.S. foreign policy World War I Communist revolution United Nations Cold War Multipolar L.O. 16.4: Evaluate the effectiveness of U.S. foreign policy. 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. Key Question How has globalization changed the types of political challenges the United States must overcome? What lessons can we take from the past and apply to foreign policy today? Copyright © 2018 Cengage Learning. All rights reserved.

Foreign Policy 2 of 3 Foreign Policy Tools Military action Rally-around-the-flag effect Nonstate actors Anti-nuclear proliferation measures United Nations treaties 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. The Nuclear Non-Proliferation Treaty that went into effect in 1970 was designed to discourage nations from developing nuclear weapons technology; currently, 190 nations are signatories.63 The key element of this treaty is the use of the International Atomic Energy Agency (IAEA) to monitor and inspect nations’ weapons capabilit Key Question How does the emergence of nonstate actors change the nature of how war is defined? Copyright © 2018 Cengage Learning. All rights reserved.

Monitoring Nuclear Facilities in Iran
Figure 16.10 Iran has been developing the capability to produce nuclear weapons but has not yet finished the process. The Iran deal is designed to prevent Iran from obtaining nuclear weapons for at least ten years. This figure shows how the international community will monitor Iran’s compliance with the deal at every stage of nuclear development. Source: Source: Copyright © 2018 Cengage Learning. All rights reserved.

Foreign Policy 3 of 3 Foreign Policy Tools continued Diplomacy and humanitarian assistance U.S. embassies The World Bank The International Monetary Fund Peace Corps 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. Key Question What goals can the United States accomplish through humanitarian aid? Copyright © 2018 Cengage Learning. All rights reserved.

Public Policy Democracy
Domestic policy has expanded Economic policy affected by government but business has strong impact Foreign policy has to be balanced Copyright © 2018 Cengage Learning. All rights reserved.

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