By: Miranda Schwartz

Domestic Policy

A. Domestic Policy 1.Consists of all government programs and regulations that directly affect those living within a country. 2.Includes everything from education and health care to transportation and garbage collection. 3.Economic policies are generally most important.

A. Problem Identification 1. Recognition of an issue that disturbs the people and leads them to call for government intervention. 2. Agenda Setting - government recognition of a problem that is worthy of government intervention. B. Policy Formulation 1. Identification of alternative approaches to addressing the problems placed on government’s agenda. C. Policy Adoption 1. The formal selection of public policies through legislative, executive, judicial, and bureaucratic means. 2. Budgeting – the allocation of resources to provide for proper implementation of public policies.

D. Policy Implementation 1.The actual administration or application of public polices to their targets. E. Policy Evaluation 1. The determination of a policy’s accomplishments, consequences, or shortcomings.

A. A type of domestic policy that is used to assist those that are thought to be in need. B. The balance between government assistance to the elderly and young is the biggest issue. C. Although poverty has declined among the elderly, it has not for children.

A. Social Security 1.Enacted by Congress in 1935 a)Created a broad range of social programs, including Social Security, a social insurance program for seniors. 2.Originally cost little for the government a) Those who first retired under the program received few benefits because little was paid into the program. b) People retiring at age 65 were expected to only live for another 12.6 years, now living for another 17 more years on average.

3. Medicare enacted by Congress in 1965, provides medical benefits to social security recipients. 4. In 1972, Congress increased the monthly social security check and it continued to increase due to the cost of living index. 5. Social Security has always given more to people than they have put in.

B. How can benefits exceed contribution? 1.Increase in workers, more people contributing. 2. Greater earnings by workers then those who came before them. 3. A larger percentage of earnings are put into social security than in the past. C. Younger generations are being forced to pay more to cover the expenses of older ones.

A. Education responsibility is divided 1. Local school boards 2. State Departments of Education 3. Federal Department of Education B. Most of education control is at the state and local level. C. Congress set aside money in 1785 for the maintenance of public schools. 1. Accessible to immigrants 2. Fostered a common language 3. Open to most citizens

D. Issues in Education 1. Financial support for public schools has increased only slightly over the past 15 years. 2. Teacher salaries have declined since Many countries spend more on education and appear to do better then the U.S. in terms of educational outcomes.

Economic Policy

A. Fiscal: taxing and spending, budget matters. 1.Conducted by Congress and the President. B. Monetary: regulation of money supply by the Federal Reserve Board. 1. Regulation by adjusting interest rates to increase or decrease inflation.

A. Congress has the power to regulate interstate and foreign commerce. B. The Industrial Revolution led to Congress making greater use of economic regulatory powers. 1. For example: breaking up trusts, regulating meat and drugs, regulating railroads. C. The Great Depression led to greater regulation of the economy by Congress. 1. Why needed? Unemployment rate of 25%, bank failures, farm crisis, and deflation.

D. Keynesian economics 1. Created by British economist, John Maynard Keynes. 2. His approach was to increase spending in hard times to stimulate economic health. In inflationary periods, the government should decrease spending to “cool down” the economy. 3. The Employment Act of 1946 made the government responsible for maintaining high employment rates. 4. Causes difficulties for governments that use it because it is generally difficult to cut spending after it rises. 5. Used in the economic downturn of 2008, Congress passed stimulus and bailout packages in order to jumpstart the economy.

E. Supply-side Economics 1. Idea that cuts in taxes will produce business investment that will compensate for the loss of money. 2. Extensively used by Ronald Reagan ( ). a) Applied incorrectly, taxes cuts were paired with spending increase an resulted in the national debt tripling. 3. Also used by President Bush II. a)Cut taxes and raised spending resulting in a higher national debt.

A. The push for balanced budget amendment 1. High deficits have led to the belief that Congress needs to be tied down to a constitutional amendment that would require that spending not exceed income. 2. Supporters of this proposal say that this is the only way to overcome the national difficulties of spending cuts. 3. This proposal is criticized on the argument that the amendment would be messing with constitution, decrease needed flexibility in crisis, and that Congress would evade it. 4. Proposed in Congress in 1992, turned down in House the same year.

B. PAYGO was passed in the early 90s. 1. Coupled with an expanding economy, the budget was balanced in the late 1990s. C. Expiration of PAYGO and war on terrorism caused federal deficit to rise again in the early 2000s.

D. Trade Policy 1. Increased trade deficits, where imports exceed exports, caused by the exceeding economy in China and rising oil prices. 2. Trade deficits have led to the call for protectionism, when higher taxes are put o foreign products to insure purchase of American goods. 3. Loss of American jobs, offshoring. 4. Movement for free trade over call for tariffs GATT-General Agreements on Tariffs and Trade Lowered trade barriers between countries. WTO – Replaced GATT, same goal NAFTA – North American Free Trade Agreement CAFTA – Central American Free Trade Agreement

 American Government Roots and Reform Textbook, Karen O’Connor and Larry J. Sabato  Public Policy Notes, Mr. Burgeson  Domestic Policy Notes, Pearson-Longman