Law Making and Political Strategies © 2014 Routledge, Inc., Taylor and Francis Group. All rights reserved. PowerPoint Presentation Design by Charlie Cook CHAPTER 8 Law Making and Political Strategies © Routledge

Learning Outcomes After studying this chapter, you should be able to: Describe the branches of the federal government Discuss how business rules are made and enforced Explain the business–government relationship, public policy, and the types of economic public policies Describe how a bill becomes a law Identify the legislative stage that business should focus on to influence lawmaking and who should be the strategic focus Discuss political information strategies and message framing Explain the reasons for political campaign contributions, the role of PACs, and the difference between hard and soft money Describe what lobbyists do, access, and the revolving door Define the key terms in the chapter © Routledge

The U.S. Constitution and Branches of Government U.S. Constitutional Law Founding principles All persons are created equal with certain unalienable rights. Governing power is derived from consent of the people. Supremacy clause Federal laws have precedence over state laws. System of Checks and Balances No one branch of government has supreme power. Each branch has separate responsibilities and powers. © Routledge

Government Branches Judicial Law interpretation and determination Legislative Lawmaking Executive Law enforcement © Routledge

Figure 8.1 Government Branches © Routledge

Federal, State and Local Government Federal Government State Governments County, Parish, or District Governments Regional Governments Municipal Governments © Routledge

Business Rules Public sentiment on issue Congress passes law on issue Law establishes regulatory agency Agency issues rules to implement the law © Routledge

Reasons for Government Regulation of Business Setting rules of business Efficiency in granting a natural monopoly Control of the cost of negative externalities Ensure adequate consumer information Achieve social goals and equal opportunity © Routledge

Figure 8.2 Laws, Regulation, and Enforcement © Routledge

Public Policy Public Policy Input and Issue Selection Setting Public Policy Goals Taking Public Policy Action Assessing Public Policy Effect © Routledge

Types of Public Policy Public Policy Economic Policy Social Policy Fiscal policy Monetary policy Industrial policy Social services © Routledge

Figure 8.3 Federal Government Budget © Routledge

Government Nonregulatory Influence on Business Government subsidies Government loans and credit Tax incentives Helping business through government influences Government pay Government purchases Transfer payments © Routledge

Political Parties Democratic Party Republicans Liberal regarding moral issues and in favor of more government regulation, spending, and taxation and wealth redistribution Republicans Conservative regarding moral issues and in favor of free markets with less government regulation, spending, and taxation © Routledge

Congressional Power Congressional Powers Investigate matters of national importance Control government organizational structure Oversee offices Impeach or remove any civil officer Create laws Override presidential veto Amend Constitution Senate confirms presidential appointments Provide regulatory oversight Declare war © Routledge

Figure 8.4 How a Bill Becomes a Law Committee action—developing and voting on the bill in both chambers by smaller groups with expertise Floor action—further bill development and vote by both chambers Conference action—creating one bill for both chambers Vote by both chambers—House and Senate debate and vote President—signs into law or vetoes If vetoed, Congress—can override veto with a two- thirds vote of both chambers © Routledge

Influencing the Legislative Process Focus of Influence Efforts Focus on the committee stage Focus on the pivotal voters © Routledge

Business Nonmarket and Market Strategies And Ethics Factors influencing the level of political involvement by a firm: Size of firm Importance of government sales by firm Impact of government regulations on the firm Degree of concentration of the firm’s industry Issue’s benefit to firm vs. cost of its involvement Likelihood success in attaining influence on the issue © Routledge

Information Strategies Political information strategies Focus on technical facts and how the business side of the issue will benefit politicians and their constituents. Message framing Refers to the terms used to gain public sentiment for one’s side of an issue. Jobs That are affected by business issues and represent votes which are, in turn, important to elected representatives. © Routledge

Figure 8.6 Political Strategies Used by Business with Government Business Interest Groups Campaign Contributions, PACs Grand Nonmarket Strategies Lobbying Grassroots Constituency Lobbying Coalition Building Testimony Advisory Panels and Committees © Routledge

Reasons for Campaign Contributions Intended effects of campaign contributions Hard money Soft money To affect the outcomes of elections To obtain access to officeholders To influence adoption of regulations © Routledge

Key Terms Democrats externalities fiscal policy hard money industrial policy legislative process lobbying message framing monetary policy natural monopoly pivotal voters political action committees (PACs) political information strategies prisoners’ dilemma public policy regulations Republicans rules soft money supremacy clause taxation policy trade policy © Routledge