Political Science 320 B, Fall 2013 Lecture 2: Overview of Public Policy in the US September 11, 2012 ANNOUNCEMENTS, PRELIMINARIES

-- Sit in a seat you like. We will try to keep same seats (so I can use a seating chart to learn names). Sign up for seating (count rows from the front, seats from right, and combine: 3rd row, second seat is 302.) No sitting in last four rows. -- Syllabus: Will send today. Some readings details not yet available. -- Next assignment and key dates for course. Coming by email and posted to website. (Email will say when website is relevant.) -- How to take notes: Type or handwrite. Use a few words to reference the posted notes. Make comments on additional material of interest. (Usually, just occasional notes, because my notes are extensive.)

LECTURE: OVERVIEW OF PUBLIC POLICY IN THE US Topics What is Public Policy? Growth of Government Instruments of Policy Types of Programs Role of the States Distinctive Features

I. What is Public Policy? Public policy is not easy to define. My rough definition: A public policy is a formally adopted decision concerning the on-going actions of government, directed toward the public, other countries, or the physical environment. It is intended to affect the conditions of the society and the lives of citizens, not merely internal structures or operations of government. (The concept of policy does not indicate any particular level of generality, importance, or permanence. Policies vary enormously on these dimensions: Policy of religious freedom, or policy of charging 85 cents for a postage stamp.

Additional attributes: -- policy is general and on-going: E.g., Dept of Justice challenged a proposed merger of AT&T with T-Mobile, alleging antitrust violation. This was a one-time action, even though large and important. Do we say opposing the suit is policy of the government? Not usuallyrather, perhaps, policy is to block mergers between biggest companies in a concentrated market. -- policy is authorized, legitimated (by a law or a regulation). Not, Dept of Housing and Urban Development makes grants for low-income housing to companies that contribute to Dem party. That could be true (I made it up), but it would not be called policy. -- endless borderline issues: is the set of wage scales for government employees a policy (although directed toward internal operations)? Is fighting a war in Afghanistan a policy? Dont worry about fine distinctions, what counts as policy. II. Growth of Government Framers objective: very limited government, especially for federal. (Framersthose who wrote the constitution. Role of fed govt in early 19th Century: regulate commerce (tariffs on imports); relations with Indians (native Americans); internal improvementse.g. dams, canals. Postal service.

Major periods of growth of government (with a few leading examples from each period): - Progressive era (1890s-1920). Regulation of railroads and banks, antitrust policy. - New Deal (1932-1940). Social security; agriculture programs; regulation of securities, airlines, radio, prescription drugs. -- Post WWII (late 1940s-1950s): a national security state: large standing military; Central Intelligence Agency. Also: full employment act (1946)makes it official policy that fed govt is responsible for economic stability. Federal highway program. -- Great Society (1960s): Anti-poverty programs; urban renewal; public housing; civil rights (laws versus racial discrimination). Medicarehealth care for aged. -- 1970s: environmental regulation (Clean Air Act of 1970); water, toxic substances, hazardous waste. -- 2000s: expansion of health care (Medicare Rx coverage, Obama health care); expansion of financial regulation; financial bailout and auto industry bailout. -- Issue for speculation: whats next? Are there potential areas of future growth of government? III. Instruments of Policy Govt policy involves one or more a several instruments. That is, methods of acting. Important: for a given objective, there are often alternative instruments.

ASK: What can a govt official do that will change something about society or the world? Imagine writing a law to fix something. Discuss: Someone mention a problem students.

=== Regulation impose and enforce an obligation or prohibition on private citizens or others. Provide a service, directly or by contracting. Provide information Subsidygive funds to support some private activity (pays part of cost). E.g federal subsidy for state sewer projects. Taxation e.g. gasoline, tobacco. Distribute funds (as income, without restrictionse.g. pensions, welfare. ---Possible additional example: unemployment. (Exercise for the student:

Key point: for any given purpose, one instrument may work better than another. Example of environmental protection. Alternatives: - regulation: specify equipment required - regulation (different kind): specify emission levels permitted - taxation: charge a tax per unit of emissions

IV. Types of Programs (by substantive focus or objective) Mention several types, plus examples. Economic stabilizationefforts to maintain growth, employment, price stability. Business regulation -- Securities and Exchange Commission (stock and bond markets), Federal Communications Commission (radio and TV spectrum wardrobe malfunctions), Food and Drug Administration (largest), Environmental Protection Agency. Social services mental health programs, family planning, nurse visits to poor families, school lunch program. (Most of these are by grants, contracts.)

Entitlement programs: definelaw specifies payments, based on qualifications. Social security, Medicare (elderly), Medicaid (poor), AFDC/TANF (welfare), Veterans benefits. Note great importance of middle-class entitlementsesp Medicare and Social Security: Taxation: income tax (personal, corporate). Payroll tax (for social security). Tariffs, duties (imported goods). Excise taxes (gasoline, tobacco). Note: US does not have a national value added tax, or sales taxlike HST or GST. States have various taxesincome, sales, property tax. Law enforcement and security. Federal Bureau of Investigation (FBI); alcohol, tobacco, firearms; customs and border security. Vast growth of Homeland Security programs. Defense and foreign policymilitary services; State Dept (like Foreign Affairs); foreign aid. Many others (miscellaneous): Emergency management, management of currency, predicting weather V. Role of the States -- meaning of term: states, like provinces. Subnational governments. US has 50 states.

-- Constitution originally called for states to control most policies. But fed govt gradually has become involved in almost everything. -- U.S. states have lesser role than Canadian provinces, in some areas. E.g., health care and environmental policy are federal in US. -- states main current roles (along with local govts): land use and planning, local services (garbage, traffic), criminal law enforcement, education. (Yet fed govt is involved in some of these.) -- social programs: most social programs are mandated and funded (wholly or partly) by federal government but administered by states or nongovernmental organizations. E.g, planned parenthood. Famous exception: Massachusetts universal health care program, with individual mandate. -- Conflict over US federalism. Constitutional provision federal government has power to regulate interstate commerce. In fact, the federal government is active in almost every area of policye.g., sets standards for school lunches, and pays for them. Since the 1930s, US Supreme Court has authorized this expansive notion of federal role. But in recent years it has

challenged the federal role, expressed doubts. Major example: 5-4 vote in 2012, narrowly upholding Obamas health care reform. Majority said the individual mandate (a provision that penalizes individuals who do not buy health insurance, if they can afford it) was not valid under commerce poweri.e., regulating commerce doesnt include requiring people to purchase insurance. (Chief Justice Roberts, one of the 5, argued it was valid on other grounds--as valid under taxing power). This is a possible signal of constitutional problems for federal programs.

VI. Distinctive Features of US Government and Policy US is somewhat usual in the size of government (but not an extreme outlier). These are interesting in relation to partisan debates, and Republican argument that govt is too big. 2011 Data (Heritage Foundation) Country Australia Canada Tax as % Govt Expend of GDP % of GDP 30.8 34.3 32.2 39.7

Denmark France Germany Japan Netherlands Sweden Switzerland United Kingdom United States

49 44.6 40.6 28.3 39.8 47.9 29.4 38.9 26.9

51.8 52.8 43.7 37.1 45.9 52.5 32 47.3 38.9

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Colors: green US, yellow lower than US, aqua slightly higher.

I selected these countries. A good mix of cases. Observations: Government is smaller in US than most others. Only three of these have lower percentage of expenditures. None has lower percentage of taxes. US has biggest gap between expenditures and taxes indicating a massive deficit. Additional point: US defense spending is far higher than any other country. If the comparison was just non-defense spending, US would be smallest.

More on composition of the budget: - 20% for defense. Canada about 7-8%. - Social Security, Medicare, Medicaid = 43%! (mostly for older people). (Medicaid is for poor; but much smaller.) -Discretionary = 18%. (Meaning: not an entitlement, with statute-specified amounts due to individuals.) Included: FBI, State Dept, Foreign Aid, Environmental Regulation, Highways, Education, Housing.. and on and on.

On other hand: health care for most people is not part of this. That implies more left over for other functions. Other distinctive features (compared with most developed countries): Still does not have universal health care. If Obama reform remains in force, it will be close. US has more indirect social spending. E.g., health care for most adults: provided by employers (firm pays part, employee pays part, and there is a tax deduction for bothin effect government pays part, through a tax deduction). This kind of indirect spending is very important. More legal conflict than other countriese.g. regulation of business. Is often legally contentious. Govt agency sues a business, e.g. penalty for a violation; or business sues govt agency, claiming a regulation is not justified. Less generous support for low-income people. Less redistribution of income. ====== NEXT TIME Next section: some ways of thinking about what policies are desirable. I.e., what should US citizens expect or hope for? First, American political values or culture.