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chapter 17 domestic policy

Opening passage: It is typical for politicians from oil-producing states to lobby for greater deregulation of the oil industry. Requiring oil companies to submit plans for the containment of spills and having resources on hand for dealing with emergencies cuts into profits. On the other hand, these same politicians are the first to criticize the government when something goes wrong and the oil companies are overwhelmed by the problem. It would appear the expectation is for the American taxpayer to pick up the tab for the negative externalities of a highly profitable industry.

Chapter 17 Domestic Policy
public policy

Public policy: “An intentional course of action or inaction followed by government in dealing with some problem or matter of concern.” Whether we choose to address a problem or simply maintain the status quo a decision was made and this becomes policy.

“The impact or meaning of a policy depends on whether it is vigorously enforced, enforced only in some instances, or not enforced at all.” This statement links the effectiveness of legislation to bureaucratic responses of administrative law. This also demonstrates the potential veto power of the bureaucracy – the third leg of the iron triangle.

Public policy

The book provides a disclaimer to the concept of a model. Models are used to give a visual explanation of a more complex issue. Models should not be misconstrued as what is really occurring.

step 1 problem recognition and definition

Is there a problem? If there is a problem, is it something that the government can and should address? What are the causes of the problem (framing)?

Income inequality: Is it a problem? Not for the well off, but definitely for the growing number of Americans slipping into poverty. Whether the government can and should address the problem depends on what you believe to be the cause. If you believe that poverty is increasing because those falling into poverty are incompetent or lazy, then government cannot fix the problem. If, on the other hand, you believe that concentrated economic power is forcing Americans to accept less and less, reducing their ability to stimulate the economy through consumption and investment, then you would believe that government can (and should) do something about the problem.

The first step, though, is recognizing that there is a problem.

Step 1 problem recognition and definition
step 2 agenda setting

Agenda setting: “The constant process of forming the list of issues to be addressed by government.”

The government has literally hundreds of issues to deal with. If we see 5000 bills introduced per year in Congress, is the problem of sufficient salience to be moved up the ladder as a priority? Issues are regularly added to and removed from the agenda. Often, interest groups play a significant role in this process. Seniors, struggling to afford medications were able to get drug prices on the agenda through AARP and other groups.

Focusing events that highlight a specific problem can move an acknowledged problem that was on the back burner to a priority position on the agenda.

Politicians with power can move their own agendas up in priority. The President has this power, so does the Speaker of the House and the Senate Majority leader.

Do the Koch Brothers and the Chamber of Commerce have this power? Interest groups find greater success in keeping things off the agenda (veto power).

Step 2 agenda setting
step 3 policy formulation

“The crafting of proposed courses of action to resolve public problems.”

    • Routine formulation: regular and routine marginal changes in existing policies.
    • Analogous formulation: what has been done before with the same problem in other places or a similar problem? How have states handled this problem? The development of SCHIP came out this way as a state policy became a national policy.
    • Creative formulation: The New Deal and The Great Society were both examples of thinking outside the box and implementing policies that did not exist elsewhere.
    • Policy formulation takes into consideration the various stakeholders in an issue area and the political feasibility of a given proposal. For example: Barack Obama first negotiated with PhRMA in order to get their support prior to working to get something passed. The result was the abandonment of a public option, government negotiation, and parallel importation as possible cost controls for drug prices.
Step 3 Policy formulation
step 4 policy adoption

“The approval of a policy proposal by the people with the requisite authority, such as a legislature.”

Congress can pass a law or the president can issue an executive order. During this process, the bill can be amended to either water it down or make it stronger. The form of amendments added are often influenced by party leadership and committee chairs. Max Baucus either allowed healthcare reform to be watered down or negotiated for the best deal he could get. Nobody knows for sure except Max Baucus.

The textbook talks about Barack Obama issuing executive orders on the issues of “abortion, foreign policy, energy, and stem cell research.”

Step 4 Policy adoption
step 5 budgeting

“Whether a policy is well funded, poorly funded, or funded at all has a significant effect on its scope, impact, and effectiveness.”

Many social programs are seriously underfunded. The textbook gives the example of OSHA and HUD. Add to this list No Child Left Behind, the EPA, and the SEC. At the same time, we have no problems in finding funding for oil and agricultural subsidies.

These are the priorities established by our system of governance when there is no limit to capital accumulation.

Step 5 budgeting
step 6 policy implementation

“The actual administration or application of public policies to their targets.”

    • Voluntary compliance: paying taxes, not smoking in businesses.
    • Courts: May rule on whether the legislation can be enforced in a constitutional manner
    • Administrative agencies: Through the making of rules and regulations. (don’t worry about the names of techniques, but understand what they do) Administrative agencies can use a system of sticks and carrots to coerce and incentivize the desired behavior of businesses and individuals.
Step 6 Policy implementation
step 7 policy evaluation

“The process of determining whether a course of action is achieving its intended goals.”

It is in this step that we see a clear difference between pragmatism and ideology. If a policy clearly is not working it should be scrapped. If there are flaws in the policy preventing it from working effectively, it should be reformed and reevaluated until it does work.

Ideologues deny the failure of their own policies while denying the success of policies they oppose. Pragmatists have no attachment to a policy and are willing to get rid of it, but are also disinclined to “throw the baby out with the bath water.”

Step 7 policy evaluation
example wlefare

Example: Welfare as originally passed did develop a subculture of women dependent on the state for assistance. Ideological conservatives advocated for ending the program while the more socialist among the Democrats denied a need for reform.

The Earned Income Tax Credit (EITC) and the State Children's Health Insurance Program (SCHIP) gave welfare recipients a pathway to gainful employment without posing a threat to their children’s health and welfare. Those to the far left see the reforms as throwing the poor under a bus, but the reforms reduced welfare rolls by 60% and affected families increased income by 35%.

Example: wlefare
medicare and medicaid

Medicaid: “A government program that subsidizes medical care for the poor.”

  • Medicare: “The federal program established during the Lyndon B. Johnson administration that provides medical care to elderly Social Security recipients.”
    • Has 4 parts: A, B, C, and D, with D being the most controversial aspect of Medicare. Enables drug companies to charge higher prices for drugs to increase revenues without the government using its monopsony power to negotiate for lower prices.
Medicare and Medicaid
medicare part d

In terms of policy evaluation: Drug prices increased. Seniors were now able to afford the higher prices to a point.

  • Part D coverage:
    • Deductible: $295
    • Basic coverage: $295 - $2,700 75% covered
    • The donut hole: $2,700 - $6,154 0% covered (senior pays all costs)
    • Catastrophic coverage: Over $6,154 95% covered
  • Whether seniors are better off depends on whether they are in the donut hole or not.
  • Are we better off? Our tax dollars are paying for this policy. In addition, the cost of medications for those not on Medicare have increased as demand has increased. This is a market distortion.
Medicare part D
national health insurance policy

The textbook talks about the AMA being opposed to a national healthcare policy in the 1930s and 1940s.

What is perhaps more important is the mobilization of unions to oppose healthcare. One of the benefits of union membership has been healthcare coverage. Unions were concerned that if it was universally provided that union membership could potentially fall off. Unions organized at the grassroots level to depict a single-payer system as being socialist. Today unions are using membership as manufacturing moves offshore, often to countries that do provide universal coverage so the cost of healthcare is not figured into the cost of labor.

National health insurance policy
the nih phrma and the bayh dole act

The National Institutes of Health (NIH) spends taxpayer money on the earlier processes of research. 10,000 chemical compounds may be tested before one drug is identified that may be useful in the fight against cancer. This is an expensive process that, more often than not, leads to dead ends.

Once a drug is isolated and shown to have a potential for commercial use (not necessarily something new and novel) it is transferred to private sector drug companies for development and distribution with drug companies setting prices regardless of the ratio of government cost vs company cost in the development of the drug. Other countries negotiate with the drug companies for a fair price, we do not.

The NIH, PhRMA, and the bayh-dole Act
who are they helping

From the textbook: “Most Americans accept and support extensive government spending on medical research. Congress, in fact, often appropriates more money for medical research than the president recommends.”

Would Americans be as supportive if they realized that the technology transfer of research was lining the pockets of the drug companies? Yes, we need advances in medicine, but there are ways to develop new drugs with taxpayer money that would not require the taxpayer to pay for the research twice: once through initial discovery and the second time being in exorbitant prices for drugs.

For more on this topic: Angell, Marcia, M.D. 2005. The Truth About the Drug Companies: How they Deceive us and what to do about it. New York, NY: Random House.

Who are they helping?
education reforms

The difference between conservative and liberal reforms may well come from the basic perception of individuals. Where conservatives see some as being superior, liberals see individuals as having a greater potential for equality. Conservatives see concepts of equality as futile where liberals see equality as an essential element of democracy. Brown v. BOE stressed the importance of education in determining life chances.

Education reforms

“Liberal policy reformers emphasized the need to promote equality through educational opportunity.”

    • Bussing
    • Standardization of curriculum
    • Dept. of Education
  • “Conservative policy reformers viewed education through the lens of political and social order, while also emphasizing the issue of economic freedom in educational choices.”
    • Privatization of the education system
    • Bad schools fail and are closed to be replaced with better schools.
  • When we consider efforts to disenfranchise lower income voters, is there a conscious effort to keep poorer people uninformed and misinformed?
energy policy

As a result of the oil crises of the 1970s and the stagflation that went with it, President Jimmy Carter, a nuclear engineer adopted policies to promote new technologies of conservation and alternative energy sources.

    • An unpopular 55mph speed limit
    • Funding for alternative sources of energy, including photovoltaics
    • Tougher Corporate Average Fuel Efficiency (CAFÉ) standards
  • When oil prices dropped in the early 1980s, these efforts were largely abandoned or defunded. In fact, tax breaks were offered through a 1986 loophole for businesses and farmers who purchased gas-guzzling SUVs and trucks.
Energy policy
energy task force

Energy policy of the Bush Administration was developed behind closed doors under the supervision of Vice President Dick Cheney. Oil companies, environmental groups, and state, local, and federal officials were present in months of meetings. Information from the meetings remains confidential with a Court of Appeals denied access to meeting information under the Freedom of Information Act (FOIA)

Energy Task Force
environmental policy

Clean Water Act (1972)

The Cuyahoga River burning in 1969. It was not the first time but it was the last time.

Environmental policy
energy and environmental policy

It is, perhaps, illuminating that the textbook does not talk about national initiatives in addressing these issues. Current advancements in these policy areas is primarily being forwarded by individual state and local governments. Efforts at the national level meet with obstruction and the status quo remains.

Energy and environmental policy