1. law, govt and politics
2. politics
3. foreign policy

AP GOVERNMENT
COOKBOOK
Unit V:
Public Policy.
SYLLABUS - Unit V Description
V.
Public PolicyPublic policy is the result of interactions and dynamics among actors, interests,
institutions, and processes . The formation of policy agendas, the enactment of public
policies by Congress and the president, and the implementation and interpretation of
policies by the bureaucracy and the courts are all stages in the policy process with
which students should be familiar . Students should also investigate policy networks
and issue networks in the domestic and foreign policy areas . The study of these will
give students a clear understanding of the impact of federalism, interest groups,
parties, and elections on policy processes and policymaking in the federal context .
Students should be familiar with major public policies
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Unit V Vocabulary: Public Policy
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Unit V Vocabulary – Public Policy
Public Policy Overview
Simple Definition: Public policy is a course of action adopted and
pursued by a government. (Laws, regulations, philosophies, etc.)
There are TWO main avenues of Policy
Foreign Policy
Domestic Policy
• Courses of action
regarding issues
OUTSIDE the Country
• Courses of action
regarding issues
INSIDE the Country
• Ex: Treaties, Trade
Agreements, Alliances
• Ex: Health Care, Fiscal
Policy, Monetary
Policy, Budgeting
Public Policy Notes:
1. Public Policy is created by iron triangles & issue networks.
2. Public Policy is constantly changing and evolving.
3. Public Policy is a summative measure of how the government
views a particular topic
Foreign Policy Formation
Top Influences on Foreign Policy:
President
State Department, led by Secretary of State
Senate Committee on Foreign Affairs
Defense Department led by Secretary of Defense
Foreign Diplomats
Foreign Governments
Interest Groups
Public Opinion
FORMAL TREATIES AND TRADE AGREEMENTS:
Negotiated by
the President
and State
Diplomats
Passed To
The Senate:
Ratified by 2/3
EXECUTIVE AGREEMENTS:
Negotiated by
the President
and State
Diplomats
Signed into law by the President.
Similar to Executive Orders. Subject to
Judicial Review. Quicker than formal
treaties; not as durable.
AGENTS OF FOREIGN POLICY TEND TO BE HIGHLY SPECIALIZED.
Domestic Policy Formation
Top Influences on Domestic Policy:
President
Both Houses of Congress
Interest Groups
Federal Bureaucracy
State Governments
Public Opinion
HOW DOMESTIC POLICY FORMS
WHITE HOUSE
AND FEDERAL
BUREAUCRACY
INTEREST
GROUPS AND
PUBLIC
OPINION
CONGRSSIONAL
COMMITTEES
Fiscal Policy Formation
FISCAL POLICY IS A BRANCH OF DOMESTIC POLICY THAT DEALS
WITH TAXATION AND FEDERAL SPENDING
Taxation: Tax Policy is
formulated by the
President, the OMB,
the IRS and Congress
Spending: Spending
Policy is formulated by
the President, the OMB
the IRS and Congress
TWO TYPES OF FEDERAL SPENDING:
MANDATORY: SPENDING THAT IS DICTATED BY
PREVIOUS POLICY DECISIONS. COMPOSED OF
ENTITLEMENTS (SUCH AS SOCIAL SECURITY) AND
INTEREST PAYMENTS ON BONDS AND LOANS.
DISCRETIONARY: SPENDING THAT IS AUTHORIZED
BY THE CURRENT ADMINISTRATION. THIS SPENDING
MAY EXPIRE OR BE RENEWED. (INFRASTUCTURE
PROJECTS, MILITARY RESEARCH)
Monetary Policy Formation
MONETARY POLICY IS A BRANCH OF DOMESTIC POLICY THAT DEALS
WITH STEERING THE ECONOMY BY ADJUSTING THE INTEREST RATE
AND MONEY SUPPLY.
The BIG Goal- Keep the
economy from overheating or
bottoming out. In other
words…
STEADY GROWTH!
MONETARY POLICY
TOOL
HOW DO THEY DO IT?
IMPACT:
LOWER THE INTEREST
RATE
MANDATE BANKS TO
LOAN MONEY FOR LESS.
MORE LOANS.
ECONOMY GROWS.
RAISE INTEREST RATE
MANDATE BANKS TO
LOAN MONEY FOR
MORE.
FEWER LOANS.
ECONOMY SLOWS.
INCREASE MONEY
SUPPLY
BUY T-BILLS BACK FROM
THE PUBLIC
MORE MONEY –
ECONOMY GROWS
REDUCE MONEY SUPPLY
SELL T- BILLS TO THE
PUBLIC
LESS MONEY –
ECONOMY SLOWS
RAISE RESERVE RATE
MANDATE BANKS TO
KEEP MORE IN RESERVE.
FEWER LOANS –
ECONOMY SLOWS.
LOWER RESERVE RATE
ALLOW BANKS TO KEEP
LESS IN RESERVE.
MORE LOANS –
ECONOMY GROWS
The Federal Reserve Board
The Federal Reserve is a unique agency in the bureaucracy, The Seven ,members of
the federal reserve board are appointed by the President and serve 14 year terms.
THE FEDERAL RESERVE BOARD IS AN INDEPENDENT REGULATORY AGENCY
THAT IS SOLELY CONCERNED WITH MONETARY POLICY.
How does the Federal Reserve
Board steer the economy?
Alter
Money
Supply
Alter
Interest
Rate
Alter
Reserve
Percentage
Approximately ONE THIRD of all banks of the United States are
under the oversight of the Federal Reserve Board? All national
banks MUST be members. By imposing its will on national banks,
the federal reserve board controls the economy.
Budget Formation
Trends in Policy and Budget Formation
Trends in Budget Formation:
1.
In the last 80 years, spending on entitlement programs has been steadily INCREASING.
(EX: Social Security and Disability Benefits)
2.
In the last 80 years, mandatory spending has become a much larger percentage of the
budget than discretionary spending (EX: Loan interest and foreign debt)
3.
Presidents and Congresses are very quick to increase spending on social programs and
very slow to increase taxes. This is because raising taxes may ruin reelection chances
and often leads to a budget deficit.
4.
The United States government has seriously considered a “Balanced Budget
Amendment” that would require Congress to limit spending to tax revenues.
5.
Income tax represents the largest amount of revenue for the Federal Government.
Republicans
(Conservatives)
Democrats
(Liberals)
Fiscal Policy
•Favor Tax Cuts
•Favor Decrease of
Federal Program
Spending
• Favor Tax Increase
•Favor Increase of
Federal Program
Spending
Monetary Policy
•Laissez-Faire
Capitalism
• Favor a reduction
of monetary
regulation
•Disapproval of
Federal Reserve
Activity
•Keynesian
Economics
•Favor an increase
of monetary
regulation
•Approval of
Federal Reserve
Activity