Ch.14 Module - -1Ch.14 - Domestic and Economic Policy The...

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-1Ch.14 - Domestic and Economic Policy The institutions of national government have been described in earlier chapters. There, we looked closely at how the nature of each institution affected policymaking. In this chapter, we focus on policymaking across institutions. In the first part of this chapter, we differentiate between different types of policies, based on the objectives pursued by the policymakers. We then tie together the processes described in the chapters on the institutions of government into a general model of public policymaking. Next, the chapter explains the interrelationship between private sector actors and government officials and examines in detail the ongoing relationships among those who work in the same issue area. Coordinating policies in a fragmented political system poses significant challenges. After briefly discussing the concept of iron triangles, we outline the concept of issue networks. A feature common to both iron triangles and issue networks is the movement of people back and forth between jobs in their policy subsystem. In the second half of this chapter, we examine economic policy and the budget. We begin with a brief overview of Keynesian theory, which holds that government fiscal and monetary policies can smooth out the business cycles in market economies, thus preventing economic depressions or raging inflation. Most democratic governments in the twentieth century have used some Keynesian techniques. Policymakers rely on the budget as the tool by which decisions about policies are made. Since 1921, the president has been responsible for drafting and submitting the budget to Congress. The actual preparation of the budget is supervised by the Office of Management and Budget (OMB). Since the 1970s, however, Congress has regained some control over the budget-making process by creating new budget committees and the Congressional Budget Office. In passing the Gramm-Rudman-Hollings bill in 1985, Congress resorted to more drastic measures in order to reduce the exploding budget deficit. Tax and spending policies are continually changing to meet the goals of policymakers. The sweeping tax reform of 1986 represents the most dramatic change in recent tax history. Public concern over the national deficit has prompted politicians to attempt to reduce public expenditures. Several factors militate against successful reductions in many programs. First, incremental budgeting produces a sort of bureaucratic momentum that continually increases federal spending. Second, most government spending programs cannot be reduced easily because they were enacted by existing laws that are politically difficult to modify. Third, Americans have become accustomed to large domestic spending projects but are reluctant to have their taxes increased. While spending on many government programs is reviewed in the annual budgeting process and is termed
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Ch.14 Module - -1Ch.14 - Domestic and Economic Policy The...

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