18.2: Who Makes U.S. Foreign Policy?

18.2.1: The President

Learning Objective

Explain the President’s authority as Commander-in-Chief of the United States

Key Points

• Throughout the course of their time in office, most presidents gravitate towards foreign policy. It is often argued that the president has more autonomy in foreign policy as compared to domestic policy.
• The president is commander-in-chief of the armed forces, but only Congress has authority to declare war and provide funding. The War Powers Act attempted to limit the president’s war-waging powers.
• The president has the power to make treaties, with a two-thirds vote of the Senate, and has the power to make international agreements.
• The president is the chief diplomat as head of state. The president can also influence foreign policy by appointing US diplomats and foreign aid workers.

Key Terms

congressional-executive agreements

An accord made by joint authority of the Congress and the President covering areas of International Law that are not within the ambit of treaties.

War Powers Act

A federal law intended to check the President’s power to commit the United States to an armed conflict without the consent of Congress.

treaty

A binding agreement under international law concluded by subjects of international law, namely states and international organizations.

Example

• Sometimes, presidents amass several different ways of authorizing the use of force. In his last press conference before the start of the invasion of Iraq in 2003, President Bush invoked the congressional authorization of force, UN resolutions, and the inherent power of the president to protect the United States derived from his oath of office.

The President’s Influence on US Foreign Policy

Presidents have more power and responsibility in foreign and defense policy than in domestic affairs. They are the commanders in chief of the armed forces; they decide how and when to wage war. As America’ chief diplomat, the president has the power to make treaties to be approved by the Senate. And as head of state, the president speaks for the nation to other world leaders and receives ambassadors.

Presidents almost always point to foreign policy as evidence of their term’s success. Domestic policy wonk Bill Clinton metamorphosed into a foreign policy enthusiast from 1993 to 2001. Even prior to 9/11, the notoriously untraveled George W. Bush underwent the same transformation. President Obama has been just as involved, if not more, in foreign policy than his predecessors. Congress—as long as it is consulted—is less inclined to challenge presidential initiatives in foreign policy than in domestic policy. The idea that the president has greater autonomy in foreign than domestic policy is known as the “Two Presidencies Thesis.”

The President and Waging War

The President is the Commander-in-Chief of the United States Armed Forces and as such has broad authority over the armed forces. However, only Congress has authority to declare war and decide the civilian and military budget.

War powers provide a key avenue for presidents to act in foreign policy. After the 9/11 attacks, President Bush’s Office of Legal Counsel argued that as commander in chief President Bush could do what was necessary to protect the American people. Since World War II, presidents have never asked Congress for (or received) a declaration of war. Instead, they relied on open-ended congressional authorizations to use force, United Nations resolutions, North American Treaty Organization (NATO) actions, and orchestrated requests from tiny international organizations like the Organization of Eastern Caribbean States.

Congress can react against undeclared wars by cutting funds for military interventions. Such efforts are time consuming and not in place until long after the initial incursion. Congress’s most concerted effort to restrict presidential war powers, the War Powers Act, passed despite President Nixon’s veto in 1973. It was established to limit presidential war powers, but it gave presidents the right to commit troops for sixty days with only the conditions being to consult with and report to Congress—conditions presidents often feel free to ignore. Since Vietnam, the act has done little to prevent presidents from unilaterally launching invasions.

President Obama did not seek congressional authorization before ordering the US military to join attacks on the Libyan air defenses and government forces in March 2011. After the bombing campaign started, Obama sent Congress a letter contending that as Commander-in-Chief he had constitutional authority for the attacks. White House lawyers used the distinction between “limited military operation” and “war” to justify this.

The President, Treaties, and Agreements

Article II, Section 2 of the United States Constitution grants power to the president to make treaties with the “advice and consent” of two-thirds of the Senate. This is different from normal legislation which requires approval by simple majorities in both the Senate and the House of Representatives. .

President Wilson

Wilson had disagreements with Congress over how the peace treaty ending World War I should be handled. Presidents often have a wide range of influence on US foreign policy.

Throughout U.S. history, the President has also made international “agreements” through congressional-executive agreements (CEAs) that are ratified with only a majority from both houses of Congress, or sole-executive agreements made by the President alone. The Supreme Court of the United States has considered congressional-executive and sole-executive agreements to be valid, and they have been common throughout American history.

The President and Diplomacy

Another section of the Constitution that gives the president power over foreign affairs is Article II, Section 2, Clause 2 of the United States Constitution, known as the Appointments Clause. This clause empowers the President to appoint certain public officials with the “advice and consent” of the Senate. This clause also allows lower-level officials to be appointed without the advice and consent process. Thus, the President is responsible for the appointment of both upper- and lower-level diplomats and foreign-aid workers.

For example, the United States Secretary of State is the Foreign Minister of the United States and the primary conductor of state-to-state diplomacy. Both the Secretary of State and ambassadors are appointed by the President, with the advice and consent of the Senate .

Hillary Rodham Clinton

Hillary Clinton served as Secretary of State, which is the US’s Foreign Minister. The President has the power to appoint diplomats (such as the Secretary of State), giving him or her substantial influence in US foreign policy.

As head of state, the President serves as the nation’s top diplomat. Presidents are often depicted as speaking for and symbolically embodying the nation: giving a State of the Union address, welcoming foreign leaders, traveling abroad, or representing the United States at an international conference. All of these duties serve an important function in US foreign policy.

18.2.2: The Cabinet

Learning Objective

Compare and contrast the roles of the Secretary of State and Secretary of Defense in U.S. foreign policy

Key Points

• The secretary of state assists the president in foreign affairs and advises him on representatives and international relations.
• The secretary of defense, among other things, advises the president on military affairs and hot spots throughout the world.
• Since 9/11 many functions of the secretary of state has been shifted to other departments so the secretary can focus on pressing foreign matters.

Key Term

commander-in-chief

A commander-in-chief is the person exercising supreme command authority over a nation’s military forces or significant element of those forces.

The presidential cabinet has several secretaries who aid the president in foreign affairs. This includes the secretary of state and the secretary of defense.

The United States Secretary of State is the head of the United States Department of State, which is concerned with foreign affairs. The Secretary is a member of the cabinet and the highest-ranking cabinet secretary both in line of succession and order of precedence. The current Secretary of State is John Kerry, the 68^th person to hold the post. The specific duties of the Secretary of State include:

• Organizes and supervises the entire United States Department of State and the United States Foreign Service.
• Advises the President on matters relating to U.S. foreign policy, including the appointment of diplomatic representatives to other nations, and on the acceptance or dismissal of representatives from other nations.
• Participates in high-level negotiations with other countries, either bilaterally or as part of an international conference or organization, or appoints representatives to do so. This includes the negotiation of international treaties and other agreements.
• Responsible for overall direction, coordination, and supervision of interdepartmental activities of the U.S. Government overseas.
• Provides information and services to U.S. citizens living or traveling abroad. Also provides credentials in the form of passports and visas.
• Supervises the United States immigration policy at home and abroad.
• Communicates issues relating the United States foreign policy to Congress and U.S. citizens.

Most of the domestic functions of the Department of State have been transferred to other agencies. Those that remain include storage and use of the Great Seal of the United States, performance of protocol functions for the White House, and the drafting of certain proclamations. The Secretary also negotiates with the individual states over the extradition of fugitives to foreign countries. Under Federal Law, the resignation of a President or of a Vice-President is only valid if declared in writing in an instrument delivered to the office of the Secretary of State. Accordingly, the resignations of President Nixon and of Vice-President Spiro Agnew, domestic issues, were formalized in instruments delivered to the Secretary of State.

As the highest-ranking member of the cabinet, the Secretary of State is the third-highest official of the executive branch of the Federal Government of the United States, after the President and Vice President. The Secretary of State is fourth in line to succeed the Presidency, coming after the Vice President, the Speaker of the House of Representatives, and the President Pro Tempore of the Senate. Six Secretaries of State have gone on to be elected President.

As the head of the United States Foreign Service, the Secretary of State is responsible for managing the diplomatic service of the United States. The foreign service employs about 12,000 people domestically and internationally. It supports 265 United States Diplomatic missions around the world, including ambassadors to various nations.

The Secretary of Defense is the head and chief executive officer of the Department of Defense, which is an Executive Department of the Government of the United States of America . This position corresponds to what is generally known as a defense Minister in many other countries. The Secretary of Defense is appointed by the president with the advice and consent of the senate. The individual is by custom a member of the cabinet and by law a member of the National Security Council.

Flag of the Secretary of Defense

The flag of the secretary of defense.

Secretary of Defense is a statutory office. It is the general provision in administrative law that provides that the Secretary of Defense has “authority, direction and control over the Department of Defense. ” The Secretary of Defense is further designated by the same statute as “the principal assistant to the President in all matters relating to the Department of Defense. ” Ensuring civilian control of the military, an individual may not be appointed as Secretary of Defense within seven years after relief from active duty as a commissioned officer of a regular (i.e., non-reserve) component of an armed force.

The Secretary of Defense is in the chain of command and exercises command and control, subject only to the orders of the President, over all Department of Defense forces (Army, Navy, Air Force, and Marine Corps) for both operational and administrative purposes. Only the Secretary of Defense (or the President) can authorize the transfer of operational control of forces between the three Military Departments and between the combatant commands. Because the Office of Secretary of Defense is vested with legal powers which exceeds those of any commissioned officer, and is second only to the Office of President in the military hierarchy, it has sometimes unofficially been referred to as a de facto “deputy commander-in-chief. ” The Chairman of the Joint Chiefs of Staff is the principal military adviser to the Secretary of Defense and the President. While the Chairman may assist the Secretary and President in their command functions, the Chairman is not in the chain of command.

18.2.3: The Bureaucracy

Learning Objective

Compare and contrast the roles of the State Department, the Defense Department, and the Central Intelligence Agency in shaping U.S. foreign policy.

Key Points

• The State Department’s responsibilities include protecting and assisting U.S. citizens living or traveling abroad; assisting U.S. businesses in the international marketplace; and coordinating and providing support for international activities of other U.S. agencies.
• The Department of Defense is the executive department of the U.S. government concerned directly with national security and the U.S. armed forces.
• The Central Intelligence Agency (CIA) is an independent civilian intelligence agency of the U.S. government that provides national security intelligence assessments to senior U.S. policymakers.

Key Terms

tactical

of, or relating to military operations that are smaller or more local than strategic ones

diplomatic immunity

A diplomat’s immunity to prosecution and/or litigation under local law.

There are several bureaucratic organizations that are actively involved in shaping U.S. foreign policy. Prominent among them are the State Department, the Defense Department, and the Central Intelligence Agency.

The United States Department of State (DoS), often referred to as the State Department, is the U.S. federal executive department responsible for the international relations of the United States, equivalent to the foreign ministries of other countries. The Department was created in 1789 and was the first executive department established. The Department is led by the Secretary of State, who is nominated by the President, confirmed by the Senate, and is a member of the Cabinet. As stated by the Department of State, its purpose includes:

U.S. State Department

The State Department is one bureaucratic agency that shapes U.S. foreign policy

• Protecting and assisting U.S. citizens living or traveling abroad;
• Assisting U.S. businesses in the international marketplace;
• Coordinating and providing support for international activities of other U.S. agencies (local, state, or federal government), official visits overseas and at home, and other diplomatic efforts.
• Keeping the public informed about U.S. foreign policy and relations with other countries and providing feedback from the public to administration officials.
• Providing automobile registration for non-diplomatic staff vehicles and the vehicles of diplomats of foreign countries having diplomatic immunity in the United States

The Department of Defense (also known as the Defense Department, USDOD, DOD, DoD or the Pentagon) is the executive department of the U.S. government charged with coordinating and supervising all agencies and functions of the government concerned directly with national security and the U.S. armed forces. The Department – headed by the Secretary of Defense – has three subordinate military departments: the Department of the Army, the Department of the Navy, and the Department of the Air Force. The Military Departments are each headed by their own Secretary, appointed by the President, with the advice and consent of the Senate.

The Central Intelligence Agency (CIA) is an independent civilian intelligence agency of the U.S. government. It is an executive agency that reports directly to the Director of National Intelligence with responsibility for providing national security intelligence assessments to senior U.S. policymakers. Intelligence-gathering, a core function of the agency, is performed by non-military commissioned civilian intelligence agents, many of whom are trained to avoid tactical situations. The CIA also oversees and sometimes engages in tactical and covert activities at the request of the U.S. President. Often, when such field operations are organized, the U.S. military or other warfare tacticians carry these tactical operations out on behalf of the agency while the CIA oversees them.

18.2.4: Congress

Learning Objective

Evaluate the War Powers Clause and how the United States’ process of declaring and entering into war has changed over time, identifying the general role that Congress plays in making and coordinating foreign policy

Key Points

• The War Power clause states that only Congress can declare war. This has been evoked five times in American history.
• Sometimes, this clause directly conflicts with what the president wants to do. As a result, the president will create a “police action” in a hostile territory instead of declaring war.
• Trade is also an important policy-making tool. Congress has the power to regulate foreign trade.

Key Term

police action

Police action in military/security studies and international relations is a euphemism for a military action undertaken without a formal declaration of war.

Congress is given several powers to engage in foreign policy, but also to check the president’s actions foreign policy, especially in the event of war. Perhaps the most important powers are in the War Power Clause which was given to Congress in the Constitution and Foreign Commerce Clause. This clause provides Congress with the power to regulate commerce overseas. Five wars have been declared under the Constitution: the War of 1812, the Mexican-American War, the Spanish-American War, World War I, and World War II.

In the instance of the Mexican-American War, President James Polk explained that Texas was about to become a part of United States of America. Mexico threatened to invade Texas. The President gathered troops near Corpus Christi. U.S. troops moved into an area in which the new international boundary was being disputed. Mexican troops moved into the same area and the two forces clashed. The President claimed that Mexico had passed the boundary into the United States. Some individuals in Congress, including Abraham Lincoln, wondered if this was true.

However, U.S. presidents have not sought formal declarations of war often. Instead, they maintain that they have the Constitutional authority, as commander in chief to use the military for “police actions. ” According to historian Thomas Woods, “Ever since the Korean, Article II, Section 2 of the Constitution — which refers to the president as the ‘Commander in Chief of the Army and Navy of the United States’ — has been interpreted to mean that the president may act with an essentially free hand in foreign affairs, or at the very least that he may send men into battle without consulting Congress. ” Some people have argued this could pass as offensive actions, although historically police actions fell mostly under the purview of protecting embassies, U.S. citizens overseas, and shipping such as the quasi war.

The Korean War was the first modern example of the U.S. going to war without a formal declaration. This has been repeated in every armed conflict since that time. However, beginning with the Vietnam, Congress has given other forms of authorizations to declare war . Some debate continues about whether the actions are appropriate. The tendency of the Executive Branch to engage in the origination of such a push, its marketing, and even propagandizing or related activities to generate such support is also highly debated.

Johnson and His Advisors

Johnson being shown a map of an area in Vietnam. The police action spiraled into a war-like situation quickly, although it was one war never waged by Congress.

Therefore, in light of the speculation concerning the Gulf of Tonkin and the possible abuse of the authorization that followed, Congress passed the War Powers Resolution in 1973. It requires the president to obtain either a declaration of war or a resolution authorizing the use of force from Congress within 60 days of initiating hostilities with a full disclosure of facts in the process. The constitutionality of the resolution has never been settled. Some presidents have criticized it as an unconstitutional encroachment upon the president.

Some legal scholars maintain that offensive, non-police military actions, while a quorum can still be convened, taken without a formal Congressional declaration of war is unconstitutional. They believe this because no amendment with two-thirds majority of states has changed the original intent to make the War Powers Resolution legally binding. However, the Supreme Court has never ruled directly on the matter and to date no counter-resolutions have come to a vote. This separation of powers stalemate effect creates a “functional,” if not unanimous, governmental opinion and outcome on the matter.

The Commerce Clause in the Constitution also give Congress the power to regulate trade between nations. The Commerce Clause is an enumerated list in the United States Constitution. The clause states that the United States Congress shall have power “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes. ” These powers are sometimes discussed as separate powers, but they are essentially important because trade is considered to be an important form of economic diplomacy between the United States and foreign nations.

18.2.5: Interest Groups

Learning Objective

Illustrate how interest groups influence U.S. foreign policy

Key Points

• In order to build and maintain their influence, they use tactics such as framing the issue and shaping the terms of debate, offering information and analysis to elected representatives, and monitoring the policy process and reacting to it.
• Foreign policy interest groups often overlap with so-called “ethnic” interest groups, as they try to influence the foreign policy of the United States for the benefit of the foreign “ethnic kin” or homeland with whom respective ethnic groups identify.
• Though ethnic interest groups have existed for many decades, they have become a particularly influential phenomenon since the end of the Cold War.

Key Term

advocacy

The act of arguing in favor of, or supporting something.

Foreign policy interest groups, which are domestic advocacy organizations seeking to directly or indirectly influence the government’s foreign policy, are a key player in U.S. foreign policy.

According to U.S. scholar John Dietrich, these interest groups have mobilized to represent a diverse array of business, labor, ethnic, human rights, environmental, and other organizations. In order to build and maintain their influence, they use tactics, such as framing the issue and shaping the terms of debate; offering information and analysis to elected representatives (who may not have the time to research the issue himself or herself); and monitoring the policy process and reacting to it through disseminating supplementary information, letter-writing campaigns, calling for additional hearings or legislation, and supporting or opposing candidates during elections.

Foreign policy interest groups often overlap with so-called “ethnic” interest groups, as they try to influence the foreign policy and, to a lesser extent, the domestic policy of the United States for the benefit of the foreign “ethnic kin” or homeland with whom respective ethnic groups identify. Though ethnic interest groups have existed for many decades, they have become a particularly influential phenomenon since the end of the Cold War.

According to political scientist Thomas Ambrosio, this is a result of growing acceptance that ethnic identity groups have the right to mobilize politically for the purpose of influencing U.S. policies at home and abroad. Prominent examples of these organizations include the American Israel Public Affairs Committee, the Cuban American National Foundation, the Armenian Assembly of America, the U.S.-India Political Action Committee, and the National Iranian American Council.

the American Israel Public Affairs Committee

The American Israel Public Affairs Committee is a prominent foreign policy interest group

18.2.6: The Media

Learning Objective

Explain the media’s role in setting the agenda for foreign policy debate

Key Points

• The media is most influential when it covers foreign policy that directly affects Americans, especially affairs with which Americans are not acquainted.
• Vietnam was a time when many people watched the horrors of war on television. This helped the popularity of the war sink.
• After these viewings, the military founds itself involved in politics and having to do damage control to ease the public’s and the politicians’ concerns.

Key Terms

media bias

A bias in journalistic reporting, in programming selection, etc., in mass communications media.

media

Means and institutions for publishing and broadcasting information.

Agenda-Setting in Foreign Policy

One way in which the media could set the agenda is if it is in an area in which very few Americans have direct knowledge of the issues. This applies to foreign policy. When American military personnel are involved, the media needs to report because the personnel are related to the American public. The media is also likely to have an interest in reporting issues that have substantial effects on American workers, such as major trade agreements with Mexico during the NAFTA negotiations in the 1990’s.

David McKay, author of American Politics and Society, lists as one of the three main distortions of information by the media, “Placing high priority on American news to the detriment of foreign news. And when the U.S. is engaged in military action abroad, this ‘foreign news’ crowds out other foreign news. “

News Media and the Vietnam War

In the media’s most famous case in involvement on foreign affairs was its involvement in the Vietnam War. From 40 press corpsmen in 1964, the number in South Vietnam had grown to 282 by January 1966. By August that number had jumped to 419. Of the 282 at the beginning of the year, only 110 were Americans. 67 were South Vietnamese, 26 Japanese, 24 British, 13 Korean, 11 French, and seven German. The media caught many combat events, usually on live television, which prompted many American citizens to be concerned about foreign policy .

Soldier in Vietnam

Graphics like this helped contribute to Americans’ concern over foreign policy in Vietnam.

The U.S. Mission and the MACV (Military Assistance Command) also installed an “information czar,” the U.S. Mission’s Minister-Counselor for Public Affairs, Barry Zorthian, advised General William Westmoreland on public affairs matters. He had theoretical responsibility under the ambassador for the development of all information policy. He maintained liaison between the embassy, MACV, and the press; publicized information to refute erroneous and misleading news stories; and sought to assist the Saigon correspondents in covering the side of the war most favorable to the policies of the U.S. government. Zorthian possessed both experience with the media and a great deal of patience and tact while maintaining reasonably good relations with the press corps. Media correspondents were invited to attend nightly MACV briefings covering the day’s events that became known as the “Five O’Clock Follies. ” Most correspondents considered these briefings to be a waste of time. The Saigon bureau chiefs were also often invited to closed sessions at which presentations would be made by a briefing officer, the CIA station chief, or an official from the embassy who would present background or off-the-record information on upcoming military operations or Vietnamese political events.

According to Daniel Hallin, the dramatic structure of the uncensored “living room war” as reported during 1965–1967 remained simple and traditional: “the forces of good were locked in battle once again with the forces of evil. What began to change in 1967 was the conviction that the forces of good would inevitably prevail. ” During late 1967 the MACV had also begun to disregard the decision it had made at the Honolulu Conference that the military should leave the justification of the war to elected officials in Washington. The military found itself drawn progressively into politics, to the point that it had become as involved in “selling” the war to the American public as the political appointees it served. This change would have far-reaching detrimental effects.

Media Bias

A self-described liberal media watchdog group, Fairness and Accuracy in Reporting (FAIR), in consultation with the Survey and Evaluation Research Laboratory at Virginia Commonwealth University, sponsored an academic study in which journalists were asked a range of questions about how they did their work and about how they viewed the quality of media coverage in the broad area of politics and economic policy. “They were asked for their opinions and views about a range of recent policy issues and debates. Finally, they were asked for demographic and identifying information, including their political orientation.” They then compared to the same or similar questions posed with “the public” based on Gallup, and Pew Trust polls. Their study concluded that a majority of journalists, although relatively liberal on social policies, were significantly to the right of the public on economic, labor, health care, and foreign policy issues.

18.3: The History of American Foreign Policy

18.3.1: Isolationism

Isolationism or non-interventionism was a tradition in America’s foreign policy for its first two centuries.

Learning Objective

Explain the historical reasons for American isolationism in foreign affairs

Key Points

• President George Washington established non-interventionism in his farewell address, and this policy was continued by Thomas Jefferson.
• The United States policy of non-intervention was maintained throughout most of the nineteenth century. The first significant foreign intervention by the United States was the Spanish-American War, which saw it occupy and control the Philippines.
• In the wake of the First World War, the non-interventionist tendencies of U.S. foreign policy were in full force. First, the United States Congress rejected President Woodrow Wilson’s most cherished condition of the Treaty of Versailles, the League of Nations.
• The near total humiliation of Germany in the wake of World War I, laid the groundwork for a pride-hungry German people to embrace Adolf Hitler’s rise to power. Non-intervention eventually contributed to Hitler’s rise to power in the 1930s.

Key Terms

isolationism

The policy or doctrine of isolating one’s country from the affairs of other nations by declining to enter into alliances, foreign economic commitments, foreign trade, international agreements, etc..

brainchild

A creation, original idea, or innovation, usually used to indicate the originators

non-interventionism

Non-interventionism, the diplomatic policy whereby a nation seeks to avoid alliances with other nations in order to avoid being drawn into wars not related to direct territorial self-defense, has had a long history in the United States.

Background

For the first 200 years of United States history, the national policy was isolationism and non-interventionism. George Washington’s farewell address is often cited as laying the foundation for a tradition of American non-interventionism: “The great rule of conduct for us, in regard to foreign nations, is in extending our commercial relations, to have with them as little political connection as possible. Europe has a set of primary interests, which to us have none, or a very remote relation. Hence she must be engaged in frequent controversies the causes of which are essentially foreign to our concerns. Hence, therefore, it must be unwise in us to implicate ourselves, by artificial ties, in the ordinary vicissitudes of her politics, or the ordinary combinations and collisions of her friendships or enmities.”

No Entangling Alliances in the Nineteenth Century

President Thomas Jefferson extended Washington’s ideas in his March 4, 1801 inaugural address: “peace, commerce, and honest friendship with all nations, entangling alliances with none. ” Jefferson’s phrase “entangling alliances” is, incidentally, sometimes incorrectly attributed to Washington.

Non-interventionism continued throughout the nineteeth century. After Tsar Alexander II put down the 1863 January Uprising in Poland, French Emperor Napoleon III asked the United States to “join in a protest to the Tsar. ” Secretary of State William H Seward declined, “defending ‘our policy of non-intervention — straight, absolute, and peculiar as it may seem to other nations,'” and insisted that “the American people must be content to recommend the cause of human progress by the wisdom with which they should exercise the powers of self-government, forbearing at all times, and in every way, from foreign alliances, intervention, and interference. “

The United States’ policy of non-intervention was maintained throughout most of the nineteenth century. The first significant foreign intervention by the United States was the Spanish-American War, which saw the United States occupy and control the Philipines.

Twentieth Century Non-intervention

Theodore Roosevelt’s administration is credited with inciting the Panamanian Revolt against Colombia in order to secure construction rights for the Panama Canal, begun in 1904. President Woodrow Wilson, after winning re-election with the slogan, “He kept us out of war,” was nonetheless compelled to declare war on Germany and so involve the nation in World War I when the Zimmerman Telegram was discovered. Yet non-interventionist sentiment remained; the U.S. Congress refused to endorse the Treaty of Versailles or the League of Nations.

Non-Interventionism between the World Wars

In the wake of the First World War, the non-interventionist tendencies of U.S. foreign policy were in full force . First, the United States Congress rejected president Woodrow Wilson’s most cherished condition of the Treaty of Versailles, the League of Nations. Many Americans felt that they did not need the rest of the world, and that they were fine making decisions concerning peace on their own. Even though “anti-League” was the policy of the nation, private citizens and lower diplomats either supported or observed the League of Nations. This quasi-isolationism shows that the United States was interested in foreign affairs but was afraid that by pledging full support for the League, it would lose the ability to act on foreign policy as it pleased.

Wake Up America!

At the dawn of WWI, posters like this asked America to abandon its isolationist policies.

Although the United States was unwilling to commit to the League of Nations, they were willing to engage in foreign affairs on their own terms. In August 1928, 15 nations signed the Kellogg-Briand Pact, brainchild of American Secretary of State Frank Kellogg and French Foreign Minister Aristride Briand. This pact that was said to have outlawed war and showed the United States commitment to international peace had its semantic flaws. For example, it did not hold the United States to the conditions of any existing treaties, it still allowed European nations the right to self-defense, and stated that if one nation broke the pact, it would be up to the other signatories to enforce it. The Kellogg-Briand Pact was more of a sign of good intentions on the part of the United States, rather than a legitimate step towards the sustenance of world peace.

Non-interventionism took a new turn after the Crash of 1929. With the economic hysteria, the United States began to focus solely on fixing its economy within its borders and ignored the outside world. As the world’s democratic powers were busy fixing their economies within their borders, the fascist powers of Europe and Asia moved their armies into a position to start World War II. With military victory came the spoils of war –a very draconian pummeling of Germany into submission, via the Treaty of Versailles. This near-total humiliation of Germany in the wake of World War I, as the treaty placed sole blame for the war on the nation, laid the groundwork for a pride-hungry German people to embrace Adolf Hitler’s rise to power.

18.3.2: World War I and the League of Nations

The League of Nations was created as an international organization after WWI.

Learning Objective

Explain the historical rise and fall of the League of Nations after World War I

Key Points

• The League of Nations was suggested in Wilson’s 14 points.
• The League of Nations’ functions included arbitration and peace-keeping. However, it did not have an army to enforce power.
• The League of Nations was the precursor to the United Nations.

Key Terms

arbitration

A process through which two or more parties use an arbitrator or arbiter (an impartial third party) in order to resolve a dispute.

World Trade Organization

an international organization designed by its founders to supervise and liberalize international trade

disarmament

The reduction or the abolition of the military forces and armaments of a nation, and of its capability to wage war

intergovernmental

Of, pertaining to, or involving two or more governments

An Early Attempt at International Organization

The League of Nations was an intergovernmental organization founded as a result of the Paris Peace Talks that ended the First World War. The form and ideals were drawn to some extent from US President Woodrow Wilson’s 14 Points. The League was the first permanent international organization whose principal mission was to maintain world peace. Its primary goals, as stated in its Covenant, included preventing wars through collective security and disarmament, and settling international disputes through negotiation and arbitration. Other issues in this and related treaties included labor conditions, just treatment of native inhabitants, human and drug trafficking, arms trade, global health, prisoners of war, and protection of minorities in Europe. At the height of its development, from 28 September 1934 to 23 February 1935, it had 58 member nations.

Map of League of Nations

The countries on the map represent those that have been involved with the League of Nations.

A Lack of Leverage

The diplomatic philosophy behind the League represented a fundamental shift from the preceding hundred years. The League lacked its own armed force, and depended on the Great powers to enforce its resolutions, keep to its economic sanctions, or provide an army when needed. However, the Great Powers were often reluctant to do so. Sanctions could hurt League members, so they were reluctant to comply with them.

Failure of the League

After a number of notable successes and some early failures in the 1920s, the League ultimately proved incapable of preventing aggression by the Axis powers. In the 1930s, Germany withdrew from the League, as did Japan, Italy, Spain, and others. The onset of World War II showed that the League had failed its primary purpose, which was to prevent any future world war. The United Nations (UN) replaced it after the end of the war and inherited a number of agencies and organizations founded by the League.

18.3.3: World War II

Although isolationists kept the U.S. out of WWII for years, the interventionists eventually had their way and the U.S. declared war in 1941.

Learning Objective

Compare and contrast the arguments made by interventionists and non-interventionists with respect to American involvement in World War II

Key Points

• Fascism was becoming a growing fear in the United States, and after Germany invaded Poland, many wondered if the US should intervene.
• Many famous public figures called for isolationism, such as professors and even Charles Lindburg.
• The Lend Lease program was a way to ease into interventionism, though the US stayed out militarily.

Key Term

Neutrality Act

The Neutrality Acts were passed by the United State Congress in the 1930’s and sought to ensure that the US would not become entangled again in foreign conflicts.

As Europe moved closer and closer to war in the late 1930s, the United States Congress was doing everything it could to prevent it. Between 1936 and 1937, much to the dismay of the pro-British President Roosevelt, Congress passed the Neutrality Acts. In the final Neutrality Act, Americans could not sail on ships flying the flag of a belligerent nation or trade arms with warring nations, potential causes for U.S. entry into war.

On September 1, 1939, Germany invaded Poland, and Britain and France subsequently declared war on Germany, marking the start of World War II . In an address to the American people two days later, President Roosevelt assured the nation that he would do all he could to keep them out of war. However, he also said: “When peace has been broken anywhere, the peace of all countries everywhere is in danger. “

germany invades poland

Germany invading Poland caused the United States to reconsider intervening.

The war in Europe split the American people into two distinct groups: non-interventionists and interventionists. The basic principle of the interventionist argument was fear of German invasion. By the summer of 1940, France had fallen to the Germans, and Britain was the only democratic stronghold between Germany and the United States. Interventionists were afraid of a world after this war, a world where they would have to coexist with the fascist power of Europe. In a 1940 speech, Roosevelt argued, “Some, indeed, still hold to the now somewhat obvious delusion that we … can safely permit the United States to become a lone island … in a world dominated by the philosophy of force. ” A national survey found that in the summer of 1940, 67% of Americans believed that a German-Italian victory would endanger the United States, that if such an event occurred 88% supported “arm[ing] to the teeth at any expense to be prepared for any trouble”, and that 71% favored “the immediate adoption of compulsory military training for all young men.”

Ultimately, the rift between the ideals of the United States and the goals of the fascist powers is what was at the core of the interventionist argument. “How could we sit back as spectators of a war against ourselves? ” writer Archibald MacLeish questioned. The reason why interventionists said we could not coexist with the fascist powers was not due to economic pressures or deficiencies in our armed forces, but rather because it was the goal of fascist leaders to destroy the American ideology of democracy. In an address to the American people on December 29, 1940, President Roosevelt said, “…the Axis not merely admits but proclaims that there can be no ultimate peace between their philosophy of government and our philosophy of government.”

However, there were still many who held on to the age-old tenets of non-interventionism. Although a minority, they were well organized, and had a powerful presence in Congress. Non-interventionists rooted a significant portion of their arguments in historical precedent, citing events such as Washington’s farewell address and the failure of World War I. In 1941, the actions of the Roosevelt administration made it clearer and clearer that the United States was on its way to war. This policy shift, driven by the President, came in two phases. The first came in 1939 with the passage of the Fourth Neutrality Act, which permitted the United States to trade arms with belligerent nations, as long as these nations came to America to retrieve the arms and paid for them in cash. This policy was quickly dubbed “Cash and Carry. ” The second phase was the Lend-Lease Act of early 1941. This act allowed the President “to lend, lease, sell, or barter arms, ammunition, food, or any ‘defense article’ or any ‘defense information’ to ‘the government of any country whose defense the President deems vital to the defense of the United States.’ He used these two programs to side economically with the British and the French in their fight against the Nazis.

On December 7, 1941, Japan attacked the American fleet at Pearl Harbor, Hawaii. The attack was intended as a preventive action in order to keep the U.S. Pacific Fleet from interfering with military actions the Empire of Japan was planning in Southeast Asia against overseas territories of the United Kingdom, the Netherlands, and the United States. The following day, the United States declared war on Japan. Domestic support for non-interventionism disappeared. Clandestine support of Britain was replaced by active alliance. Subsequent operations by the U.S. prompted Germany and Italy to declare war on the U.S. on December 11, which was reciprocated by the U.S. the same day.

During the final stages of World War II in 1945, the United States conducted atomic bombings of the cities of Hiroshima and Nagasaki in Japan. These two events represent the only use of nuclear weapons in war to date.

18.3.4: Interventionism

After WWII, the US’s foreign policy was characterized by interventionism, which meant the US was directly involved in other states’ affairs.

Learning Objective

Define interventionism and its relation to American foreign policy

Key Points

• In the period between World War I and World War II, the US’s foreign policy was characterized by isolationism, which meant it preferred to be isolated from the affairs of other countries.
• The ideological goals of the fascist powers in Europe during World War II and the growing aggression of Germany led many Americans to fear for the security of their nation, and thus call for an end to the US policy of isolationism.
• In the early 1940s, US policies such as the Cash and Carry Program and the Lend-Lease Act provided assistance to the Allied Powers in their fight against Germany. This growing involvement by the US marked a move away from isolationist tendencies towards interventionism.
• After World War II, the US became fully interventionist. US interventionism was motivated primarily by the goal of containing the influence of communism, and essentially meant the US was now a leader in global security, economic, and social issues.

Key Terms

interventionism

The political practice of intervening in a sovereign state’s affairs.

isolationism

The policy or doctrine of isolating one’s country from the affairs of other nations by declining to enter into alliances, foreign economic commitments, foreign trade, international agreements, etc..

Abandoning Isolationism

As the world was quickly drawn into WWII, the United States’ isolationist policies were replaced by more interventionism. In part, this foreign policy shift sprung from Euro-American relations and public fear.

On September 1, 1939, Germany invaded Poland; Britain and France subsequently declared war on Germany, marking the start of World War II. In an address to the American People two days later, President Roosevelt assured the nation that he would do all he could to keep them out of war. However, even though he was intent on neutrality as the official policy of the United States, he still echoed the dangers of staying out of this war. He also cautioned the American people to not let their wish to avoid war at all costs supersede the security of the nation.

The war in Europe split the American people into two distinct groups: non-interventionists and interventionists. The two sides argued over America’s involvement in this Second World War. The basic principle of the interventionist argument was fear of German invasion. By the summer of 1940, France had fallen to the Germans, and Britain was the only democratic stronghold between Germany and the United States. Interventionists feared that if Britain fell, their security as a nation would shrink immediately. A national survey found that in the summer of 1940, 67% of Americans believed that a German-Italian victory would endanger the United States, that if such an event occurred 88% supported “arm[ing] to the teeth at any expense to be prepared for any trouble”, and that 71% favored “the immediate adoption of compulsory military training for all young men”.

Ultimately, the ideological rift between the ideals of the United States and the goals of the fascist powers is what made the core of the interventionist argument.

Moving Towards War

As 1940 became 1941, the actions of the Roosevelt administration made it more and more clear that the United States was on a course to war. This policy shift, driven by the President, came in two phases. The first came in 1939 with the passage of the Fourth Neutrality Act, which permitted the United States to trade arms with belligerent nations, as long as these nations came to America to retrieve the arms, and pay for them in cash. This policy was quickly dubbed ‘Cash and Carry.’ The second phase was the Lend-Lease Act of early 1941 . This act allowed the President “to lend, lease, sell, or barter arms, ammunition, food, or any ‘defense article’ or any ‘defense information’ to ‘the government of any country whose defense the President deems vital to the defense of the United States.’ He used these two programs to side economically with the British and the French in their fight against the Nazis.

President Roosevelt signing the Lend-Lease Act

The Lend Lease Act allowed the United States to tip-toe from isolationism while still remaining militarily neutral.

Policies of Interventionism

After WWII, the United States took a policy of interventionism in order to contain communist influence abroad. Such forms of interventionism included giving aid to European nations to rebuild , having an active role in the UN, NATO, and police actions around the world, and involving the CIA in several coup take overs in Latin America and the Middle East. The US was not merely non-isolationist (i.e. the US was not merely abandoning policies of isolationism), but actively intervening and leading world affairs.

Marshall Plan and US Interventionism

After WWII, the US’s foreign policy was characterized by interventionism. For example, immediately after the end of the war, the US supplied Europe with monetary aid in hopes of combating the influence of communism in a vulnerable, war-weakened Europe. This label was posted on Marshall Aid packages.

18.3.5: The Cold War and Containment

Truman’s Containment policy was the first major policy during the Cold War and used numerous strategies to prevent the spread of communism abroad.

Learning Objective

Discuss the doctrine of Containment and its role during the Cold War

Key Points

• Containment was suggested by diplomat George Kennan who eagerly suggested the United States stifle communist influence in Eastern Europe and Asia.
• One of the ways to accomplish this was by establishing NATO so the Western European nations had a defense against communist influence.
• After Vietnam and détente, President Jimmy Carter focused less on containment and more on fighting the Cold War by promoting human rights in hot spot countries.

Key Terms

deterrence

Action taken by states or alliances of nations against equally powerful alliances to prevent hostile action

rollback

A withdrawal of military forces.

The Cold War and Containment

Containment was a United States policy using numerous strategies to prevent the spread of communism abroad. A component of the Cold War, this policy was a response to a series of moves by the Soviet Union to enlarge its communist sphere of influence in Eastern Europe, China, Korea, and Vietnam. It represented a middle-ground position between détente and rollback.

The basis of the doctrine was articulated in a 1946 cable by United States diplomat, George F. Kennan (below). As a description of United States foreign policy, the word originated in a report Kennan submitted to the U.S. defense secretary in 1947—a report that was later used in a magazine article.

George F. Kennan

George F. Kennan was the diplomat behind the doctrine of containment.

The word containment is associated most strongly with the policies of United States President Harry Truman (1945–53), including the establishment of the North Atlantic Treaty Organization (NATO), a mutual defense pact. Although President Dwight Eisenhower (1953–61) toyed with the rival doctrine of rollback, he refused to intervene in the Hungarian Uprising of 1956. President Lyndon Johnson (1963–69) cited containment as a justification for his policies in Vietnam. President Richard Nixon (1969–74), working with his top advisor Henry Kissinger, rejected containment in favor of friendly relations with the Soviet Union and China; this détente, or relaxation of tensions, involved expanded trade and cultural contacts.

President Jimmy Carter (1976–81) emphasized human rights rather than anti-communism, but dropped détente and returned to containment when the Soviets invaded Afghanistan in 1979. President Ronald Reagan (1981–89), denouncing the Soviet state as an “evil empire”, escalated the Cold War and promoted rollback in Nicaragua and Afghanistan. Central programs begun under containment, including NATO and nuclear deterrence, remained in effect even after the end of the war.

18.3.6: Détente and Human Rights

Détente was a period in U.S./Soviet relations in which tension between the two superpowers was eased.

Learning Objective

Explain the significance of the Helsinki Accords for the history of human rights in the 20th century and define the doctrine of Détente and its use by the United States during the Cold War

Key Points

• Détente was an effort by the super powers to ease tensions in the Cold War.
• The Nixon and Brezhnev administrations led the way with détente, talking about world issues and signing treaties such as SALT I and the Anti-Ballistic Missile Treaty.
• The Carter administration ushered in a human rights component to détente, criticizing the USSR’s poor record of human rights. The USSR countered by criticizing the US for its own human rights record, and for interfering in USSR domestic affairs.
• During the Carter administration, the Conference on Security and Cooperation in Europe created the Helsinki Accords, which addressed human rights in the USSR.
• Détente ended in 1980 with Soviet interference in Afghanistan, the US boycott of the 1980 Moscow Olympics, and Reagan’s election.

Key Terms

Warsaw Pact

A pact (long-term alliance treaty) signed on May 14, 1955 by the Soviet Union and its Communist military allies in Europe.

Détente

French for “relaxation,” détente is the easing of tense relations, particularly in a political situation. The term is often used in reference to the general easing of geo-political tensions between the Soviet Union and the US, which began in 1971 and ended in 1980.

Helsinki Accords

A declaration in an attempt to improve relations between the Communist bloc and the West. Developed in Europe, the Helsinki Accords called for human rights improvements in the USSR.

Détente

Détente, French for “relaxation”, is an international theory that refers to the easing of strained relations, especially in a political situation. The term is often used in reference to the general easing of relations between the Soviet Union and the United States in 1971, a thawing at a period roughly in the middle of the Cold War.

Treaties Toward Peace

The most important treaties of détente were developed when the Nixon Administration came into office in 1969. The Political Consultative Committee of the Warsaw Pact sent an offer to the West, urging to hold a summit on “security and cooperation in Europe”. The West agreed and talks began towards actual limits to the nuclear capabilities of the two superpowers. This ultimately led to the signing of the treaty in 1972. This treaty limited each power’s nuclear arsenals, though it was quickly rendered out-of-date as a result of the development of a new type of warhead. In the same year that SALT I was signed, the Biological Weapons Convention and the Anti-Ballistic Missile Treaty were also concluded.

A follow up treaty, SALT II was discussed but was never ratified by the United States. There is debate among historians as to how successful the détente period was in achieving peace. The two superpowers agreed to install a direct hotline between Washington DC and Moscow, the so-called “red telephone,” enabling both countries to quickly interact with each other in a time of urgency. The SALT II pact of the late 1970s built on the work of the SALT I talks, ensuring further reduction in arms by the Soviets and by the US .

Nixon and Brezhnev

President Nixon and Premier Brezhnev lead in the high period of détente, signing treaties such as SALT I and the Helsinki Accords.

The Helsinki Accords and Human Rights in the USSR

The Helsinki Accords, in which the Soviets promised to grant free elections in Europe, has been seen as a major concession to ensure peace by the Soviets. The Helsinki Accord were developed by the Conference on Security and Cooperation in Europe, a wide ranging series of agreements on economic, political, and human rights issues. The CSCE was initiated by the USSR, involving 35 states throughout Europe.

Among other issues, one of the most prevalent and discussed after the conference was the human rights violations in the Soviet Union. The Soviet Constitution directly violated the declaration of Human Rights from the United Nations, and this issue became a prominent point of dissonance between the United States and the Soviet Union.

Because the Carter administration had been supporting human rights groups inside the Soviet Union, Leonid Brezhnev accused the administration of interference in other countries’ internal affairs. This prompted intense discussion of whether or not other nations may interfere if basic human rights are being violated, such as freedom of speech and religion. The basic differences between the philosophies of a democracy and a single-party state did not allow for reconciliation of this issue. Furthermore, the Soviet Union proceeded to defend their internal policies on human rights by attacking American support of countries like South Africa and Chile, which were known to violate many of the same human rights issues.

Détente ended after the Soviet intervention in Afghanistan, which led to America’s boycott in the 1980s Olympics in Moscow . Ronald Reagan’s election in 1980, based on an anti-détente campaign, marked the close of détente and a return to Cold War tension.

1980 Moscow Olympics

After the Soviet invasion of Afghanistan, many countries boycotted the 1980 Olympic Games, held in Moscow. This photograph depicts Olympic runners in the 1980 games in front of Saint Basil’s Cathedral in Moscow.

18.3.7: Foreign Policy After the Cold War

The post-Cold War era saw optimism, and the balance of power shifted solely to the United States.

Learning Objective

Explain the origins and elements of the New World Order after the end of the Cold War

Key Points

• The post-Cold War era saw the United States as the sole leader of the world affairs.
• The Cold War set the standard for military-industrial complexes which, while weaker than during the Cold War, is a legacy that continues to exist.
• The new world order as theorized between Bush and Gorbachev saw optimism and democratization for countries.

Key Terms

military-industrial complex

The armed forces of a nation together with the industries that supply their weapons and materiel.

new world order

The term new world order has been used to refer to any new period of history evidencing a dramatic change in world political thought and the balance of power. Despite various interpretations of this term, it is primarily associated with the ideological notion of global governance only in the sense of new collective efforts to identify, understand, or address worldwide problems that go beyond the capacity of individual nation-states to solve. The most widely discussed application of the phrase in recent times came at the end of the Cold War.

War on Terror

The war on terror is a term commonly applied to an international military campaign begun by the United States and the United Kingdom with support from other countries after the September 11, 2001 terrorist attacks.

Post-Cold War Foreign Policy

Introduction

With the breakup of the Soviet Union into separate nations, and the re-emergence of the nation of Russia, the world of pro-U.S. and pro-Soviet alliances broke down. Different challenges presented themselves, such as climate change and the threat of nuclear terrorism. Regional powerbrokers in Iraq and Saddam Hussein challenged the peace with a surprise attack on the small nation of Kuwait in 1991.

President George H.W. Bush organized a coalition of allied and Middle Eastern powers that successfully pushed back the invading forces, but stopped short of invading Iraq and capturing Hussein. As a result, the dictator was free to cause mischief for another twelve years. After the Gulf War, many scholars like Zbigniew Brzezinski claimed that the lack of a new strategic vision for U.S. foreign policy resulted in many missed opportunities for its foreign policy. The United States mostly scaled back its foreign policy budget as well as its cold war defense budget during the 1990s, which amounted to 6.5% of GDP while focusing on domestic economic prosperity under President Clinton, who succeeded in achieving a budget surplus for 1999 and 2000.

The aftermath of the Cold War continues to influence world affairs. After the dissolution of the Soviet Union, the post–Cold War world was widely considered as unipolar, with the United States the sole remaining superpower. The Cold War defined the political role of the United States in the post–World War II world: by 1989 the U.S. held military alliances with 50 countries, and had 526,000 troops posted abroad in dozens of countries, with 326,000 in Europe (two-thirds of which in west Germany) and about 130,000 in Asia (mainly Japan and South Korea). The Cold War also marked the apex of peacetime military-industrial complexes, especially in the United States, and large-scale military funding of science. These complexes, though their origins may be found as early as the 19^th century, have grown considerably during the Cold War. The military-industrial complexes have great impact on their countries and help shape their society, policy and foreign relations.

New World Order

A concept that defined the world power after the Cold-War was known as the new world order. The most widely discussed application of the phrase of recent times came at the end of the Cold War. Presidents Mikhail Gorbachev and George H.W. Bush used the term to try to define the nature of the post Cold War era, and the spirit of a great power cooperation they hoped might materialize . Historians will look back and say this was no ordinary time but a defining moment: an unprecedented period of global change, and a time when one chapter ended and another began.

Bush and Gorbachev

Bush and Gorbachev helped shape international relation theories after the cold war.

War on Terrorism

A concept that defined the world power after the Cold-War was known as the new world order. The most widely discussed application of the phrase of recent times came at the end of the Cold War. Presidents Mikhail Gorbachev and George H.W. Bush used the term to try to define the nature of the post Cold War era, and the spirit of a great power cooperation they hoped might materialize . Historians will look back and say this was no ordinary time but a defining moment: an unprecedented period of global change, and a time when one chapter ended and another began.

Furthermore, when no weapons of mass destruction were found after a military conquest of Iraq, there was worldwide skepticism that the war had been fought to prevent terrorism, and the continuing war in Iraq has had serious negative public relations consequences for the image of the United States.

Multipolar World

The big change during these years was a transition from a bipolar world to a multipolar world. While the United States remains a strong power economically and militarily, rising nations such as China, India, Brazil, and Russia as well as a united Europe have challenged its dominance. Foreign policy analysts such as Nina Harchigian suggest that the six emerging big powers share common concerns: free trade, economic growth, prevention of terrorism, and efforts to stymie nuclear proliferation. And if they can avoid war, the coming decades can be peaceful and productive provided there are no misunderstandings or dangerous rivalries.

18.3.8: The War on Terrorism

The War on Terror refers to an international military campaign begun by the U.S. and the U.K. after the 9/11 terrorist attacks.

Learning Objective

Identify the main elements of U.S. foreign policy during the War on Terror

Key Points

• The campaign’s official purpose was to eliminate al-Qaeda and other militant organizations, and the two main military operations associated with the War on Terror were Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom in Iraq.
• The Bush administration and the Western media used the term to denote a global military, political, legal and ideological struggle targeting both organizations designated as terrorist and regimes accused of supporting them.
• On 20 September 2001, in the wake of the 11 September attacks, George W. Bush delivered an ultimatum to the Taliban government of Afghanistan to turn over Osama bin Laden and al-Qaeda leaders operating in the country or face attack.
• In October 2002, a large bipartisan majority in the United States Congress authorized the president to use force if necessary to disarm Iraq in order to “prosecute the war on terrorism. ” The Iraq War began in March 2003 with an air campaign, which was immediately followed by a U.S. ground invasion.

Key Terms

Islamist

A person who espouses Islamic fundamentalist beliefs.

War on Terror

The war on terror is a term commonly applied to an international military campaign begun by the United States and the United Kingdom with support from other countries after the September 11, 2001 terrorist attacks.

terrorism

The deliberate commission of an act of violence to create an emotional response through the suffering of the victims in the furtherance of a political or social agenda.

Introduction

The War on Terror is a term commonly applied to an international military campaign begun by the United States and United Kingdom with support from other countries after the September 11, 2001 terrorist attacks . The campaign’s official purpose was to eliminate al-Qaeda and other militant organizations. The two main military operations associated with the War on Terror were Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom in Iraq.

9/11 Attacks on the World Trade Center

The north face of Two World Trade Center (south tower) immediately after being struck by United Airlines Flight 175.

The phrase “War on Terror” was first used by U.S. President George W. Bush on 20 September 2001. The Bush administration and the Western media have since used the term to denote a global military, political, legal, and ideological struggle targeting organizations designated as terrorist and regimes accused of supporting them. It was typically used with a particular focus on Al-Qaeda and other militant Islamists. Although the term is not officially used by the administration of U.S. President Barack Obama, it is still commonly used by politicians, in the media, and officially by some aspects of government, such as the United States’ Global War on Terrorism Service Medal.

Precursor to 9/11 Attacks

The origins of al-Qaeda as a network inspiring terrorism around the world and training operatives can be traced to the Soviet war in Afghanistan (December 1979–February 1989). The United States supported the Islamist mujahadeen guerillas against the military forces of the Soviet Union and the Democratic Republic of Afghanistan. In May 1996 the group World Islamic Front for Jihad Against Jews and Crusaders (WIFJAJC), sponsored by Osama bin Laden and later reformed as al-Qaeda, started forming a large base of operations in Afghanistan, where the Islamist extremist regime of the Taliban had seized power that same year. In February 1998, Osama bin Laden, as the head of al-Qaeda, signed a fatwā declaring war on the West and Israel, and later in May of that same year al-Qaeda released a video declaring war on the U.S. and the West.

U.S. Military Responses (Afghanistan)

On 20 September 2001, in the wake of the 11 September attacks, George W. Bush delivered an ultimatum to the Taliban government of Afghanistan to turn over Osama bin Laden and al-Qaeda leaders operating in the country or face attack. The Taliban demanded evidence of bin Laden’s link to the 11 September attacks and, if such evidence warranted a trial, they offered to handle such a trial in an Islamic Court. The US refused to provide any evidence.

Subsequently, in October 2001, US forces invaded Afghanistan to oust the Taliban regime. On 7 October 2001, the official invasion began with British and U.S. forces conducting airstrike campaigns over enemy targets. Kabul, the capital city of Afghanistan, fell by mid-November. The remaining al-Qaeda and Taliban remnants fell back to the rugged mountains of eastern Afghanistan, mainly Tora Bora. In December, Coalition forces (the U.S. and its allies) fought within that region. It is believed that Osama bin Laden escaped into Pakistan during the battle.

U.S. Military Responses (Iraq)

Iraq had been listed as a State Sponsor of Terrorism by the U.S. since 1990, when Saddam Hussein invaded Kuwait. Iraq was also on the list from 1979 to 1982; it had been removed so that the U.S. could provide material support to Iraq in its war with Iran. Hussein’s regime proved a continuing problem for the U.N. and Iraq’s neighbors due to its use of chemical weapons against Iranians and Kurds.

In October 2002, a large bipartisan majority in the United States Congress authorized the president to use force if necessary to disarm Iraq in order to “prosecute the war on terrorism. ” After failing to overcome opposition from France, Russia, and China against a UNSC resolution that would sanction the use of force against Iraq, and before the U.N. weapons inspectors had completed their inspections, the U.S. assembled a “Coalition of the Willing” composed of nations who pledged support for its policy of regime change in Iraq.

The Iraq War began in March 2003 with an air campaign, which was immediately followed by a U.S.-led ground invasion . The Bush administration stated that the invasion was the “serious consequences” spoken of in the UNSC Resolution 1441. The Bush administration also stated that the Iraq War was part of the War on Terror, a claim that was later questioned.

Baghdad, Iraq’s capital city, fell in April 2003 and Saddam Hussein’s government quickly dissolved. On 1 May 2003, Bush announced that major combat operations in Iraq had ended. However, an insurgency arose against the U.S.-led coalition and the newly developing Iraqi military and post-Saddam government. The insurgency, which included al-Qaeda affiliated groups, led to far more coalition casualties than the invasion. Iraq’s former president, Saddam Hussein, was captured by U.S. forces in December 2003. He was executed in 2006.

18.4: Challenges of Foreign Policy

18.4.1: Trade

U.S. foreign policy is characterized by a commitment to free trade and open borders to promote and strengthen national interests.

Learning Objective

Discuss the historical institutional arrangements that created the current framework of international trade and criticisms of it

Key Points

• While international trade has been present throughout much of history, its economic, social, and political importance have increased in recent centuries, mainly because of industrialization, advanced transportation, globalization, the growth of multinational corporations, and outsourcing.
• During the World War II, 44 countries signed the Bretton Woods Agreement, a system of monetary management that established the rules for commercial and financial relations among the world’s major industrial states.
• This Agreement resulted in the creation of organizations such as the the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (later divided into the World Bank and Bank for International Settlements).
• The World Trade Organization (WTO) is an organization that was formed in 1995 to supervise and liberalize international trade.
• International trade greatly contributes to the process of globalization, the processes of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.
• The anti-globalization movement has grown in recent decades in reaction to the unequal power dynamics of globalization and international trade, and the policies that are used to exploit developing countries for the profit of the developed Western world.

Key Term

globalization

The process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture; advances in transportation and telecommunications infrastructure, including the rise of the Internet, are major factors that precipitate interdependence of economic and cultural activities.

International Trade

International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of the Gross Domestic Product (GDP). While international trade has been practiced throughout much of history, its economic, social, and political importance have become increasingly relevant in recent times, mainly due to industrialization, advanced transportation, globalization, the growth of multinational corporations, and outsourcing .

The Bretton Woods Agreement

During World War II, 44 countries signed the Bretton Woods Agreement. This system of monetary management established the rules for commercial and financial relations among the world’s major industrial states, and was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states. The agreement was intended to prevent national trade barriers that could create global economic depressions. The political basis for the Bretton Woods Agreement was in the confluence of two key conditions: the shared experiences of the Great Depression, and the concentration of power in a small number of states which was further enhanced by the exclusion of a number of important nations due to ongoing war.

The agreement set up rules and institutions to regulate the international political economy, resulting in the creation of organizations such as the the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (later divided into the World Bank and Bank for International Settlements). These organizations became operational in 1946 after enough countries ratified the agreement. Currently, the Doha round of World Trade Organization negotiations aims to lower barriers to trade around the world, with a focus on making trade more favorable for so-called “developing” countries, though talks have faced a divide between “developed” countries and the major “developing” countries.

The World Trade Organization (WTO)

The World Trade Organization (WTO) is an organization that was formed in 1995 to supervise and liberalize international trade . The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments.

WTO Logo

The WTO, succeeding GATT in 1995, is an organization that seeks to liberalize international trade.

Trade, Globalization, and the Anti-Globalization Movement

International trade greatly contributes to the process of globalization, the processes of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Advances in transportation and telecommunications infrastructure, including the rise of the telegraph and its posterity the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities. In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge.

Globalization has been criticized in recent decades for the unequal power dynamics of international trade, and the policies that are used to exploit developing countries for the profit of the developed Western world. The anti-globalization movement is critical of the globalization of corporate capitalism for these reasons. Many anti-globalization activists, however, call for forms of global integration that provide better democratic representation, advancement of human rights, fair trade and sustainable development and therefore feel the term “anti-globalization” is misleading.

In general, the anti-globalization movement is especially opposed to the various abuses which are perpetuated by globalization and the international institutions which are believed to promote neoliberalism without regard to ethical standards. Common targets include the World Bank (WB), International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) and free trade treaties like the North American Free Trade Agreement (NAFTA), Free Trade Area of the Americas (FTAA), the Trans Pacific Trade Agreement (TPPA), the Multilateral Agreement on Investment (MAI) and the General Agreement on Trade in Services (GATS). In light of the economic gap between rich and poor countries, movement adherents claim “free trade” without regulations in place to protect the environment, the health and well being of workers, and the economies of “developing” countries contributes only to strengthening the power of industrialized nations (often termed the “global North” in opposition to the developing world’s “global South”).

The anti-globalization movement is considered a rather new and modern day social movement, as the issues it is fighting against are relevant in today’s time. However, the events that occurred which fuels the movement can be traced back through the lineage of the movement of a 500-year old history of resistance against European colonialism and U.S. imperialism, in which the continent of Africa and many other areas of the world were colonized and stripped of their resources for the profit of the Western world.

One of the most infamous tactics of the movement is the Battle of Seattle in 1999, where grassroots activists organized large and creative protests against the World Trade Organization’s Third Ministerial Meeting in order to gain the attention towards the issue of globalization. It is still one of the most significant and memorable social movement protests in the past 20 years.

Contemporary Issues in International Trade

Issues currently associated with international trade are: intellectual property rights, in that creations of the mind for which exclusive rights are recognized in law are considered essential for economic growth; smuggling, especially as it relates to human and drug trafficking; outsourcing, the contracting out of business processes to another country, generally one with lower wages; fair trade, which promotes the use of labor, environmental, and social standards for the production of commodities; and trade sanctions, in which punitive economic measures are taken against a defaulting country.

18.4.2: Immigration and Border Security

Immigration and border security are two important issues for United States policy.

Learning Objective

Identify the relationship between immigration issues and national security

Key Points

• Illegal immigrants are those non-citizens who enter the United States without government permission and in violation of United States nationality law or stay beyond the termination date of a visa, also in violation of the law.
• Illegal immigrants who come generally for economic opportunities or to escape political oppression continue to outpace the number of legal immigrants – a trend that has held steady since the 1990s.
• The challenge of illegal immigration is closely linked with that of border security, the concept of which is related to the persistent threat of terrorism.

Key Term

visa

A permit to enter and leave a country, normally issued by the authorities of the country to be visited.

Immigration and border security are two important issues for U.S. policy.

Though immigration to the United States has been a major source of economic growth and cultural change throughout American history, the recent discourse surrounding immigration deals mostly with illegal immigration. Illegal immigrants are those non-citizens who enter the United States without government permission and are in violation of United States nationality law or stay beyond the termination date of a visa, also in violation of the law.

The illegal immigrant population in the United States in 2008 was estimated by the Center for Immigration Studies to be about 11 million people, down from 12.5 million people in 2007. Other estimates range from 7 to 20 million. According to a Pew Hispanic Center report, in 2005, 56% of illegal immigrants were from Mexico; 22% were from other Latin American countries, primarily from Central America; 13% were from Asia; 6% were from Europe and Canada; and 3% were from Africa and the rest of the world.

Immigration to the U.S.

Rate of immigration to the United States relative to sending countries’ population size, 2001–2005

Illegal immigrants who come generally for economic opportunities or to escape political oppression, continue to outpace the number of legal immigrants – a trend that has held steady since the 1990s. While the majority of illegal immigrants continue to concentrate in places with existing large Hispanic communities, an increasing number of them are settling throughout the rest of the country.

The challenge of illegal immigration is closely linked with that of border security, the concept of which is related to the persistent threat of terrorism. Border security includes the protection of land borders, ports, and airports and after the September 11, 2001 terrorist attacks, many questioned whether the threat posed by the largely unchecked 3,017 mile Canadian border, the 1,933 mile Mexican border, and the many unsecured ports.

18.4.3: Terrorism

The threat of terrorism is one of the greatest challenges facing the United States and the international community.

Learning Objective

Discuss the War on Terror campaign against religious fundamentalist groups and individuals who engage in terrorism

Key Points

• Terrorism generally refers to those violent acts that are intended to create fear (terror). The acts are perpetrated for a religious, political, and/or ideological goal. They deliberately target or disregard the safety of civilians in order to gain publicity for a group, cause, or individual.
• In current international affairs, the threat of Islamic terrorism, a form of religious terrorism committed by Muslims for the purpose of achieving varying political and/or religious ends, has been particularly prevalent.
• The September 11, 2001 terrorist attacks, committed by members of Al-Qaeda, left nearly 3,000 people dead and would mark the beginning of the War on Terror.

Key Term

revolutionary

Of or pertaining to a revolution in government; tending to, or promoting, revolution; as, revolutionary war; revolutionary measures; revolutionary agitators.

The threat of terrorism is one of the greatest challenges facing the United States and the international community. Common definitions of terrorism refer to those violent acts that are intended to create fear (terror). The acts are perpetrated for a religious, political, and/or ideological goal. They deliberately target or disregard the safety of civilians in order to gain publicity for a group, cause, or individual. Terrorism has been practiced by a broad array of political organizations, including right-wing and left-wing political parties, nationalistic groups, religious groups, revolutionary groups, and ruling governments.

Islamic Terrorism

In current international affairs, the threat of Islamic terrorism, a form of religious terrorism committed by Muslims for the purpose of achieving varying political and/or religious ends, has been particularly prevalent. Islamic terrorism has taken place in the Middle East, Africa, Europe, South Asia, Southeast Asia, and the United States since the 1970’s. Islamic terrorist organizations have been known to engage in tactics including suicide attacks, hijackings, kidnappings, and recruiting new members through the Internet. Well-known Islamic terrorist organizations include Al-Qaeda, Hamas, Hezbollah, and Islamic Jihad.

The 9/11 Attacks and the War on Terror

The September 11, 2001 terrorist attacks, in which members of Al-Qaeda under the leadership of Osama bin Laden hijacked and crashed four passenger jets in New York, Virginia, and Pennsylvania, left nearly 3,000 people dead. These attacks marked the beginning of the “War on Terror,” an international military campaign led by the United States and the United Kingdom (with the support of NATO and non-NATO allies) against Al-Qaeda and other associated militant organizations with the stated goal of eliminating them. The War on Terror would include the military campaigns in Afghanistan and Iraq .

September 11, 2001 attacks

The attack on the World Trade Center in New York City on September 11, 2001.

18.4.4: Nuclear Weapons

The proliferation of nuclear weapons, explosive devices which derive force from nuclear reactions, is a key challenge of foreign policy.

Learning Objective

Identify the history of nuclear weapons and international efforts to regulate them

Key Points

• Only two nuclear weapons have been used in the course of warfare, both by the United States against Japan near the end of World War II.
• In 1957, the International Atomic Energy Agency (IAEA) was established under the mandate of the United Nations to encourage development of peaceful applications for nuclear technology, provide international safeguards against its misuse, and facilitate the application of safety measures in its use.
• Currently, the prospect of nuclear technology falling into the hands of rogue states and terrorist organizations is considered a major threat to international security.

Key Terms

fission

The process of splitting the nucleus of an atom into smaller particles; nuclear fission

fusion

A nuclear reaction in which nuclei combine to form more massive nuclei with the concomitant release of energy

The proliferation of nuclear weapons, explosive devices which derive their destructive force from nuclear reactions (either fission or a combination of fission and fusion), is an important challenge of foreign policy.

Only a few nations possess such weapons or are suspected of seeking them. The only countries known to have detonated nuclear weapons—and that acknowledge possessing such weapons—are (chronologically by date of first test) the United States, the Soviet Union (succeeded as a nuclear power by Russia), the United Kingdom, France, China, India, Pakistan, and North Korea. In addition, Israel is also widely believed to possess nuclear weapons, though it does not acknowledge having them. One state, South Africa, fabricated nuclear weapons in the past, but has since disassembled their arsenal and submitted to international safeguards.

Only two nuclear weapons have been used in the course of warfare, both by the United States near the end of World War II. On August 6, 1945, a uranium gun-type fission bomb was detonated over the Japanese city of Hiroshima. Three days later, on August 9, a plutonium implosion-type fission bomb was exploded over Nagasaki, Japan. These two bombings resulted in the deaths of approximately 200,000 Japanese people—mostly civilians—from acute injuries sustained from the explosions.

Since the bombings of Hiroshima and Nagasaki, nuclear weapons have been detonated on over two thousand occasions for testing purposes and demonstrations. Because of the immense military power they can confer, the political control of nuclear weapons has been a key issue for as long as they have existed; in most countries the use of nuclear force can only be authorized by the head of government or head of state. In 1957, the International Atomic Energy Agency (IAEA) was established under the mandate of the United Nations to encourage development of peaceful applications for nuclear technology, provide international safeguards against its misuse, and facilitate the application of safety measures in its use.

By the 1960s, steps were being taken to limit both the proliferation of nuclear weapons to other countries and the environmental effects of nuclear testing. The Partial Test Ban Treaty (1963) restricted all nuclear testing to underground facilities, to prevent contamination from nuclear fallout, while the Nuclear Non-Proliferation Treaty (1968) attempted to place restrictions on the types of activities signatories could participate in, with the goal of allowing the transference of non-military nuclear technology to member countries without fear of proliferation. Currently, the prospect of nuclear technology falling into the hands of rogue states and terrorist organizations is considered a major threat to international security.

18.4.5: Iraq

Particularly since the beginning of Operation Iraqi Freedom in 2003, U.S. relations with Iraq have been central to its foreign policy.

Learning Objective

Discuss the history of U.S.-Iraq relations and the U.S. Occupation of Iraq

Key Points

• After the September 11, 2001 attacks, the governments of the United States and the United Kingdom claimed that Iraq’s alleged possession of weapons of mass destruction (WMD) posed a threat to their security and that of their coalitional and regional allies.
• On March 20, 2003, a U.S.-led coalition conducted a military invasion of Iraq, referred to as Operation Iraqi Freedom, without declaring war.
• The last U.S. troops left Iraqi territory on December 18, 2011 after Barack Obama announced an eighteen month withdrawal window for combat forces.

Key Terms

Shia

the second largest denomination of Islam; “followers”, “faction”, or “party” of Muhammad’s son-in-law Ali, whom the Shia believe to be Muhammad’s successor

sectarian

Of, or relating to a sect.

Sunni

The branch of Islam that believes that the Qur’an is the final authority, and that their leaders have no special sacred wisdom.

Since the United States recognized an independent Iraq in 1930, relations with that nation have been an important aspect of U.S. foreign policy.

After the September 11, 2001 attacks, the governments of the United States and the United Kingdom claimed that Iraq’s alleged possession of weapons of mass destruction (WMD) posed a threat to their security and that of their coalitional and regional allies. Some U.S. officials also accused Iraqi President Saddam Hussein of harboring and supporting al-Qaeda, but no evidence of a meaningful connection was ever found. Other proclaimed accusations against Iraq included its financial support for the families of Palestinian suicide bombers, Iraqi government human rights abuses, and an effort to spread democracy to the country.

On March 20, 2003, a U.S.-led coalition conducted a military invasion of Iraq without declaring war. The invasion, referred to as Operation Iraqi Freedom, led to an occupation and the eventual capture of President Hussein, who was later tried in an Iraqi court of law and executed by the new Iraqi government. Violence against coalition forces and among various sectarian groups soon led to the Iraqi insurgency, strife between many Sunni and Shia Iraqi groups, and the emergence of a new faction of al-Qaeda in Iraq.

Operation Iraqi Freedom

A U.S. Marine tank in Baghdad during the Iraq War.

The “One weekend a month, two weeks a year” slogan has lost most of its relevance since the Iraq War, when nearly 28% of total US forces in Iraq and Afghanistan at the end of 2007 consisted of mobilized personnel of the National Guard and other Reserve components. [35] In July 2012, the Army’s top general stated his intention to increase the annual drill requirement from two weeks per year to up to seven weeks per year.

As public opinion favoring troop withdrawals increased and as Iraqi forces began to take responsibility for security, member nations of the Coalition withdrew their forces. In late 2008, the U.S. and Iraqi governments approved a Status of Forces Agreement, effective through January 1, 2012. The Iraqi Parliament also ratified a Strategic Framework Agreement with the U.S., aimed at ensuring cooperation in constitutional rights, threat deterrence, education, energy development, and in other areas.

In late February 2009, newly-elected U.S. President Barack Obama announced an eighteen month withdrawal window for combat forces, with approximately 50,000 troops remaining in the country “to advise and train Iraqi security forces and to provide intelligence and surveillance. ” On October 21, 2011, President Obama announced that all U.S. troops and trainers would leave Iraq by the end of the year, bringing the U.S. mission in Iraq to an end. The last U.S. troops left Iraqi territory on December 18, 2011.

18.4.6: Afghanistan

The relationship between the United States and Afghanistan has become an integral aspect of U.S. foreign policy.

Learning Objective

Discuss the nature of the U.S. foreign policy toward Afghanistan since 2001

Key Points

• Following the attacks of September 11, 2001– thought to be orchestrated by Osama bin Laden, who was residing in Afghanistan under asylum at the time– the United States launched and led Operation Enduring Freedom.
• The United States has taken a leading role in the overall reconstruction of Afghanistan by investing billions of dollars in national roads, government and educational institutions, and the Afghan military and national police force.
• U.S. forces are scheduled to begin leaving between mid-2011 to the end of 2014. Concerns remain regarding the Taliban insurgency, the role of Pakistan in training those insurgents, and the risk of Afghanistan degenerating into a failed state after the withdrawal.

Key Terms

insurgency

rebellion; revolt; the state of being insurgent

Taliban

A Sunni Islamic student movement in Afghanistan; organized in 1994 by the radical mullah “Mohammad Omar”

The relationship between the United States and Afghanistan has become an integral aspect of U.S. foreign policy.

Following the attacks of September 11, 2001– thought to be orchestrated by Osama bin Laden, who was residing in Afghanistan under asylum at the time– the United States launched and led Operation Enduring Freedom. This major military operation was aimed at removing the Taliban government from power and capturing Al-Qaeda members, including Osama bin Laden himself. Following the overthrow of the Taliban, the U.S. supported the new government of Afghan President Hamid Karzai by maintaining a high level of troops in the area, as well as by combating Taliban insurgency. Afghanistan and the United States resumed diplomatic ties in late 2001.

The United States has taken a leading role in the overall reconstruction of Afghanistan by investing billions of dollars in national roads, government and educational institutions, and the Afghan military and national police force. In 2005, the United States and Afghanistan signed a strategic partnership agreement, committing both nations to a long-term relationship.

The U.S. Armed Forces has been gradually increasing its troop level in Afghanistan since 2002, reaching about 100,000 in 2010. They are scheduled to begin leaving between mid-2011 to the end of 2014. In 2012, Presidents Obama and Karzai signed a strategic partnership agreement between their respective countries, designating Afghanistan as a major non-NATO ally. Concerns remain regarding the Taliban insurgency, the role of Pakistan in training those insurgents, the drug trade, the effectiveness of Afghan security forces, and the risk of Afghanistan degenerating into a failed state after the withdrawal.

Operation Enduring Freedom

An American soldier on patrol in Afghanistan

18.4.7: China

Three issues of particular importance in Chinese-American relations are economic trade, the contested status of Taiwan, and human rights.

Learning Objective

Examine the social, political and economic issues that are significant for U.S.-China relations

Key Points

• China, which became the world’s second largest economy in 2010, may overtake the United States and become the world’s largest economy by 2030, if current trends persist.
• American support for the island nation of Taiwan, which China claims as one of its provinces and has threatened to take over by force, is another source of tension.
• The Chinese government’s stance toward human rights, which has been criticized by international humanitarian groups, is another source of controversy.

Key Terms

joint venture

A cooperative partnership between two individuals or businesses in which both profits and risks are shared

one child policy

A policy of population control in China that officially limits married, urban couples to having only one child

The political, economic, and military rise of China, with its enormous population of more than 1.3 billion people, is a key foreign policy challenge for the United States. Within current U.S.-China relations, three issues of particular importance stand out: economic trade, the status of Taiwan, and human rights.

U.S.-China relations

President Obama and Chinese Premier Wen Jiabao

Since China and the United States resumed trade relations in 1972 and 1973, U.S. companies have entered into numerous agreements with Chinese counterparts that have established more than 20,000 equity joint ventures, contractual joint ventures, and wholly foreign-owned enterprises. The American trade deficit with China exceeded $350 billion in 2006, and is the U.S.’ s largest bilateral trade deficit.

China, which became the world’s second largest economy in 2010, may overtake the United States and become the world’s largest economy by 2030, if current trends continue (although this growth might be limited by domestic challenges facing China, including income inequality and pollution). Among foreign nations, China holds the largest amount of U.S. public debt and has been a vocal critic of U.S. deficits and fiscal policy. In turn, the United States has criticized China’s undervaluation of its currency, the Renminbi.

American support for the island of Taiwan, which China claims as one of its provinces and has threatened to take over by force, is another source of tension. The U.S. maintains sympathy for a independent Taiwan due to its liberal, pluralistic democracy, and gives Taiwan extensive political and military support. This support has resulted in threats of retaliation from China.

The Chinese government’s policy toward human rights is another source of controversy. International human rights organizations have identified a number of potential violations in China, including the use of capital punishment, the application of the one child policy, the denial of independence to Tibet, the absence of a free press, the absence of an independent judiciary with due process, the absence of labor rights, and the absence of religious freedom.

18.4.8: Israel and Palestine

The conflict between the State of Israel and the Palestinians is an important issue affecting American and international policy.

Learning Objective

Explain the importance of the Israeli-Palestinian conflict for American foreign policy in the Middle East

Key Points

• Many currently consider the central foreign policy issue in the conflict to be the creation of an independent Palestinian state next to the existing Jewish state of Israel.
• The Oslo Accords of 1993 allowed the Palestinian National Authority to have autonomy over large parts of the West Bank and the Gaza Strip, although terrorism from Palestinian extremist groups and the assassination of Israeli Prime Minister Yitzhak Rabin in 1995 would derail further negotiations.
• Current issues for negotiations include: mutual recognition, borders, terrorism and security, water rights, control of Jerusalem, Israeli settlements, Palestinian incitement, and finding a solution for Palestinian refugees from Israel’s War of Independence in 1948.

Key Term

Palestinian

An inhabitant of the West Bank and Gaza Strip, legally governed by the Palestinian National Authority.

The conflict between the State of Israel and the Palestinians is an important issue affecting American and international policy. While the United States has a longstanding policy of political, military, and economic support for Israel, it often must balance such support with its relations with Arab nations and its commitment to a Palestinian state.

The conflict dates back to early Arab opposition to Jewish national sovereignty and numerous wars fought between Israel and neighboring Arab states. However, many currently consider the central foreign policy issue to be the creation of an independent Palestinian state next to the existing Jewish state of Israel. Most of the West Bank and the Gaza Strip, territories taken by Israel during the Six-Day War in 1967, are considered acceptable locations for a future Palestinian state.

Numerous efforts have been made to achieve peace through a negotiated settlement between the Israeli government and its Palestinian counterparts. Most prominently, the Oslo Accords of 1993 allowed the Palestinian National Authority to have autonomy over large parts of the West Bank and the Gaza Strip, although a campaign of terrorism from Palestinian extremist groups and the assassination of Israeli Prime Minister Yitzhak Rabin in 1995 would derail further negotiations.

The Oslo Accords

The signing of the Oslo Accords in 1993

Current issues for negotiations include: mutual recognition, borders, terrorism and security, water rights, control of Jerusalem, Israeli settlements, Palestinian incitement, and finding a solution for Palestinian refugees from Israel’s War of Independence in 1948. Another challenge is the lack of unity among Palestinians, reflected in the political struggle between Fatah, which controls the Palestinian areas of the West Bank, and the terrorist group Hamas, which has controlled the Gaza Strip since Israel’s withdrawal from that territory in 2005.

18.4.9: Humanitarian Efforts

Humanitarian aid is material or logistical assistance in response to crises including natural and man-made disasters.

Learning Objective

Compare and contrast humanitarian aid with development aid

Key Points

• The primary objective of humanitarian aid is to save lives, alleviate suffering and maintain human dignity.
• The humanitarian community has initiated a number of inter-agency initiatives to improve accountability, quality and performance in humanitarian action.
• Prominent humanitarian organizations include Doctors Without Borders, Mercy Corps and the International Red Cross.

Key Terms

humanitarian

Concerned with people’s welfare and the alleviation of suffering; humane or compassionate.

socioeconomic

Of or pertaining to social and economic factors.

Humanitarian aid is material or logistical assistance in response to crises including natural and man-made disasters. The primary objective of humanitarian aid is to save lives, alleviate suffering and maintain human dignity. Humanitarian aid differs from development aid, which seeks to address the underlying socioeconomic factors leading to a crises.

Aid is funded by donations from individuals, corporations, governments and other organizations. The funding and delivery of humanitarian aid has become increasingly international in scope. This makes it much more responsive and effective in coping with major emergencies. With humanitarian aid efforts sometimes criticized for a lack of transparency, the humanitarian community has initiated a number of inter-agency initiatives to improve its accountability, quality and performance.

The People in Aid initiative, for example, links seven areas that would improve the operations of aid organizations – health, safety and security learning; training and development; recruitment and selection; consultation and communication; support management and leadership; staff policies and practices; and human resources strategy.

Prominent humanitarian organizations include Doctors Without Borders, Mercy Corps and the International Red Cross. Major humanitarian projects include the Berlin Airlift, in which U.S. and U.K governments flew supplies into the Western-held sectors of Berlin during the Soviet blockade of 1948-1949. Another example is the aid efforts for refugees felling from the fighting in Bosnia and Kosovo in 1993 and 1999, respectively .

Humanitarian aid

Aid for refugees of the Kosovo War

18.5: Modern Foreign Policy

18.5.1: Diplomacy

Standard diplomacy involves government-to-government communication; modern diplomacy has begun to emphasize public diplomacy as well.

Learning Objective

Compare and contrast public diplomacy with standard diplomacy

Key Points

• Through diplomacy, governments of one country engage governments of another country. Usually this is accomplished by diplomats (e.g. ambassadors) in an official, U.S. government capacity in order to improve relationships between two countries, negotiate treaties, etc.
• Through public diplomacy, governments attempt to influence and communicate with the societies of another country. Film, music, arts, social and educational exchange programs, direct radio broadcasts, and the Internet can all be used to achieve public diplomacy.
• Public diplomacy has increased in importance since 9/11. The U.S. government has actively sought to use public diplomacy to improve their reputation abroad, particularly in the Middle East.
• Increasing globalization has caused public diplomacy to grow in importance in modern foreign policy. People– not just states– matter in an increasingly interconnected world.

Key Terms

diplomacy

The art and practice of conducting international relations by negotiating alliances, treaties, agreements, etc., bilaterally or multilaterally, between states and sometimes international organizations or even between policies with varying statuses, such as those of monarchs and their princely vassals.

foreign policy

A government’s policy relating to matters beyond its own jurisdiction: usually relations with other nations and international organisations.

public diplomacy

The communication between foreign societies, intended primarily to establish a dialogue designed to inform and influence.

Public Diplomacy

Public diplomacy has become increasingly important in modern foreign policy. Public diplomacy– or people’s diplomacy, broadly speaking– is the communication between foreign societies, intended primarily to establish a dialogue designed to inform and influence. It is practiced through a variety of instruments and methods ranging from personal contact and media interviews to the Internet and educational exchanges.

Public Diplomacy Versus Standard Diplomacy

Standard diplomacy can be described as the way in which government leaders communicate with each other at the highest levels; it is the elite diplomacy we are all familiar with. By contrast, public diplomacy focuses on the way in which a country (or multi-lateral organization such as the United Nations) communicates with citizens in other societies . A country may be acting deliberately or inadvertently, and through both official and private individuals and institutions. Effective public diplomacy begins with the premise that dialogue, rather than a sales pitch, is often central to achieving the goals of foreign policy: public diplomacy must be seen as a two-way street. Furthermore, public diplomacy advocates many differing views as represented by private American individuals and organizations in addition to the official views of the US government.

Ambassadors and Fulbright Scholars

Eric G. John, the U.S. Ambassador to Thailand from 2007-2010, speaks at a reception for Fulbright Grantees in Thailand. As an ambassador and formal representative of the U.S. government, John addresses traditional, elite-to-elite diplomacy, while the Fulbright program emphasizes public diplomacy.

Traditional diplomacy actively engages one government with another government. In traditional diplomacy, U.S. embassy officials represent the U.S. government in a host country primarily by maintaining relations and conducting official U.S. government business with the officials of the host government, whereas public diplomacy primarily engages many diverse, non-governmental elements of a society .

US Embassies

Maintaining an embassy in every recognized country is an important traditional diplomatic task. Depicted here is the U.S. embassy in London, England.

Avenues for Public Diplomacy

Film, television, music, sports, video games and other social/cultural activities are seen by public diplomacy advocates as enormously important avenues for otherwise diverse citizens to understand each other, as well as integral to international cultural understanding, considered a key goal of modern public diplomacy. This goal involves not only shaping the messages that a country wishes to present abroad– by developing the necessary tools of conversation and persuasion– but also analyzing and understanding the ways that the message is interpreted by diverse societies.

Instruments used for practicing public diplomacy include broadcasting stations (The Voice of America, Radio Free Europe, Radio Liberty), exchange programs (Fulbright, the International Visitor Leadership Program), American arts and performances in foreign countries, the Internet, and personal contact .

Voice of America

Pictured is the Voice of America headquarters in Washington, DC. Media such as Voice of America seek to influence foreign societies by making American policy seem more favorable. This is a key component of modern public diplomacy.

Globalization and Increase in U.S. Public Diplomacy

Public diplomacy has been an essential element of American foreign policy for decades. It was an important tool in influencing public opinion during the Cold War. Since the attacks of September 11, 2001, the term has come back into vogue and the practice has increased in importance as the United States government works to improve their reputation abroad, particularly in the Middle East and among those in the Islamic world. Numerous panels, including those sponsored by the Council on Foreign Relations, have evaluated American efforts in public diplomacy since 9/11 and have written reports recommending that the United States take various actions to improve the effectiveness of its public diplomacy.

This traditional concept is expanded on with the idea of adopting what is called “population-centric foreign affairs” within which foreign populations assume a central component of foreign policy. Since people, not just states, are of global importance in a world where technology and migration increasingly face everyone, an entire new door of policy is opened.

18.5.2: The United Nations

The United Nations is the most important and influential international, intergovernmental organization.

Learning Objective

Analyze the United States position toward the United Nations

Key Points

• The United Nations was established in 1945 to replace the failed League of Nations, with the goal of promoting peace by establishing a forum for cooperation, dialogue, and humanitarian response.
• The UN’s main bodies include the Security Council, the General Assembly, the Economic and Social Council, the Secretariat, and the International Court of Justice. The U.S. is a permanent member of the UN Security Council, which is arguably the most influential body of the UN.
• The UN’s main objectives include peacekeeping and security, disarmament, human rights protection and humanitarian assistance, and social and economic development.
• The U.S. led the creation of the UN, and has been an influential player in the UN’s work since its beginning.
• Since the U.S. has taken on the role of the world’s sole superpower, the UN and the U.S. have often conflicted. In particular, the UN and the U.S. have conflicted over the U.S.’ s debts to the UN, as well as the U.S.’ s 2003 near-unilateral invasion of Iraq.

Key Terms

multilateral

Involving more than one party (often used in politics to refer to negotiations, talks, or proceedings involving several nations).

international organization

Often referred to as intergovernmental organization; organizations that are made up primarily of sovereign states (referred to as member states).

Universal Declaration of Human Rights

A declaration adopted by the United Nations General Assembly after World War II that represents the first global expression of rights to which all human beings are inherently entitled. It includes economic, political and social rights.

What is the United Nations?

The United Nations (UN) is an intergovernmental, international organization consisting of all 193 states in the world, whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and the achievement of world peace. The UN was founded in 1945 to stop wars between countries and to provide a platform for dialogue. It contains multiple subsidiary organizations to carry out its missions.

History of the UN

After World War II, most government leaders recognized that humankind could not afford a third world war. The United Nations was established to replace the flawed League of Nations, in order to maintain international peace and promote cooperation in solving international economic, social and humanitarian problems.

In 1945, the UN officially came into existence upon ratification of the United Nations Charter by the five then-permanent members of the Security Council—France, the Republic of China, the Soviet Union, the United Kingdom and the United States—and by a majority of the other 46 signatories.

Organization of the UN

The organization’s principle organs are as follows:

1. The General Assembly is the main deliberative assembly and is composed of all United Nations member states.
2. The Security Council (UNSC) is charged with maintaining peace and security among countries. It is composed of 15 member states, including 5 permanent members–China, France, Russia, the UK, and the US.
3. The Economic and Social Council promotes international economic and social progress through cooperation and development.
4. The Secretariat, headed by the Secretary-General, provides studies, information and facilities needed by the UN bodies.
5. The International Court of Justice is the primary judicial organ of the UN.

Other prominent UN agencies exist to work on particular issues. Some of the most well-known agencies are the International Atomic Energy Agency, the World Bank, the World Health Organization (WHO), the World Food Programme (WFP), and the United Nation’s Children’s Fund (UNICEF). It is through these agencies that the UN performs most of its humanitarian work.

The UN is financed from assessed and voluntary contributions from member states. The General Assembly approves the regular budget and determines the assessment for each member.

Objectives of the UN

One of the main objectives of the UN is peacekeeping and security . With approval from the Security Council, the UN sends peacekeepers, voluntarily provided by UN member states, to regions where armed conflict has recently ceased. The goal of the peacekeepers is to enforce the terms of peace agreements and to discourage combatants from resuming hostilities.

UN Peacekeepers

A UN peacekeeper carries out operations in Haiti. Peacekeeping and security are primary objectives of the UN, and UN peacekeepers have been deployed around the world.

The UN is a world leader in human rights protection and humanitarian assistance. The Universal Declaration of Human Rights, though not legally binding, was adopted by the General Assembly in 1948 as a common standard of achievement for all. The UN and its agencies are central in upholding and implementing the principles enshrined in the Declaration, from assisting countries transitioning to democracy, to supporting women’s rights, to providing humanitarian aid.

Lastly, the UN also focuses on social and economic development through the UN Development Program (UNDP) and other agencies like the WHO and the World Bank.

The United States and the UN

The United States is a charter member of the United Nations and one of five permanent members of the UN Security Council. The most important American contribution to the United Nations system is perhaps the Bretton Woods conference. This conference took place in 1944, and its goal was “to create a new international monetary and trade regime that was stable and predictable.” This new system opened world markets, promoted a liberal economy and was implemented through different institutions, such as the World Bank and the International Monetary Fund.

Since 1991 the United States has been the world’s dominant military, economic, social and political power (plus it hosts the UN Headquarters itself in New York City ). The United Nations was not designed for such a unipolar world with a single superpower, and conflict between an ascendant U.S. and other UN members has increased.

UN Building in New York

This picture shows the UN Secretariat’s headquarters in New York City.

One of such conflicts occurred when the U.S. refused to pay its arrears in order to force UN compliance with U.S. wishes, as well as to cause the UN to reduce the U.S. assessment.

Another conflict between the U.S. and some UN members arose in 2003 over the issue of Iraq. U.S. President Bush maintained that Iraqi President Saddam Hussein possessed weapons of mass destruction (WMDs) in violation of his post-Gulf War obligations. In order to find these WMDs, Bush and a “coalition of the willing” invaded Iraq without explicit UN Security Council approval, causing friction within the multilateral UN .

2003 Invasion of Iraq

President George W. Bush addresses the nation in 2003, announcing the beginning of Operation Iraqi Freedom. The U.S.’ s near-unilateral invasion of Iraq caused tension in the multilateral UN.

18.5.3: The International Monetary Structure

The international monetary structure involves international institutions, regional trading blocs, private players, and national governments.

Learning Objective

Explain the role played by the United States over the history of the international monetary structure

Key Points

• The International Monetary Fund (IMF) is one of the most prominent institutions in the international monetary structure. The IMF oversees the global financial system and offers assistance to states.
• Another international institution, the World Bank, is important in the global monetary structure as it provides assistance and loans to developing nations.
• The World Trade Organization is an international institution that helps settle trade disputes and negotiate trade arrangements among states.
• Other important institutions in the international monetary structure include private participants (such as banks or insurance companies), regional trading blocs (such as the Eurozone or NAFTA), and national governments.
• Some argue that because of the U.S.’ s economic power and global influence, the international monetary structure has been created to match the U.S.’ s preferences and national interests.
• The U.S. helped establish the current structure of the international monetary system by leading the creation of the Bretton Woods system in 1944.

Key Terms

Washington Consensus

A term that refers to a set of ten relatively specific economic policy prescriptions that constitute the “standard” reform package promoted for crisis-wracked developing countries.

World Bank

A group of five financial organizations whose purpose is economic development and the elimination of poverty.

International Monetary Fund

The international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. Abbreviated as IMF.

Major Components of the International Monetary Structure

The main components in the international monetary structure are global institutions (such as the International Monetary Fund and Bank for International Settlements), national agencies and government departments (such as central banks and finance ministries), private institutions acting on the global scale (such as banks and hedge funds), and regional institutions (like the Eurozone or NAFTA).

International Institutions

The most prominent international institutions are the International Monetary Fund (IMF) , the World Bank, and the World Trade Organization (WTO). The IMF keeps account of the international balance of payments accounts of member states, but also lends money as a last resort for members in financial distress. Membership is based on the amount of money a country provides to the fund relative to the size of its role in the international trading system.

IMF Headquarters

The headquarters of the International Monetary Fund in Washington, DC.

The World Bank aims to provide funding, takes up credit risk, or offers favorable terms to developing countries for development projects that couldn’t be obtained by the private sector.

The World Trade Organization settles trade disputes and negotiates international trade agreements in its rounds of talks (currently the Doha Round) .

Members of the WTO

This map depicts the member states of the World Trade Organization (WTO). Dark green states are members; light green are members of the EU and thus members of the WTO as well; blue states are observer states; and gray states have no official interaction with the WTO. Notice the global reach of organizations like the WTO.

Private Participants

Also important to the international monetary structure are private participants, such as players active in the markets of stocks, bonds, foreign exchange, derivatives, and commodities, as well as investment banking. This includes commercial banks, hedge funds and private equity, pension funds, insurance companies, mutual funds, and sovereign wealth funds.

Regional Institutions

Certain regional institutions also play a role in the structure of the international monetary system. For example, the Commonwealth of Independent States (CIS), the Eurozone, Mercosur, and North American Free Trade Agreement (NAFTA) are all examples of regional trade blocs, which are very important to the international monetary structure .

Bill Clinton Signs NAFTA

In this picture, President Bill Clinton signs the North American Free Trade Agreement into law. NAFTA, a free trade area between Canada, the U.S., and Mexico, is an example of the importance of regional trade blocs to the international monetary structure. NAFTA is also an example of the U.S.’ s disproportionate power in determining the direction of the international monetary structure.

Government Institutions

Governments are also a part of the international monetary structure, primarily through their finance ministries: they pass the laws and regulations for financial markets, and set the tax burden for private players such as banks, funds, and exchanges. They also participate actively through discretionary spending. They are closely tied to central banks that issue government debt, set interest rates and deposit requirements, and intervene in the foreign exchange market.

Perspectives on the International Monetary Structure

The liberal view of the international monetary structure holds that the exchange of currencies should be determined not by state institutions but instead individual players at a market level. This view has been labelled as the Washington Consensus. The social democratic view challenges the liberal view, advocating for the tempering of market mechanisms and the institution of economic safeguards in an attempt to ensure financial stability and redistribution. Besides the liberal and social democratic views, neo-Marxists are highly critical of the modern financial system in that it promotes inequality between state players, particularly holding the view that the wealthier countries abuse the financial system to exercise control of developing countries’ economies.

U.S. Influence on the International Monetary Structure

The most important American contribution to the global financial system is perhaps the introduction of the Bretton Woods system. The Bretton Woods system of monetary management, created at a conference in 1944, established the rules for commercial and financial relations among the world’s major industrial states in the mid-20^th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the IMF and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group.

Besides the influence of the U.S. on the Bretton Woods system, it is often claimed that the United States’s transition to neoliberalism and global capitalism also led to a change in the identity and functions of international financial institutions like the IMF. Because of the high involvement and voting power of the United States, the global economic ideology could effectively be transformed to match that of the U.S. This is consistent with the IMF’s function change during the 1970s after a change in President Nixon’s policies (when the Nixon Shock ended the Bretton Woods gold standard). Others also claim that, because of the disproportionate economic power of the United States, allies of the United States are able to receive bigger loans with fewer conditions.

18.5.4: Collective Military Force

A collective military force (when multiple countries pool their militaries) involves both collective security and collective defense.

Learning Objective

Compare and contrast the concepts of collective security and collective defense

Key Points

• Collective security is more far-reaching than collective defense as it addresses a broader range of threats.
• States usually establish an organization in order to pursue collective security. The UN is the most prominent example of a collective security organization.
• In collective defense (usually formalized by a treaty or an organization) states agree to come to the defense of another state; an attack on one state is considered an attack on all.
• The North Atlantic Treaty Organization (NATO) is one of the most prominent collective defense organizations. The US is a prominent and leading member of NATO.
• The 1991 Gulf War is an example of states successfully creating and deploying a collective military force.

Key Terms

collective defense

An arrangement, usually formalized by a treaty and an organization, among participant states that commit support in defense of a member state if it is attacked by another state outside the organization.

collective security

The concept of maintaining peace among all nations or members of a group by making the security concerns of one member important to all members. This is broader than mere military alliances; a primary example of collective security is the UN.

North Atlantic Treaty Organization

An intergovernmental military alliance based on the North Atlantic Treaty which was signed on 4 April 1949. The organization constitutes a system of collective defense whereby its member states agree to mutual defense in response to an attack by any external party.

Collective Military Force

A collective military force is what arises when countries decide that it is in their best interest to pool their militaries in order to achieve a common goal. The use of collective military force in the global environment involves two primary concepts: collective security and collective defense. These concepts are similar but not identical.

Collective Security

Collective security can be understood as a security arrangement, regional or global, in which each state in the system accepts that the security of one is the concern of all, and agrees to join in a collective response to threats to, and breaches of, the peace. Collective security is more ambitious than collective defense in that it seeks to encompass the totality of states within a region or indeed globally, and to address a wide range of possible threats.

Collective security is achieved by setting up an international cooperative organization, under the auspices of international law. This gives rise to a form of international collective governance, albeit limited in scope and effectiveness. The collective security organization then becomes an arena for diplomacy.

The UN and Collective Security

The UN is often provided as the primary example of collective security. By employing a system of collective security, the UN hopes to dissuade any member state from acting in a manner likely to threaten peace, thereby avoiding any conflict.

Collective Defense

Collective defense is an arrangement, usually formalized by a treaty and an organization, among participant states that commit support in defense of a member state if it is attacked by another state outside the organization .

NATO and Collective Defense

The North Atlantic Treaty Organization (NATO) is the best known collective defense organization . Its now famous Article V calls on (but does not fully commit) member states to assist another member under attack. This article was invoked after the September 11 attacks on the United States, after which other NATO members provided assistance to the US War on Terror in Afghanistan . As a global military and economic superpower, the US has taken charge of leading many of NATO’s initiatives and interventions.

NATO in Afghanistan

In 2003, NATO took command of ISAF (International Security Assistance Force), which was the group of international troops operating in Afghanistan. This picture depicts a commander passing the NATO flag during a change of command in Afghanistan.

September 11 and Collective Defense

The 11 September attacks in the United States caused NATO to invoke its collective defense article for the first time.

NATO Coverage

This map depicts current members of the North Atlantic Treaty Organization, one of the primary examples of a collective defense organization.

Benefits and Drawbacks to Collective Defense

Collective defense entails benefits as well as risks. On the one hand, by combining and pooling resources, it can reduce any single state’s cost of providing fully for its security. Smaller members of NATO, for example, have leeway to invest a greater proportion of their budget on non-military priorities, such as education or health, since they can count on other members to come to their defense, if needed.

On the other hand, collective defense also involves risky commitments. Member states can become embroiled in costly wars in which neither the direct victim nor the aggressor benefit. In the First World War, countries in the collective defense arrangement known as the Triple Entente (France, Britain, Russia) were pulled into war quickly when Russia started full mobilization against Austria-Hungary, whose ally Germany subsequently declared war on Russia.

Using Collective Military Force: The 1991 Gulf War

The Gulf War (2 August 1990 – 28 February 1991), codenamed Operation Desert Storm, was a war waged by a UN-authorized coalition force from 34 nations led by the United States, against Iraq in response to Iraq’s invasion and annexation of Kuwait. This invasion is often given as an example of the successful deployment of a collective military force.

In August, 1990, Iraqi troops invaded Kuwait. This invasion met with unified international condemnation, and brought immediate economic sanctions against Iraq by members of the UN Security Council. U.S. President George H. W. Bush deployed American forces into Saudi Arabia, and an array of nations joined the coalition. In this conflict, the UN, the US, and other nations were united into a military force that successfully propelled the Iraqi aggressor out of sovereign Kuwait.

18.5.5: Economic Aid and Sanctions

States can give economic aid to help another country, or implement economic sanctions to try and force another country to change policies.

Learning Objective

Analyze criticisms of the institutions, practices and policies of economic aid

Key Points

• Economic aid is given, at least partly, with the motivation of helping the recipient country. Aid can also be a tool of foreign policy given to show diplomatic approval, reward a government, or gain some other benefit.
• Economic aid is often given with conditions, meaning that in order to receive the aid, the recipient country must change economic policies, agree to spend the aid only on certain items, etc.
• Economic aid is often criticized for being motivated more by donor concerns than recipient concerns, for being a form of neocolonialism, and for simply not being effective.
• Economic sanctions are a foreign policy tool in which one country places trade penalties on another country, and may include trade barriers, duties, or quotas.
• Economic sanctions can be put in place as a foreign policy measure designed to make another country change some sort of human rights or political policy (for example, the US has sanctions against Iran).
• One country can declare sanctions against another country in protest of unfair trading practices.

Key Terms

conditionality

A condition applied to the access of a government to credit facilities and other international financial assistance, especially from the IMF and the World Bank.

neocolonialism

The control or domination by a powerful country over weaker ones (especially former colonies) by the use of economic pressure, political suppression and cultural dominance.

sanction

A penalty, or some coercive measure, intended to ensure compliance; especially one adopted by several nations, or by an international body.

Economic Aid and Sanctions

As part of foreign policy, states can use money and monetary policies to either help or penalize other states. Economic aid is a voluntary transfer of resources from one country to another, given at least partly with the objective of benefiting the recipient country . Sanctions, on the other hand, are penalties (usually in the form of trade policies) that are applied to one country by another.

Development Aid

States can give economic aid to help another country’s economic development. In this picture, the US government has supplied water pumps to a village in Afghanistan.

Economic Aid

Aid may have other functions besides humanitarian: it may be given to signal diplomatic approval, strengthen a military ally, reward a government for behavior desired by the donor, extend the donor’s cultural influence, provide infrastructure needed by the donor for resource extraction from the recipient country, or gain other kinds of commercial access. The threat of withdrawing aid can be another means by which a state can pursue its national interest. Humanitarianism and altruism are, nevertheless, significant motivations for the giving of aid.

A major proportion of aid from donor nations is based on conditionality, meaning that the aid comes with conditions. For example, some donors mandate that a receiving nation must spend the aid on products and expertise originating only from the donor country. Similarly, the World Bank and the International Monetary Fund, as primary holders of developing countries’ debt, attach structural adjustment conditionalities to loans which generally include eliminating state subsidies and the privatizing state services.

Criticisms of Economic Aid

Aid is seldom given from motives of pure altruism; instead, it is often used as a tool of foreign policy. It may be given as a means of supporting an ally in international politics. It may also be given with the intention of influencing the political process in the receiving nation. Aid to underdeveloped countries is often more in the interest of the donor than the recipient, or even a form of neocolonialism. In recent decades, aid by organizations such as the International Monetary Fund and the World Bank has been criticized as being primarily a tool used to open new areas up to global capitalists, and being only secondarily, if at all, concerned with the well-being of the people in the recipient countries.

Economic aid is often criticized for simply not being effective: it does not do what it was intended to do or help the people it was intended to help. Statistical studies have produced widely differing assessments of the correlation between aid and economic growth, and no firm consensus has emerged to suggest that foreign aid boosts growth. It has also been argued that foreign aid harms recipient governments, often because aid distributed by local politicians finances the creation of corrupt government.

Economic Sanctions: Resolving Trade Disputes

Economic sanctions are domestic penalties applied by one country or group of countries on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas.

Sanctions can arise from an unresolved trade or policy dispute, such as a disagreement about the fairness of a policy affecting international trade. For instance, one country may conclude that another is unfairly subsidizing exports of one or more products, or unfairly protecting some sector from competition from imported goods or services. The first country may retaliate by imposing import duties on goods or services from the second.

For example, in March 2010, Brazil introduced new sanctions against the US. These sanctions were on the basis that the US government was paying cotton farmers for their products, an action not allowed by the WTO. The WTO is currently supervising talks between the states to remove the sanctions.

Economic Sanctions: Achieving Policy Goals

Economic sanctions also can be a coercive foreign policy measure used to achieve particular policy goals related to trade, governance, or humanitarian violations. For example, the United States has imposed economic sanctions against Iran for years on the basis that the Iranian government sponsors groups who work against US interests . The United Nations imposed stringent economic sanctions on Iraq after the first Gulf War, partly as an attempt to make the Iraqi government cooperate with the UN weapons inspectors’ monitoring of Iraq’s weapons programs.

Iran and Sanctions

The US has long upheld economic sanctions against Iran, arguing that Iran pursues policies that are contrary to US national interest.

18.5.6: Arbitration

Arbitration is a form of dispute resolution that can be used to resolve international commercial, investment, and interstate conflicts.

Learning Objective

Explain the advantages of international commercial and investment arbitration

Key Points

• Arbitration is a form of alternative dispute resolution in which a third party reviews evidence in a dispute and makes a decision that is legally binding for all involved.
• International arbitration has frequently been used in resolving international commercial or investment disputes.
• International commercial and investment arbitration is popular primarily because it avoids the uncertainties and problems that come with litigating in a foreign, national court, and arbitration is confidential and enforceable.
• The main legal instrument that governs international commercial arbitration is the 1958 New York Convention, which was created under the auspices of the UN and has been signed by more than 140 countries.
• Arbitration can also be an important tool of foreign policy, as it provides a way for states to resolve their conflicts peaceably. For example, in 1903, arbitration settled a border dispute between the United States and Canada.

Key Terms

New York Convention

Widely considered the foundational instrument for international arbitration, this agreement requires the courts of states who signed the agreement to give effect to private arbitration agreements and to recognize and enforce arbitration awards made in other contracting states.

alternative dispute resolution

Resolution of a dispute through negotiation, mediation, arbitration, or similar means, as opposed to litigation

arbitration

A process through which two or more parties use an arbitrator or arbiter (an impartial third party) in order to resolve a dispute.

What is Arbitration?

Arbitration, a form of alternative dispute resolution, is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons by whose decision they agree to be bound. It is a resolution technique in which a third party reviews the evidence in the case and imposes a decision that is legally binding for both sides and enforceable.

Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions. Arbitration can be an important tool of foreign policy, as it allows states a forum to resolve disputes.

International Arbitration

International arbitration is a leading method for resolving disputes arising from international commercial agreements and other international relationships. As with arbitration generally, international arbitration is a creature of contract. In other words, the parties’ agree to submit disputes to binding resolution by arbitrators, usually by including a provision for the arbitration of future disputes in their contract. The practice of international arbitration has developed so as to allow parties from different legal and cultural backgrounds to resolve their disputes, generally without the formalities of their respective legal systems.

Advantages to International Arbitration

International arbitration has enjoyed growing popularity with business and other users over the past 50 years. There are a number of reasons that parties elect to have their international disputes resolved through arbitration. These include: the desire to avoid the uncertainties and local practices associated with litigation in national courts, the desire to obtain a quicker, more efficient decision, the relative enforceability of arbitration agreements and awards, the commercial expertise of arbitrators, the parties’ freedom to select and design the arbitral procedures, confidentiality of arbitration, and other benefits.

The New York Convention

The principal instrument governing the enforcement of commercial international arbitration agreements and awards is the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “New York Convention”). The New York Convention was drafted under the auspices of the United Nations and has been ratified by more than 140 countries, including most major countries involved in significant international trade and economic transactions . The New York Convention requires that the states that have ratified it to recognize and enforce international arbitration agreements and foreign arbitral awards issued in other contracting states, subject to certain limited exceptions. These provisions of the New York Convention, together with the large number of contracting states, has created an international legal regime that significantly favors the enforcement of international arbitration agreements and awards.

New York Convention Signatories

This map depicts all of the countries who have signed on to the New York Convention. This extensive treaty is often recognized as the most important instrument governing international commercial arbitration.

International Commercial and Investment Arbitration

The resolution of disputes under international commercial contracts is widely conducted under the auspices of several major international institutions and rule making bodies. Specialist dispute resolution bodies also exist, such as the World Intellectual Property Organisation (WIPO), which has an arbitration and mediation center and a panel of international neutrals specializing in intellectual property and technology related disputes.

The last few decades have seen the promulgation of numerous investment treaties such as the Energy Charter Treaty, which are designed to encourage investment in signatory countries by offering protections to investors from other signatory states.

Interstate Arbitration

Arbitration has been used for centuries for the resolution of disputes between states and state-like entities. The 1899 and 1907 Hague Conferences addressed arbitration as a mechanism for resolving state-to-state disputes, leading to the adoption of the Hague Conventions for the Pacific Settlement of International Disputes. The Conventions established the Permanent Court of Arbitration and a rudimentary institutional framework for international arbitration of inter-state disputes .

Members of the Permanent Court of Arbitration

These states are parties to the Permanent Court of Arbitration (the green states signed on to the 1907 agreement and the blue ones to the 1899 agreement).

For example, in 1903, arbitration resolved a dispute over the Canada-Alaska border. The Alaska Purchase of 1867 drew the boundary between Canada and Alaska in ambiguous fashion. With the gold rush into the Yukon in 1898, miners had to enter through Alaska and Canada wanted the boundary redrawn to obtain its own port. The issue went to arbitration and the Alaska boundary dispute was resolved in US favor by an arbitration in 1903 . In recent years, international arbitration has been used to resolve a number of disputes between states or state-like entities, thus making arbitration an important tool in modern foreign policy.

Alaska Boundary Dispute

Blue is the border as was claimed by the United States, red is the border as was claimed by Canada. The Canadian province of British Columbia claimed a greater area, shown in green. Yellow shows the current border, after the boundary dispute was resolved by arbitration in 1903. Arbitration can be an important tool in solving interstate disputes.

17.2: Social Policies

17.2.1: Education Policy

Learning Objective

Identify the main issues and institutions behind education policy

Key Points

• Towards the 20th century, states started passing laws to make schooling compulsory, and by 1910, 72 percent of children were attending school. Private schools continued to spread during this time, as well as colleges and—in the rural centers—land grant colleges.
• The landmark Supreme Court case Brown v. Board of Education made the desegregation of elementary and high schools a national priority, while the Pell Grant program helped poor minorities gain access to college.
• The resulting No Child Left Behind Act of 2001 was controversial and its goals proved to be unrealistic. A commission established in 2006 evaluated higher education, but its recommendations are yet to be fully implemented.
• School districts are usually separate from other local jurisdictions, with independent officials and budgets. State governments usually make educational standards and standardized testing decisions.
• The reliance on local funding sources has led to a long history of court challenges about how states fund their schools. These challenges have relied on interpretations of state constitutions after a U.S. Supreme Court ruling that school funding was not a matter of the U.S. Constitution.
• At the college and university level, student loan funding is split in half; half is managed by the Department of Education directly, called the Federal Direct Student Loan Program (FDSLP).

Key Terms

standardized

A designed or constructed in a standard manner or according to an official standard

compulsory

Required; obligatory; mandatory

Background

Government supported, free public schools was introduced after the revolution, and expanded in the 19^th century as a result of the efforts of men like Horace Mann and Booker T. Washington. By 1870, all states had free elementary schools, but only in urban centers. Towards the 20^th century, states started passing laws that made schooling compulsory. By 1910, 72 percent of children were attending school. Private schools continued to spread during this time, as well as colleges and—in the rural centers—land grant colleges. The year of 1910 also saw the first true high schools.

During the rest of the 20^th century, educational efforts were centered on reducing the inequality in the school system. The landmark Supreme Court case Brown v. Board of Education made the desegregation of elementary and high schools a national priority, while the Pell Grant program helped poor minorities gain access to college. Special education was made into federal law in 1975.

The Elementary and Secondary Education Act of 1965 made standardized testing a requirement, and in 1983, a commission was established to evaluate their results and propose a course of action. The resulting No Child Left Behind Act of 2001 was controversial and its goals proved to be unrealistic. A commission established in 2006 evaluated higher education, but its recommendations are yet to be fully implemented.

Education in the United States is mainly provided by the public sector, with control and funding coming from three levels: local, state, and federal, in that order. Child education is compulsory. There are also a large number and wide variety of higher education institutions throughout the country that one can choose to attend, both publicly and privately administered.

Public education is universally available. School curricula, funding, teaching, employment, and other policies are set through locally elected school boards with jurisdiction over the school districts. The districts receive many directives from the state government. School districts are usually separate from other local jurisdictions, with independent officials and budgets. State governments usually set educational standards and standardized testing decisions.

Statistics in Education

Among the country’s adult population, over 85 percent have completed high school and 27 percent have received a bachelor’s degree or higher. According to a 2005 study by the U.S. Census Bureau, the average salary for college or university graduates is greater than $51,000, exceeding the national average of those without a high school diploma by more than $23,000. The 2010 unemployment rate for high school graduates was 10.8%; the rate for college graduates was 4.9%. The country has a reading literacy rate at 99% of the population over age 15, while ranking below average in science and mathematics proficiency compared to other developed countries. In 2008, the high school graduation rate was 77%, below that of most developed countries.

The poor performance has pushed public and private efforts such as the No Child Left Behind Act. In addition, the ratio of college-educated adults entering the workforce to general population (33%) is slightly below the mean of other developed countries (35%) and rate of participation of the labor force in continuing education is high.

Funding for Education

The reliance on local funding sources has led to a long history of court challenges about how states fund their schools. These challenges have relied on interpretations of state constitutions after a U.S. Supreme Court ruling that school funding was not a matter of the U.S. Constitution (San Antonio Independent School District v. Rodriguez, 411 U.S. 1 (1973)). The state court cases, beginning with the California case of Serrano v. Priest, 5 Cal.3d 584 (1971), were initially concerned with equity in funding, which was defined in terms of variations in spending across local school districts. More recently, state court cases have begun to consider what has been called ‘adequacy. ‘ These cases have questioned whether the total amount of spending was sufficient to meet state constitutional requirements.

At the college and university level student loan funding is split in half; half is managed by the Department of Education directly, called the Federal Direct Student Loan Program (FDSLP). The other half is managed by commercial entities such as banks, credit unions, and financial services firms such as Sallie Mae, under the Federal Family Education Loan Program (FFELP). Some schools accept only FFELP loans; others accept only FDSLP. Still others accept both, and a few schools will accept neither, in which case students must seek out private alternatives for student loans. The federal Pell Grant program provides funding for students who demonstrate financial need.

College Tuition Rising

Cost of US college education relative to the consumer price index (inflation).

17.2.2: Employment Policy

Learning Objective

Illustrate how employment policy is driven by federal, state and local law

Key Points

• Federal law not only sets the standards that govern workers’ rights to organize in the private sector, but also overrides most state and local laws that attempt to regulate this area.
• Federal and state laws protect workers from employment discrimination. In most areas these two bodies of law overlap. Federal law permits states to enact their own statutes barring discrimination on the basis of race, gender, religion, national origin and age.
• The NLRA and RLA displace state laws that attempt to regulate the right to organize, to strike and to engage in collective bargaining. The NLRB has exclusive jurisdiction to determine whether an employer has engaged in an unfair labor practice and to decide what remedies should be provided.
• US private-sector employees thus do not have the indefinite contracts traditionally common in many European countries, Canada and New Zealand.
• Public employees in both federal and state government are also typically covered by civil service systems that protect them from unjust discharge.
• The Fair Labor Standards Act of 1938 (FLSA) establishes minimum wage and overtime rights for most private sector workers, with a number of exemptions and exceptions. The FLSA does not preempt state and local governments from providing greater protections under their own laws.

Key Terms

statutory protections

Protections received by the statue of law set by the legislature.

safety standards

Providing state regulations to set the standards of a safe work environment.

minimum wage

The lowest rate at which an employer can legally pay an employee; usually expressed as pay per hour.

Background

United States labor law is a heterogeneous collection of state and federal laws. Federal law not only sets the standards that govern workers’ rights to organize in the private sector, but also overrides most state and local laws that attempt to regulate this area. Federal law also provides more limited rights for employees of the federal government. These federal laws do not apply to employees of state and local governments, agricultural workers and domestic employees; any statutory protections these workers have derived from state law.

Federal law establishes minimum wages and overtime rights for most workers in the private and public sectors; state and local laws may provide more expansive rights. Federal law provides minimum workplace safety standards, but allows the states to take over those responsibilities and to provide more stringent standards.

Federal and state laws protect workers from employment discrimination. In most aspects, these two bodies of law overlap. Federal law permits states to enact their own statutes barring discrimination on the basis of race, gender, religion, national origin and age, so long as the state law does not provide less protections than federal law would. Federal law, on the other hand, preempts most state statutes that would bar employers from discriminating against employees to prevent them from obtaining pensions or other benefits or retaliating against them for asserting those rights.

Regulation of Unions and Organizing

The Taft-Hartley Act (also known as the “Labor-Management Relations Act”), passed in 1947, loosened some of the restrictions on employers, changed NLRB election procedures, and added a number of limitations on unions. The Act, among other things, prohibits jurisdictional strikes and secondary boycotts by unions, and authorizes individual states to pass “right-to-work laws”, regulates pension and other benefit plans established by unions and provides that federal courts have jurisdiction to enforce collective bargaining agreements.

For the most part, the NLRA and RLA displace state laws that attempt to regulate the right to organize, to strike and to engage in collective bargaining. The NLRB has exclusive jurisdiction to determine whether an employer has engaged in an unfair labor practice and to decide what remedies should be provided. States and local governments can, on the other hand, impose requirements when acting as market participants, such as requiring that all contractors sign a project labor agreement to avoid strikes when building a public works project, that they could not if they were attempting to regulate those employers’ labor relations directly.

Regulation of Wages, Benefits and Working Conditions

The Fair Labor Standards Act of 1938 (FLSA) establishes minimum wage and overtime rights for most private sector workers, with a number of exemptions and exceptions. The FLSA does not preempt state and local governments from providing greater protections under their own laws. A number of states have enacted higher minimum wages and extended their laws to cover workers who are excluded under the FLSA or to provide rights that federal law ignores. Local governments have also adopted a number of “living wage” laws that require those employers that contract with them to pay higher minimum wages and benefits to their employees. The federal government, along with many state governments, also requires employers to pay the prevailing wage to workers on public works projects, a practice which typically reflects the standards established by unions’ collective bargaining agreements in the area.

History of the Minimum Wage

This graph of the minimum wage in the United States shows the fluctuation in government guarantees for minimum standards of labor.

Job Security

While most state and federal laws start from the presumption that workers who are not covered by a collective bargaining agreement or an individual employment agreement are “at will” employees who can be fired without notice and for no stated reason, state and federal laws prohibiting discrimination or protecting the right to organize or engage in whistleblowing activities modify that rule by providing that discharge or other forms of discrimination are illegal if undertaken on grounds specifically prohibited by law. In addition, a number of states have modified the general rule that employment is at will by holding that employees may, under that state’s common law, have implied contract rights to fair treatment by their employers. US private-sector employees thus do not have the indefinite contracts traditionally common in many European countries, Canada and New Zealand.

Public employees in both federal and state government are also typically covered by civil service systems that protect them from unjust discharge. Public employees who have enough rights against unjustified discharge by their employers may also acquire a property right in their jobs, which entitles them in turn to additional protections under the due process clause of the Fourteenth Amendment to the United States Constitution.

The Worker Adjustment and Retraining Notification Act, better known by its acronym, the WARN Act, requires private sector employers to give sixty days’ notice of large-scale layoffs and plant closures; it allows a number of exceptions for unforeseen emergencies and other cases.

17.2.3: Health Care Policy

Learning Objective

Compare and contrast the provision of healthcare by private and public providers

Key Points

• The government primarily provides health insurance for public sector employees. 60-65% of healthcare provision and spending comes from programs such as Medicare, Medicaid, TRICARE, the Children’s Health Insurance Program, and the Veterans Health Administration.
• In May of 2011, the state of Vermont became the first state to pass legislation establishing a single-payer health care system.
• The Patient Protection and Affordable Care Act (PPACA), commonly called Obamacare (or the federal health care law), is a United States federal statute signed into law by President Barack Obama on March 23, 2010.
• According to the World Health Organization (WHO), total health care spending in the U.S. was 15.2% of its GDP in 2008, the highest in the world.
• Most Americans under age 65 (59.3%) receive their health insurance coverage through an employer (which includes both private as well as civilian public-sector employers) under group coverage, although this percentage is declining.
• Public spending accounts for 45% to 56.1% of U.S. health care spending.

Key Terms

Medicare

Guarantees healthcare for people older than 65 and younger people with disabilities and other physical ailments.

Medicaid

Guarantees healthcare for low income families.

TRICARE

A public healthcare program for the U.S. military.

Background

Health care in the United States is provided by many distinct organizations. Health care facilities are largely owned and operated by private sector businesses. The government primarily provides health insurance for public sector employees. 60-65% of healthcare provision and spending comes from programs such as Medicare, Medicaid, TRICARE, the Children’s Health Insurance Program, and the Veterans Health Administration. Their family member’s employer insures most of the population under 65, some buy health insurance on their own, and the remainder is uninsured.

In May of 2011, the state of Vermont became the first state to pass legislation creating a single-payer health care system. The legislation, known as Act 48, establishes health care in the state as a “human right” and lays the responsibility on the state to provide a health care system which best meets the needs of the citizens of Vermont. The state is currently in the studying phase of how best to implement this system.

The Patient Protection and Affordable Care Act (PPACA), commonly called Obamacare (or the federal health care law), is a United States federal statute signed into law by President Barack Obama on March 23, 2010. Together with the Health Care and Education Reconciliation Act, Obamacare represents the most significant regulatory overhaul of the U.S. healthcare system since the passage of Medicare and Medicaid in 1965.

PPACA is aimed primarily at decreasing the number of uninsured Americans and reducing the overall costs of health care. It provides a number of mechanisms—including mandates, subsidies, and tax credits—to employers and individuals in order to increase the coverage rate.

Spending

According to the World Health Organization (WHO), total health care spending in the U.S. was 15.2% of its GDP in 2008, the highest in the world . The Health and Human Services Department expects that the health share of GDP will continue its historical upward trend, reaching 19.5% of GDP by 2017. Of each dollar spent on health care in the United States, 31% goes to hospital care, 21% goes to physician/clinical services, 10% to pharmaceuticals, 4% to dental, 6% to nursing homes and 3% to home health care, 3% for other retail products, 3% for government public health activities, 7% to administrative costs, 7% to investment, and 6% to other professional services (physical therapists, optometrists, etc.).

International Comparison for Healthcare spending as % GDP

This graph shows the fraction of gross domestic product (GDP) devoted to health care in a number of developed countries in 2006.According to the Organization for Economic Cooperation and Development (OECD), the United States spent 15.3 percent of its GDP on health care in 2006.The next highest country was Switzerland, with 11.3 percent.In most other high-income countries, the share was less than 10 percent.

Increased spending on disease prevention is often suggested as a way of reducing health care spending. Whether prevention saves or costs money depends on the intervention. Childhood vaccinations, or contraceptives save much more than they cost. Research suggests that in many cases prevention does not produce significant long-term cost savings. Some interventions may be cost-effective by providing health benefits, while others are not cost-effective. Preventive care is typically provided to many people who would never become ill, and for those who would have become ill, it is partially offset by the health care costs during additional years of life.

Private Healthcare

Most Americans under age 65 (59.3%) receive their health insurance coverage through an employer (which includes both private as well as civilian public-sector employers) under group coverage, although this percentage is declining. Costs for employer-paid health insurance are rising rapidly: since 2001, premiums for family coverage have increased 78%, while wages have risen 19% and inflation has risen 17%, according to a 2007 study by the Kaiser Family Foundation. Workers with employer-sponsored insurance also contribute; in 2007, the average percentage of premium paid by covered workers is 16% for single coverage and 28% for family coverage. In addition to their premium contributions, most covered workers face additional payments when they use health care services, in the form of deductibles and copayments.

Public Healthcare

Government programs directly cover 27.8% of the population (83 million), including the elderly, disabled, children, veterans, and some of the poor, and federal law mandates public access to emergency services regardless of ability to pay. Public spending accounts for 45% to 56.1% of U.S. health care spending.

There are also various state and local programs for the poor. In 2007, Medicaid provided health care coverage for 39.6 million low-income Americans (although Medicaid covers approximately 40% of America’s poor). Also in 2007, Medicare provided health care coverage for 41.4 million elderly and disabled Americans. Enrollment in Medicare is expected to reach 77 million by 2031, when the baby boom generation is fully enrolled.

It has been reported that the number of physicians accepting Medicaid has decreased in recent years due to relatively high administrative costs and low reimbursements. In 1997, the federal government also created the State Children’s Health Insurance Program (SCHIP), a joint federal-state program to insure children in families that earn too much to qualify for Medicaid but cannot afford health insurance.

17.2.4: Health Care Reform

Learning Objective

Explain the elements and provisions of the Patient Protection and Affordable Act and discuss the history of health-care reform in the 20th century

Key Points

• Health care reform was a major concern of the Bill Clinton administration, headed by First Lady Hillary Clinton; however, the 1993 Clinton health care plan was not enacted into law.
• The Health Security Express was a bus tour that started in late July of 1994. It involved supporters of President Clinton’s national health care reform.
• Barack Obama called for universal health care and the creation of a National Health Insurance Exchange that would include both private insurance plans and a Medicare-like government run option.
• In 2010, the Patient Protection and Affordable Care Act was enacted by President Obama, providing for the introduction, over four years, of a comprehensive system of mandated health insurance with reforms designed to eliminate some of the least-desirable practices of the insurance companies.

Key Term

pilot

Something serving as a test or trial.

Background

The issue of health insurance reform in the United States has been the subject of political debate since the early part of the 20^th century. Recent reforms remain an active political issue. Alternative reform proposals were offered by both of the two major candidates in the 2008 presidential election and President Obama’s plan for universal health care was challenged in the 2012 presidential election.

Clinton Initiative

Health care reform was a major concern of the Bill Clinton administration, headed by First Lady Hillary Clinton; however, the 1993 Clinton health care plan was not enacted into law.

The Health Security Express was a bus tour that started in late July of 1994. It involved supporters of President Clinton’s national health care reform. Several buses leaving from different points in the United States stopped in many cities along the way to the final destination of the White House. During these stops, each of the bus riders would talk about personal experiences, health care disasters, and why they felt it was important for all Americans to have health insurance. When the bus tour ended on August 3^rd, the riders were greeted by President Clinton and the First Lady on the White House South lawn for a rally that was broadcast all over the world.

Changes under George W. Bush

In 2003 Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act , which President George W. Bush signed into law on December 8, 2003. Part of this legislation included filling gaps in prescription-drug coverage left by the Medicare Secondary Payer Act that was enacted in 1980. The 2003 bill strengthened the Workers’ Compensation Medicare Set-Aside Program (WCMSA) that is monitored and administered by CMS.

Debate in the 2008 Presidential Election

Barack Obama called for universal health care and the creation of a National Health Insurance Exchange that would include both private insurance plans and a Medicare-like government run option. Coverage would be guaranteed regardless of health status and premiums would not vary based on health status. Obama’s plan required that parents cover their children, but did not require that adults buy insurance.

In 2010, the Patient Protection and Affordable Care Act (PPACA) was enacted by President Obama, providing for the introduction, over four years, of a comprehensive system of mandated health insurance with reforms designed to eliminate some of the least-desirable practices of the insurance companies (such as precondition screenings, rescinding policies when illness seemed imminent, and annual and lifetime coverage caps). The PPACA also set a minimum ratio of direct health care spending to premium income, created price competition bolstered by the creation of three standard insurance coverage levels to enable like-for-like comparisons by consumers, and also created a web-based health insurance exchange where consumers can compare prices and purchase plans. The system preserves private insurance and private health care providers and provides more subsidies to enable the poor to buy insurance.

Effective as of 2013

• A national pilot program is established for Medicare on payment bundling to encourage doctors, hospitals, and other care providers to better coordinate patient care. The threshold for claiming medical expenses on itemized tax returns is raised from 7.5% to 10% of adjusted gross income. The threshold remains at 7.5% for the elderly through 2016.
• The Federal Insurance Contributions Act tax (FICA) is raised to 2.35% from 1.45% for individuals earning more than $200,000 and married couples with incomes over $250,000. The tax is imposed on some investment income for that income group.
• A 2.9% excise tax is imposed on the sale of medical devices. Anything generally purchased at the retail level by the public is excluded from the tax

Effective as of 2014

• State health insurance exchanges open for small businesses and individuals.
• Individuals with income up to 133% of the federal poverty level qualify for Medicaid coverage.
• Healthcare tax credits become available to help people with incomes up to 400 percent of poverty purchase coverage on the exchange.
• Premium cap for maximum “out-of-pocket” pay will be established for people with incomes up to 400 percent of the Federal Poverty Line.
• Most people will be required to obtain health insurance or pay a tax.
• Health plans can no longer exclude people from coverage due to preexisting conditions.
• Employers with 50 or more workers who do not offer coverage face a fine of $2,000 for each employee if any worker receives subsidized insurance on the exchange. The first 30 employees are not counted for the fine.
• Effects on insurance premiums
• The Associated Press reported that, as a result of PPACA’s provisions concerning the Medicare Part D coverage gap (between the initial coverage limit and the catastrophic coverage threshold in the Medicare Part D prescription drug program), individuals falling in this “donut hole” would save about 40 percent. Almost all of the savings came because, with regard to brand-name drugs, PPACA secured a discount from pharmaceutical companies. The change benefited more than two million people, most of them in the middle class

17.2.5: Housing Policy

Learning Objective

Explain the implications of national and local housing policy

Key Points

• Originally, public housing in the U.S. consisted of one or more blocks of low-rise and/or high-rise apartment buildings operated by a government agency.
• Subsidized apartment buildings in the U.S. are usually called housing projects, and the slang term for a group of these buildings is “the projects”.
• In 1937, the Wagner-Stegall Housing Act established the United States Housing Authority Housing Act of 1937.
• In the 1960s, across the nation, housing authorities became key partners in urban renewal efforts, constructing new homes for those displaced by highway, hospital, and other public efforts.
• The Housing and Community Development Act of 1974 created the Section 8 Housing Program to encourage the private sector to construct affordable homes.
• The city housing authorities or local governments generally run scattered-site housing programs. They are intended to increase the availability of affordable housing and improve the quality of low-income housing, while avoiding problems associated with concentrated subsidized housing.

Key Terms

middle-class

occupying a position between the upper class and the working class.

retail price

A price given to any item influenced by the behaviors of the market demand.

subsidized housing

A form of housing that is subsidized by the government for people with low-incomes.

Background

Public housing in the United States has been administered by federal, state, and local agencies to provide subsidized assistance for low-income people and those living in poverty. Now increasingly provided in a variety of settings and formats, originally public housing in the U.S. consisted of one or more blocks of low-rise and/or high-rise apartment buildings operated by a government agency. Subsidized apartment buildings in the U.S. are usually called housing projects, and the slang term for a group of these buildings is “the projects”.

Public Housing

In 1937, the Wagner-Stegall Housing Act established the United States Housing Authority Housing Act (USHA) of 1937. Building on the Housing Division’s organizational and architectural precedent, the USHA built housing in the build-up to World War II, supported war-production efforts, and battled the housing shortage that occurred after the end of the war. In the 1960s, across the nation, housing authorities became key partners in urban renewal efforts, constructing new homes for those displaced by highway, hospital, and other public efforts.

One of the most unique U.S. public housing initiatives was the development of subsidized middle-class housing during the late New Deal (1940–42) under the auspices of the Mutual Ownership Defense Housing Division of the Federal Works Agency under the direction of Colonel Lawrence Westbrook. The residents purchased these eight projects after the Second World War and as of 2009 seven of the projects continue to operate as mutual housing corporations owned by their residents. These projects are among the very few definitive success stories in the history of the U.S. public housing effort.

Public housing in its earliest decades was usually much more working-class and middle-class and white than it was by the 1970s. Many Americans associate large, multi-story towers with public housing, but early projects, like the Ida B. Wells projects in Chicago, were actually low-rise towers. Le Corbusier superblocks caught on before World War II, as seen in the (union built) Penn South houses in New York.

Hylan Houses Bushwick, Brooklyn NY

The 20-story John F. Hylan Houses in the Bushwick section of Brooklyn, New York City.

The Housing and Community Development Act of 1974 created the Section 8 Housing Program to encourage the private sector to construct affordable homes. This kind of housing assistance helps poor tenants by giving a monthly subsidy to their landlords. This assistance can be ‘project based,’ which applies to specific properties, or ‘tenant based,’ which provides tenants with a voucher they can use anywhere vouchers are accepted. Virtually no new project based Section 8 housing has been produced since 1983. Effective October 1, 1999, existing tenant based voucher programs were merged into the Housing Choice Voucher Program, which is today the primary means of providing subsidies to low-income renters.

Public Policy and Implications

The city housing authorities or local governments generally run scattered-site housing programs. They are intended to increase the availability of affordable housing and improve the quality of low-income housing, while avoiding problems associated with concentrated subsidized housing. Many scattered-site units are built to be similar in appearance to other homes in the neighborhood to somewhat mask the financial stature of tenants and reduce the stigma associated with public housing.

Where to construct these housing units and how to gain the support of the community are issues of concern when it comes to public housing. Frequent concerns of community members include potential decreases in the retail price of their home, and a decline in neighborhood safety due to elevated levels of crime. Thus, one of the major concerns with the relocation of scattered-site tenants into white, middle-class neighborhoods is that residents will move elsewhere – a phenomenon known as white flight. To counter this phenomenon, some programs place tenants in private apartments that do not appear outwardly different. Despite these efforts, many members of middle-class, predominantly white neighborhoods have fought hard to keep public housing out of their communities.

There are also concerns associated with the financial burden that these programs have on the state. Scattered-site housing provides no better living conditions for its tenants than traditional concentrated housing if the units are not properly maintained. There are questions as to whether or not scattered-site public facilities are more expensive to manage because dispersal throughout the city makes maintenance more difficult.

17.3: Social Policy Demographics

17.3.1: The Elderly

There are several social policy challenges relating to the elderly, who are generally over the age of 65 and have retired from their jobs.

Learning Objective

Discuss government policies that affect the elderly

Key Points

• Within the United States, senior citizens are at the center of several social policy issues, most prominently Social Security and Medicare.
• Social Security is a social insurance program consisting of retirement, disability, and survivors’ benefits.
• In 1965, Congress created Medicare under Title XVIII of the Social Security Act to provide health insurance to people age 65 and older, regardless of income or medical history.

Key Terms

social insurance

a program where risks are transferred to and pooled by an organization, often governmental, that is legally required to provide certain benefits

New Deal

The New Deal was a series of economic programs enacted in the United States between 1933 and 1936. They involved presidential executive orders or laws passed by Congress during the first term of President Franklin D. Roosevelt. The programs were in response to the Great Depression, and focused on what historians call the “3 Rs”: Relief, Recovery, and Reform.

The elderly, often referred to as senior citizens, are people who are generally over the age of 65 and have retired from their jobs. Within the United States, senior citizens are at the center of several social policy issues, most prominently Social Security and Medicare.

Social security is a social insurance program consisting of retirement, disability, and survivors’ benefits. To qualify for these benefits, most American workers pay Social Security taxes on their earnings, and future benefits are based on the employees’ contributions. The Social Security Administration was set up in 1935 as part of President Franklin D. Roosevelt’s “New Deal. ” Social Security is currently the largest social welfare program in the United States, constituting 37% of government expenditure and 7% of GDP. In 2010, more than 54 million Americans received approximately $712 billion in Social Security benefits

Social Security

Social Security card, which grants certain benefits to citizens.

In 1965, Congress created Medicare under Title XVIII of the Social Security Act to provide health insurance to people age 65 and older, regardless of income or medical history. Medicare spreads the financial risk associated with illness across society in order to protect everyone. Thus, it has a somewhat different social role from for-profit private insurers, which manage their risk portfolio by adjusting their pricing according to perceived risk.

The Medicare population differs in significant ways from the general population. Compared to the rest of Americans, Medicare enrollees are disproportionately white and female (due to women’s greater longevity). They also have a comparatively precarious economic situation, which is usually exacerbated by the high cost of health care for the elderly.

17.3.2: The Middle Class

The middle class consists of people in the middle of a societal hierarchy, which varies between cultures.

Learning Objective

Identify the central features of the middle-class in the United States

Key Points

• The following factors are often ascribed to someone in the middle class: having a college education; holding professional qualifications, including academics, lawyers, engineers and doctors; a belief in bourgeois values; and identification culturally with mainstream popular culture.
• Within the United States, the broader middle class is often described as divided into the upper-middle class (also called the “professional class”) and the lower-middle class.
• Recently, the typical lifestyle of the American middle class has been criticized for its “conspicuous consumption” and materialism, as Americans have the largest homes and most appliances and automobiles in the world.

Key Terms

bourgeois

Of or relating to the middle class, especially its attitudes and conventions.

inflation

An increase in the general level of prices or in the cost of living.

materialism

Constant concern over material possessions and wealth and a great or excessive regard for worldly concerns.

The middle class is a category of people in the middle of a societal hierarchy, though common measures of what constitutes middle class vary significantly between cultures.

The size of the middle class depends on how it is defined, whether by education, wealth, environment of upbringing, social network, manners or values, etc. However, the following factors are often ascribed in modern usage to someone in the middle class: having a college education; holding professional qualifications, including academics, lawyers, engineers, and doctors; a belief in bourgeoisvalues, such as high rates of home ownership and secure jobs; a particular lifestyle; and the identification culturally with mainstream popular culture (particularly in the United States).

Within the United States, the broader middle class is often described as divided into the upper-middle class (also called the “professional class”) and the lower-middle class. The upper-middle class consists mostly of white-collar professionals, most of whom are highly educated, salaried professionals whose work is largely self-directed and typically involves conceptualizing, creating, consulting, and supervising. Many have graduate degrees, with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000. The lower-middle class consists mainly of people in technical and lower-level management positions who work for those in the upper middle class. Though they enjoy a reasonably comfortable standard of living, they are often threatened by taxes and inflation.

Recently, the typical lifestyle of the American middle class has been criticized for its “conspicuous consumption” and materialism, as Americans have the largest homes and most appliances and automobiles in the world. Another challenge to the stability of the middle class within the United States is increasing income inequality, as middle class Americans have seen their incomes increase at a much slower rate than the wealthiest 1% in the country .

Suburban Middle Class Home

An upscale home in suburban California, an example of the “conspicuous consumption” of the American middle class.

17.3.3: The Working Poor

The working poor are working people whose incomes fall below a given poverty line.

Learning Objective

Define the working poor in the United States

Key Points

• Of the 8.8 million US families below the poverty line (11.1% of all families), 5.19 million, or 58.9%, had at least one person who was classified as working.
• Within the United States, since the start of the War on Poverty in the 1960s, scholars and policymakers on both ends of the political spectrum have paid an increasing amount of attention to the working poor.
• Some of the obstacles that working poor people may face include finding affordable housing, arranging transportation to and from work, buying basic necessities, arranging childcare, having unpredictable work schedules, juggling two or more jobs, and coping with low-status work.

Key Term

Poverty line

The threshold of poverty below which one’s income does not cover necessities.

The working poor are working people whose incomes fall below a given poverty line. While poverty is often associated with joblessness, the wages of the working poor are usually insufficient to provide basic necessities, causing them to face numerous obstacles that make it difficult for many of them to find and keep a job, save up money, and maintain a sense of self-worth. In 2009, according to the U.S. Census Bureau’s official definition of poverty, 8.8 million US families were below the poverty line (11.1% of all families). Of these families, 5.19 million, or 58.9%, had at least one person who was classified as working

The Working Poor

Percentage of the working and nonworking poor in different countries

Within the United States, since the start of the War on Poverty in the 1960s, scholars and policymakers on both ends of the political spectrum have paid an increasing amount of attention to the working poor. One of the key ongoing debates concerns the distinction between the working and the nonworking (unemployed) poor. Conservative scholars and policymakers often attribute the prevalence of inequality and working poverty to overregulation and overtaxation, which they claim constricts job growth. In contrast, liberal scholars argue that the government should provide more housing assistance, childcare, and other kinds of aid to poor families, in order to help them overcome the obstacles they face.

Some of these obstacles may include finding affordable housing, arranging transportation to and from work, buying basic necessities, arranging childcare, having unpredictable work schedules, juggling two or more jobs, and coping with low-status work. Many scholars and policymakers suggest welfare state generosity, increased wages and benefits, more vocational education and training, increased child support, and increased rates of marriage as probable remedies to these obstacles.

17.3.4: The Nonworking Poor

The nonworking poor are unemployed people whose incomes fall below a given poverty line.

Learning Objective

Discuss the nonworking poor and the obstacles they face in the United States

Key Points

• Many conservative scholars tend to see nonworking poverty as a more urgent problem than working poverty because they believe that non-work is a moral hazard that leads to welfare dependency and laziness, whereas work, even poorly paid work, is morally beneficial.
• In order to help the nonworking poor gain entry into the labor market, liberal scholars advocate that the government should provide more housing assistance, childcare, and other kinds of aid to poor families.
• Many policies that have been proposed to alleviate the obstacles that working poor people face may also be applied to the nonworking poor, including welfare state generosity, increased wages, increased vocational education and training, child support assurance, and increased rates of marriage.
• Since the start of the War on Poverty in the 1960s, scholars and policymakers on both ends of the political spectrum have paid an increasing amount of attention to working poverty.

Key Terms

welfare state

a social system in which the state takes overall responsibility for the welfare of its citizens, providing health care, education, unemployment compensation and social security

Poverty line

The threshold of poverty below which one’s income does not cover necessities.

Introduction

The working poor are working people whose incomes fall below a given poverty line. Conversely, the nonworking poor are unemployed people whose incomes fall below a given poverty line . The main difference between the working and the nonworking poor, liberal policymakers argue, is that the nonworking poor have a more difficult time overcoming basic barriers to entry into the labor market, such as arranging for affordable childcare, finding housing near potential jobs, or arranging for transportation to and from work. In order to help the nonworking poor gain entry into the labor market, liberal scholars advocate that the government should provide more housing assistance, childcare, and other kinds of aid to poor families.

The Working Poor

Percentage of the working and nonworking poor in different countries

Distinctions

Since the start of the War on Poverty in the 1960s, scholars and policymakers on both ends of the political spectrum have paid an increasing amount of attention to tackling poverty. One of the key ongoing debates concerns the distinction between the working and the nonworking poor. Many conservative scholars tend to see nonworking poverty as a more urgent problem than working poverty because they believe that non-work is a moral hazard that leads to welfare dependency and laziness, whereas work, even poorly paid work, is morally beneficial. On the other hand, liberal scholars and policymakers often argue that most working and nonworking poor people are quite similar.

Many of the policies that have been proposed to alleviate the obstacles that working poor people face may also be applied to the nonworking poor. These policies include: welfare state generosity, including unemployment and child benefits; increased wages and benefits, which may have a positive effect on unskilled workers who are likely to be among the nonworking poor; increased vocational education and training for the same demographic; child support assurance, especially for families headed by a single parent; and increased rates of marriage, although a lack of good employment opportunities may not lower the poverty rate among low-income people.

Obstacles to uplift

The working poor face many of the same everyday struggles as the nonworking poor, but they also face some unique obstacles. Some studies, many of them qualitative, provide detailed insights into the obstacles that hinder workers’ ability to find jobs, keep jobs, and make ends meet. Some of the most common struggles faced by the working poor are finding affordable housing, arranging transportation to and from work, buying basic necessities, arranging childcare, having unpredictable work schedules, juggling two or more jobs, and coping with low-status work.

Housing

Working poor people who do not have friends or relatives with whom they can live often find themselves unable to rent an apartment of their own. Although the working poor are employed at least some of the time, they often find it difficult to save enough money for a deposit on a rental property. As a result, many working poor people end up in living situations that are actually more costly than a month-to-month rental.

Transportation

Given the fact that many working poor people do not own a car or cannot afford to drive their car, where they live can significantly limit where they are able to work, and vice versa. Given the fact that public transportation in many US cities is sparse, expensive, or non-existent, this is a particularly salient obstacle.

Basic Necessities

Like the unemployed poor, the working poor struggle to pay for basic necessities like food, clothing, housing, and transportation. In some cases, however, the working poor’s basic expenses can be higher than the unemployed poor’s. For instance, the working poor’s clothing expenses may be higher than the unemployed poor’s because they must purchase specific clothes or uniforms for their jobs.

Childcare

Working poor parents with young children, especially single parents, face significantly more childcare-related obstacles than other people. Oftentimes, childcare costs can exceed a low-wage earners’ income, making work, especially in a job with no potential for advancement, an economically illogical activity. However, some single parents are able to rely on their social networks to provide free or below-market-cost childcare. There are also some free childcare options provided by the government, such as the Head Start Program. However, these free options are only available during certain hours, which may limit parents’ ability to take jobs that require late-night shifts.

17.3.5: Minorities, Women, and Children

Minorities, women, and children are often the target of specific social policies.

Learning Objective

Discuss government social policy toward minorities, women and children in the United States

Key Points

• A minority group is a sociological category within a demographic that is differentiated from those who hold the majority of positions of social power in a society.
• While in most societies, numbers of men and women are roughly equal, the status of women as a subordinate group has led some (especially within feminist movements) to equate them with minorities.
• One major, particularly controversial policy targeting minority groups is affirmative action.
• People with disabilities continue to be an especially vulnerable minority group in modern society. 

Key Term

affirmative action

A policy or program providing advantages for people of a minority group with the aim of creating a more racially equal society through preferential access to education, employment, health care, social welfare, etc.

Minorities, Women, and Children

Minorities, women, and children are often the target of specific social policies. A minority group is a sociological category within a demographic that is differentiated and defined by the social majority. That is, those who hold the majority of positions of social power in a society.

The differentiation can be based on one or more observable human characteristics that include ethnicity, race, gender, wealth, or sexual orientation. Usage of the term is applied to various situations and civilizations within history, despite its popular wrongful association with a numerical, statistical minority. In the social sciences, the term minority is used to refer to categories of persons who hold few positions of social power .

Minorities

The Civil Rights Movement attempted to increase rights for minorities within the U.S.

While in most societies, numbers of men and women are roughly equal, the status of women as a subordinate group has led some (especially within feminist movements) to equate them with minorities. Children can also be understood as a minority group in these terms, as they are economically non-active and not necessarily given all the rights of adult citizens.

One major, particularly controversial policy targeting minority groups is affirmative action. This can be, for example, a government program to provide immigrant or minority groups who primarily speak a marginalized language with extra teaching in the majority language, so they are better able to compete for places at universities or for jobs. These may be considered necessary because the minority group in question is socially disadvantaged. Another form of affirmative action is quotas, where a percentage of places at university, or in employment in public services, are set aside for minority groups (including women) because a court has found that there has been a history of exclusion as it pertains to certain groups in certain sectors of society.

16.2: The History of Economic Policy

16.2.1: The Nineteenth Century

Learning Objective

Summarize the main currents of economic thought in the 19th-century

Key Points

• The beginning of the 19th century was dominated by classical economists, who concerned themselves with the transformation brought by the Industrial Revolution including rural depopulation, precariousness, poverty, and apparition of a working class.
• Karl Marx’s combination of political theory, represented in the Communist Manifesto and the dialectic theory of history inspired by Friedrich Hegel, provided a revolutionary critique of capitalism as he saw it in the 19th century.
• In the 1860’s, a revolution took place in economics.
• This current of thought was not united. There were three main schools working independently.

Key Terms

industrialization

A process of social and economic change whereby a human society is transformed from a pre-industrial to an industrial state

capitalism

A socio-economic system based on private property rights, including the private ownership of resources or capital, with economic decisions made largely through the operation of a market unregulated by the state.

As the century most associated with industrialization and capitalism in the West, the 19^th century looms large in the history of economic policy and economic thought.

The beginning of the 19^th century was dominated by “classical economists,” a group not actually referred to by this name until Karl Marx. One unifying part of their theories was the labor theory of value, contrasting to value deriving from a general equilibrium of supply and demand. These economists had seen the first economic and social transformation brought by the Industrial Revolution: rural depopulation, precariousness, poverty, and apparition of a working class. They wondered about the population growth because the demographic transition had begun in Great Britain at that time. They also asked many fundamental questions about the source of value, the causes of economic growth, and the role of money in the economy. They supported a free-market economy. They argued that it was a natural system based upon freedom and property. However, these economists were divided and did not make up a unified group of thought.

A notable current within classical economics was the under-consumption theory, as advanced by the Birmingham School and Malthus in the early 19^th century. The theory argued for government action to mitigate unemployment and economic downturns. It was an intellectual predecessor of what later became Keynesian economics in the 1930’s.

Just as the term “mercantilism” had been coined and popularized by its critics like Adam Smith, so was the term “capitalism” or Kapitalismus used by its dissidents, primarily Karl Marx. Karl Marx (1818–1883) was, and in many ways still remains, the pre-eminent socialist economist. His combination of political theory represented in the Communist Manifesto and the dialectic theory of history inspired by Friedrich Hegel provided a revolutionary critique of capitalism as he saw it in the 19^th century. The socialist movement that he joined had emerged in response to the conditions of people in the new industrial era and the classical economics which accompanied it. He wrote his magnum opus Das Kapital at the British Museum’s library .

Das Kapital

Karl Marx’s definition and popularizing of the term “capitalism” or Kapitalismus, as defined in “Das Kapital,” first published in 1867, remains one of the most influential works on the subject to this day.

In the 1860’s, a revolution took place in economics. The new ideas were that of the Marginalist school. Writing simultaneously and independently, a Frenchman (Léon Walras), an Austrian (Carl Menger), and an Englishman (Stanley Jevons) were developing the theory that had some antecedents. Instead of the price of a good or service reflecting the labor that has produced it, it reflected the marginal usefulness (utility) of the last purchase. This meant that in equilibrium, people’s preferences determined prices including, indirectly, the price of labor.

This current of thought was not united. There were three main schools working independently. The Lausanne school, whose two main representatives were Walras and Vilfredo Pareto, developed the theories of general equilibrium and optimality. The main written work of this school was Walras’ Elements of Pure Economics. The Cambridge school appeared with Jevons’ Theory of Political Economy in 1871. This English school developed the theories of the partial equilibrium and insisted on markets’ failures. The main representatives were Alfred Marshall, Stanley Jevons, and Arthur Pigou. The Vienna school was made up of Austrian economists Menger, Eugen von Böhm-Bawerk, and Friedrich von Wieser. They developed the theory of capital and tried to explain the presence of economic crises. It appeared in 1871 with Menger’s Principles of Economics.

16.2.2: The Progressive Era

Learning Objective

Discuss the economic policies of the Progressive Era in the United States.

Key Points

• The weakened economy and persistent federal deficits led to changes in fiscal policy including the imposition of federal income taxes on businesses and individuals and the creation of the Federal Reserve System.
• The progressives voiced the need for government regulation of business practices to ensure competition and free enterprise.
• By the turn of the century, a middle class had developed that was leery of both the business elite and the radical political movements of farmers and laborers in the Midwest and West.

Key Terms

tariff

a system of government-imposed duties levied on imported or exported goods; a list of such duties, or the duties themselves

laissez-faire

an economic environment in which transactions between private parties are free from tariffs, government subsidies, and enforced monopolies with only enough government regulations sufficient to protect property rights against theft and aggression.

fiscal policy

Government policy that attempts to influence the direction of the economy through changes in government spending or taxes.

The Progressive Era was one of general prosperity after the Panic of 1893; a severe depression that ended in 1897. The Panic of 1907 was short and mainly affected financiers. However, Campbell (2005) stresses the weak points of the economy in 1907–1914, linking them to public demands for more progressive interventions. The Panic of 1907 was followed by a small decline in real wages and increased unemployment, with both trends continuing until World War I. This resulted in stress on public finance and impacted the Wilson administration’s policies. The weakened economy and persistent federal deficits led to changes in fiscal policy, including the imposition of federal income taxes on businesses and individuals and the creation of the Federal Reserve System. Government agencies were also transformed in an effort to improve administrative efficiency.

In the Gilded Age (late 19^th century) the parties were reluctant to involve the federal government too heavily in the private sector, except in the area of railroads and tariffs. In general, they accepted the concept of laissez-faire, which was doctrine opposing government interference in the economy except to maintain law and order. This attitude started to change during the depression of the 1890’s when small business, farm, and labor movements began asking the government to intercede on their behalf.

By the turn of the century, a middle class had developed that was leery of both the business elite and the radical political movements of farmers and laborers in the Midwest and West. The progressives voiced the need for government regulation of business practices to ensure competition and free enterprise. Congress enacted a law regulating railroads in 1887 (the Interstate Commerce Act) and one preventing large firms from controlling a single industry in 1890 (the Sherman Antitrust Act). However, these laws were not rigorously enforced until 1900 to 1920, when Republican President Theodore Roosevelt (1901–1909), Democratic President Woodrow Wilson (1913–1921), and others sympathetic to the views of the Progressives came to power . Many of today’s U.S. regulatory agencies were created during these years including the Interstate Commerce Commission and the Federal Trade Commission. Muckrakers were journalists who encouraged readers to demand more regulation of business. Upton Sinclair’s The Jungle (1906) was influential and persuaded America about the supposed horrors of the Chicago Union Stock Yards (though Sinclair himself never visited the site); a giant complex of meat processing that developed in the 1870’s. The federal government responded to Sinclair’s book and The Neill-Reynolds Report with the new regulatory Food and Drug Administration. Ida M. Tarbell wrote a series of articles against Standard Oil, which was perceived to be a monopoly. This affected both the government and the public reformers. Attacks by Tarbell and others helped pave the way for public acceptance of the breakup of the company by the Supreme Court in 1911.

Anti-Trust Legislation

President Wilson uses tariff, currency, and anti-trust laws to prime the pump and get the economy working.

When Democrat Woodrow Wilson was elected President with a Democratic Congress in 1912, he implemented a series of progressive policies in economics. In 1913, the 16^th Amendment was ratified and a small income tax was imposed on high incomes. The Democrats lowered tariffs with the Underwood Tariff in 1913, although its effects were overwhelmed by the changes in trade caused by the World War that broke out in 1914. Wilson proved especially effective in mobilizing public opinion behind tariff changes by denouncing corporate lobbyists, addressing Congress in person in highly dramatic fashion, and staging an elaborate ceremony when he signed the bill into law. Wilson helped end the long battles over the trusts with the Clayton Antitrust Act of 1914. He managed to convince lawmakers on the issues of money and banking by the creation in 1913 of the Federal Reserve System, a complex business-government partnership that to this day dominates the financial world.

In 1913, Henry Ford adopted the moving assembly line, with each worker doing one simple task in the production of automobiles. Taking his cue from developments during the progressive era , Ford offered a very generous wage—$5 a day—to his (male) workers. He argued that a mass production enterprise could not survive if average workers could not buy the goods.

16.2.3: The Great Depression and the New Deal

Learning Objective

Describe the Great Depression, the Roosevelt administration’s economic response to it in the New Deal, and its lasting effects

Key Points

• The programs focused on what historians call the “3 Rs”: Relief, Recovery, and Reform.
• The New Deal produced a political realignment.
• By 1942–43 the Conservative Coalition had shut down relief programs such as the WPA and CCC and blocked major liberal proposals.

Key Terms

economic depression

In economics, a depression is a sustained, long-term downturn in economic activity in one or more economies. It is a more severe downturn than a recession, which is seen by some economists as part of the modern business cycle.

political realignment

Realigning election (often called a critical election or political realignment) is a term from political science and political history describing a dramatic change in the political system.

regulation

A law or administrative rule, issued by an organization, used to guide or prescribe the conduct of members of that organization; can specifically refer to acts in which a government or state body limits the behavior of businesses.

The Great Depression was a severe worldwide economic depression in the decade preceding World War II. It was the longest, most widespread, and deepest depression of the 20^th century. In the 21^st century, the Great Depression is commonly used as an example of how far the world’s economy can decline. The depression originated in the U.S., after the fall in stock prices that began around September 4, 1929, and became worldwide news with the stock market crash of October 29, 1929 (known as Black Tuesday).

Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining, and logging suffered the most. Some economies started to recover by the mid-1930s. In many countries, the negative effects of the Great Depression lasted until the end of World War II.

Great Depression in Unemployment

Unemployment rate in the US 1910–1960, with the years of the Great Depression (1929–1939) highlighted; accurate data begins in 1939.

Great Depression in GDP

USA annual real GDP from 1910 to 1960, with the years of the Great Depression (1929–1939) highlighted.

The New Deal was a series of economic programs enacted in the United States between 1933 and 1936. The programs were in response to the Great Depression, and focused on what historians call the “3 Rs”: Relief, Recovery, and Reform. That is, Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression.

The New Deal produced a political realignment, making the Democratic Party the majority (as well as the party that held the White House for seven out of nine Presidential terms from 1933 to 1969). Its basis was liberal ideas, the white South, traditional Democrats, big city machines, and the newly empowered labor unions and ethnic minorities. The Republicans were split, with conservatives opposing the entire New Deal as an enemy of business and growth, and liberals accepting some of it and promising to make it more efficient. The realignment crystallized into the New Deal Coalition that dominated most presidential elections into the 1960s, while the opposing Conservative Coalition largely controlled Congress from 1937 to 1963.

From 1934 to 1938, Roosevelt was assisted in his endeavors by a “pro-spender” majority in Congress. Many historians distinguish a “First New Deal” (1933–34) and a “Second New Deal” (1935–38), with the second one being more liberal and more controversial. It included a national work program, the Works Progress Administration (WPA), which made the federal government by far the largest single employer in the nation. The “First New Deal” (1933–34) dealt with diverse groups, from banking and railroads to industry and farming, all of which demanded help for economic survival. The Federal Emergency Relief Administration, for instance, provided $500 million for relief operations by states and cities, while the short-lived CWA (Civil Works Administration) gave localities money to operate make-work projects in 1933-34.

The “Second New Deal” in 1935–38 included the Wagner Act to promote labor unions, the Works Progress Administration (WPA) relief program, the Social Security Act, and new programs to aid tenant farmers and migrant workers. The final major items of New Deal legislation were the creation of the United States Housing Authority and Farm Security Administration, both in 1937, and the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers.

The economic downturn of 1937–38, and the bitter split between the AFL and CIO labor unions, led to major Republican gains in Congress in 1938. Conservative Republicans and Democrats in Congress joined in the informal Conservative Coalition. By 1942–43 they shut down relief programs such as the WPA and CCC and blocked major liberal proposals. Roosevelt himself turned his attention to the war effort, and won reelection in 1940 and 1944. The Supreme Court declared the National Recovery Administration (NRA) and the first version of the Agricultural Adjustment Act (AAA) unconstitutional, although the AAA was rewritten and then upheld. As the first Republican president elected after FDR, Dwight D. Eisenhower (1953–61) left the New Deal largely intact, even expanding it in some areas. In the 1960s, Lyndon B. Johnson’s Great Society used the New Deal as inspiration for a dramatic expansion of liberal programs, which Republican Richard M. Nixon generally retained. After 1974, however, the call for deregulation of the economy gained bipartisan support. The New Deal regulation of banking (Glass–Steagall Act) was suspended in the 1990s. Many New Deal programs remain active, with some still operating under the original names, including the Federal Deposit Insurance Corporation (FDIC), the Federal Crop Insurance Corporation (FCIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence today are the Social Security System and the Securities and Exchange Commission (SEC).

16.2.4: Social Regulation

Learning Objective

Summarize the broad periods of regulation and deregulation in American history

Key Points

• Social policy aims to improve human welfare and to meet human needs for education, health, housing, and social security.
• Important areas of social policy are the welfare state, social security, unemployment insurance, environmental policy, pensions, health care, social housing, social care, child protection, social exclusion, education policy, crime, and criminal justice.
• With regard to economic policy, regulations may include central planning of the economy, remedying market failure, enriching well-connected firms, or benefiting politicians.
• Informal social control is often not sufficient in a large society in which an individual can choose to ignore the sanctions of an individual group, leading to the use of formal, usually government control.
• With regard to economic policy, regulations may include central planning of the economy, remedying market failure, enriching well-connected firms, or benefiting politicians.

Key Terms

laissez-faire

an economic environment in which transactions between private parties are free from tariffs, government subsidies, and enforced monopolies with only enough government regulations sufficient to protect property rights against theft and aggression.

social policy

Social policy primarily refers to guidelines, principles, legislation, and activities that affect the living conditions conducive to human welfare.

Example

• The Malcolm Wiener Center for Social Policy at Harvard University describes it as “public policy and practice in the areas of health care, human services, criminal justice, inequality, education, and labor. “

Social Policy

Social policy primarily refers to guidelines, principles, legislation and activities that affect the living conditions conducive to human welfare. The Malcolm Wiener Center for Social Policy at Harvard University describes it as “public policy and practice in the areas of health care, human services, criminal justice, inequality, education, and labor. “

Types of Social Policy

Social policy aims to improve human welfare and to meet human needs for education, health, housing and social security. Important areas of social policy are the welfare state, social security, unemployment insurance, environmental policy, pensions, health care, social housing, social care, child protection, social exclusion, education policy, crime, and criminal justice.

The term ‘social policy’ can also refer to policies which govern human behavior. In the United States, the term ‘social policy’ may be used to refer to abortion and the regulation of its practice, euthanasia, homosexuality, the rules surrounding issues of marriage, divorce, adoption, the legal status of recreational drugs, and the legal status of prostitution.

Economic Policy

With regard to economic policy, regulations may include central planning of the economy, remedying market failure, enriching well-connected firms, or benefiting politicians. In the U.S., throughout the 18^th and 19^th centuries, the government engaged in substantial regulation of the economy. In the 18^th century, the production and distribution of goods were regulated by British government ministries over the American Colonies. Subsidies were granted to agriculture and tariffs were imposed, sparking the American Revolution.

The United States government maintained high tariffs throughout the 19^th century and into the 20^th century, until the Reciprocal Trade Agreement was passed in 1934 under the Franklin D. Roosevelt administration. Other forms of regulation and deregulation came in waves: the deregulation of big business in the Gilded Age, which led to President Theodore Roosevelt’s trust busting from 1901 to 1909; more deregulation and Laissez-Faire economics in the 1920’s, which was followed by the Great Depression and intense governmental regulation under Franklin Roosevelt’s New Deal; and President Ronald Reagan’s deregulation of business in the 1980s.

The Seal of the SEC

Seal of the U.S. Securities and Exchange Commission.

16.2.5: Deregulation

Learning Objective

Analyze arguments in favor of deregulation

Key Points

• The stated rationale for deregulation is often that fewer and simpler regulations will lead to a raised level of competitiveness, therefore higher productivity, more efficiency and lower prices overall.
• Opposition to deregulation usually involves apprehension regarding environmental pollution and environmental quality standards (these issues are protected against by certain regulations, such as those that limit the use of hazardous materials), financial uncertainty, and constraining monopolies.
• Regulatory reform is a parallel development alongside deregulation.
• Deregulation can be distinguished from privatization, because privatization involves taking state-owned service providers into the private sector.

Key Terms

privatization

The transfer of a company or organization from government to private ownership and control.

deregulation

The process of removing constraints, especially government-imposed economic regulations.

regulation

A law or administrative rule, issued by an organization, used to guide or prescribe the conduct of members of that organization; can specifically refer to acts in which a government or state body limits the behavior of businesses.

Deregulation is the act or process of removing or reducing state regulations. It is therefore the opposite of regulation, which is the process in which the government regulates certain activities. Laissez-faire is an example of a deregulated economic environment in which transactions between private parties are free from government restrictions, tariffs, and subsidies, with only enough regulations to protect property rights. The phrase laissez-faire is French and literally means “let [them] do,” broadly implying “let it be” or “leave it alone. “

The rationale for deregulation, as it is often phrased, is that fewer and simpler regulations will lead to a raised level of competitiveness between businesses, which itself will generate higher productivity, higher efficiency and lower prices. The Financial Times Lexicon states that deregulation, in the sense of a substantial easing of government restrictions on industry, is normally justified in order to promote competition.

Opposition to deregulation usually stems from concerns regarding environmental pollution and environmental quality standards, both of which are protected against by certain types of regulations, such as those that limit the ability of businesses to use hazardous materials. Opposition has also stemmed from fears that a free market, without protective regulations, would become financially unstable or controlled by monopolies.

Regulatory reform is a parallel development alongside deregulation. Regulatory reform refers to efforts, by the government, to review regulations with a view towards minimizing them, simplifying them, and making them more cost effective. Such efforts, given impetus by the Regulatory Flexibility Act of 1980, are embodied in the U.S. Office of Management and Budget’s Office of Information and Regulatory Affairs, and the United Kingdom’s Better Regulation Commission. Cost-benefit analysis is frequently used in such reviews. Another catalyst of reform has been regulatory innovations (such as emissions trading), usually suggested by economists..

Deregulation can be distinguished from privatization, because privatization involves moving state-owned service providers into the private sector.

History

Many industries in the United States became regulated by the federal government in the late 19^th and early 20^th century. Entry to some markets was restricted to stimulate and protect private companies as they made initial investments into an infrastructure that provided essential public services, such as water, electric and communications utilities. Because the entry of competitors was highly restricted, monopoly situations were created. The government responded by instituting more regulations, this time price and economic controls aimed at protecting the public from these monopolies. Other forms of regulation were motivated by what was seen as the corporate abuse of the public interest by businesses that already existed. This occurred with the railroad industry following the era of the so-called “robber barons”. In the first instance, as markets matured to a point where several providers could be financially viable offering similar services, prices determined by that ensuing competition were seen as more economically efficient than those set by the regulatory process. Under these conditions, deregulation became attractive.

One phenomenon that encouraged deregulation was the fact that regulated industries often controlled the government regulatory agencies and used them to serve the industries’ interests. Even when regulatory bodies started out functioning independently, a process known as regulatory capture often saw industry interests come to dominate those of the consumer. A similar pattern has been observed within the deregulation process itself, which is often effectively controlled by the regulated industries through lobbying the legislative process. Such political forces, however, exist in many other forms for other special interest groups.

After a several decade hiatus, deregulation gained momentum in the 1970s, influenced by research at the University of Chicago and the theories of Ludwig von Mises, Friedrich von Hayek, and Milton Friedman, among others . Two leading ‘think tanks’ in Washington, the Brookings Institution and the American Enterprise Institute, were also active, holding seminars and publishing studies that advocated deregulatory initiatives throughout the 1970s and 1980s. Alfred E. Kahn played an unusual role, because he published as an academic and also participated in the Carter Administration’s efforts to deregulate transportation.

Friedrich Von Hayek

Austrian economist Friedrich von Hayek, along with University of Chicago economist Milton Friedman are two classic liberal economists attributed with the return of laissez-faire economics and deregulation.

The deregulation movement of the late 20^th century had substantial economic effects and engendered substantial controversy.

16.3: Economic Policy

16.3.1: Monetary Policy

Monetary policy is the process by which the monetary authority of a country controls the supply of money.

Learning Objective

Describe how central banking authorities use monetary policy to achieve the twin economic goals of relatively stable prices and low unemployment

Key Points

• Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding.
• Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values.
• Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing.
• The primary tool of monetary policy is open market operations. This entails managing the quantity of money in circulation through the buying and selling of various financial instruments, such as treasury bills, company bonds, or foreign currencies.

Key Terms

Expansionary policy

Expansionary policy increases the total supply of money in the economy more rapidly than usual.

monetary policy

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.

Contractionary policy

Contractionary policy expands the money supply more slowly than usual or even shrinks it.

Monetary Policy

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary theory provides insight into how to craft optimal monetary policy. It is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values.

Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing.

Monetary policy rests on the relationship between the rates of interest in an economy, that is, the price at which money can be borrowed, and the total supply of money. Monetary policy uses a variety of tools to control one or both of these, to influence outcomes like economic growth, inflation, exchange rates with other currencies and unemployment. Where currency is under a monopoly of issuance, or where there is a regulated system of issuing currency through banks which are tied to a central bank, the monetary authority has the ability to alter the money supply and thus influence the interest rate to achieve policy goals. The beginning of monetary policy as such comes from the late 19^th century, where it was used to maintain the gold standard.

Monetary policies are described as follows: accommodative, if the interest rate set by the central monetary authority is intended to create economic growth; neutral, if it is intended neither to create growth nor combat inflation; or tight if intended to reduce inflation.

There are several monetary policy tools available to achieve these ends: increasing interest rates by fiat; reducing the monetary base; and increasing reserve requirements with the effect of contracting the money supply; and, if reversed, expand the money supply.

Within almost all modern nations, special institutions, central banks, (the Federal Reserve System in the United States) have the task of executing the monetary policy and often independently of the executive .

The Federal Reserve Board Building

The Federal Reserve Board Building in Washington D. C.

The primary tool of monetary policy is open market operations. This entails managing the quantity of money in circulation through the buying and selling of various financial instruments, such as treasury bills, company bonds, or foreign currencies. All of these purchases or sales result in more or less base currency entering or leaving market circulation.

Usually, the short term goal of open market operations is to achieve a specific short term interest rate target. In other instances, monetary policy might instead entail the targeting of a specific exchange rate relative to some foreign currency or else relative to gold. For example, in the case of the USA the Federal Reserve targets the federal funds rate, the rate at which member banks lend to one another overnight; however, the monetary policy of China is to target the exchange rate between the Chinese renminbi and a basket of foreign currencies.

The other primary means of conducting monetary policy include:

1. Discount window lending (lender of last resort)
2. Fractional deposit lending (changes in the reserve requirement)
3. Moral suasion (cajoling certain market players to achieve specified outcomes)
4. “Open mouth operations” (talking monetary policy with the market).

16.3.2: Fiscal Policy

Fiscal policy is the use of government revenue collection or taxation, and expenditure (spending) to influence the economy.

Learning Objective

Review the United States’ stances of fiscal policy, methods of funding, and policies regarding borrowing

Key Points

• There are three main stances of fiscal policy: neutral fiscal policy, expansionary fiscal policy, and contractionary fiscal policy.
• Governments can use a budget surplus to do two things: to slow the pace of strong economic growth and to stabilize prices when inflation is too high.
• However, economists debate the effectiveness of fiscal stimulus. The argument mostly centers on crowding out.
• In the classical view, the expansionary fiscal policy also decreases net exports, which has a mitigating effect on national output and income.

Key Terms

Neoclassical Economists

Neoclassical economists generally emphasize crowding out; when government borrowing leads to higher interest rates that may offset the stimulative impact of spending.

fiscal policy

In economics and political science, fiscal policy is the use of government revenue collection or taxation, and expenditure (spending) to influence the economy.

Keynesian Economics

Keynesian economics suggests that increasing government spending and decreasing tax rates are the best ways to stimulate aggregate demand, and only to decrease spending & increase taxes after the economic boom begins.

Fiscal Policy

In economics and political science, fiscal policy is the use of government revenue collection or taxation, and expenditure (spending) to influence the economy. Changes in the level and composition of taxation and government spending can impact the following variables in the economy: aggregate demand and the level of economic activity; the pattern of resource allocation; and the distribution of income.

Stances of Fiscal Policy

There are three main stances of fiscal policy:

• Neutral fiscal policy is usually undertaken when an economy is in equilibrium. Government spending is fully funded by tax revenue and overall the budget outcome has a neutral effect on the level of economic activity.
• Expansionary fiscal policy involves government spending exceeding tax revenue, and is usually undertaken during recessions.
• Contractionary fiscal policy occurs when government spending is lower than tax revenue, and is usually undertaken to pay down government debt.

However, these definitions can be misleading as, even with no changes in spending or tax laws at all, cyclic fluctuations of the economy cause cyclic fluctuations of tax revenues and of some types of government spending, altering the deficit situation; these are not considered to be policy changes. Thus, for example, a government budget that is balanced over the course of the business cycle is considered to represent a neutral fiscal policy stance.

Methods of Funding

Governments spend money on a wide variety of things, from the military and police to services like education and healthcare, as well as transfer payments such as welfare benefits. This expenditure can be funded in a number of different ways: taxation, printing money, borrowing money from the population or from abroad, consumption of fiscal reserves, or sale of fixed assets (land).

Borrowing

A fiscal deficit is often funded by issuing bonds. These pay interest, either for a fixed period or indefinitely. If the interest and capital requirements are too large, a nation may default on its debts, usually to foreign creditors, while public debt or borrowing refers to the government borrowing from the public.

Economic Effects of Fiscal Policy

Governments use fiscal policy to influence the level of aggregate demand in the economy, in an effort to achieve economic objectives of price stability, full employment, and economic growth. One school of fiscal policy developed by John Maynard Keynes suggests that increasing government spending and decreasing tax rates are the best ways to stimulate aggregate demand, and only to decrease spending & increase taxes after the economic boom begins. Keynesian Economics argues this method be used in times of recession or low economic activity as an essential tool for building the framework for strong economic growth and working towards full employment. In theory, the resulting deficits would be paid for by an expanded economy during the boom that would follow; this was the reasoning behind the New Deal.

John Maynard Keynes and Harry Dexter White

Keynes (right) was the father and founder of Keynesian economics.

Governments can use a budget surplus to do two things: to slow the pace of strong economic growth and to stabilize prices when inflation is too high. Keynesian theory posits that removing spending from the economy will reduce levels of aggregate demand and contract the economy, thus stabilizing prices.

However, economists debate the effectiveness of fiscal stimulus. The argument mostly centers on crowding out; whether government borrowing leads to higher interest rates that may offset the stimulative impact of spending. When the government runs a budget deficit, funds will need to come from public borrowing (government bonds), overseas borrowing, or monetizing the debt. When governments fund a deficit with the issuing of government bonds, interest rates can increase across the market, because government borrowing creates higher demand for credit in the financial markets. This causes a lower aggregate demand for goods and services, contrary to the objective of a fiscal stimulus. Neoclassical economists generally emphasize crowding out while Keynesians argue that fiscal policy can still be effective especially in a liquidity trap where, they argue, crowding out is minimal.

In the classical view, the expansionary fiscal policy also decreases net exports, which has a mitigating effect on national output and income. When government borrowing increases interest rates it attracts foreign capital from foreign investors. This is because, all other things being equal, the bonds issued from a country executing expansionary fiscal policy now offer a higher rate of return. To purchase bonds originating from a certain country, foreign investors must obtain that country’s currency. Therefore, when foreign capital flows into the country undergoing fiscal expansion, demand for that country’s currency increases. The increased demand causes that country’s currency to appreciate. Once the currency appreciates, goods originating from that country now cost more to foreigners than they did before and foreign goods now cost less than they did before. Consequently, exports decrease and imports increase.

16.3.3: Income Security Policy

Fiscal policy is considered to be any change the government makes to the national budget in order to influence a nation’s economy.

Learning Objective

Analyze the transformation of American fiscal policy in the years of the Great Depression and World War II

Key Points

• The Great Depression showed the American population that there was a growing need for the government to manage economic affairs. The size of the federal government began rapidly expanding in the 1930s, growing from 553,000 paid civilian employees in the late 1920s to 953,891 employees in 1939.
• FDR was important because he implicated the New Deal, a program that would offer relief, recovery, and reform to the American nation. In terms of relief, new organizations (such as the Works Progress Administration) saved many U.S. lives.
• In 1971, at Bretton Woods, the U.S. went off the gold standard, allowing the dollar to float. Shortly after that, OPEC pegged the price of oil to gold rather than the dollar. The 70s were marked by oil shocks, recessions, and inflation in the U.S.
• Fixed income refers to any type of investment under which the borrower/issuer is obliged to make payments of a fixed amount on a fixed schedule: for example, if the borrower has to pay interest at a fixed rate once a year, and to repay the principal amount on maturity.
• Fixed-income securities can be contrasted with equity securities, often referred to as stocks and shares, that create no obligation to pay dividends or any other form of income.
• Governments issue government bonds in their own currency and sovereign bonds in foreign currencies. Local governments issue municipal bonds to finance themselves. Debt issued by government-backed agencies is called an agency bond.

Key Terms

fiscal

Related to the treasury of a country, company, region, or city, particularly to government spending and revenue.

fixed income

Fixed income refers to any type of investment under which the borrower/issuer is obliged to make payments of a fixed amount on a fixed schedule: for example, if the borrower has to pay interest at a fixed rate once a year, and to repay the principal amount on maturity.

Background

Any changes the government makes to the national budget in order to influence a nation’s economy is considered fiscal policy. The approach to economic policy in the United States was rather laissez-faire until the Great Depression. The government tried to stay away from economic matters as much as possible and hoped that a balanced budget would be maintained.

Fixed income refers to any type of investment under which the borrower/issuer is obliged to make payments of a fixed amount on a fixed schedule: for example, if the borrower has to pay interest at a fixed rate once a year, and to repay the principal amount on maturity. Fixed-income securities can be contrasted with equity securities, often referred to as stocks and shares, that create no obligation to pay dividends or any other form of income. In order for a company to grow its business, it often must raise money: to finance an acquisition, buy equipment or land or invest in new product development. Governments issue government bonds in their own currency and sovereign bonds in foreign currencies. Local governments issue municipal bonds to finance themselves. Debt issued by government-backed agencies is called an agency bond.

The Great Depression

The Great Depression struck countries in the late 1920s and continued throughout the entire 1930s. It affected some countries more than others, and the effects in the U.S. were detrimental. In 1933, around 25% of all workers were unemployed in America. Many families starved or lost their homes. Some tried traveling to the West to find work, also to no avail. Because of the prolonged recovery of the United States economy and the major changes that the Great Depression forced the government to make, the creation of fiscal policy is often referred to as one of the defining moments in the history of the United States.

Crowds outside the New York Stock Exchange in 1929.

A solemn crowd gathers outside the Stock Exchange after the crash.

Another contributor to changing the role of government in the 1930s was President Franklin Delano Roosevelt. FDR was important because he implicated the New Deal, a program that would offer relief, recovery, and reform to the American nation. In terms of relief, new organizations (such as the Works Progress Administration) saved the lives of many U.S. citizens. The reform aspect was indeed the most influential in the New Deal, as it forever changed the role of government in the U.S. economy.

FDR

FDR’s “New Deal” policies were based on the principle of government intervention and regulation of the economy.

World War II and Effects

World War II forced the government to run huge deficits, or spend more than they were generating economically, in order to keep up with all of the production the U.S. military needed. By running deficits, the economy recovered, and America rebounded from its drought of unemployment. The military strategy of full employment had a huge benefit: the government’s massive deficits were used to pay for the war, and ended the Great Depression. This phenomenon set the standard and showed just how necessary it was for the government to play an active role in fiscal policy.

Modern Fiscal Policy

In 1971, at Bretton Woods, the U.S. went off the gold standard, allowing the dollar to float. Shortly after that, OPEC pegged the price of oil to gold rather than the dollar. The 70s were marked by oil shocks, recessions, and inflation in the U.S.

In late 2007 to early 2008, the economy would enter a particularly bad recession as a result of high oil and food prices, and a substantial credit crisis leading to the bankruptcy and eventual federal takeover of certain large and well-established mortgage providers. In an attempt to fix these economic problems, the United States federal government passed a series of costly economic stimulus and bailout packages. As a result of this, the deficit would increase to $455 billion and is projected to continue to increase dramatically for years to come, due in part to both the severity of the current recession and the high spending fiscal policy the federal government has adopted to help combat the nation’s economic woes.

16.3.4: Regulation and Antitrust Policy

Antitrust laws are a form of marketplace regulation intended to prohibit monopolization and unfair business practices.

Learning Objective

Assess the balance the federal government attempts to strike between regulation and deregulation

Key Points

• A number of governmental programs review regulatory innovations in order to minimize and simplify those regulations, and to make regulations more cost-effective.
• Government agencies known as competition regulators, as well as private litigants, apply antitrust and consumer protection laws in the hopes of preventing market failure.
• Large companies with huge cash reserves and large lines of credit can stifle competition by engaging in predatory pricing, in which they intentionally sell their products and services at a loss for a time, in order to force smaller competitors out of business.

Key Terms

Antitrust Law

The United States antitrust law is a body of law that prohibits anti-competitive behavior (monopolization) and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace.

regulation

A regulation is a legal provision that creates, limits, or constrains a right; creates or limits a duty; or allocates a responsibility.

A regulation is a legal provision with many possible functions. It can create or limit a right; it can create or limit a duty; or it can allocate a responsibility. Regulations take many forms, including legal restrictions from a government authority, contractual obligations, industry self-regulations, social regulations, co-regulations, and market regulations.

State, or governmental, regulation attempts to produce outcomes which might not otherwise occur. Common examples of this type of regulation include laws that control prices, wages, market entries, development approvals, pollution effects, employment for certain people in certain industries, standards of production for certain goods, the military forces, and services.

The study of formal (legal and/or official) and informal (extra-legal and/or unofficial) regulation is one of the central concerns of the sociology of law. Scholars in this field are particularly interested in exploring the degree to which formal and legal regulation actually changes social behavior.

Deregulation, Regulatory Reform, and Liberalization

According to the Competitive Enterprise Institute, government regulation in the United States costs the economy approximately $1.75 trillion per year, a number that exceeds the combined total of all corporate pretax profits. Because of this, programs exist that review regulatory initiatives in order to minimize and simplify regulations, and to make them more cost-effective. Such efforts, given impetus by the Regulatory Flexibility Act of 1980 in the United States, are embodied in the United States Office of Management and Budget’s Office of Information and Regulatory Affairs. Economists also occasionally develop regulation innovations, such as emissions trading.

U.S. Department of Justice

The Department of Justice is home to the U.S. anti-trust enforcers.

U.S. Antitrust Law

U.S. antitrust law is a body of law that prohibits anti-competitive behavior (monopolization) and unfair business practices. Intended to encourage competition in the marketplace, these laws make it illegal for businesses to employ practices that hurt other businesses or consumers, or that generally violate standards of ethical behavior. Government agencies known as competition regulators, along with private litigants, apply the antitrust and consumer protection laws in hopes of preventing market failure. Originally, these types of laws emerged in the U.S. to combat “corporate trusts,” which were big businesses. Other countries use the term “competition law” for this action. Many countries, including most of the Western world, have antitrust laws of some form. For example, the European Union has provisions under the Treaty of Rome to maintain fair competition, as does Australia under its Trade Practices Act of 1974.

Antitrust Rationale

Antitrust laws prohibit monopolization, attempted monopolization, agreements that restrain trade, anticompetitive mergers, and, in some circumstances, price discrimination in the sale of commodities.

Monopolization, or attempts to monopolize, are offenses that an individual firm may commit. Typically, this behavior involves a firm using unreasonable, unlawful, and exclusionary practices that are intended to secure, for that firm, control of a market. Large companies with huge cash reserves and large lines of credit can stifle competition by engaging in predatory pricing, in which they intentionally sell their products and services at a loss for a time, in order to force smaller competitors out of business. Afterwards, with no competition, these companies are free to consolidate control of an industry and charge whatever prices they desire.

A number of barriers make it difficult for new competitors to enter a market, including the fact that entry requires a large upfront investment, specific investments in infrastructure, and exclusive arrangements with distributors, customers and wholesalers. Even if competitors do shoulder these costs, monopolies will have ample warning and time in which to either buy out the competitor, engage in its own research, or return to predatory pricing long enough to eliminate the upstart business.

Federal Antitrust Actions

The federal government, via the Antitrust Division of the United States Department of Justice, and the Federal Trade Commission, can bring civil lawsuits enforcing the laws. Famous examples of these lawsuits include the government’s break-up of AT&T’s local telephone service monopoly in the early 1980s, and governmental actions against Microsoft in the late 1990s.

The federal government also reviews potential mergers to prevent market concentration. As a result of the Hart-Scott-Rodino Antitrust Improvements Act, larger companies attempting to merge must first notify the Federal Trade Commission and the Department of Justice’s Antitrust Division prior to consummating a merger. These agencies then review the proposed merger by defining what the market is, and then determining the market concentration using the Herfindahl-Hirschman Index and each company’s market share. The government is hesitant to allow a company to develop market power, because if unchecked, such power can lead to monopoly behavior.

Exemptions to Antitrust Laws

Several types of organizations are exempt from federal antitrust laws, including labor unions, agricultural cooperatives, and banks. Mergers and joint agreements of professional football, hockey, baseball, and basketball leagues are exempt. Newspapers run by joint operating agreements are also allowed limited antitrust immunity under the Newspaper Preservation Act of 1970.

16.3.5: Subsidies and Contracting

A subsidy is assistance paid to business, economic sectors, or producers; a contract is an agreement between two or more parties.

Learning Objective

Discuss the aims of subsidies and their effects on supply and demand

Key Points

• Subsidies are often regarded as a form of protectionism or trade barrier by making domestic goods and services artificially competitive against imports. Subsidies may distort markets and can impose large economic costs.
• A subsidy may be an efficient means of correcting a market failure. For example, economic analysis may suggest that direct subsidies (cash benefits) would be more efficient than indirect subsidies (such as trade barriers).
• Government procurement in the United States addresses the federal government’s need to acquire goods, services (including construction), and interests in real property.
• The authority of a contracting officer (the Government’s agent) to contract on behalf of the Government is set forth in public documents (a warrant) that a person dealing with the contracting officer can review.

Key Terms

Contract

An agreement entered into voluntarily by two or more parties with the intention of creating a legal obligation, which may have elements in writing, though contracts can be made orally.

subsidy

Assistance paid to a business, economic sector, or producers.

Subsidy

A subsidy is assistance paid to a business, economic sector or producers. Most subsidies are paid by the government to producers or distributed as subventions in an industry to prevent the decline of that industry, to increase the prices of its products, or simply to encourage the hiring of more labor. Some subsidies are to encourage the sale of exports; some are for food to keep down the cost of living; and other subsidies encourage the expansion of farm production.

Subsidies

This graph depicts U.S. farm subsidies in 2005.

Subsidies are often regarded as a form of protectionism or trade barrier by making domestic goods and services artificially competitive against imports. Subsidies may distort markets and can impose large economic costs. Financial assistance in the form of subsidies may come from a government, but the term subsidy may also refer to assistance granted by others, such as individuals or non-governmental institutions.

Examples of industries or sectors where subsidies are often found include utilities, gasoline in the United States, welfare, farm subsidies, and (in some countries) certain aspects of student loans.

Types of Subsidies

Ways to classify subsidies include the reason behind them, the recipients of the subsidy, and the source of the funds. One of the primary ways to classify subsidies is the means of distributing the subsidy. The term subsidy may or may not have a negative connotation. A subsidy may be characterized as inefficient relative to no subsidies; inefficient relative to other means of producing the same results; or “second-best;” implying an inefficient but feasible solution.

In other cases, a subsidy may be an efficient means of correcting a market failure. For example, economic analysis may suggest that direct subsidies (cash benefits) would be more efficient than indirect subsidies (such as trade barriers); this does not necessarily imply that direct subsidies are bad, but they may be more efficient or effective than other mechanisms to achieve the same (or better) results. Insofar as they are inefficient, subsidies would generally be considered bad, as economics is the study of efficient use of limited resources.

Effects

In standard supply and demand curve diagrams, a subsidy shifts either the demand curve up or the supply curve down. Subsidies that increase the production will tend to result in lower prices, while subsidies that increase demand will tend to result in an increase in price. Both cases result in a new economic equilibrium. The recipient of the subsidy may need to be distinguished from the beneficiary of the subsidy, and this analysis will depend on elasticity of supply and demand as well as other factors. The net effect and identification of winners and losers is rarely straightforward, but subsidies generally result in a transfer of wealth from one group to another (or transfer between sub-groups).

Government Procurement

Government procurement in the United States addresses the federal government’s need to acquire goods, services (including construction), and interests in real property. It involves the acquiring by contract, usually with appropriated funds, of supplies, services, and interests in real property by and for the use of the Federal Government. This is done through purchase or lease, whether the supplies, services, or interests are already in existence or must be created, developed, demonstrated, and evaluated.

The authority of a contracting officer (the Government’s agent) to contract on behalf of the Government is set forth in public documents (a warrant) that a person dealing with the contracting officer can review. The contracting officer has no authority to act outside of his or her warrant or to deviate from the laws and regulations controlling Federal Government contracts. The private contracting party is held to know the limitations of the contracting officer’s authority, even if the contracting officer does not. This makes contracting with the United States a very structured and restricted process. As a result, unlike in the commercial arena, where the parties have great freedom, a contract with the U.S. Government must comply with the laws and regulations that permit it, and must be made by a contracting officer with actual authority to execute the contract.

16.3.6: The Public Debt

Government debt, also known as public debt, or national debt, is the debt owed by a central government.

Learning Objective

Describe how countries finance activities by issuing debt

Key Points

• Government debt is one method of financing government operations but not the only method. Governments can also create money to monetize their debts, thus removing the need to pay interest. However, this practice simply reduces government interest costs rather than truly canceling government debt.
• As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers.
• Lending to a national government in the country’s own currency is often considered risk free and is done at a so-called risk-free interest rate. This is because, up to a point, the debt and interest can be repaid by raising tax receipts, a reduction in spending, or by simply printing more money.

Key Terms

Public Debt

Government debt, also known as public debt, or national debt, is the debt owed by a central government.

Sovereign Debt

Sovereign debt usually refers to government debt that has been issued in a foreign currency.

Government Bond

A government bond is a bond issued by a national government. Such bonds are often denominated in the country’s domestic currency.

Government Debt

Government debt, also known as public debt, or national debt, is the debt owed by a central government. In the U.S. and other federal states, “government debt” may also refer to the debt of a state or provincial government, municipal or local government. Government debt is one method of financing government operations, but it is not the only method. Governments can also create money to monetize their debts, thereby removing the need to pay interest. However, this practice simply reduces government interest costs rather than truly canceling government debt. shows each country’s public debt as a percentage of their GDP in 2011.

Global Public Debt

This map shows each country’s public debt as a percentage of their GDP.

Governments usually borrow by issuing securities, government bonds and bills. Less creditworthy countries sometimes borrow directly from a supranational organization (the World Bank) or international financial institutions. As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers. Government debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Sovereign debt usually refers to government debt that has been issued in a foreign currency. A broader definition of government debt may consider all government liabilities, including future pension payments and payments for goods and services the government has contracted but not yet paid.

Government and Sovereign Bonds

A government bond is a bond issued by a national government. Such bonds are often denominated in the country’s domestic currency. Most developed country governments are prohibited by law from printing money directly, that function having been relegated to their central banks. However, central banks may buy government bonds in order to finance government spending, thereby monetizing the debt.

Bonds issued by national governments in foreign currencies are normally referred to as sovereign bonds. Investors in sovereign bonds denominated in foreign currency have the additional risk that the issuer may be unable to obtain foreign currency to redeem the bonds.

Denominated in Reserve Currencies

Governments often borrow money in currency in which the demand for debt securities is strong. An advantage of issuing bonds in a currency such as the US dollar, the pound sterling, or the euro is that many investors wish to invest in such bonds.

Risk

Lending to a national government in the country’s own sovereign currency is often considered “risk free” and is done at a so-called “risk-free interest rate. ” This is because, up to a point, the debt and interest can be repaid by raising tax receipts (either by economic growth or raising tax rates), a reduction in spending, or failing that by simply printing more money. It is widely considered that this would increase inflation and reduce the value of the invested capital. A typical example of this is provided by Weimar Germany of the 1920s which suffered from hyperinflation due to its government’s inability to pay the national debt deriving from the costs of World War I.

In practice, the market interest rate tends to be different for debts of different countries. An example is in borrowing by different European Union countries denominated in euros. Even though the currency is the same in each case, the yield required by the market is higher for some countries’ debt than for others. This reflects the views of the market on the relative solvency of the various countries and the likelihood that the debt will be repaid.

A politically unstable state is anything but risk-free as it may cease its payments. Another political risk is caused by external threats. It is mostly uncommon for invaders to accept responsibility for the national debt of the annexed state or that of an organization it considered as rebels. For example, all borrowings by the Confederate States of America were left unpaid after the American Civil War. On the other hand, in the modern era, the transition from dictatorship and illegitimate governments to democracy does not automatically free the country of the debt contracted by the former government. Today’s highly developed global credit markets would be less likely to lend to a country that negated its previous debt, or might require punishing levels of interest rates that would be unacceptable to the borrower.

U.S. Treasury bonds denominated in U.S. dollars are often considered “risk free” in the U.S. This disregards the risk to foreign purchasers of depreciation in the dollar relative to the lender’s currency. In addition, a risk-free status implicitly assumes the stability of the US government and its ability to continue repayments during any financial crisis.

Lending to a national government in a currency other than its own does not give the same confidence in the ability to repay, but this may be offset by reducing the exchange rate risk to foreign lenders. Usually small states with volatile economies have most of their national debt in foreign currency.

16.4: Taxes

16.4.1: The Federal Tax System

The United States is a federal republic with autonomous state and local governments with taxes imposed at each level.

Learning Objective

Describe the various levels of the tax structure in the United States

Key Points

• Taxes are imposed on net income of individuals and corporations by federal, most state, and some local governments. Federal tax rates vary from 10% to 35% of taxable income. State and local tax rates vary widely by jurisdiction, from 0% to 12.696% and many are graduated.
• Payroll taxes are imposed by the federal and all state governments. These include Social Security and Medicare taxes imposed on both employers and employees, at a combined rate of 15.3% (13.3% for 2011).
• Property taxes are imposed by most local governments and many special purpose authorities based on the fair market value of property. Sales taxes are imposed on the price at retail sale of many goods and some services by most states and some localities.

Key Terms

tariff

a system of government-imposed duties levied on imported or exported goods; a list of such duties, or the duties themselves

autonomous

Self-governing. Governing independently.

The Federal Tax System

The United States is a federal republic with autonomous state and local governments. Taxes are imposed at each of these levels. These include taxes on income, payroll, property, sales, imports, estates and gifts, as well as various fees. The taxes collected in 2010 by federal, state and municipal governments amounted to 24.8% of the GDP.

U.S. Tax Revenues

U.S. Tax Revenues as a Percentage of GDP

Taxes are imposed on net income of individuals and corporations by the federal, most state, and some local governments. Citizens and residents are taxed on worldwide income and allowed a credit for foreign taxes. Income subject to tax is determined under tax rules, not accounting principles, and includes almost all income. Most business expenses reduce taxable income, though limits apply to a few expenses. Individuals are permitted to reduce taxable income by personal allowances and certain non-business expenses that can include home mortgage interest, state and local taxes, charitable contributions, medical, and certain other expenses incurred above certain percentages of income. State rules for determining taxable income often differ from federal rules. Federal tax rates vary from 10% to 35% of taxable income. State and local tax rates vary widely by jurisdiction, from 0% to 12.696% and many are graduated. State taxes are generally treated as a deductible expense for federal tax computation. Certain alternative taxes may apply. The United States is the only country in the world that taxes its nonresident citizens on worldwide income or estate, in the same manner and rates as residents.

Payroll taxes are imposed by the federal and all state governments. These include Social Security and Medicare taxes imposed on both employers and employees, at a combined rate of 15.3% (13.3% for 2011). Social Security tax applies only to the first $106,800 of wages in 2009 through 2011. Employers also must withhold income taxes on wages. An unemployment tax and certain other levies apply.

Property taxes are imposed by most local governments and many special purpose authorities based on the fair market value of property. School and other authorities are often separately governed, and impose separate taxes. Property tax is generally imposed only on realty, though some jurisdictions tax some forms of business property. Property tax rules and rates vary widely.

Sales taxes are imposed on the retail price of many goods and some services by most states and some localities. Sales tax rates vary widely among jurisdictions, from 0% to 16%, and may vary within a jurisdiction based on the particular goods or services taxed. Sales tax is collected by the seller at the time of sale, or remitted as use tax by buyers of taxable items who did not pay sales tax.

The United States imposes tariffs or customs duties on the import of many types of goods from many jurisdictions. This tax must be paid before the goods can be legally imported. Rates of duty vary from 0% to more than 20%, based on the particular goods and country of origin.

Estate and gift taxes are imposed by the federal and some state governments on property passed by inheritance or donation. Similar to federal income taxes, federal estate and gift taxes are imposed on worldwide property of citizens and residents and allow a credit for foreign taxes.

16.4.2: Federal Income Tax Rates

Federal income tax is levied on the income of individuals or businesses, which is the total income minus allowable deductions.

Learning Objective

Summarize the key moments in the development of a national income tax

Key Points

• In order to help pay for its war effort in the American Civil War, the federal government imposed its first personal income tax on August 5, 1861 as part of the Revenue Act of 1861.
• In 1913, the Sixteenth Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system.
• Taxpayers generally must self assess income tax by filing tax returns. Advance payments of tax are required in the form of withholding tax or estimated tax payments.
• The 2012 marginal tax rates for a single person is 10 percent for $0–8,700, 15 percent for $8,701–35,350, 25 percent for $35,351–85,650, 28 percent for $85,651–178,650, 33 percent for $178,651–388,350 and 35 percent for $388,351 and up.
• In the United States, payroll taxes are assessed by the federal government, all fifty states, the District of Columbia, and numerous cities.
• The United States social insurance system is funded by a tax similar to an income tax.

Key Term

net

The amount remaining after expenses are deducted; profit.

Federal income tax is levied on the income of individuals or businesses. When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax or profit tax. Individual income taxes often tax the total income of the individual, while corporate income taxes often tax net income. Taxable income is total income less allowable deductions.

Income is broadly defined. Most business expenses are deductible. Individuals may also deduct a personal allowance and certain personal expenses. These include home mortgage interest, state taxes, contributions to charity, and some other items. Some of these deductions are subject to limits. Capital gains are taxable, and capital losses reduce taxable income only to the extent of gains. Individuals currently pay a lower rate of tax on capital gains and certain corporate dividends.

U.S. Income Taxes out of Total Taxes

This graph shows the revenue the U.S. government has made purely from income tax, in relation to all taxes.

In order to help pay for the American Civil War, the federal government imposed its first personal income tax on August 5, 1861 as part of the Revenue Act of 1861. The tax rate was 3 percent of all incomes over $800 ($20,693 in 2011 dollars). This tax was repealed and replaced by another income tax in 1862.

In 1894, Democrats in Congress passed the Wilson-Gorman tariff, which imposed the first peacetime income tax. The rate was 2 percent on income over $4,000 ($107,446.15 in 2011 dollars). This meant fewer than 10 percent of households would pay the tax. The purpose of Wilson-Gorman tariff was to make up for revenue that would be lost by other tariff reductions.

In 1895 the Supreme Court, in Pollock v. Farmers’ Loan & Trust Co., ruled that a tax based on receipts from the use of property was unconstitutional. The Court held that taxes on rents from real estate, interest income from personal property, and other income from personal property were treated as direct taxes on property, and had to be apportioned. Since apportionment of income taxes was impractical, this decision effectively prohibited a federal tax on income from property.

In 1913, the Sixteenth Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The United States Supreme Court, in Stanton v. Baltic Mining Co., ruled that the amendment conferred no new power of taxation. They ruled that it simply prevented the courts from taking the power of income taxation from Congress. In fiscal year 1918, annual internal revenue collections for the first time passed the billion-dollar mark, rising to 5.4 billion by 1920. With the advent of World War II, employment increased, as did tax collections—to 7.3 billion. The withholding tax on wages was introduced in 1943 and was instrumental in increasing the number of taxpayers to $60 million and tax collections to $43 billion by 1945.

Taxpayers generally must self-assess income tax by filing tax returns. Advance payments of tax are required in the form of withholding tax or estimated tax payments. Taxes are determined separately by each jurisdiction imposing tax. Due dates and other administrative procedures vary by jurisdiction. April 15 is the due date for individual returns for federal and many state and local returns. Tax, as determined by the taxpayer, may be adjusted by the taxing jurisdiction.

Social Security Tax

The United States social insurance system is funded by a tax similar to an income tax. Social Security tax of 6.2% is imposed on wages paid to employees. The tax is imposed on both the employer and the employee. For 2011 and 2012, the employee tax has been reduced by 6.2% to 4.2%. The maximum amount of wages subject to the tax for 2009, 2010, and 2011 was/is $106,800. This amount is indexed for inflation. A companion Medicare Tax of 1.45% of wages is imposed on employers and employees, with no limitation. A self-employment tax in like amounts (totaling 15.3%, 13.3% for 2011 and 2012) is imposed on self-employed persons.

Payroll Tax

Payroll taxes generally fall into two categories: deductions from an employee’s wages and taxes paid by the employer based on the employee’s wages. In the United States, payroll taxes are assessed by the federal government, all fifty states, the District of Columbia, and numerous cities. These taxes are imposed on employers and employees and on various compensation bases and are collected and paid to the taxing jurisdiction by the employers. Most jurisdictions imposing payroll taxes require reporting quarterly and annually in most cases, and electronic reporting is generally required for all but small employers.

16.4.3: Tax Loopholes and Lowered Taxes

Tax evasion is the term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means.

Learning Objective

Describe the legal and illegal ways individuals and corporations avoid paying some or all taxes owed

Key Points

• The “term tax mitigation” has also been used in the tax regulations of some jurisdictions to distinguish tax avoidance foreseen by the legislators from tax avoidance, which exploits loopholes in the law.
• The United States Supreme Court has stated that “The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by means which the law permits, cannot be doubted”.
• Tax evasion is the general term for efforts by individuals, corporations, trusts, and other entities to evade taxes by illegal means. Both tax avoidance and evasion can be viewed as forms of tax noncompliance, as they describe a range of activities that are unfavorable to a state’s tax system.
• The Internal Revenue Service has identified small business and sole proprietorship employees as the largest contributors to the tax gap between what Americans owe in federal taxes and what the federal government receives.
• When tips, side-jobs, cash receipts, and barter income is not reported, it is illegal cheating because no tax are paid by individuals. Similarly, those who are self-employed or run small businesses may not declare income and evade the payment of taxes.

Key Terms

evasion

The act of eluding or avoiding, particularly the pressure of an argument, accusation, charge, or interrogation; artful means of eluding.

loophole

A method of escape, especially an ambiguity or exception in a rule that can be exploited in order to avoid its effect.

mitigation

relief; alleviation

Example

• In the United States, the IRS estimate of the 2001 tax gap was $345 billion. For 2006, the tax gap is estimated to be $450 billion. A more recent study estimates the 2008 tax gap in the range of $450-500 billion, and unreported income to be approximately $2 trillion. Thus, 18-19% of total reportable income is not properly reported to the IRS.

Tax Avoidance

Tax avoidance is the legal utilization of the tax regime to one’s own advantage, to reduce the amount of tax that is payable by means that are within the law. The term tax mitigation’s original use was by tax advisors as an alternative to the pejorative term tax avoidance. The term has also been used in the tax regulations of some jurisdictions to distinguish tax avoidance foreseen by the legislators from tax avoidance which exploits loopholes in the law. The United States Supreme Court has stated that “The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by means which the law permits, cannot be doubted. “

Tax Evasion

Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Both tax avoidance and evasion can be viewed as forms of tax noncompliance, as they describe a range of activities that are unfavorable to a state’s tax system. Tax evasion is an activity commonly associated with the underground economy, and one measure of the extent of tax evasion is the amount of unreported income, namely the difference between the amount of income that should legally be reported to the tax authorities and the actual amount reported, which is also sometimes referred to as the “tax gap. “

Taxes are imposed in the United States at each of these levels. These include taxes on income, payroll, property, sales, imports, estates, and gifts, as well as various fees. In 2010, taxes collected by federal, state and municipal governments amounted to 24.8% of GDP . Under the federal law of the United States of America, tax evasion or tax fraud is the purposeful illegal attempt of a taxpayer to evade payment of a tax imposed by the federal government. Conviction of tax evasion may result in fines and imprisonment.

U.S. Income Taxes out of Total Taxes

This graph shows the revenue the U.S. government has made purely from income tax, in relation to all taxes.

The Internal Revenue Service has identified small business and sole proprietorship employees as the largest contributors to the tax gap between what Americans owe in federal taxes and what the federal government receives. Rather than W-2 wage earners and corporations, small business and sole proprietorship employees contribute to the tax gap, because there are few ways for the government to know about skimming or non-reporting of income without mounting more significant investigations. When tips, side-jobs, cash receipts, and barter income is not reported it is illegal cheating, because no tax is paid by individuals. Similarly, those who are self-employed or run small businesses may not declare income and evade the payment of taxes.

Examples of Tax Evasion

An IRS report indicates that, in 2009, 1,470 individuals earning more than $1,000,000 annually faced a net tax liability of zero or less. Also, in 1998 alone, a total of 94 corporations faced a net liability of less than half the full 35% corporate tax rate and the corporations Lyondell Chemical, Texaco, Chevron, CSX, Tosco, PepsiCo, Owens & Minor, Pfizer, JP Morgan Saks, Goodyear, Ryder, Enron, Colgate-Palmolive, Worldcom, Eaton, Weyerhaeuser, General Motors, El Paso Energy, Westpoint Stevens, MedPartners, Phillips Petroleum, McKesson, and Northrup Grumman all had net negative tax liabilities. Additionally, this phenomenon was widely documented regarding General Electric in early 2011. A Government Accountability Office study found that, from 1998 to 2005, 55% of United States companies paid no federal income taxes during at least one year in a seven-year period it studied. A review in 2011 by Citizens for Tax Justice and the Institute on Taxation and Economic Policy of companies in the Fortune 500 profitable every year from 2008 through 2010 stated these companies paid an average tax rate of 18.5%, and that 30 of these companies actually had a negative income tax due.

In the United States, the IRS estimate of the 2001 tax gap was $345 billion. For 2006, the tax gap is estimated to be $450 billion. A more recent study estimates the 2008 tax gap in the range of $450–$500 billion, and unreported income to be approximately $2 trillion. Thus, 18-19 percent of total reportable income is not properly reported to the IRS.

16.5: Politics and Economic Policy

16.5.1: Fiscal Policy and Policy Making

Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy.

Learning Objective

Identify the central elements of fiscal policy

Key Points

• The two main instruments of fiscal policy are government taxation and expenditure.
• There are three main stances in fiscal policy: neutral, expansionary, and contractionary.
• Even with no changes in spending or tax laws at all, cyclic fluctuations of the economy cause cyclic fluctuations of tax revenues and of some types of government spending, which alters the deficit situation; these are not considered fiscal policy changes.

Key Terms

fiscal policy

Government policy that attempts to influence the direction of the economy through changes in government spending or taxes.

taxation

The act of imposing taxes and the fact of being taxed

expenditure

Act of expending or paying out.

In economics and political science, fiscal policy is the use of government budget or revenue collection (taxation) and expenditure (spending) to influence economic. The two main instruments of fiscal policy are government taxation and expenditure. Changes in the level and composition of taxation and government spending can impact the following variables in the economy: (1) aggregate demand and the level of economic activity; (2) the pattern of resource allocation; and (3) the distribution of income.

The three main stances of fiscal policy are:

• Neutral fiscal policy, usually undertaken when an economy is in equilibrium. Government spending is fully funded by tax revenue and overall the budget outcome has a neutral effect on the level of economic activity.
• Expansionary fiscal policy, which involves government spending exceeding tax revenue, and is usually undertaken during recessions.
• Contractionary fiscal policy, which occurs when government spending is lower than tax revenue, and is usually undertaken to pay down government debt .

These definitions can be misleading however. Even with no changes in spending or tax laws at all, cyclic fluctuations of the economy cause cyclic fluctuations of tax revenues and of some types of government spending, which alters the deficit situation; these are not considered to be policy changes. Therefore, for purposes of the above definitions, “government spending” and “tax revenue” are normally replaced by “cyclically adjusted government spending” and “cyclically adjusted tax revenue”. Thus, for example, a government budget that is balanced over the course of the business cycle is considered to represent a neutral fiscal policy stance.

Methods of Funding

Governments spend money on a wide variety of things, from the military and police to services like education and healthcare, as well as transfer payments such as welfare benefits. This expenditure can be funded in a number of different ways:

• Taxation
• Seigniorage, the benefit from printing money
• Borrowing money from the population or from abroad
• Consumption of fiscal reservesSale of fixed assets (e.g., land)
• Borrowing: A fiscal deficit is often funded by issuing bonds, like treasury bills or consols and gilt-edged securities. These pay interest, either for a fixed period or indefinitely. If the interest and capital requirements are too large, a nation may default on its debts, usually to foreign creditors. Public debt or borrowing : it refers to the government borrowing from the public.
• Consuming prior surpluses: A fiscal surplus is often saved for future use, and may be invested in either local currency or any financial instrument that may be traded later once resources are needed; additional debt is not needed. For this to happen, the marginal propensity to save needs to be strictly positive.

Fiscal Policy

Comparison of National Spending Per Citizen for the 20 Largest Economies is an example of various fiscal policies.

16.5.2: Deficit Spending, the Public Debt, and Policy Making

Deficit spending and public debt are controversial issues within economic policy debates.

Learning Objective

Describe government debt and how it is formed

Key Points

• Whereas, public debt refers to debt owed by a central government, deficit spending refers to spending done by a government in excess of tax receipts is known as deficit spending.
• As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers.
• Deficit spending may, however, be consistent with public debt remaining stable as a proportion of GDP, depending on the level of GDP growth.
• The mainstream economics position is that deficit spending is desirable and necessary as part of counter-cyclical fiscal policy, but that there should not be a structural deficit.
• The mainstream position is attacked from both sides – advocates of sound finance argue that deficit spending is always bad policy, while some Post-Keynesian economists, particularly Chartalists, argue that deficit spending is necessary, and not only for fiscal stimulus.

Key Terms

deficit

A situation wherein, or amount whereby, spending exceeds government revenue.

debt

The state or condition of owing something to another.

financing

A transaction that provides funds for a business.

Government debt is the debt owed by a central government. In the United States and other federal states, government debt may also refer to the debt of a state or provincial government, municipal or local government. By contrast, the annual government deficit refers to the difference between government receipts and government spending in a single year, that is, the increase in debt over a particular year. Government debt is one method of financing government operations, but it is not the only method. Governments can also create money to monetize their debts, thereby eliminating the need to pay interest. Doing this, however, simply reduces government interest costs, rather than truly fixing the government debt. Governments usually borrow by issuing securities, government bonds, and bills. Less creditworthy countries sometimes borrow directly from a supranational organization, like the World Bank, or international financial institutions.

Public Debt

National Debt Clock outside the IRS office in NYC, July 1, 2010.

Because the government draws its income from much of the population, government debt is an indirect debt of the taxpayers. Government debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Sovereign debt usually refers to government debt that has been issued in a foreign currency. Government debt can also be categorized by duration until repayment is due. For instance, short term debt is generally considered to last for one year or less, while long term debt is for more than ten years. Medium term debt falls between these two boundaries. A broader definition of government debt may consider all government liabilities, including future pension payments and payments for goods and services the government has contracted, but not yet paid.

Government deficit, on the other hand, refers to a situation when the government’s expenses, including its purchases of goods and services, its transfers (grants) to individuals and corporations, and its net interest payments, exceed its tax revenues. Deficit spending occurs when government spending exceeds tax receipts. Governments usually issue bonds to match their deficits. Bonds can be bought by the Central Bank through quantitative easing. Otherwise the debt issuance can increase the level of (i) public debt, (ii) private sector net worth, (iii) debt service (interest payments) and (iv) interest rates. Deficit spending may, however, be consistent with public debt, remaining stable as a proportion of GDP, depending on the level of GDP growth.

Public Debt as a Percentage of GDP

General government debt as a percent of GDP in USA, Japan, and Germany.

Deficit Reduction Debate: Differences between the two Parties

In the United States, taxes are imposed on net income of individuals and corporations by the federal, most state, and some local governments. One of the largest budget expenditures for state governments is Medicaid. The United States public debt is the outstanding amount owed by the federal government of the United States from the issue of securities by the Treasury and other federal government agencies. US public debt consists of two components:

1. Debt held by the public includes Treasury securities held by investors outside the federal government, including that held by individuals, corporations, the Federal Reserve System and foreign, state and local governments.
2. Debt held by government accounts or intragovernmental debt includes non-marketable Treasury securities held in accounts administered by the federal government that are owed to program beneficiaries, such as the Social Security Trust Fund. Debt held by government accounts represents the cumulative surpluses, including interest earnings, of these accounts that have been invested in Treasury securities.

Democrats and Republicans mean very different things when they talk about tax reform. Democrats argue for the wealthy to pay more via higher income tax rates, while Republicans focus on lowering income tax rates. While both parties discuss reducing tax expenditures (i.e., exemptions and deductions), Republicans focus on preserving lower tax rates for capital gains and dividends, while Democrats prefer educational credits and capping deductions. Political realities make it unlikely that more than $150 billion per year in individual tax expenditures could be eliminated. One area with more common ground is corporate tax rates, where both parties have generally agreed that lower rates and fewer tax expenditures would align the U.S. more directly with foreign competitioIn addition to policies regarding revenue and spending, policies that encourage economic growth are the third major way to reduce deficits. Economic growth offers the “win-win” scenario of higher employment, which increases tax revenue while reducing safety net expenditures for such things as unemployment compensation and food stamps. Other deficit proposals related to spending or revenue tend to take money or benefits from one constituency and give it to others, a “win-lose” scenario. Democrats typically advocate Keynesian economics, which involves additional government spending during an economic downturn. Republicans typically advocate Supply-side economics, which involves tax cuts and deregulation to encourage the private sector to increase its spending and investment.

16.5.3: Monetary Policy

Monetary policy is the process by which a country controls the supply of money in order to promote economic growth and stability.

Learning Objective

Recognize the importance of monetary policy for addressing common economic problems

Key Points

• The official goals of monetary policy usually include relatively stable prices and low unemployment.
• A policy is referred to as “contractionary” if it reduces the size of the money supply, increases money supply slowly, or if it raises the interest rate.
• An expansionary policy increases the size of the money supply more rapidly or decreases the interest rate.
• Within almost all modern nations, special institutions exist that have the task of executing the monetary policy, often independently of the executive.

Key Terms

monetary policy

The process by which the government, central bank, or monetary authority manages the supply of money or trading in foreign exchange markets.

contractionary

Tending to reduce the size of the money supply.

expansionary

Tending to increase the total supply of money in the economy.

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary theory provides insight into how to craft optimal monetary policy. It is referred to as either being expansionary or contractionary. An expansionary policy increases the total supply of money in the economy more rapidly than usual. A contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses to expand. Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values.

Monetary policy differs from fiscal policy. Fiscal policy refers to taxation, government spending, and associated borrowing.

Monetary policy uses a variety of tools to influence outcomes like economic growth, inflation, exchange rates with other currencies and to control unemployment. When currency is under a monopoly of issuance or when there is a regulated system of issuing currency through banks which are tied to a central bank, the monetary authority has the ability to alter the money supply and therefore influence the interest rate (to achieve policy goals). The beginning of monetary policy was introduced in the late 19^th century, where it was used to maintain the gold standard.

A policy is referred to as “contractionary” if it reduces the size of the money supply, increases the money supply slowly, or if it raises the interest rate. An expansionary policy increases the size of the money supply more rapidly or decreases the interest rate. Furthermore, monetary policies are described as “accommodative” if the interest rate set by the central monetary authority is intended to create economic growth. Policies are referred to as “neutral” if it is intended neither to create growth nor combat inflation. Policies are called “tight” if they are intended to reduce inflation.

There are several monetary policy tools available to achieve these ends including increasing interest rates by fiat, reducing the monetary base, and increasing reserve requirements. All of the tools have the effect of contracting the money supply and, if reversed, expanding the money supply. Since the 1970’s, monetary policy has generally been formed separately from fiscal policy. Even prior to the 1970’s, the Bretton Woods system still ensured that most nations would form the two policies separately.

Within most modern nations, special institutions (such as the Federal Reserve System in the United States, the Bank of England, the European Central Bank, the People’s Bank of China, the Reserve bank of India, and the Bank of Japan) exist which have the task of executing the monetary policy, often independently of the executive. In general, these institutions are called central banks and usually have other responsibilities such as supervising the smooth operation of the financial system .

Federal Reserve System

The Federal Reserve System acts as the central mechanism for federal intervention in the U.S. economy.

The primary tool of monetary policy is open market operations. This entails managing the quantity of money in circulation through the buying and selling of various financial instruments, such as treasury bills, company bonds, or foreign currencies. All of these purchases or sales result in more or less base currency entering or leaving market circulation.

Usually, the short term goal of open market operations is to achieve a specific short term interest rate target. In other instances, monetary policy might entail the targeting of a specific exchange rate relative to some foreign currency or gold. For example, in the case of the United States, the Federal Reserve targets the federal funds rate, which is the rate at which member banks lend to one another overnight. However, the monetary policy of China is to target the exchange rate between the Chinese renminbi and a basket of foreign currencies.

The other primary means of conducting monetary policy include: (i) Discount window lending (lender of last resort); (ii) Fractional deposit lending (changes in the reserve requirement); (iii) Moral suasion (cajoling certain market players to achieve specified outcomes); (iv) “Open mouth operations” (talking monetary policy with the market).

16.5.4: Income Security Policy and Policy Making

Income security policy is designed to provide a population with income at times when they are unable to care for themselves.

Learning Objective

Define income security policy in the United States

Key Points

• Income maintenance is based on a combination of five main types of program: social insurance, means-tested benefits, non-contributory benefits, discretionary benefits, and universal or categorical benefits.
• The fact that a compulsory government program, not the private market, provides unemployment insurance can be explained using the concepts of adverse selection and moral hazard.
• The amount of support is enough to cover basic needs, and eligibility is often subject to a comprehensive and complex assessment of an applicant’s social and financial situation.

Key Terms

demogrants

Non-contributory benefits given to whole sections of the population without a test of means or need.

discretion

The freedom to make one’s own judgements

Income Security Policy is usually applied through various programs designed to provide a population with income at times when they are unable to care for themselves. Income maintenance is based in a combination of five main types of program

1. Social insurance.
2. Means-tested benefits. This is financial assistance provided for those who are unable to cover basic needs (such as food, clothing, and housing) due to poverty or lack of income because of unemployment, sickness, disability, or caring for children. While assistance is often in the form of financial payments, those eligible for social welfare can usually access health and educational services free of charge. The amount of support is enough to cover basic needs and eligibility is often subject to a comprehensive and complex assessment of an applicant’s social and financial situation.
3. Non-contributory benefits. Several countries have special schemes, administered with no requirement for contributions and no means test, for people in certain categories of need (for example, veterans of armed forces, people with disabilities, and very old people).
4. Discretionary benefits. Some schemes are based on the discretion of an official, such as a social worker.
5. Universal or categorical benefits, also known as demogrants. These are non-contributory benefits given to whole sections of the population without a test of means or need, such as family allowances or the public pension in New Zealand (known as New Zealand Superannuation).

That a compulsory government program, not the private market, provides unemployment insurance can be explained using the concepts of adverse selection and moral hazard.

Adverse selection refers to the fact that “workers who have the highest probability of becoming unemployed have the highest demand for unemployment insurance.” Adverse selection causes profit maximizing private insurance agencies to set high premiums for the insurance because there is a high likelihood they will have to make payments to the policyholder. High premiums exclude many individuals who otherwise might purchase the insurance. “A compulsory government program avoids the adverse selection problem. Hence, government provision of UI has the potential to increase efficiency. However, government provision does not eliminate moral hazard.”

“At the same time, those workers who managed to obtain insurance might experience more unemployment other than what would have been the case.” The private insurance company would have to determine whether the employee is unemployed through no fault of their own, which is difficult to determine. Incorrect determinations could result in the payout of significant amounts for fraudulent claims, or alternately failure to pay legitimate claims. This leads to the rationale that if the government could solve either problem, then government intervention would increase efficiency.

16.5.5: The Changing Federal Role in the Economy

The role of the federal government in the economy has been a central debate among economists and political scientists for two centuries.

Learning Objective

Explain the role and the historical origins of the Federal Reserve System in the early 20th century

Key Points

• In the United States, the Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) serves as the central mechanism for understanding federal intervention (and de-entanglement) with the economy.
• Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure has evolved.
• Events such as the Great Depression were major factors leading to changes in the system.

Key Terms

monetary policy

The process by which the government, central bank, or monetary authority manages the supply of money or trading in foreign exchange markets.

bank regulation

Bank regulations are a form of government regulation which subject banks to certain requirements, restrictions and guidelines.

The role of the federal government in the economy has been a central debate among economists and political scientists for over two centuries. Classic liberalism and Right-libertarian arguments argue for limited or no role for the federal government in the economy, while welfare economics argue for an increased role of the federal government.

In the United States, the Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) serves as the central mechanism for understanding federal intervention (and de-entanglement) with the economy. The central banking system of the United States, the Fed was created on December 23, 1913, with the enactment of the Federal Reserve Act. This was largely in response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded, and its structure has evolved. Events such as the Great Depression were major factors leading to changes in the system.

Federal Reserve System

The Federal Reserve System acts as the central mechanism for federal intervention in the U.S. economy.

The Congress established three key objectives for monetary policy—maximum employment, stable prices, and moderate long-term interest rates—in the Federal Reserve Act. The first two objectives are sometimes referred to as the Federal Reserve’s dual mandate. Its duties have expanded over the years, and today, according to official Federal Reserve documentation, include conducting the nation’s monetary policy, bank regulation, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Fed also conducts research into the economy and releases numerous publications, such as the Beige Book.

16.5.6: Politics and the Great Recession of 2008

Global political instability is rising fast due to the global financial crisis and is creating new challenges that need to be managed.

Learning Objective

Explain the causes and consequences of the 2008-2012 Global Recession

Key Points

• Economic weakness could lead to political instability in many developing nations.
• Globally, mass protest movements have arisen in many countries as a response to the economic crisis.
• The bursting of the U.S. housing bubble, which peaked in 2006, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally.
• The U.S. Senate’s Levin–Coburn Report asserted that the crisis was the result of “high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.
• The 1999 repeal of the Glass–Steagall Act effectively removed the separation between investment banks and depository banks in the United States.
• Most governments in Europe, including Greece, Spain, Italy, have faced austerity measures that include reduced government spending, elimination of social programs in education and health, and the deregulation of short-term and long-term capital markets.

Key Terms

recession

A period of reduced economic activity

financial crisis

A period of economic slowdown characterised by declining productivity and devaluing of financial institutions often due to reckless and unsustainable money lending.

secession

Secession (derived from the Latin term secessio) is the act of withdrawing from an organization, union, or especially a political entity. Threats of secession also can be a strategy for achieving more limited goals.

The Global Recession

The 2008–2012 global recession is a massive global economic decline that began in December 2007 and took a particularly sharp downward turn in September 2008. No economic recession since The Great Depression of the 1930s has affected economic input, production and circulation of capital like the current global recession. The global recession affected the entire world economy, hitting some countries more than others. It is a major global recession characterized by various systemic imbalances sparked by the outbreak of the Financial crisis of 2007–2008. shows the trend in international trade that reflects the recession in 2008.

World Trade

Evolution of international trade since 2000. There exists a dip in 2009 that corresponds to the recession of 2008.

Beginning February 26, 2009 an Economic Intelligence Briefing was added to the daily intelligence briefings prepared for the President of the United States. This addition reflects the assessment of United States intelligence agencies that the global financial crisis presents a serious threat to international stability.

Causes

The bursting of the U.S. housing bubble, which peaked in 2006, caused the values of securities tied to U.S. real estate prices to plummet, damaging financial institutions globally. The financial crisis was triggered by a complex interplay of government policies that encouraged home ownership, providing easier access to loans for subprime borrowers, overvaluation of bundled sub-prime mortgages based on the theory that housing prices would continue to escalate, questionable trading practices on behalf of both buyers and sellers, compensation structures that prioritize short-term deal flow over long-term value creation, and a lack of adequate capital holdings from banks and insurance companies to back the financial commitments they were making.

Several causes of the financial crisis have been proposed, with varying weights assigned by experts. The U.S. Senate’s Levin–Coburn Report asserted that the crisis was the result of “high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street. ” The 1999 repeal of the Glass–Steagall Act effectively removed the separation between investment banks and depository banks in the United States. Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets. Research into the causes of the financial crisis has also focused on the role of interest rate spreads.

Political Consequences

In March 2009, Business Week stated that global political instability is rising fast due to the global financial crisis and is creating new challenges that needed to be addressed. The Associated Press reported in March 2009 that: United States “Director of National Intelligence Dennis Blair has said the economic weakness could lead to political instability in many developing nations. ” Even some developed countries are experiencing political instability. NPR reports that David Gordon, a former intelligence officer who now leads research at the Eurasia Group, said: “Many, if not most, of the big countries out there have room to accommodate economic downturns without having large-scale political instability if we’re in a recession of normal length. If you’re in a much longer-run downturn, then all bets are off.”

In January 2009, the government leaders of Iceland were forced to call elections two years early after the people of Iceland staged mass protests and clashed with the police due to the government’s handling of the economy. Hundreds of thousands protested in France against President Sarkozy’s economic policies. Prompted by the financial crisis in Latvia, the opposition and trade unions there organized a rally against the cabinet of premier Ivars Godmanis. The rally gathered some 10-20 thousand people. In the evening the rally turned into a Riot. The crowd moved to the building of the parliament and attempted to force their way into it, but were repelled by the state’s police. In late February many Greeks took part in a massive general strike to protest the economic situation and they shut down schools, airports, and many other services in Greece. Communists in Moscow also rallied to protest the Russian government’s economic plans. Protests have also occurred in China as demands from the west for exports have been dramatically reduced and unemployment increased. Beyond these initial protests, the protest movement has grown and continued in 2011. In late 2011, the Occupy Wall Street protest took place in the United States, spawning several offshoots that came to be known as the Occupy movement.

In 2012 the economic difficulties in Spain have caused support for secession movements to increase. In Catalonia support for the secession movement exceeded 50%, up from 25% in 2010. On September 11, a pro-independence march, which in the past had never drawn more than 50,000 people, pulled in a crowd estimated by city police at 1.5 million..

16.5.7: Business and Labor in the Economy

The relationship between business and labor has been at the center of economic and political theory for the last two centuries.

Learning Objective

Explain the relationship between labor and business in the economy

Key Points

• The late nineteenth century saw many governments starting to address questions surrounding the relationship between business and labor, primarily through labor law or employment law.
• Labor law is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations.
• Labor law arose due to the demand for workers to have better conditions, the right to organize, or, alternatively, the right to work without joining a labor union, and the simultaneous demands of employers to restrict the powers of workers’ many organizations and to keep labor costs low.
• Workers’ organizations, such as trade unions, can also transcend purely industrial disputes, and gain political power. The state of labor law at any one time is therefore both the product of, and a component of, struggles between different interests in society.
• Commercial law is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales. It is often considered to be a branch of civil law and deals with issues of both private law and public law.

Key Terms

labor law

This is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations.

capitalism

A socio-economic system based on private property rights, including the private ownership of resources or capital, with economic decisions made largely through the operation of a market unregulated by the state.

labor union

A continuous association of wage earners for the purpose of maintaining or improving the conditions of their employment; a trade union.

Example

• The Fair Labor Standards Act of 1938 set the maximum standard work week to 44 hours and in 1950, this was reduced to 40 hours. A green card entitles legal immigrants to work just like U.S. citizens, without requirement of work permits. Despite the 40-hour standard maximum work week, some lines of work require more than 40 hours to complete the tasks of the job. For example, if you prepare agricultural products for market, you can work over 72 hours a week, if you want to, but you cannot be required to.

Introduction

The relationship between business and labor has been at the center of some of the major economic and political theories about capitalism over the last two centuries. In his 1867 work, Das Kapital, Karl Marx argued that business and labor were inherently at odds under capitalism, because the motivating force of capitalism is in the exploitation of labor, whose unpaid work is the ultimate source of profit and surplus value. In order for this tension to be resolved, the workers had to take ownership over the means of the production, and, therefore, their own labor–a process that Marx explained in his other major work, The Communist Manifesto.

The late nineteenth century saw many governments starting to address questions surrounding the relationship between business and labor, primarily through labor law or employment law. Labor law is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations. As such, it mediates many aspects of the relationship between trade unions, employers, and employees.

Labor and Business

Labor strikes, such as this one in Tyldesley in the 1926 General Strike in the U.K., represent the often fraught relationship between labor and business.

Labor Law

Labor law arose due to the demand for workers to have better conditions, the right to organize, or, alternatively, the right to work without joining a labor union, and the simultaneous demands of employers to restrict the powers of the many organizations of workers and to keep labor costs low. Employers’ costs can increase due to workers organizing to achieve higher wages, or by laws imposing costly requirements, such as health and safety or restrictions on their free choice of whom to hire . Workers’ organizations, such as trade unions, can also transcend purely industrial disputes and gain political power. The state of labor law at any one time is, therefore, both the product of, and a component of, struggles between different interests in society.

Palmer Carpenter

1942 photograph of a carpenter at work on Douglas Dam, Tennessee (TVA). Encyclopedic both as a document of carpentry during that era and as a historic example of early color photography. Supersaturation was popular in the United States during that era; a fine example of the esthetics of its place and time.

The Fair Labor Standards Act of 1938 set the maximum standard work week to 44 hours and in 1950, this was reduced to 40 hours. A green card entitles legal immigrants to work just like U.S. citizens, without requirement of work permits. Despite the 40-hour standard maximum work week, some lines of work require more than 40 hours to complete the tasks of the job. For example, if you prepare agricultural products for market, you can work over 72 hours a week, if you want to, but you cannot be required to work these many hours. If you harvest products you must get a period of 24 hours off after working up to 72 hours in a seven-day period. There are exceptions to the 24-hour break period for certain harvesting employees, such as those involved in harvesting grapes, tree fruits, and cotton. Professionals, clerical (administrative assistants), technical, and mechanical employees cannot be terminated for refusing to work more than 72 hours in a work week. These high-hour ceilings, combined with a competitive job market, often motivate American workers to work more hours than required. American workers consistently take fewer vacation days than their European counterparts and on average, take the fewest days off of any developed country.

Commercial Law

Commercial law is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales. It is often considered to be a branch of civil law and deals with issues of both private law and public law.

15.2: Health Care Policy

15.2.1: Health Care Policy

Learning Objective

Discuss the structure and institutions responsible for creating health care policy

Key Points

• Health care facilities are largely owned and operated by private sector businesses. The government primarily provides health insurance for public sector employees.
• Active debate about health care reform in the United States concerns questions of the right to health care, access, fairness, efficiency, cost, choice, value, and quality. Some have argued that the system does not deliver equivalent value for the money spent.
• Publicly funded health care programs help provide for the elderly, disabled, military service families and veterans, children, and the poor. Federal law ensures public access to emergency services regardless of ability to pay.
• The resulting economy of scale in providing health care services appears to enable a much tighter grip on costs. The U.S., as a matter of oft-stated public policy, largely does not regulate prices of services from private providers, assuming the private sector to do it better.

Key Terms

monopolistic

Acting in the manner of a monopoly.

socialize

To take into collective or governmental ownership

Background

Health care policy can be defined as the decisions, plans, and actions that are undertaken to achieve specific health care goals within a society. According to the World Health Organization (WHO), an explicit health policy achieves several things: it defines a vision for the future; it outlines priorities and the expected roles of different groups; and it builds consensus and informs people.

In many countries individuals must pay for health care directly out-of-pocket in order to gain access to health care goods and services. Individuals of these countries also have to pay private sector players in the medical and pharmaceutical industries to develop research. The planning and production of health human resources is distributed among labor market participants.

Health care in the United States is provided by many different organizations. Health care facilities are largely owned and operated by private sector businesses. The government primarily provides health insurance for public sector employees. 60-65 percent of healthcare provisions and spending comes from programs such as Medicare, Medicaid, TRICARE, the Children’s Health Insurance Program, and the Veterans Health Administration. Most of the population under 65 is insured by his/her or a family member’s employer, some buy health insurance on their own, and the remainder are uninsured.

The current active debate about health care reform in the United States concerns questions of a right to health care, access, fairness, efficiency, cost, choice, value, and quality. Some have argued that the system does not deliver equivalent value for the money spent. The United States pays twice as much for health care, yet lags behind other wealthy nations in measures such as infant mortality and life expectancy. In fact, the United States has a higher infant mortality rate than most of the world’s industrialized nations.

The Role of Government in the Health Care Market

Numerous publicly funded health care programs help provide for the elderly, disabled, military service families, veterans, children, and the poor. Additionally, the federal law ensures public access to emergency services regardless of the ability to pay. However, a system of universal health care has not been implemented nation-wide. Nevertheless, as the Organization for Economic Co-operation and Development (OECD) has pointed out, the total U.S. public expenditure for this limited population would, in most other OECD countries, be enough for the government to provide primary health insurance for the entire population. Although the federal Medicare program and the federal-state Medicaid programs possess some monopolistic purchasing power, the highly fragmented buying side of the U.S. health system is relatively weak by international standards, and in some areas, some suppliers such as large hospital groups have a virtual monopoly on the supply side. In most OECD countries, there is a high degree of public ownership and public finance. The resulting economy of scale in providing health care services appears to enable a much tighter grip on costs. The United States, as a matter of oft-stated public policy, largely does not regulate prices of services from private providers, assuming the private sector could do it better.

Examples of Health Care Reform

Massachusetts has adopted a universal health care system through the Massachusetts 2006 Health Reform Statute. It mandates that all residents who can afford to purchase health insurance must do so, and it provides subsidized insurance plans so that nearly everyone can afford health insurance. The law also provides a “Health Safety Net Fund” to pay for necessary treatment for those who cannot find affordable health insurance or for those who are not eligible. In July 2009, Connecticut similarly passed a law called SustiNet, with the goal of achieving health-care coverage for 98 percent of its residents by 2014.

Advocates for single-payer health care often point to other countries, where national government-funded systems produce better health outcomes at a lower cost. A single-payer universal health care plan for an entire population can be financed from a pool to which many parties such as employees, employers, and the state have contributed. Opponents deride this type of system as socialized medicine, and it has not been one of the favored reform options by Congress or the President in both the Clinton and Obama reform efforts. It has been pointed out that socialized medicine is a system in which the government owns the means of providing medicine. Britain’s health care system is an example of this socialized system, along with the Veterans Health Administration program in America. Medicare is an example of a mostly single-payer system, as is France’s system. Both of these systems have private insurers to choose from, but the government is the dominant purchaser.

Physicians for National Healthcare Poster

Single payer health care poster about the United States National Health Care Act.

15.2.2: Medicaid and Medicare

Learning Objective

Compare and contrast Medicaid and Medicare as social programs provided by the U.S. government

Key Points

• Medicaid is the United States’ health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the states and federal government; however, it is managed by the states.
• Medicare is a national social insurance program, administered by the U.S. federal government since 1965. It guarantees access to health insurance for Americans ages 65 and older in addition to younger people with disabilities and people with end stage renal disease.
• Beginning in the 1990’s, many states received waivers from the federal government to create Medicaid managed care programs. Under managed care, Medicaid recipients are enrolled in a private health plan, which receives a fixed monthly premium from the state.
• Medicare Advantage plans are required to offer coverage that meets or exceeds the standards set by the original Medicare program, but they do not have to cover every benefit in the same way.
• Unlike Medicare, which is solely a federal program, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive matching funds and grants.
• Medicare is a earned entitlement. Medicare entitlement is most commonly based on a record of contributions to the Medicare fund.

Key Terms

per capita

shared equally among all individuals.

disabled

those who are disabled, regarded collectively or as a social group.

Background

Medicaid is the United States’ health program for qualified individuals and families with low incomes and resources. It is a means-tested program that is jointly funded by the states and federal government; however, it is managed by the states. Medicaid serves people who are U.S. citizens or legal permanent residents, including low-income adults, their children, and people with certain disabilities. Poverty alone does not necessarily qualify someone for Medicaid. Medicaid is the largest source of funding for medical and health-related services for people with limited incomes in the United States.

Medicare is a national social insurance program, administered by the U.S. federal government since 1965. It guarantees access to health insurance for Americans ages 65 and older in addition to younger people with disabilities and people with advanced renal disease. Medicare has a different social role from for-profit private insurers, which manage their risk portfolio to maximize profitability by denying coverage to those they anticipate will need it. As a social insurance program, Medicare spreads the financial risk associated with illness across society in order to protect everyone. In 2008, the U.S. Federal Government spent $391,266,000,000 on Medicare.

Features

Beginning in the 1990’s, many states received waivers from the federal government to create Medicaid managed care programs. Under managed care, Medicaid recipients are enrolled in a private health plan, which receives a fixed monthly premium from the state. The health plan is then responsible for providing for all or most of the recipient’s healthcare needs. Today, all but a few states use managed care to provide coverage to a significant proportion of Medicaid enrollees. Nationwide, roughly 60% of enrollees are enrolled in managed care plans. Core eligibility groups of poor children and parents are most likely to be enrolled in managed care, while the elderly and disabled eligibility groups more often remain in traditional “fee for service” Medicaid.

Some states operate a program known as the Health Insurance Premium Payment Program (HIPP). This program allows a Medicaid recipient to have private health insurance paid for by Medicaid. As of 2008, only a few states had premium assistance programs and enrollment was relatively low. However, interest in this approach remained high.

Medicare Advantage plans are required to offer coverage that meets or exceeds the standards set by the original Medicare program, but they do not have to cover every benefit in the same way. If a plan chooses to pay less than Medicare for some benefits, like skilled nursing facility care, the savings may be passed along to consumers by offering lower co-payments for doctor visits. Medicare Advantage plans use a portion of the payments they receive from the government for each enrollee to offer supplemental benefits. All plans limit their members’ annual out-of-pocket spending on medical care, with a yearly limit of $6,700. Some plans offer dental coverage, vision coverage, and other services not covered by Medicare Parts A or B. These plans are a good value for the health care dollar, if an individual wants to use the provider included in the plan’s network.

Comparing Medicare and Medicaid

Unlike Medicare, which is solely a federal program, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive matching funds and grants. The matching rate provided to states is determined using a federal matching formula (called Federal Medical Assistance Percentages), which generates payment rates that vary from state to state, depending on each state’s respective per capita income. The wealthiest states only receive a federal match of 50% while poorer states receive a larger match.

Medicaid funding has become a major budgetary issue for many states over the last few years. On average, states spend 16.8% of their general funds on the program. If the federal match expenditure is also counted, the program usually takes up 22% of each state’s budget.

U.S. Healthcare GDP

Spending on U.S. healthcare as a percentage of gross domestic product (GDP).

Medicare is a earned entitlement. Entitlement is most commonly based on a record of contributions to the Medicare fund. As a result, it is a form of social insurance that makes it feasible for people to pay for insurance for sickness in old age. They contribute to the fund when they are young and able to work. Medicare offers assurance that contributing individuals will receive benefits when they are older and no longer working. Some people will pay in more than they receive back and others will get back more than they paid in, but this is the practice with any form of insurance, public or private.

15.2.3: Universal Coverage

Learning Objective

Explain how universal healthcare works as a national health care policy and the arguments made for and against it

Key Points

• Universal healthcare–sometimes referred to as universal health coverage, universal coverage, universal care or social health protection–usually refers to a healthcare system that provides healthcare and financial protection to all citizens.
• Proponents of healthcare reforms that call for the expansion of government involvement in order to achieve universal healthcare argue that the need to provide profits to investors in a predominantly free-market health system, and the additional administrative spending, tends to drive up costs.
• The United States has instead adopted a single-payer system for healthcare. The term single-payer healthcare is used in the United States to describe a funding mechanism meeting the costs of medical care from a single fund.

Key Term

coverage

The amount of space or time given to an event in newspapers or on television

Background

Universal healthcare–sometimes referred to as universal health coverage, universal coverage, universal care, or social health protection–usually refers to a healthcare system that provides healthcare and financial protection to all citizens. It is organized to provide a specified package of benefits to all members of a society with the end goal of providing financial risk protection, improved access to health services, and improved health outcomes. Universal healthcare is not a one-size-fits-all concept, nor does it imply unlimited coverage for all people. Three critical dimensions can determine universal healthcare: who is covered, what services are covered, and how much of the cost is covered.

Universal healthcare systems vary according to the extent of government involvement in providing care and/or health insurance. In some countries, such as the United Kingdom, Spain, Italy, and the Nordic countries, the government has a high degree of involvement in the commissioning and delivery of healthcare services. In these countries, access is based on residence rights, and not on the purchase of insurance. Other countries have a much more pluralistic delivery system of obligatory health insurance, with contributory rates based on salaries or income and usually funded jointly by employers and beneficiaries . Sometimes the healthcare funds are derived from a combination of insurance premiums, salary-based mandatory contributions by employees and/or employers to regulated sickness funds, and by government taxes.

Total Health Expenditure Per Capita, US Dollars

This image depicts the total healthcare services expenditure per capita, in U.S. dollars PPP-adjusted, for the nations of Australia, Canada, France, Germany, Japan, Switzerland, the United Kingdom, and the United States with the years 1995, 2000, 2005, and 2007 compared.

Proponents of Universal Healthcare in the United States

Proponents of healthcare reforms that call for the expansion of government involvement in order to achieve universal healthcare argue that the need to provide profits to investors in a predominantly free-market health system, and the additional administrative spending, tends to drive up costs and lead to more expensive healthcare.

According to economist and former US Secretary of Labor, Robert Reich, only a “big, national, public option” can force insurance companies to cooperate, share information, and reduce costs. Scattered, localized, “insurance cooperatives” are too small to do that and are “designed to fail” by the moneyed forces opposing Democratic healthcare reform.

The United States has instead adopted a single-payer system for healthcare. The term “single-payer healthcare” is used in the United States to describe a funding mechanism meeting the costs of medical care from a single fund. Although the fund holder is usually the government, some forms of single-payer employ a public-private system.

15.2.4: Health Care Reform Under Obama

Learning Objective

Explain the tenets of President Obama’s Health Care reform legislation

Key Points

• As of 2012, the healthcare legislation remains controversial, with some states challenging it in federal court. There has also been opposition from some voters. In June 2012, in a 5–4 decision, the U.S. Supreme Court found the law to be constitutional.
• Starting in 2014, the law will prohibit insurers from denying coverage (see guaranteed issue) to sicker applicants or imposing special conditions such as higher premiums or payments (see community rating).
• Also beginning in 2014, the law will generally require uninsured individuals to buy government-approved health insurance, the individual mandate.
• Analysts argued that the insurance premium structure may shift more costs onto younger, healthier people. About $43 billion was spent in 2008 providing non-reimbursed emergency services for the uninsured. Act supporters argued that these costs increased the average family’s insurance premiums.

Key Term

premium

something offered at a reduced price as an incentive to buy something else.

Background

In March 2010, President Obama gave a speech at a rally in Pennsylvania explaining the necessity of health insurance reform. The speech called on Congress to hold a final up or down vote on reform. As of 2012, the legislation remains controversial, with some states challenging it in federal court. There has also been opposition from some voters. In June 2012, in a 5–4 decision, the U.S. Supreme Court found the law to be constitutional.

Expanding Medicaid and Subsidizing Insurance

The law includes health-related provisions that take effect over several years. The law intends to expand Medicaid eligibility for people making up to 133% of the federal poverty level (FPL). It would subsidize insurance premiums for people making up to 400% of the FPL ($88,000 for family of 4 in 2010) so their maximum “out-of-pocket” payment for annual premiums would be on sliding scale from 2% to 9.5% of income. The law also intends to provide incentives for businesses to offer health care benefits, prohibit denial of coverage and denial of claims based on pre-existing conditions, establish health insurance exchanges, prohibit insurers from establishing annual coverage caps, and provide support for medical research.

Guaranteed Issue, Community Rating, Individual Mandate

Starting in 2014, the law will prohibit insurers from denying coverage (see guaranteed issue) to sicker applicants or imposing special conditions such as higher premiums or payments (see community rating). Health care expenditures are highly concentrated with the most expensive 5% of the population accounting for half of aggregate health care spending. The bottom 50% of spenders account for only 3% of health care spending. This means that what insurance companies gain from avoiding the sick greatly outweighs any possible gains from managing their care. As a result, insurers devoted resources to such avoidance at a direct cost to effective care management, which is against the interests of the insured. Instead of providing health security, the health insurance industry had, since the 1970’s, begun to compete by becoming risk differentiators. They sought to only insure people with good or normal health profiles and exclude those considered to be or likely to become unhealthy and therefore less profitable. According to a study from Cambridge Hospital, Harvard Law School, and Ohio University, 62% of all 2007 personal bankruptcies in the United States were driven by medical incidents, with (75% having had) health insurance.

Also beginning in 2014, the law will generally require uninsured individuals to buy government-approved health insurance — the individual mandate. Government-run exchanges may present information to facilitate comparison among competing plans, if available, but previous attempts at creating similar exchanges only produced mixed results. This requirement is expected to reduce the number of the uninsured from 19% of all residents in 2010 to 8% by 2016. Some analysts believe that the 8% figure of uninsured are expected to be mostly illegal immigrants (5%), with the rest paying the fine unless exempted. Whether or not this is true remains unclear based on the present available data.

Uninsured and Uninsured Rate (1987 to 2008)

This image depicts the number of uninsured Americans and the uninsured rate from 1987 to 2008.

Some analysts have argued that the insurance premium structure may shift more costs onto younger and healthier people. Approximately $43 billion was spent in 2008 providing non-reimbursed emergency services for the uninsured, which the Act’s supporters argued increased the average family’s insurance premiums. Other studies claim the opposite that the argument for reduced ER visits has been shown to be largely a canard […] insuring the uninsured will lead to, very approximately, a doubling of health expenditures for the currently uninsured. The studies suggest that making insurance mandatory rather than voluntary will tend to bring younger, healthier people into the insurance pool, shifting the cost of the Act’s increased spending onto them.

15.2.5: Public Health

Learning Objective

Categorize the institutions responsible for public health and good governance

Key Points

• The dramatic increase in the average life span during the 20th century is widely credited to public health achievements, such as vaccination programs and control of many infectious diseases.
• One of the major sources of the increase in average life span in the early 20th century was the decline in the urban penalty brought on by improvements in sanitation. These improvements included chlorination of drinking water, filtration, and sewage treatment.
• Public health plays an important role in disease prevention efforts in both the developing world and in developed countries, through local health systems and non-governmental organizations.

Key Term

epidemiological

Of or pertaining to epidemiology, the branch of a science dealing with the spread and control of diseases, computer viruses, concepts etc. throughout populations or systems.

Example

• In the United States, the front line of public health initiatives is state and local health departments. The United States Public Health Service (PHS), led by the Surgeon General of the United States, and the Centers for Disease Control and Prevention, headquartered in Atlanta, are involved with several international health activities in addition to their national duties.

Background

The dramatic increase in the average life span during the 20^th century is widely credited to public health achievements, such as vaccination programs and control of many infectious diseases including polio, diphtheria, yellow fever, and smallpox; effective health and safety policies such as road traffic safety and occupational safety; improved family planning; tobacco control measures; and programs designed to decrease non-communicable diseases by acting on known risk factors such as a person’s background, lifestyle and environment.

One of the major sources of the increase in average life span in the early 20^th century was the decline in the urban penalty brought on by improvements in sanitation. These improvements included chlorination of drinking water, filtration, and sewage treatment, which led to the decline in deaths caused by infectious waterborne diseases such as cholera and intestinal diseases. Cutler and Miller in “The Role of Public Health Improvements in Health Advances” demonstrate how typhoid fever deaths in Chicago, Baltimore, Cincinnati, and Cleveland declined after these American cities adopted chlorination, filtration, and sewage treatment.

Since the 1980s, the growing field of population health has broadened the focus of public health from individual behaviors and risk factors to population-level issues such as inequality, poverty, and education. Modern public health is often concerned with addressing determinants of health across a population. There is recognition that our health is affected by many factors including where we live, genetics, income, education and social relationships – these are known as the social determinants of health. A social gradient in health runs through society, with those who are poorest generally suffering poor health. However even those in the middle classes will generally have poorer health than those of a higher social stratum. Newer public health policies seeks to address these health inequalities by advocating for population-based policies that improve health in an equitable manner.

Additionally, with the onset of the epidemiological transition and as the prevalence of infectious diseases decreased through the 20^th century, the focus of public health has recently turned to chronic diseases such as cancer and heart disease.

Public Health and the Government

Public health plays an important role in disease prevention efforts in both the developing world and in developed countries, through local health systems and non-governmental organizations. The World Health Organization (WHO) is the international agency that coordinates and acts on global public health issues. Most countries have their own government public health agencies , sometimes known as ministries of health, to respond to domestic health issues. For example in the United States, the front line of public health initiatives is state and local health departments. The United States Public Health Service (PHS), led by the Surgeon General of the United States, and the Centers for Disease Control and Prevention, headquartered in Atlanta, are involved with several international health activities, in addition to their national duties. In Canada, the Public Health Agency of Canada is the national agency responsible for public health, emergency preparedness and response, and infectious and chronic disease control and prevention. The public health system in India is managed by the Ministry of Health & Family Welfare of the government of India with state owned health care facilities.

Public Health Nursing

Public health nursing made available through child welfare services.

15.3: Energy and Environmental Policy

15.3.1: Energy Policy

The energy policy of the United States is determined by federal, state, and local entities in the United States.

Learning Objective

Summarize the key provisions of a “cap-and-trade” approach to pollution reduction

Key Points

• Energy policy may include legislation, international treaties, subsidies and incentives to investment, guidelines for energy conservation, taxation, and other public policy techniques.
• The United States had resisted endorsing the Kyoto Protocol, preferring to let the market drive CO2 reductions to mitigate global warming, which will require CO2 emission taxation.
• The administration of Barack Obama has proposed an aggressive energy policy reform, including the need for a reduction of CO2 emissions with a cap and trade program, which could help encourage more clean renewable, sustainable energy development.
• The United States receives approximately 84% of its energy from fossil fuels. This energy is used for transport, industry, and domestic use. The remaining portion comes primarily from hydroelectric and nuclear stations.
• Renewable energy accounted for about 8% of total energy consumption in the United States in 2009. In the same year, approximately 10% of the electricity produced nationally came from renewable sources.
• Cap-and-trade is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.

Key Terms

Renewable

A resource that is able to reproduce itself through biological and natural methods over time.

Kyoto Protocol

The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC or FCCC) that set binding obligations on the industrialized countries to reduce their emissions of greenhouse gases.

Example

• The 2010 United States federal budget proposes to support clean energy development with a 10-year investment of US $15 billion per year, generated from the sale of greenhouse gas (GHG) emissions credits. Under the proposed cap-and-trade program, all GHG emissions credits would be auctioned off, generating an estimated $78.7 billion in additional revenue in FY 2012, steadily increasing to $83 billion by FY 2019.

Background

The energy policy of the United States is determined by federal, state, and local entities in the United States, which address issues of energy production, distribution, and consumption, such as building codes and gas mileage standards. Energy policy may include legislation, international treaties, subsidies and incentives to investment, guidelines for energy conservation, taxation, and other public policy techniques. Global warming is the rise in the average temperature of Earth’s atmosphere and oceans since the late 19^th century and its projected continuation. Since the early 20^th century, Earth’s mean surface temperature has increased by about 0.8 °C (1.4 °F), with about two-thirds of the increase occurring since 1980. Warming of the climate system is unequivocal, and scientists are more than 90% certain that it is primarily caused by increasing concentrations of greenhouse gases produced by human activities such as the burning of fossil fuels and deforestation. These findings are recognized by the national science academies of all major industrialized nations.

State-specific energy-efficiency incentive programs also play a significant role in the overall energy policy of the United States. The United States had resisted endorsing the Kyoto Protocol, preferring to let the market drive CO2 reductions to mitigate global warming, which will require CO2 emission taxation . The administration of Barack Obama has proposed an aggressive energy policy reform, including the need for a reduction of CO2 emissions with a cap and trade program, which could help encourage more clean renewable, sustainable energy development.

Diagram of Greenhouse Effect

This diagram shows how the greenhouse effect works. Incoming solar radiation to the Earth equals 341 watts per square meter (Trenberth et al., 2009). Some of the solar radiation is reflected back from the Earth by clouds, the atmosphere, and the Earth’s surface (102 watts per square meter). Some of the solar radiation passes through the atmosphere. About half of the solar radiation is absorbed by the Earth’s surface (161 watts per square meter). Solar radiation is converted to heat energy, causing the emission of longwave (infrared) radiation back to the atmosphere (396 watts per square meter). Some of the infrared radiation is absorbed an re-emitted by heat-trapping “greenhouse” gases in the atmosphere. Outgoing infrared radiation from the Earth equals 239 watts per square meter.

Energy Independence

The 1973 oil crisis made energy a popular topic of discussion in the US. The Federal Department of Energy was started with steps planned toward energy conservation and more modern energy producers. A National Maximum Speed Limit of 55 mph (88 km/h) was imposed to help reduce consumption, and Corporate Average Fuel Economy (aka CAFE) standards were enacted to downsize automobile categories. Year-round Daylight Saving Time was imposed, the United States Strategic Petroleum Reserve was created, and the National Energy Act of 1978 was introduced. These initiatives resulted in alternate forms of energy and a diversified oil supply.

The United States receives approximately 84% of its energy from fossil fuels . This energy is used for transport, industry, and domestic use. The remaining portion comes primarily from hydroelectric and nuclear stations. Americans constitute less than 5% of the world’s population, but consume 26% of the world’s energy to produce 26% of the world’s industrial output. They account for about 25% of the world’s petroleum consumption, while producing only 6% of the world’s annual petroleum supply.

Coal

It was estimated by the Energy Information Administration that in 2007 primary sources of energy consisted of petroleum (36.0%), coal (27.4%), and natural gas (23.0%), amounting to an 86.4% share for fossil fuels in primary energy consumption in the world.

Cap-and-Trade

Cap-and-trade is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. A central authority (usually a governmental body) sets a limit or cap on the amount of a pollutant that may be emitted. The limit or cap is allocated or sold to firms in the form of emissions permits which represent the right to emit or discharge a specific volume of the specified pollutant. Firms are required to hold a number of permits (or allowances or carbon credits) equivalent to their emissions. The total number of permits cannot exceed the cap, limiting total emissions to that level. Firms that need to increase their volume of emissions must buy permits from other firms.

The transfer of permits is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions. Thus, in theory, those who can reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest cost to society. The 2010 United States federal budget proposes to support clean energy development with a 10-year investment of US $15 billion per year, generated from the sale of greenhouse gas (GHG) emissions credits. Under the proposed cap-and-trade program, all GHG emissions credits would be auctioned off, generating an estimated $78.7 billion in additional revenue in FY 2012, steadily increasing to $83 billion by FY 2019.

Renewable Energy

Renewable energy accounted for about 8% of total energy consumption in the United States in 2009. In the same year, approximately 10% of the electricity produced nationally came from renewable sources. The United States’ hydroelectric plants make the largest contribution to the country’s renewable energy, producing 248,100MW of the 371,700MW (67%) generated through all renewable energy. However, wind power in the United States is a growing industry. Increases in wind, solar, and geothermal power are expected to allow renewable energy production to double in the three-year period from 2009 to 2012, an increase from 8% to 14% of total consumption. Most of the increase is expected to come from wind power.

Green Mountain Wind Farm, Fluvanna 2004

The Brazos Wind Farm, also known as the Green Mountain Energy Wind Farm, near Fluvanna, Texas. Note cattle grazing beneath the turbines.

15.3.2: Environmental Policy

Environmental Policy has become highly contentious and political, with competing interests involved at any legislation over the environment.

Learning Objective

Describe the key conflict in environmental policy

Key Points

• The environment covers so many different aspects of life from health and recreation to business and commerce that that there are always competing interests involved an any legislation over the environment.
• Many individuals and organizations are involved as stakeholders in the process of making and implementing environmental policy.
• One of the enduring conflicts in environmental policy is between environmental and business interests. There is often a sense that the regulations or limitations made for environmental protection will limit economic growth.
• However, some groups are attempting to incorporate concern for the environment with business and innovation.
• U.S. environmental policy is always international policy as well. For example, when the U.S. pulled out of its obligations under the Kyoto Accord there was a great deal of international criticism.

Key Terms

Kyoto Protocol

The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC or FCCC) that set binding obligations on the industrialized countries to reduce their emissions of greenhouse gases.

environmental policy

any course of action deliberately taken or not taken to manage human activities with a view to prevent, reduce, or mitigate harmful effects on nature and natural resources

Environmental Policy

Environmental policy in the U.S. has become highly contentious, competitive, and political. The environment covers so many different aspects of life from health and recreation to business and commerce that there are always competing interests involved at any legislation focused on the environment.

Additionally, many individuals and organizations are involved as stakeholders in the process of making and implementing environmental policy. These include various members of the executive and legislative branches of government, state and municipal governments, as well as civil servants, external interests groups, and international governments and residents. Within the Federal government alone there are the Environmental Protections Agency , the Department of Transportation, and the U.S. Fish and Wildlife Agency.

Environmental Protection Agency

The EPA is just one of the various bureaus involved in U.S. environmental policy.

Various legislation governs environmental concerns in the U.S., including the National Environmental Policy Act (NEPA) which was first introduced in 1970. This act mandates the preparation of Environmental Assessments and Environmental Impact Statements to try and limit the environmental damage of development.

One of the enduring conflicts in environmental policy is between environmental and business interests. There is often a sense that the regulations or limitations made for environmental protection will limit economic growth. However, some groups are attempting to incorporate concerns for the environment, with business and innovation. For example, the Bright Green environmental movement focuses on developing technological fixes for environmental problems. The Green Jobs movement focuses on combining needed new employment opportunities in low-income neighborhoods and neighborhoods of color with environment improvements in those same neighborhoods.

Finally, because the U.S. has to share the Earth with all of the other countries, U.S. environmental policy is always international policy as well. For example, when the U.S. pulled out of its obligations under the Kyoto Protocol there was a great deal of international criticism.

15.3.3: Oil

Oil remains a major energy source in the U.S., and changing this reliance requires political initiative.

Learning Objective

Describe the key impediments to severing a dependence on fossil fuels

Key Points

• In the 1970s, politicians began considering the importance of the U.S. becoming less dependent on foreign-produced oil.
• However, fossil fuels and petroleum remain a major energy source in the U.S.. This is in part because of the strength of the oil and energy lobby.
• Two concerns over the influence of oil companies on energy policy are ongoing environmental consequences and political impact.
• Today the idea of energy independence has emerged as an important political buzzword. It is yet to be seen if there is enough political will to make a significant shift from oil to other energy sources.

Key Term

energy independence

Energy independence involves reducing U.S. imports of oil and other foreign sources of energy. If total energy is considered, the U.S. is over 70% self-sufficient.

Oil

In the 1970s, the U.S. faced an oil crisis, with severe shortages leaving lineups at gas stations across the country . The crisis was set off at least in part because of oil embargoes levied by OAPEC (Organization of Arab Petroleum Exporting Countries), and conflicts in Libya. The oil crisis contributed to recessions in the country. At that time, politicians in the U.S. began considering the importance of becoming less dependent on foreign-produced oil.

1973 Oil Crisis

During the 1970s there were oil shortages in the US. This sign outside of a gas station let patrons know the state of their supply.

However, fossil fuels and petroleum remain a major energy source in the U.S.. This is in part because of the strength of the oil and energy lobby in the US. In the 2006 election cycle, oil companies donated $19 million dollars to campaigns with over 80% of that going to Republican candidates. There have also been concerns that oil lobbyists have had direct influence through close relationships with politicians. For example, oil executives were invited to consult on issues such as the U.S. position on the Kyoto Protocol and the involvement in Iraq.

Two concerns over the influence of oil companies on energy policy are ongoing environmental consequences and the political impacts of a reliance on oil. The continuing influence of oil companies has been implicated in limiting the development of new energy resources and technologies. The film “Who Killed the Electric Car? “, for example, looks at the various factors that limited the production and success of the electric car. The movie examines the role of oil companies, and particularly the Western States Petroleum Association, in limiting the production of public car charging stations.

Today the idea of energy independence has emerged as an important political buzzword. It is yet to be seen if there is enough political will to make a significant shift from oil to other energy sources.

15.3.4: Climate Change

Global warming policy can be quite contentious because competing interests get involved in the policy-making and implementation process.

Learning Objective

Analyze the difficulties confronting cooperative international action on climate

Key Points

• Global warming, or climate change, is the idea that the actions of human beings are drastically changing weather patterns on the planet, including the temperature.
• Most scientists agree that the Earth has warmed significantly in recent years. They are quite confident about the human influence on change. However, there is disagreement about what to do about global warming.
• While 191 countries had ratified the Kyoto Protocol by September 2011, the U.S. was not one of them.
• Another idea for slowing down carbon emissions is a cap-and-trade system. As a market-based system, it would see limits or caps set on the mount of greenhouse gases that could be emitted.
• As with all environmental policy, global warming policy can be quite contentious because competing interests get involved in the policy-making and implementation process.

Key Terms

anthropogenic

Having its origin in the influence of human activity on nature.

global warming

he sustained increase in the average temperature of the earth, sufficient to cause climate change

cap-and-trade

Cap-and-trade is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.

Kyoto Protocol

The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC or FCCC) that set binding obligations on the industrialized countries to reduce their emissions of greenhouse gases.

Global Warming

Global warming, or climate change, is the idea that the actions of human beings are drastically changing weather patterns on the planet, including the temperature. Most scientists agree that the Earth has warmed significantly in recent years. The warming is particularly true around the poles . This is causing polar icecap melting and a degradation of the protective ozone layer. Most scientists are also confident about the anthropogenic drivers of climate change. However, there is a great deal of division over the question of how important these changes are and what should be done about it.

Arctic Wildlife

Global warming is disproportionately affecting the polar regions, and changing the landscape for arctic wildlife like the polar bear.

One of the key problems is that the immediate effects of climate change are likely to be felt by counties with less political and economic clout. These include many countries in the global south and island nations that will be impacted if the sea levels rise.

One aspect that has been identified as important in slowing down climate change is the reduction in greenhouse gases, also referred to as carbon emissions.

Because of the global impact of these emissions, international treaties have tried to address the issue. The Kyoto Protocol was one such treaty, first introduced in Kyoto, Japan in 2005. While 191 countries had ratified the agreement by September 2011, the U.S. was not one of them.

Another idea for slowing down carbon emissions is a cap-and-trade system. This is a market-based system that would see limits, or caps, set on the amount of greenhouse gasses that could be emitted. Companies would purchase permits for a certain level of emissions. A market for these permits would be created so companies that produced lower levels could trade their permits with companies that wished to pollute at a higher rate.

As with all environmental policy, global warming policies can be quite contentious because competing interests get involved in the policy-making and implementation process. One difficulty is that the process has become highly politicized. Republican politicians often questioning the science behind climate change. Add to that the difficulty that is caused by highly influential business lobby groups, and it becomes apparent why it is so difficult to pass legislation to try and slow climate change.

15.3.5: New Sources of Energy

There are many concerns about the environmental and political impact of continued dependence on nonrenewable, foreign-produced fossil fuels.

Learning Objective

Describe the challenges facing those attempting to shift the United States away from non-renewable sources of energy

Key Points

• There are many concerns about the environmental and political impact of a continued dependance on non-renewable fossil fuels, particularly fossil fuels from sources outside of the U.S.
• Energy independence has become an important buzzword in U.S. politics. Investment in new and alternative sources of energy has also increased in recent years.
• The cooperation of various stakeholders is necessary to make new sources of fuel successful. These stakeholders include interest groups, politicians and consumers.

Key Term

energy independence

Energy independence involves reducing U.S. imports of oil and other foreign sources of energy. If total energy is considered, the U.S. is over 70% self-sufficient.

New Sources of Energy

Environmental and political stability in the U.S. has been threatened in recent years by a continued dependence on non-renewable fossil fuels, particularly those from outside sources. “Energy independence” has thus become an important buzzword in U.S. politics, leading to greater investment in new and alternative sources of energy.

However, the widespread use of alternative fuel requires more than just scientific research. Investment in new technology is also affected by the influence of various interest groups, including representatives of traditional fuel suppliers who may have a vested interest in slowing the development of alternatives. Shifting to alternative fuels would also require strong legislative and regulations-based support in order to jump-start and sustain production. Finally, it would require a willingness on the part of consumers to make the shift away from the energy sources they have grown accustomed to.

While there are many alternative energy sources to choose from, none of them is perfect, and each has its own supporters and detractors.

Two of the best known and least scientifically controversial new energy sources are solar power and wind power. Both involve harnessing the power of naturally occurring events– sunlight and wind– and converting them into electric power through solar panels or wind turbines .

Wind Farm

These wind turbines exemplify one type of a new and alternative energy source.

Critics of these sources often cite aesthetic concerns– for example, that the panels of turbine farms block site-lines or alter landscape and architecture. Particularly in the case of wind farms, there is often extensive community consultation prior to construction in order to address potential aesthetic and environmental impacts.

Other alternatives include biofuels such as ethanol and clean coal technologies. In the U.S., ethanol is produced mainly from corn. Ethanol fuels burn more cleanly than traditional fuels; however, there is some concern that the production of large amounts of corn exclusively for biofuels could be detrimental to farm lands. The idea of clean coal is still largely experimental, but the Department of Energy is investing large sums in research and technology development in this area. The incentive is that clean coal would release less carbon, and that other energy sources such as hydrogen could also be captured for use in the process.

This is not the first time the idea of greater energy independence has become popular in U.S. policy and politics. For example, during the Oil Embargo of the 1970s, U.S. politicians began to discuss alternatives to fossil fuels. It remains to be seen whether there is sufficient political will this time around to make a significant shift towards alternative fuels.

15.4: Education Policy

15.4.1: Education Policy

Education policy refers to the collection of laws and rules that govern the operation of education systems.

Learning Objective

Discuss the institutions and issues relevant to current education policy in the United States and the sources of education policy evaluation and analysis

Key Points

• Examples of areas subject to debate in education policy include school size, class size, school choice, school privatization, teaching methods, curricular content, and graduation requirements.
• Unlike the systems of most other countries, education in the United States is highly decentralized, and the federal government and Department of Education are not heavily involved in determining curricula or educational standards (with the recent exception of the No Child Left Behind Act).

Key Terms

Department of Education

The Department of Education is a Cabinet-level department of the United States government. The primary functions of the Department of Education are to “establish policy for, administer and coordinate -most federal assistance to education, collect data on US schools, and to enforce federal educational laws regarding privacy and civil rights. “

Education policy

the principles and government policy-making in the educational sphere, as well as the collection of laws and rules that govern the operation of education systems

Education policy

Education policy refers to the collection of laws and rules that govern the operation of education systems.

Education Policy

Education policy refers to the collection of laws and rules that govern the operation of education systems.

Education occurs in many forms for many purposes. Examples include early childhood education, kindergarten through to 12^th grade, two and four year colleges or universities, graduate and professional education, adult education and job training. Therefore, education policy can directly affect the education of people at all ages.

Examples of areas subject to debate in education policy, include school size, class size, school choice, school privatization, tracking, teacher education and certification, teacher pay, teaching methods, curricular content, graduation requirements, school infrastructure investment, and the values that schools are expected to uphold and model.

Education policy analysis is the scholarly study of education policy. It seeks to answer questions about the purpose of education, the objectives (societal and personal) that it is designed to attain, the methods for attaining them and the tools for measuring their success or failure. Research intended to inform education policy is carried out in a wide variety of institutions and in many academic disciplines. Important researchers are affiliated with departments of psychology , economics , sociology , and human development , in addition to schools and departments of education or public policy.

The Department of Education

The federal department relating responsible for education oversight is the Department of Education . The Department of Education is a Cabinet-level department of the United States government. The primary functions of the Department of Education are to “establish policy for, administer and coordinate -most federal assistance to education, collect data on US schools, and to enforce federal educational laws regarding privacy and civil rights. ” However, the Department of Education does not establish schools or colleges.

U. S. Department of Education

The Lyndon B. Johnson Department of Education Building

Unlike the systems of most other countries, education in the United States is highly decentralized, and the federal government and Department of Education are not heavily involved in determining curricula or educational standards (with the recent exception of the No Child Left Behind Act). This has been left to state and local school districts. The quality of educational institutions and their degrees is maintained through an informal private process known as accreditation, over which the Department of Education has no direct public jurisdictional control.

The Department’s mission is: to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access. Aligned with this mission of ensuring equal access to education, the Department of Education is a member of the United States Interagency Council on Homelessness, and works with federal partners to ensure proper education for homeless and runaway youth in the United States.

15.4.2: Current Challenges for Education

Some challenges in education include curriculum unification, racial achievement gap, and controversy over sex education and affirmative action.

Learning Objective

Identify the most pressing issues in education curriculum and control

Key Points

• There is no unified curriculum in the United States. Not only do schools offer a range of topics and quality, but private schools may include mandatory religious classes.
• In 2003 a Supreme Court decision concerning affirmative action in universities allowed educational institutions to consider race as a factor in admitting students, but ruled that strict point systems are unconstitutional.
• Almost all students in the U.S. receive some form of sex education between grades 7 and 12; many schools begin addressing some topics as early as grades 4 or 5. However, what students learn varies widely, because curriculum decisions are so decentralized.

Key Term

Racial Achievement Gap

The Racial Achievement Gap in the United States refers to the educational disparities between minority students and Caucasian students.

Contemporary Education Issues

Major educational issues in the United States center on curriculum and control. One of the major controversies of the United States education policy is the No Child Left Behind Act which will be covered in its own section.

Curriculum issues

There is no unified curriculum in the United States. Not only do schools offer a range of topics and quality, but private schools may include mandatory religious classes. These religious aspects raise the question of government funding school vouchers in states with Blaine Amendments in their constitution. This has produced debate over the standardization of curricula. Additionally, there is debate over which subjects should receive the most focus, with astronomy and geography among those cited as not being taught enough in schools.

Attainment

Drop-out rates are a concern in American four year colleges. In New York, 54 percent of students entering four-year colleges in 1997 had a degree six years later — and even less among Hispanics and African-Americans. Since the 1980s the number of educated Americans has continued to grow, but at a slower rate. Some have attributed this to an increase in the foreign born portion of the workforce. However, the decreasing growth of the educational workforce has instead been primarily due to slowing down in educational attainment of people schooled in the United States .

Educational Attainment Since 1947

This graph shows the educational attainment from 1947 to 2003 in the United States.

Racial Achievement Gap

The Racial Achievement Gap in the United States refers to the educational disparities between minority students and Caucasian students. This disparity manifests itself in a variety of ways: African-American and Hispanic students are more likely to receive lower grades, score lower on standardized tests, drop out of high school, and are less likely to enter and complete college.

Evolution in Kansas

In 1999 the School Board of the state of Kansas caused controversy when it decided to eliminate teaching of evolution in its state assessment tests. Scientists from around the country demurred. Many religious and family values groups, on the other hand, claimed that evolution is simply a theory in the colloquial sense, and as such creationist ideas should therefore be taught alongside it as an alternative viewpoint. A majority of the Kansas population supported teaching intelligent design and/or creationism in public schools.

Sex education

Almost all students in the U.S. receive some form of sex education between grades 7 and 12; many schools begin addressing some topics as early as grades 4 or 5. However, what students learn varies widely, because curriculum decisions are so decentralized. Many states have laws governing what is taught in sex education classes or allowing parents to opt out. Some state laws leave curriculum decisions to individual school districts.

According to a 2004 survey, over 80% of polled parents agreed that the sex education was helpful while fewer than 17% stated their view that the sex education was inappropriate. 10 percent believed that their children’s sexual education class forced them to discuss sexual issues “too early. “

Textbook review and adoption

In many localities in the United States, the curriculum taught in public schools is influenced by the textbooks used by the teachers. In some states, textbooks are selected for all students at the state level. Since states such as California and Texas represent a considerable market for textbook publishers, these states can exert influence over the content of the books.

In 2010, the Texas Board of Education adopted new Social Studies standards that could potentially impact the content of textbooks purchased in other parts of the country. The deliberations that resulted in the new standards were partisan in nature and are said to reflect a conservative leaning in the view of United States history.

Affirmative action

In 2003 a Supreme Court decision concerning affirmative action in universities allowed educational institutions to consider race as a factor in admitting students, but ruled that strict point systems are unconstitutional. Opponents of racial affirmative action argue that the program actually benefits middle- and upper-class people of color at the expense of the lower class. Prominent African American academics Henry Louis Gates and Lani Guinier, while favoring affirmative action, have argued that in practice, it has led to recent black immigrants and their children being greatly overrepresented at elite institutions, at the expense of the historic African American community made up of descendants of slaves.

Control

There is some debate about where control for education actually lies. Education is not mentioned in the constitution of the United States. In the current situation, the state and national governments have a power-sharing arrangement, with the states exercising most of the control. The federal government uses the threat of decreased funding to enforce laws pertaining to education. Furthermore, within each state there are different types of control. Some states have a statewide school system, while others delegate power to county, city or township-level school boards.

15.4.3: The No Child Left Behind Act

The No Child Left Behind Act supports standards based education reform to set high standards and establish goals to improve education.

Learning Objective

Evaluate the arguments for and against the No Child Left Behind Act

Key Points

• The Act requires states to develop assessments in basic skills. States must give these assessments to all students at select grade levels in order to receive federal school funding. The standards in the act are set by each individual state.
• Schools receiving Title I funding must make Adequate Yearly Progress (AYP) in test scores; each year, its fifth graders must do better on standardized tests than the previous year’s fifth graders.
• Critics argue the focus on standardized testing as the means of assessment encourages teachers to teach a narrow subset of skills the teacher believes will increase test performance, rather than focus on acquiring deep understanding of the curriculum. This is referred to as teaching to the test.

Key Term

No Child Left Behind Act

The No Child Left Behind Act of 2001 (NCLB) is a United States Act of Congress that is a reauthorization of the Elementary and Secondary Education Act, which included Title I, the government’s flagship aid program for disadvantaged students. NCLB supports standards-based education reform based on the premise that setting high standards and establishing measurable goals can improve individual outcomes in education.

No Child Left Behind Act

The No Child Left Behind Act of 2001 (NCLB) is a United States Act of Congress that is a reauthorization of the Elementary and Secondary Education Act, which included Title I, the government’s flagship aid program for disadvantaged students. NCLB supports standards-based education reform based on the premise that setting high standards and establishing measurable goals can improve individual outcomes in education. The Act requires states to develop assessments in basic skills. States must give these assessments to all students at select grade levels in order to receive federal school funding. The standards in the act are set by each individual state. NCLB expanded the federal role in public education through annual testing, annual academic progress, report cards, teacher qualifications, and funding changes. The bill passed in the U.S. Congress with bipartisan support. President Bush signed it into law on January 8, 2002 .

The Signing of the No Child Left Behind Act

President Bush signs the No Child Left Behind Act January 8th, 2002.

Provisions of the Act

Schools receiving Title I funding through the Elementary and Secondary Education Act of 1965 must make Adequate Yearly Progress (AYP) in test scores (each year, its fifth graders must do better on standardized tests than the previous year’s fifth graders). If the school’s results are repeatedly poor, then steps are taken to improve the school.

Schools that miss AYP for a second consecutive year are labeled as being “in need of improvement” and are required to develop a two-year improvement plan for the trouble subject. Students are given the option to transfer to a better school within the school district, if any exists. Missing AYP in the third year forces the school to offer free tutoring and other supplemental education services to struggling students. If a school misses its AYP target for a fourth consecutive year, the school is labeled as requiring “corrective action,” which may involve wholesale replacement of staff, introduction of a new curriculum, or extending the amount of time students spend in class. A fifth year of failure results in planning to restructure the school; the plan is implemented if the school fails to hit its AYP targets for the sixth year in a row. Common options include closing the school, turning the school into a charter school, hiring a private company to run the school, or asking the state office of education to run the school directly.

The act also requires schools to let military recruiters have students’ contact information and other access to the student, if the school provides that information to universities or employers, unless the students opt out of giving military recruiters access.

Increased accountability

Supporters of the NCLB claim one of the strong positive points of the bill is the increased accountability that is required of schools and teachers. The yearly standardized tests are the main means of determining whether schools are living up to the standards that they are required to meet. If the required improvements are not made, the schools face decreased funding and other punishments that contribute to the increased accountability. According to supporters, these goals help teachers and schools realize the significance and importance of the educational system and how it affects the nation. Opponents of this law say that the punishments hurt the schools and do not contribute to the improvement of student education.

Additionally, the Act provides information for parents by requiring states and school districts to give parents detailed report cards on schools and districts explaining the school’s AYP performance. Schools must also inform parents when their child is being taught by a teacher or para-professional who does not meet “highly qualified” requirements.

Criticisms of standardized testing under NCLB

Critics have argued that the focus on standardized testing as the means of assessment encourages teachers to teach a narrow subset of skills that the teacher believes will increase test performance, rather than focus on acquiring deep understanding of the full, broad curriculum. This is colloquially referred to as “teaching to the test. “

Under No Child Left Behind, schools were held almost exclusively accountable for absolute levels of student performance. This means even schools that were making great strides with students were still labeled as “failing” just because the students had not yet made it to a “proficient” level of achievement.

The incentives for improvement also may cause states to lower their official standards. A 2007 study by the U.S. Dept. of Education indicates that the observed differences in states’ reported scores is largely due to differences in the stringency of their standards.

“Gaming” the system

The system of incentives and penalties sets up a strong motivation for schools, districts and states to manipulate test results. For example, schools have been shown to employ “creative reclassification” of drop-outs to reduce unfavorable statistics. Critics argue that these and other strategies create an inflated perception of NCLB’s successes, particularly in states with high minority populations.

15.5: Immigration Policy

15.5.1: Immigration Policy

Immigration reform refers to changes in government policies that attempt to either promote or curb immigration.

Learning Objective

Identify key pieces of legislation that shaped immigration policy in the U.S.

Key Points

• Proponents of greater immigration enforcement argue that illegal immigrants cost taxpayers an estimated $338.3 billion dollars and jeopardize the safety of law enforcement officials and citizens, especially along the Mexican border.
• The Immigration Reform and Control Act of 1986 made it illegal to hire or recruit illegal immigrants. In 2006, the House of Representatives passed the Border Protection, Anti-terrorism and Illegal Immigration Control Act and the Senate passed the Comprehensive Immigration Reform Act.
• In 2010, Governor of Arizona Jan Brewer signed the Support Our Law Enforcement and Safe Neighborhoods Act. The law directs law enforcement officials to ask for immigration papers on a reasonable suspicion that a person might be an illegal immigrant and make arrests for not carrying ID papers.

Key Terms

amnesty

An act of the sovereign power granting oblivion, or a general pardon, for a past offense, as to subjects concerned in an insurrection.

bipartisan

relating to, or supported by two groups, especially by two political parties

Background

In 1924 Congress passed the Immigration Act of 1924, which favored source countries that already had many immigrants in the U.S. and excluded immigrants from unpopular countries. Immigration patterns of the 1930s were dominated by the Great Depression, and in the early 1930s, more people emigrated from the United States than immigrated to it. Immigration continued to fall throughout the 1940s and 1950s, but it increased again afterwards.

Immigration is also widely used to describe proposals to increase legal immigration while decreasing illegal immigration, such as the guest worker proposal supported by George W. Bush. Proponents of greater immigration enforcement argue that illegal immigrants cost taxpayers an estimated $338.3 billion dollars and jeopardize the safety of law enforcement officials and citizens, especially along the Mexican border.

The Immigration Reform and Control Act of 1986 made it illegal to hire or recruit illegal immigrants. In 2006, the House of Representatives passed the Border Protection, Anti-terrorism and Illegal Immigration Control Act of 2005, and in 2006 the U.S. Senate passed the Comprehensive Immigration Reform Act of 2006. Neither bill became law because their differences could not be reconciled.

The Immigration and Nationality Act Amendments of 1965 (the Hart-Cellar Act) abolished the national origins quota system that had been put in place by the 1924 Immigration Act. In 2006, the number of immigrants totaled a record 37.5 million. After 2000, immigration to the United States numbered approximately 1,000,000 per year. Despite tougher border security after 9/11, nearly 8 million immigrants came to the United States from 2000 to 2005–more than in any other five-year period in the nation’s history. Almost half entered illegally. In 2006, 1.27 million immigrants were granted legal residence.

Recent Immigration Reform Hot Topics

In 2009 immigration reform became a hot topic, since the Obama administration recently signaled interest in beginning a discussion on comprehensive immigration reform before the year’s end. The proposed reform plan had as its goal bipartisan support and included six sections designed to appeal to both parties. These six sections are: (1) fixing border enforcement, (2) fixing interior enforcement, such as preventing visa overstays, (3) preventing people from working without a work permit, (4) creating a committee to adapt the number of visas available to changing economic times, (5) an amnesty type of program to legalize undocumented immigrants, and (6) programs to help immigrants adjust to life in the United States.

Citing Congress’ failure to enforce U.S. immigration laws, the state of Arizona confronted reform and on April, 23, 2010 Republican Governor Jan Brewer signed the Support Our Law Enforcement and Safe Neighborhoods Act, the broadest and strictest immigration reform imposed in the United States. The Arizona immigration law directs law enforcement officials to ask for immigration papers on a reasonable suspicion that a person might be an illegal immigrant and make arrests for not carrying ID papers. On July 6, 2010, the U.S. Department of Justice filed suit against Arizona with the intent of preventing Arizona from enforcing the law. In June 2012, the U.S. Supreme Court ruled on the case Arizona v. United States, upholding the provision requiring immigration status checks during law enforcement stops but striking down three other provisions as violations of the Supremacy Clause of the United States Constitution.

Jan Brewer

Jan Brewer, Governor of Arizona, who signed the controversial Suppor Our Law Enforcement and Safe Neighborhoods Act, which makes it a state misdemeanor crime for an immigrant to be in Arizona without carrying registration documents required by federal law.

Being the first state to pass such legislation, Arizona has set a precedent for other states. Although the response has cost the state between $7 million and $52 million, some in the state still feel that this outcome will outweigh the initial cost. Due to conflict and protest, Governor Brewer signed the Arizona House Bill 2162 (HB 2162) amending text in the original document. HB 2162 includes that race, color, and national origin would not play a role in prosecution; in order to investigate an individual’s immigration status, he or she must be “lawfully stopped, arrested, or detained. “

In the absence of comprehensive immigration reform at the federal level, many advocacy groups have focused on improving the fairness and efficiency of the immigration court system. They propose incremental steps the executive branch can take to stop an assembly line approach to deportation proceedings. These groups have identified several issues that threaten the due process rights of immigrants, including reliance on low quality videoconferencing to conduct hearings, inadequate language interpretation services for non-English speakers, and limited access to court records.

15.5.2: Illegal Immigration

Unauthorized immigration is when a non-citizen has entered the country without government permission and in violation of the law.

Learning Objective

Describe the nature and scope of illegal immigration in the United States

Key Points

• Between 7 million and 20 million illegal immigrants are estimated to be living in the United States. The majority of illegal immigrants are from Mexico.
• About 8 percent of children born in the United States in 2008 — about 340,000 — were offspring of unauthorized immigrants. These infants are, according to the Fourteenth Amendment to the Constitution, American citizens from birth.
• According to USA Today in 2006, about 4% work in farming; 21% have jobs in service industries. Substantial numbers can be found in construction and related occupations (19%), production, installation, and repair (15%), sales (12%), management (10%) and transportation (8%).
• A common means of border crossing is to hire professionals who smuggle illegal immigrants across the border for pay. Those operating on the US-Mexico border are known informally as coyotes.

Key Term

coyote

A smuggler of illegal immigrants across the land border from Mexico into the United States of America.

An illegal immigrant in the United States is a non-citizen who has either entered the country without government permission and in violation of United States Nationality Law, or stayed beyond the termination date of a visa. Unauthorized immigration raises many political, economic and social issues and has become a source of major controversy. Illegal immigrants continue to outpace the number of legal immigrants—a trend that’s held steady since the 1990s. While the majority of illegal immigrants continue to concentrate in places with existing large Hispanic communities, illegal immigrants are increasingly settling throughout the rest of the country.

Between 7 million and 20 million illegal immigrants are estimated to be living in the United States. The majority of these illegal immigrants are from Mexico. An estimated 14 million people live in families in which the head of household or the spouse is an illegal immigrant. A quarter of all immigrants who have arrived in recent years have at least some college education. Nonetheless, illegal immigrants as a group tend to be less educated than other sections of the U.S. population: 49% haven’t completed high school, compared with 9% of native-born Americans and 25% of legal immigrants.

North America

Map of Mexico and United States border

The Pew Hispanic Center determined that according to an analysis of Census Bureau data about 8 percent of children born in the United States in 2008 — about 340,000 — were offspring of unauthorized immigrants. In total, 4 million U.S.-born children of unauthorized immigrant parents resided in this country in 2009. These infants are, according to the Fourteenth Amendment to the Constitution, American citizens from birth. These children are sometimes pejoratively referred to as anchor babies by those aggressively opposed to this method of citizenship attained outside of the legal immigration process. The majority of children that are born with illegal parents fail to graduate high school, averaging two fewer years of school than their peers. But once the parents do gain citizenship, the children do much better in school.

Illegal immigrants work in many sectors of the U.S. economy. According to USA Today in 2006, about 4% work in farming; 21% have jobs in service industries; and substantial numbers can be found in construction and related occupations (19%), and in production, installation and repair (15%), with 12% in sales, 10% in management and 8% in transportation. Illegal immigrants have lower incomes than both legal immigrants and native-born Americans, but earnings do increase somewhat the longer an individual is in the country.

There are an estimated half million illegal entries into the United States each year. A common means of border crossing is to hire professionals who smuggle illegal immigrants across the border for pay. Those operating on the US-Mexico border are known informally as coyotes. According to Pew, between 4 and 5.5 million unauthorized migrants entered the United States with a legal visa, accounting for between 33–50% of the total population. A tourist or traveler is considered a “visa overstay” once he or she remains in the United States after the time of admission has expired. Visa overstays tend to be somewhat more educated and better off financially than those who entered the country illegally. A smaller number of unauthorized migrants entered the United States legally using the Border Crossing Card, authorizing border crossings into the U.S. for a set amount of time. Border Crossing Card entry accounts for the vast majority of all registered non-immigrant entry into the United States – 148 million out of 179 million total – but there is little hard data as to how much of the illegal immigrant population entered in this way.

15.5.3: Immigration Reform

Immigration reform regards changes to current policy including promoted or open immigration, as well as reduced or eliminated immigration.

Learning Objective

Summarize recent legislative trends in immigration reform on the state and national level

Key Points

• Proponents of great immigration enforcement argue that illegal immigrants cost taxpayers an estimated $338.3 billion and jeopardize the safety of law enforcement officials and citizens, especially at the Mexican border.
• The Immigration Reform and Control Act of 1986 made it illegal to hire or recruit illegal immigrants.
• In 2006, the House of Representatives passed the Border Protection, Anti-terrorism and Illegal Immigration Control Act of 2005 and the Senate passed the Comprehensive Immigration Reform Act of 2006. Neither bill became a law.
• President Obama proposed to fix border enforcement, interior enforcement, prevent people from working without a work permit, create a committee to adapt the number of visas available to changing times, an amnesty program to legalize undocumented immigrants and programs to help immigrants adjust.

Key Terms

deportation

The act of deporting or exiling, or the state of being deported; banishment; transportation.

amnesty

An act of the sovereign power granting oblivion, or a general pardon, for a past offense, as to subjects concerned in an insurrection.

bipartisan

relating to, or supported by two groups, especially by two political parties

Use of the Term

Immigration reform is a term used in political discussion regarding changes to current immigration policy. In its strict definition, reform means to change towards an improved form or condition by amending or removing faults or abuses. In the political sense, immigration reform may include promoted, expanded or open immigration. It may also include reduced or eliminated immigration. Immigration is also widely used to describe proposals to increase legal immigration while decreasing illegal immigration, such as the guest worker proposal supported by George W. Bush.

Legislative Trends

Illegal immigration is a controversial issue in the United States. Proponents of greater immigration enforcement argue that illegal immigrants cost taxpayers an estimated $338.3 billion dollars. They also argue that these immigrants jeopardize the safety of law enforcement officials and citizens, especially along the Mexican border.

The Immigration Reform and Control Act of 1986 made it illegal to hire or recruit illegal immigrants. The U.S. House of Representatives passed the Border Protection, Anti-terrorism and Illegal Immigration Control Act of 2005, and, in 2006, the U.S. Senate passed the Comprehensive Immigration Reform Act of 2006. Neither bill became law because their differences could not be reconciled in conference committee.

In 2009, immigration reform became a hot topic as the Obama administration signaled interest in beginning a discussion on comprehensive immigration reform. The proposed comprehensive immigration reform plan had as its goal bipartisan support. As such, it includes six sections designed to have something for everyone. These six sections are: (1) fixing border enforcement, (2) increasing interior enforcement, such as preventing visa overstays, (3) preventing people from working without a work permit, (4) creating a committee to adapt the number of visas available to changing economic times, (5) a type of amnesty program to legalize undocumented immigrants and (6) programs to help immigrants adjust to life in the United States.

The Case of Arizona

Citing Congress’ failure to enforce U.S. immigration laws, the state of Arizona confronted reform. In 2009, services provided to illegal immigrants, including incarceration, cost the state of Arizona an estimated $2.7 billion. On April, 23, 2010, Republican Governor Jan Brewer signed the Support Our Law Enforcement and Safe Neighborhoods Act, the broadest and strictest immigration reform imposed in the United States. The Arizona immigration law directs law enforcement officials to ask for immigration papers on a reasonable suspicion that a person might be an illegal immigrant. Officials can then arrest those not carrying ID papers. On July 6, 2010, the US Department of Justice filed suit against Arizona with the intent of preventing the state from enforcing the law and asks the court to find certain sections of the legislation null and void. Congress has left this issue untouched as many feared such a vote could threaten their chances at reelection.

Jan Brewer

Jan Brewer, Governor of Arizona, who signed the controversial Suppor Our Law Enforcement and Safe Neighborhoods Act, which makes it a state misdemeanor crime for an immigrant to be in Arizona without carrying registration documents required by federal law.

Being the first state to pass such legislation, Arizona has set a precedent for other states. Nevertheless, this legislation has also caused Arizona to carry a large burden. Although the response has cost the state between 7 million and 52 million, some in the state still feel that this outcome will outweigh the initial cost. Due to conflict and protest, Governor Brewer signed House Bill 2162 (HB 2162) a week later, amending text in the original document. HB 2162 includes that race, color, and national origin would not play a role in prosecution; in order to investigate an individual’s immigration status, he or she must be “lawfully stopped, arrested or detained. “

Reform and Advocacy

In the absence of comprehensive immigration reform at the federal level, many advocacy groups have focused on improving the fairness and efficiency of the immigration court system. They propose incremental steps the executive branch can take to stop an assembly line approach to deportation proceedings. These groups have identified several issues that threaten the due process rights of immigrants, including reliance on low quality videoconferencing to conduct hearings, inadequate language interpretation services for non-English speakers, and limited access to court records. They also focus on problems arising out of the recent increase in immigration law enforcement without a commensurate boost in resources for adjudication. Other calls for reform include increased transparency at the Board of Immigration Appeals (BIA) and more diversity of experience among immigration judges, the majority of whom previously held positions adversarial to immigrants.

14.2: Origins of American Law

14.2.1: Common Law

Learning Objective

Identify the principles and institutions that comprise the common law tradition

Key Points

• The United States and most Commonwealth countries are heirs to the common law legal tradition of English law. Certain practices traditionally allowed under English common law were specificilly outlawed by the Constitution, such as bills of attainder and general search warrants.
• All U.S. states except Louisiana have enacted “reception statutes” which generally state that the common law of England (particularly judge-made law) is the law of the state to the extent that it is not repugnant to domestic law or indigenous conditions.
• Unlike the states, there is no plenary reception statute at the federal level that continued the common law and thereby granted federal courts the power to formulate legal precedent like their English predecessors.
• The passage of time has led to state courts and legislatures expanding, overruling, or modifying the common law. As a result, the laws of any given state invariably differ from the laws of its sister states.

Key Terms

stare decisis

The principle of following judicial precedent.

heir

Someone who inherits, or is designated to inherit, the property of another.

Background

At both the federal and state levels, the law of the United States was mainly derived from the common law system of English law , which was in force at the time of the Revolutionary War. However, U.S. law has diverged greatly from its English ancestor both in terms of substance and procedure. It has incorporated a number of civil law innovations.

Royal Courts of Justice

The neo-medieval pile of the Royal Courts of Justice on G.E. Street, The Strand, London.

American Common Law

The United States and most Commonwealth countries are heirs to the common law legal tradition of English law. Certain practices traditionally allowed under English common law were specifically outlawed by the Constitution, such as bills of attainder and general search warrants.

As common law courts, U.S. courts have inherited the principle of stare decisis. American judges, like common law judges elsewhere, not only apply the law, they also make the law. Their decisions in the cases before them became the precedent for decisions in future cases.

The actual substance of English law was formally received into the United States in several ways. First, all U.S. states except Louisiana have enacted “reception statutes” which generally state that the common law of England (particularly judge-made law) is the law of the state to the extent that it is not repugnant to domestic law or indigenous conditions. Some reception statutes impose a specific cutoff date for reception, such as the date of a colony’s founding, while others are deliberately vague. Therefore, contemporary U.S. courts often cite pre-Revolution cases when discussing the evolution of an ancient judge-made common law principle into its modern form. An example is the heightened duty of care that was traditionally imposed upon common carriers.

Federal courts lack the plenary power possessed by state courts to simply make up law. State courts are able to do this in the absence of constitutional or statutory provisions replacing the common law. Only in a few limited areas, like maritime law, has the Constitution expressly authorized the continuation of English common law at the federal level (meaning that in those areas federal courts can continue to make law as they see fit, subject to the limitations of stare decisis).

Federal Precedent

Unlike the states, there is no plenary reception statute at the federal level that continued the common law and thereby granted federal courts the power to formulate legal precedent like their English predecessors. Federal courts are solely creatures of the federal Constitution and the federal Judiciary Acts. However, it is universally accepted that the Founding Fathers of the United States, by vesting judicial power into the Supreme Court and the inferior federal courts in Article Three of the United States Constitution, vested in them the implied judicial power of common law courts to formulate persuasive precedent. This power was widely accepted, understood, and recognized by the Founding Fathers at the time the Constitution was ratified. Several legal scholars have argued that the federal judicial power to decide “cases or controversies” necessarily includes the power to decide the precedential effect of those cases and controversies.

State Law

The passage of time has led to state courts and legislatures expanding, overruling, or modifying the common law. As a result, the laws of any given state invariably differ from the laws of its sister states. Therefore, with regard to the vast majority of areas of the law that are traditionally managed by the states, the United States cannot be classified as having one legal system. Instead, it must be regarded as 50 separate systems of tort law, family law, property law, contract law, criminal law, and so on. Naturally, the laws of different states frequently come into conflict with each other. In response, a very large body of law was developed to regulate the conflict of laws in the United States.

All states have a legislative branch which enacts state statutes, an executive branch that promulgates state regulations pursuant to statutory authorization, and a judicial branch that applies, interprets, and occasionally overturns state statutes, regulations, and local ordinances.

In some states, codification is often treated as a mere restatement of the common law. This occurs to the extent that the subject matter of the particular statute at issue was covered by some judge-made principle at common law. Judges are free to liberally interpret the codes unless and until their interpretations are specifically overridden by the legislature. In other states, there is a tradition of strict adherence to the plain text of the codes.

14.2.2: Primary Sources of American Law

Learning Objective

Identify the sources of American federal and state law

Key Points

• Where Congress enacts a statute that conflicts with the Constitution, the Supreme Court may find that law unconstitutional and declare it invalid. A statute does not disappear automatically merely because it has been found unconstitutional; a subsequent statute must delete it.
• The United States and most Commonwealth countries are heirs to the common law legal tradition of English law. Certain practices traditionally allowed under English common law were expressly outlawed by the Constitution, such as bills of attainder and general search warrants.
• Early American courts, even after the Revolution, often did cite contemporary English cases. This was because appellate decisions from many American courts were not regularly reported until the mid-19th century; lawyers and judges used English legal materials to fill the gap.
• Foreign law has never been cited as binding precedent, but merely as a reflection of the shared values of Anglo-American civilization or even Western civilization in general.
• Most U.S. law consists primarily of state law, which can and does vary greatly from one state to the next.

Key Term

commonwealth

A form of government, named for the concept that everything that is not owned by specific individuals or groups is owned collectively by everyone in the governmental unit, as opposed to a state, where the state itself owns such things.

Background

In the United States, the law is derived from various sources. These sources are constitutional law, statutory law, treaties, administrative regulations, and the common law. At both the federal and state levels, the law of the United States was originally largely derived from the common law system of English law, which was in force at the time of the Revolutionary War. However, U.S. law has diverged greatly from its English ancestor both in terms of substance and procedure, and has incorporated a number of civil law innovations. Thus, most U.S. law consists primarily of state law, which can and does vary greatly from one state to the next.

Constitutionality

Where Congress enacts a statute that conflicts with the Constitution , the Supreme Court may find that law unconstitutional and declare it invalid. A statute does not disappear automatically merely because it has been found unconstitutional; a subsequent statute must delete it. Many federal and state statutes have remained on the books for decades after they were ruled to be unconstitutional. However, under the principle of stare decisis, no sensible lower court will enforce an unconstitutional statute, and the Supreme Court will reverse any court that does so. Conversely, any court that refuses to enforce a constitutional statute (where such constitutionality has been expressly established in prior cases) will risk reversal by the Supreme Court.

American Common Law

As common law courts, U.S. courts have inherited the principle of stare decisis. American judges, like common law judges elsewhere, not only apply the law, they also make the law, to the extent that their decisions in the cases before them become precedent for decisions in future cases.

The actual substance of English law was formally “received” into the United States in several ways. First, all U.S. states except Louisiana have enacted “reception statutes” which generally state that the common law of England (particularly judge-made law) is the law of the state to the extent that it is not repugnant to domestic law or indigenous conditions. Some reception statutes impose a specific cutoff date for reception, such as the date of a colony’s founding, while others are deliberately vague. Thus, contemporary U.S. courts often cite pre-Revolution cases when discussing the evolution of an ancient judge-made common law principle into its modern form, such as the heightened duty of care traditionally imposed upon common carriers.

Second, a small number of important British statutes in effect at the time of the Revolution have been independently reenacted by U.S. states. Two examples that many lawyers will recognize are the Statute of Frauds (still widely known in the U.S. by that name) and the Statute of 13 Elizabeth (the ancestor of the Uniform Fraudulent Transfers Act). Such English statutes are still regularly cited in contemporary American cases interpreting their modern American descendants.

However, it is important to understand that despite the presence of reception statutes, much of contemporary American common law has diverged significantly from English common law. The reason is that although the courts of the various Commonwealth nations are often influenced by each other’s rulings, American courts rarely follow post-Revolution Commonwealth rulings unless there is no American ruling on point, the facts and law at issue are nearly identical, and the reasoning is strongly persuasive.

Early on, American courts, even after the Revolution, often did cite contemporary English cases. This was because appellate decisions from many American courts were not regularly reported until the mid-19^th century; lawyers and judges, as creatures of habit, used English legal materials to fill the gap. But citations to English decisions gradually disappeared during the 19^th century as American courts developed their own principles to resolve the legal problems of the American people. The number of published volumes of American reports soared from eighteen in 1810 to over 8,000 by 1910. By 1879, one of the delegates to the California constitutional convention was already complaining: “Now, when we require them to state the reasons for a decision, we do not mean they shall write a hundred pages of detail. We [do] not mean that they shall include the small cases, and impose on the country all this fine judicial literature, for the Lord knows we have got enough of that already. “

Today, in the words of Stanford law professor Lawrence Friedman: American cases rarely cite foreign materials. Courts occasionally cite a British classic or two, a famous old case, or a nod to Blackstone; but current British law almost never gets any mention. Foreign law has never been cited as binding precedent, but merely as a reflection of the shared values of Anglo-American civilization or even Western civilization in general.

14.2.3: Civil Law and Criminal Law

Learning Objective

Compare and contrast civil law with common law

Key Points

• The objectives of civil law are different from other types of law. In civil law there is the attempt to right a wrong, honor an agreement, or settle a dispute.
• Criminal law is the body of law that relates to crime. It is the body of rules that defines conduct that is not allowed because it is held to threaten, harm or endanger the safety and welfare of people.
• In civil law there is the attempt to right a wrong, honor an agreement, or settle a dispute. If there is a victim, they get compensation, and the person who is the cause of the wrong pays, this being a civilized form of, or legal alternative to, revenge.
• For public welfare offenses where the state is punishing merely risky (as opposed to injurious) behavior, there is significant diversity across the various states.

Key Terms

equity

A legal tradition that deals with remedies other than monetary relief, such as injunctions, divorces and similar actions.

criminal law

the area of law that regulates social conduct, prohibits threatening, harming, or otherwise endangering the health, safety, and moral welfare of people, and punishes people who violate these laws

incarceration

The act of confining, or the state of being confined; imprisonment.

Background

Criminal law is the body of law that relates to crime. It is the body of rules that defines conduct that is not allowed because it is held to threaten, harm or endanger the safety and welfare of people. Criminal law also sets out the punishment to be imposed on people who do not obey these laws. Criminal law differs from civil law, whose emphasis is more on dispute resolution than in punishment.

Civil law is the branch of law dealing with disputes between individuals or organizations, in which compensation may be awarded to the victim. For instance, if a car crash victim claims damages against the driver for loss or injury sustained in an accident, this will be a civil law case. Civil law differs from criminal law, which emphasizes punishment rather than dispute resolution. The law relating to civil wrongs and quasi-contract is part of civil law.

Civil Law Versus Criminal Law

The objectives of civil law are different from other types of law. In civil law there is the attempt to right a wrong, honor an agreement, or settle a dispute. If there is a victim, they get compensation, and the person who is the cause of the wrong pays, this being a civilized form of, or legal alternative to, revenge. If it is a matter of equity, there often exists a pie for division and a process of civil law which allocates it. In public law the objective is usually deterrence and retribution.

An action in criminal law does not necessarily preclude an action in civil law in common law countries, and may provide a mechanism for compensation to the victims of crime. Such a situation occurred when O.J. Simpson was ordered to pay damages for wrongful death after being acquitted of the criminal charge of murder.

Criminal law involves the prosecution by the state of wrongful acts, which are considered to be so serious that they are a breach of the sovereign’s peace (and cannot be deterred or remedied by mere lawsuits between private parties). Generally, crimes can result in incarceration, but torts (see below) cannot. The majority of the crimes committed in the United States are prosecuted and punished at the state level. Federal criminal law focuses on areas specifically relevant to the federal government like evading payment of federal income tax, mail theft, or physical attacks on federal officials, as well as interstate crimes like drug trafficking and wire fraud.

All states have somewhat similar laws in regard to “higher crimes” (or felonies), such as murder and rape, although penalties for these crimes may vary from state to state. Capital punishment is permitted in some states but not others. Three strikes laws in certain states impose harsh penalties on repeat offenders.

Some states distinguish between two levels: felonies and misdemeanors (minor crimes). Generally, most felony convictions result in lengthy prison sentences as well as subsequent probation, large fines, and orders to pay restitution directly to victims; while misdemeanors may lead to a year or less in jail and a substantial fine. To simplify the prosecution of traffic violations and other relatively minor crimes, some states have added a third level, infractions. These may result in fines and sometimes the loss of one’s driver’s license, but no jail time.

For public welfare offenses where the state is punishing merely risky (as opposed to injurious) behavior, there is significant diversity across the various states. For example, punishments for drunk driving varied greatly prior to 1990. State laws dealing with drug crimes still vary widely, with some states treating possession of small amounts of drugs as a misdemeanor offense or as a medical issue and others categorizing the same offense as a serious felony.

The law of most of the states is based on the common law of England; the notable exception is Louisiana. Much of Louisiana law is derived from French and Spanish civil law, which stems from its history as a colony of both France and Spain. Puerto Rico, a former Spanish colony, is also a civil law jurisdiction of the United States. However, the criminal law of both jurisdictions has been necessarily modified by common law influences and the supremacy of the federal Constitution. Many states in the southwest that were originally Mexican territory have inherited several unique features from the civil law that governed when they were part of Mexico. These states include Arizona, California , Nevada, New Mexico, and Texas.

California Penal Code

The California Penal Code, the codification of criminal law and procedure in the U.S. state of California.

14.2.4: Basic Judicial Requirements

Learning Objective

Identify the type and structure of courts that make up the U.S. federal court system

Key Points

• In federal legislation, regulations governing the “courts of the United States” only refer to the courts of the United States government, and not the courts of the individual states.
• State courts may have different names and organization; trial courts may be called courts of common plea and appellate courts “superior courts” or commonwealth courts.
• The U.S. federal court system hears cases involving litigants from two or more states, violations of federal laws, treaties, and the Constitution, admiralty, bankruptcy, and related issues. In practice, about 80% of the cases are civil and 20% are criminal.
• Federal courts may not decide every case that happens to come before them. In order for a district court to entertain a lawsuit, Congress must first grant the court subject matter jurisdiction over the type of dispute in question.
• In addition to their original jurisdiction, the district courts have appellate jurisdiction over a very limited class of judgments, orders, and decrees.
• A final ruling by a district court in either a civil or a criminal case can be appealed to the United States court of appeals in the federal judicial circuit in which the district court is located, except that some district court rulings involving patents and certain other specialized matters.

Key Terms

appeal

(a) An application for the removal of a cause or suit from an inferior to a superior judge or court for re-examination or review. (b) The mode of proceeding by which such removal is effected. (c) The right of appeal. (d) An accusation; a process which formerly might be instituted by one private person against another for some heinous crime demanding punishment for the particular injury suffered, rather than for the offense against the public. (e) An accusation of a felon at common law by one of his accomplices, which accomplice was then called an approver.

original jurisdiction

the power of a court to hear a case for the first time

Background

In federal legislation, regulations governing the “courts of the United States” only refer to the courts of the United States government, and not the courts of the individual states. Because of the federalist underpinnings of the division between federal and state governments, the various state court systems are free to operate in ways that vary widely from those of the federal government, and from one another. In practice, however, every state has adopted a division of its judiciary into at least two levels, and almost every state has three levels, with trial courts hearing cases which may be reviewed by appellate courts, and finally by a state supreme court. A few states have two separate supreme courts, with one having authority over civil matters and the other reviewing criminal cases. State courts may have different names and organization; trial courts may be called “courts of common plea” and appellate courts “superior courts” or “commonwealth courts. ” State courts hear about 98% of litigation; most states have special jurisdiction courts, which typically handle minor disputes such as traffic citations, and general jurisdiction courts, which handle more serious disputes.

The U.S. federal court system hears cases involving litigants from two or more states, violations of federal laws, treaties, and the Constitution, admiralty, bankruptcy, and related issues. In practice, about 80% of the cases are civil and 20% are criminal. The civil cases often involve civil rights, patents, and Social Security while the criminal cases involve tax fraud, robbery, counterfeiting, and drug crimes. The trial courts are U.S. district courts, followed by United States courts of appeals and then the Supreme Court of the United States. The judicial system, whether state or federal, begins with a court of first instance, whose work may be reviewed by an appellate court, and then ends at the court of last resort, which may review the work of the lower courts.

Jurisdiction

Unlike some state courts, the power of federal courts to hear cases and controversies is strictly limited. Federal courts may not decide every case that happens to come before them. In order for a district court to entertain a lawsuit, Congress must first grant the court subject matter jurisdiction over the type of dispute in question. Though Congress may theoretically extend the federal courts’ subject matter jurisdiction to the outer limits described in Article III of the Constitution, it has always chosen to give the courts a somewhat narrower power.

For most of these cases, the jurisdiction of the federal district courts is concurrent with that of the state courts. In other words, a plaintiff can choose to bring these cases in either a federal district court or a state court. Congress has established a procedure whereby a party, typically the defendant, can remove a case from state court to federal court, provided that the federal court also has original jurisdiction over the matter. Patent and copyright infringement disputes and prosecutions for federal crimes, the jurisdiction of the district courts is exclusive of that of the state courts.

US Court of Appeals and District Court Map

Courts of Appeals, with the exception of one, are divided into geographic regions known as circuits that hear appeals from district courts within the region..

Attorneys

In order to represent a party in a case in a district court, a person must be an Attorney At Law and generally must be admitted to the bar of that particular court. The United States usually does not have a separate bar examination for federal practice (except with respect to patent practice before the United States Patent and Trademark Office). Admission to the bar of a district court is generally granted as a matter of course to any attorney who is admitted to practice law in the state where the district court sits. Many district courts also allow an attorney who has been admitted and remains an active member in good standing of any state, territory or the District of Columbia bar to become a member. The attorney submits his application with a fee and takes the oath of admission. Local practice varies as to whether the oath is given in writing or in open court before a judge of the district.

Several district courts require attorneys seeking admission to their bars to take an additional bar examination on federal law, including the following: the Southern District of Ohio, the Northern District of Florida, and the District of Puerto Rico.

Appeals

Generally, a final ruling by a district court in either a civil or a criminal case can be appealed to the United States court of appeals in the federal judicial circuit in which the district court is located, except that some district court rulings involving patents and certain other specialized matters must be appealed instead to the United States Court of Appeals for the Federal Circuit, and in a very few cases the appeal may be taken directly to the United States Supreme Court.

14.3: The Federal Court System

14.3.1: U.S. District Courts

The 94 U.S. district courts oversee civil and criminal cases within certain geographic or subject areas.

Learning Objective

Identify the function and characteristics of U.S. district courts

Key Points

• The U.S. district courts are the trial courts within the U.S. federal system that primarily address civil and criminal cases.
• Each state and territory has at least one district court responsible for hearing cases that arise within a given geographic area.
• Civil cases are legal disputes between two or more parties while criminal cases involve prosecution by a U.S. attorney. Civil and criminal cases also differ in how they are conducted.
• Every district court is associated with a bankruptcy court that usually provides relief for honest debtors and ensures that creditors are paid back in a timely manner.
• Two special trial courts lie outside of the district court system: the Court of International Trade and the United States Court of Federal Claims.

Key Terms

prosecutor

A lawyer who decides whether to charge a person with a crime and tries to prove in court that the person is guilty.

plaintiff

A party bringing a suit in civil law against a defendant; accusers.

defendant

In civil proceedings, the party responding to the complaint; one who is sued and called upon to make satisfaction for a wrong complained of by another.

Introduction

The United States district courts are the trial courts within the U.S. federal court system. There are a total of ninety-four district courts throughout the U.S. states and territories . Every state and territory has at least one district court that is responsible for hearing cases that arise within that geographic area. With the exception of the territorial courts in Guam, the Northern Mariana Islands, and the Virgin Islands, federal district judges are appointed for life.

District Court of Rhode Island Seal

Each state has at least one district court that is responsible for overseeing civil and criminal cases in a given region.

Criminal and Civil Cases

The U.S. district courts are responsible for holding general trials for civil and criminal cases. Civil cases are legal disputes between two or more parties; they officially begin when a plaintiff files a complaint with the court. The complaint explains the plaintiff’s injury, how the defendant caused the injury, and requests the court’s assistance in addressing the injury. A copy of the complaint is “served” to the defendant who must, subsequently, appear for a trial. Plaintiffs may ask the court to order the defendant to stop the conduct that is causing the injury or may seek monetary compensation for the injury.

Meanwhile, criminal cases involve a U.S. attorney (the prosecutor), a grand jury, and a defendant. Defendants may also have their own private attorney to represent them or a court-appointed attorney if they are unable to afford counsel. The purpose of the grand jury is to review evidence presented by the prosecutor to decide whether a defendant should stand trial. Criminal cases involve an arraignment hearing in which defendants enter a plea to the charges brought against them by the U.S. attorney. Most defendants will plead guilty at this point instead of going to trial. A judge may issue a sentence at this time or will schedule a hearing at a later point to determine the sentence. Those defendants who plead not guilty will be scheduled to receive a later trial.

Bankruptcy Court

A bankruptcy court is associated with each U.S. district court. Bankruptcy cases primarily address two concerns. First, they may provide an honest debtor with a “fresh start” by relieving the debtor of most debts. Second, bankruptcy cases ensure that creditors are repaid in a timely manner commensurate with what property the debtor has available for payment.

Other Trial Courts

While district courts are the primary trial courts within the U.S., two special trial courts exist outside of the district court system. The Court of International Trade has jurisdiction over cases involving international trade and customs issues. Meanwhile, the United States Court of Federal Claims oversees claims against the United States. These claims include money damages against the U.S., unlawful takings of private property by the federal government, and disputes over federal contracts. Both courts exercise nationwide jurisdiction versus the geographic jurisdiction limited to the district courts.

14.3.2: U.S. Court of Appeals

The U.S. courts of appeals review the decisions made in trial courts and often serve as the final arbiter in federal cases.

Learning Objective

Discuss the role of the U.S. federal courts of appeals in the judiciary

Key Points

• The U.S. federal courts of appeals hear appeals from district courts as well as appeals from decisions of federal administrative agencies.
• Courts of appeals are divided into thirteen circuits, twelve of which serve specific geographic regions.The thirteenth circuit hears appeals from the Court of International Trade, the U.S. Court of Federal Claims, the Patent and Trademark Office, and others.
• In contrast to trial courts, appellate court decisions are made by a panel of three judges who do not consider any additional evidence beyond what was presented in trial court or any additional witness testimony.
• A litigant who files an appeal, known as an appellant, and a litigant defending against an appeal, known as an appellee, present their legal arguments in documents called briefs. Oral arguments may also be made to argue for or against an appeal.
• The U.S. courts of appeals are among the most powerful courts since they establish legal precedent and serve as the final arbiter in more cases than the Supreme Court.

Key Terms

trial court

a tribunal established for the administration of justice, in which disputing parties come together to present information before a jury or judge that will decide the outcome of the case

ruling

An order or a decision on a point of law from someone in authority.

appeal

(a) An application for the removal of a cause or suit from an inferior to a superior judge or court for re-examination or review. (b) The mode of proceeding by which such removal is effected. (c) The right of appeal. (d) An accusation; a process which formerly might be instituted by one private person against another for some heinous crime demanding punishment for the particular injury suffered, rather than for the offense against the public. (e) An accusation of a felon at common law by one of his accomplices, which accomplice was then called an approver.

litigant

A party suing or being sued in a lawsuit, or otherwise calling upon the judicial process to determine the outcome of a suit.

brief

memorandum of points of fact or of law for use in conducting a case

The U.S. federal courts of appeals, also known as appellate courts or circuit courts, hear appeals from district courts as well as appeals from decisions of federal administrative agencies. There are thirteen courts of appeals, twelve of which are based on geographic districts called circuits. These twelve circuit courts decide whether or not the district courts within their geographic jurisdiction have made an error in conducting a trial . The thirteenth court of appeals hears appeals from the Court of International Trade, the U.S. Court of Federal Claims, the Patent and Trademark Office, and others.

US Court of Appeals and District Court Map

Courts of Appeals, with the exception of one, are divided into geographic regions known as circuits that hear appeals from district courts within the region..

Every federal court litigant has the right to appeal an unfavorable ruling from the district court by requesting a hearing in a circuit court. However, only about 17% of eligible litigants do so because of the expense of appealing. In addition, few appealed cases are heard in the higher courts. Those that are, are rarely reversed.

Procedure

The procedure within appellate courts diverges widely from that within district courts. First, a litigant who files an appeal, known as an appellant, must show that the trial court or an administrative agency made a legal error that affected the decision in the case. Appeals are then passed to a panel of three judges working together to make a decision. These judges base their decision on the record of the case established by the trial court or agency. The appellant presents a document called a brief, which lays out the legal arguments to persuade the judge that the trial court made an error. Meanwhile, the party defending against the appeal, known as the apellee, also presents a brief presenting reasons the trial court decision is correct or why an error made by the trial court is not significant enough to reverse the decision. The appellate judges do not receive any additional evidence or hear witnesses.

While some cases are decided on the basis of written briefs alone, other cases move on to an oral argument stage. Oral argument consists of a structured discussion between the appellate lawyers and the panel of judges on the legal principles in dispute. Each side is given a short time to present their arguments to the judges. The court of appeals decision is usually the final word in the case unless it sends the case back to the trial court for additional proceedings. A litigant who loses in the federal courts of appeals may also ask the Supreme Court to review the case.

Legal Precedent

The U.S. courts of appeals are among the most powerful and influential courts in the United States. Decisions made within courts of appeals, unlike those of the lower district courts, establish binding precedents. After a ruling has been made, other federal courts in the circuit must follow the appellate court’s guidance in similar cases, even if the trial judge thinks that the case should be handled differently. In addition, the courts of appeals often serve as the final arbiter in federal cases, since the Supreme Court hears less than 100 of the over 10,000 cases sent to it annually.

14.3.3: The Supreme Court

The U.S. Supreme Court is the highest tribunal within the U.S. and most often hears cases concerning the Constitution or federal law.

Learning Objective

Explain the composition and significance of the Supreme Court, as well as its methodology to decide which cases to hear.

Key Points

• The Supreme Court is currently composed of a Chief Justice and eight associate justices nominated the President and confirmed by the U.S. Senate.
• The justices are appointed for life and do not officially represent any political party although they are often informally categorized as being conservative, moderate, or liberal on their judicial outlook.
• Article III and the Eleventh Amendment of the Constitution establish the Supreme Court as the first court to hear certain kinds of cases.
• Most cases that reach the Supreme Court are appeals from lower courts that begin as a writ of certiorari.
• Some reasons cases are granted cert are that they present a conflict in the interpretation of federal law or the Constitution, they represent an extreme departure from the normal course of judicial proceedings, or if a decision conflicts with a previous decision of the Supreme Court.
• Cases are decided by majority rule in which at least five of the nine justices have to agree.

Key Terms

appeal

(a) An application for the removal of a cause or suit from an inferior to a superior judge or court for re-examination or review. (b) The mode of proceeding by which such removal is effected. (c) The right of appeal. (d) An accusation; a process which formerly might be instituted by one private person against another for some heinous crime demanding punishment for the particular injury suffered, rather than for the offense against the public. (e) An accusation of a felon at common law by one of his accomplices, which accomplice was then called an approver.

tribunal

An assembly including one or more judges to conduct judicial business; a court of law.

amicus curiae

someone who is not a party to a case who offers information that bears on the case but that has not been solicited by any of the parties to assist a court

Definition and Composition

The U.S. Supreme Court is the highest tribunal within the U.S. and hears a limited number of cases per year associated with the Constitution or laws of the United States. It is currently composed of the Chief Justice of the United States and eight associate justices. The current Chief Justice is John Roberts; the eight associate justices are Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Stephen Breyer, Samuel Alito, Sonia Sotomayor, and Elena Kagan. Justice Antonin Scalia died on Feb. 13, 2016. President Obama nominated Merrick Garland as his replacement on March 16, 2016, but the U.S. Senate did not initiate the process for Garland’s approval. Majority Leader Mitch McConnell stated that the Senate would not approve a Scalia replacement until after a new president took office in January, 2017.

The U.S. Supreme Court

The United States Supreme Court, the highest court in the United States, in 2010. Top row (left to right): Associate Justice Sonia Sotomayor, Associate Justice Stephen G. Breyer, Associate Justice Samuel A. Alito, and Associate Justice Elena Kagan. Bottom row (left to right): Associate Justice Clarence Thomas, Associate Justice Antonin Scalia, Chief Justice John G. Roberts, Associate Justice Anthony Kennedy, and Associate Justice Ruth Bader Ginsburg.

The Justices

The Supreme Court justices are nominated by the President and confirmed by the U.S. Senate. Justices have life tenure unless they resign, retire, or are removed after impeachment. Although the justices do not represent or receive official endorsements from political parties, they are usually informally labeled as judicial conservatives, moderates, or liberals in their legal outlook.

Article III of the United States Constitution leaves it to Congress to fix the number of justices. Initially, The Judiciary Act of 1789 called for the appointment of six justices. But in 1866, at the behest of Chief Justice Chase, Congress passed an act providing that the next three justices to retire would not be replaced, which would thin the bench to seven justices by attrition. Consequently, one seat was removed in 1866 and a second in 1867. In 1869, however, the Circuit Judges Act returned the number of justices to nine, where it has since remained.

How Cases Reach the Supreme Court

The Supreme Court is the first court to hear certain kinds of cases in accordance with both Article III and the Eleventh Amendment of the Constitution. These cases include those between the United States and one of the states, those between two or more states, those brought by one state against citizens of another state or foreign country, and those involving foreign ambassadors or other ministers. However, only about 1% of the Supreme Court’s cases consist of these cases. Most cases reach the Supreme Court as appeals from civil and criminal cases that have been decided by state and lower federal courts.

Cases that come to the Supreme Court as appeals begin as a writ of certiorari, which is a petition to the Supreme Court to review the case. The Supreme Court will review the case if four of the nine justices agree to “grant cert. ” This standard for acceptance is known as the Rule of Four. Cases that are granted cert must be chosen for “compelling reasons,” as outlined in the court’s Rule 10. These reasons could be that the cases present a conflict in the interpretation of federal law or the Constitution, that they raise an important question about federal law, or that they represent an extreme departure from the normal course of judicial proceedings. The Supreme Court can also grant cert if the decision made in a lower court conflicts with a previous decision of the Supreme Court. If the Supreme Court does not grant cert this simply means that it has decided not to review the case.

To manage the high volume of cert petitions received by the Court each year, the Court employs an internal case management tool known as the “cert pool. ” Each year, the Supreme Court receives thousands of petitions for certiorari; in 2001 the number stood at approximately 7,500, and had risen to 8,241 by October Term 2007. The Court will ultimately grant approximately 80 to 100 of these petitions, in accordance with the rule of four.

Procedure

Once a case is granted cert, lawyers on each side file a brief that presents their arguments. With the permission of the court, others with a stake in the outcome of the case may also file an amicus curiae brief for one of the parties to the case. After the briefs are reviewed, the justices hear oral arguments from both parties. During the oral argument the justices may ask questions, raise new issues, or probe arguments made in the briefs.

The justices meet in a conference some time after oral arguments to vote on a case decision. The justices vote in order of seniority, beginning with the Chief Justice. Cases are decided by majority rule in which at least five of the nine justices have to agree. Bargaining and compromise are often called for to create a majority coalition. Once a decision has been made, one of the justices will write the majority opinion of the Court. This justice is chosen by either the Chief Justice or by the justice in the majority who has served the longest in the Supreme Court. The Supreme Court cannot directly enforce its rulings. Instead, it relies on respect for the Constitution and the law for adherence to its decisions.

14.4: Judicial Review and Policy Making

14.4.1: The Impact of Court Decisions

Court decisions can have a very strong influence on current and future laws, policies, and practices.

Learning Objective

Identify the impacts of court decisions on current policies and practices.

Key Points

• Court decisions can have an important impact on policy, law, and legislative or executive action; different courts can also have an influence on each other.
• In the U.S. legal systems, a precedent is a principle or rule established in a previous legal court decision that is either binding on, or persuasive for, a court or other tribunal when deciding subsequent cases with similar issues or facts.
• Common law precedent is a third kind of law, on equal footing with statutory law (statutes and codes enacted by legislative bodies), and regulatory law (regulations promulgated by executive branch agencies).
• Stare decisis is a legal principle by which judges are obliged to respect the precedent established by prior court decisions.
• Vertical precedent is the application of the doctrine of stare decisis from a superior court to an inferior court; horizontal precedent, on the other hand, is the application of the doctrine across courts of similar or coordinate level.

Key Term

privatization

the government outsourcing of services or functions to private firms

Privatization is government outsourcing of services or functions to private firms. These services often include, revenue collection, law enforcement and prison management.

In competitive industries with well-informed consumers, privatization consistently improves efficiency. The more competitive the industry, the greater the improvement in output, profitability and efficiency. Such efficiency gains mean a one-off increase in GDP, but improved incentives to innovate and reduce costs also tend to raise the rate of economic growth. Although typically there are many costs associated with these efficiency gains, many economists argue that these can be dealt with by appropriate government support through redistribution and perhaps retraining.

Capitol Hill

Capitol Hill, where bills become laws.

Studies show that private market factors can more efficiently deliver many goods or service than governments due to free market competition. Over time this tends to lead to lower prices, improved quality, more choices, less corruption, less red tape and/or quicker delivery. Many proponents do not argue that everything should be privatized. Market failures and natural monopolies could be problematic.

Opponents of certain privatizations believe that certain public goods and services should remain primarily in the hands of government in order to ensure that everyone in society has access to them. There is a positive externality when the government provides society at large with public goods and services such as defense and disease control. Some national constitutions in effect define their governments’ core businesses as being the provision of such things as justice, tranquility, defense and general welfare. These governments’ direct provision of security, stability and safety is intended to be done for the common good with a long-term perspective. As for natural monopolies, opponents of privatization claim that they aren’t subject to fair competition and are better administrated by the state. Likewise, private goods and services should remain in the hands of the private sector.

14.4.2: The Power of Judicial Review

Judicial review is the doctrine where legislative and executive actions are subject to review by the judiciary.

Learning Objective

Explain the significance of judicial review in the history of the Supreme Court

Key Points

• Judicial review is an example of the separation of powers in a modern governmental system.
• Common law judges are seen as sources of law, capable of creating new legal rules and rejecting legal rules that are no longer valid. In the civil law tradition, judges are seen as those who apply the law, with no power to create or destroy legal rules.
• In the United States, judicial review is considered a key check on the powers of the other two branches of government by the judiciary.

Key Term

doctrine

A belief or tenet, especially about philosophical or theological matters.

Judicial review is the doctrine under which legislative and executive actions are subject to review by the judiciary. Specific courts with judicial review power must annul the acts of the state when it finds them incompatible with a higher authority. Judicial review is an example of the separation of powers in a modern governmental system. This principle is interpreted differently in different jurisdictions, so the procedure and scope of judicial review differs from state to state.

Judicial review can be understood in the context of two distinct—but parallel—legal systems, civil law and common law, and also by two distinct theories on democracy and how a government should be set up, legislative supremacy and separation of powers. Common law judges are seen as sources of law, capable of creating new legal rules and rejecting legal rules that are no longer valid. In the civil law tradition, judges are seen as those who apply the law, with no power to create or destroy legal rules.

The separation of powers is another theory about how a democratic society’s government should be organized. First introduced by French philosopher Charles de Secondat, Baron de Montesquieu , separation of powers was later institutionalized in the United States by the Supreme Court ruling in Marbury v. Madison. It is based on the idea that no branch of government should be more powerful than any other and that each branch of government should have a check on the powers of the other branches of government, thus creating a balance of power among all branches of government. The key to this idea is checks and balances. In the United States, judicial review is considered a key check on the powers of the other two branches of government by the judiciary.

14.4.3: Judicial Activism and Restraint

Judicial activism is based on personal/political considerations and judicial restraint encourages judges to limit their power.

Learning Objective

Compare and contrast judicial activist and judicial-restrained judges

Key Points

• Judicial activism describes judicial rulings suspected of being based on personal or political considerations rather than on existing law.
• Judicial restraint encourages judges to limit the exercise of their own power. It asserts that judges should hesitate to strike down laws unless they are obviously unconstitutional, though what counts as obviously unconstitutional is itself a matter of some debate.
• Detractors of judicial activism argue that it usurps the power of elected branches of government or appointed agencies, damaging the rule of law and democracy. Defenders say that in many cases it is a legitimate form of judicial review and that interpretations of the law must change with the times.

Key Term

statutory

Of, relating to, enacted or regulated by a statute.

Judicial activism describes judicial rulings suspected of being based on personal or political considerations rather than on existing law. The definition of judicial activism and which specific decisions are activist, is a controversial political issue. The phrase is generally traced back to a comment by Thomas Jefferson, referring to the despotic behavior of Federalist federal judges, in particular, John Marshall. The question of judicial activism is closely related to constitutional interpretation, statutory construction and separation of powers.

Detractors of judicial activism argue that it usurps the power of elected branches of government or appointed agencies, damaging the rule of law and democracy. Defenders say that in many cases it is a legitimate form of judicial review and that interpretations of the law must change with the times.

Judicial restraint is a theory of judicial interpretation that encourages judges to limit the exercise of their own power. It asserts that judges should hesitate to strike down laws unless they are obviously unconstitutional, though what counts as obviously unconstitutional is itself a matter of some debate.

In deciding questions of constitutional law, judicially-restrained jurists go to great lengths to defer to the legislature. Former Associate Justice Oliver Holmes Jr. is considered to be one of the first major advocates of the philosophy. Former Associate Justice Felix Frankfurter , a Democrat appointed by Franklin Roosevelt, is generally seen as the model of judicial restraint.

Judicially-restrained judges respect stare decisis, the principle of upholding established precedent handed down by past judges. When Chief Justice Rehnquist overturned some of the precedents of the Warren Court, Time magazine said he was not following the theory of judicial restraint. However, Rehnquist was also acknowledged as a more conservative advocate of the philosophy.

Felix Frankfurter

Former Associate Justice Felix Frankfurter, one of the first major advocates to advocate deferring to the legislature.

14.4.4: The Supreme Court as Policy Makers

The Constitution does not grant the Supreme Court the power of judicial review but the power to overturn laws and executive actions.

Learning Objective

Discuss the constitutional powers and authority of the Supreme Court and its role in developing policies

Key Points

• The Supreme Court first established its power to declare laws unconstitutional in Marbury v. Madison (1803), consummating the system of checks and balances, allowing judges to have the last word on allocation of authority among the three branches of the federal government.
• The Supreme Court cannot directly enforce its rulings, but it relies on respect for the Constitution and for the law for adherence to its judgments.
• Through its power of judicial review, the Supreme Court has defined the scope and nature of the powers and separation between the legislative and executive branches of the federal government.

Key Term

impeachment

the act of impeaching a public official, either elected or appointed, before a tribunal charged with determining the facts of the matter.

A policy is described as a principle or rule to guide decisions and achieve rational outcomes. The policy cycle is a tool used for the analyzing of the development of a policy item. A standardizes version includes agenda setting, policy formulation, adoption, implementation and evaluation.

The Constitution does not explicitly grant the Supreme Court the power of judicial review but the power of the Court to overturn laws and executive actions it deems unlawful or unconstitutional is well-established. Many of the Founding Fathers accepted the notion of judicial review. The Supreme Court first established its power to declare laws unconstitutional in Marbury v. Madison (1803), consummating the system of checks and balances. This power allows judges to have the last word on allocation of authority among the three branches of the federal government, which grants them the ability to set bounds to their own authority, as well as to their immunity from outside checks and balances.

Supreme Court

The Supreme Court holds the power to overturn laws and executive actions they deem unlawful or unconstitutional.

The Supreme Court cannot directly enforce its rulings, but it relies on respect for the Constitution and for the law for adherence to its judgments. One notable instance came in 1832, when the state of Georgia ignored the Supreme Court’s decision in Worcester v. Georgia. Some state governments in the south also resisted the desegregation of public schools after the 1954 judgment Brown v. Board of Education. More recently, many feared that President Nixon would refuse to comply with the Court’s order in United States v. Nixon (1974) to surrender the Watergate tapes. Nixon ultimately complied with the Supreme Court’s ruling.

Some argue that the Supreme Court is the most separated and least checked of all branches of government. Justices are not required to stand for election by virtue of their tenure during good behavior and their pay may not be diminished while they hold their position. Though subject to the process of impeachment, only one Justice has ever been impeached and no Supreme Court Justice has been removed from office. Supreme Court decisions have been purposefully overridden by constitutional amendment in only four instances: the Eleventh Amendment overturned Chisholm v. Georgia (1793), the13^th and 14^th Amendments in effect overturned Dred Scott v. Standford (1857), the 16^th Amendment reversed Pollock v. Farmers’ Loan and Trust Co. (1895) and the 16^th Amendment overturned some portions of Oregon v. Mitchell (1970). When the Court rules on matters involving the interpretation of laws rather than of the Constitution, simple legislative action can reverse the decisions. The Supreme Court is not immune from political and institutional restraints: lower federal courts and state courts sometimes resist doctrinal innovations, as do law enforcement officials.

On the other hand, through its power of judicial review, the Supreme Court has defined the scope and nature of the powers and separation between the legislative and executive branches of the federal government. The Court’s decisions can also impose limitations on the scope of Executive authority, as in Humphrey’s Executor v. United States (1935), the Steel Seizure Case (1952) and United States v. Nixon (1974).

14.4.5: Two Judicial Revolutions: The Rehnquist Court and the Roberts Court

The Rehnquist Court favored federalism and social liberalism, while the Roberts Court was considered more conservative.

Learning Objective

Compare and contrast the Rehnquist Court and the Roberts Court

Key Points

• Rehnquist favored a conception of federalism that emphasized the Tenth Amendment’s reservation of powers to the states. Under this view of federalism, the Supreme Court, for the first time since the 1930s, struck down an Act of Congress as exceeding federal power under the Commerce Clause.
• In 1999, Rehnquist became the second Chief Justice to preside over a presidential impeachment trial, during the proceedings against President Bill Clinton.
• One of the Court’s major developments involved reinforcing and extending the doctrine of sovereign immunity, which limits the ability of Congress to subject non-consenting states to lawsuits by individual citizens seeking money damages.
• The Roberts Court refers to the Supreme Court of the United States since 2005, under the leadership of Chief Justice John G. Roberts. It is generally considered more conservative than the preceding Rehnquist Court, as a result of the retirement of moderate Justice Sandra Day O’Connor.
• In its first five years, the Roberts court has issued major rulings on gun control. affirmative action, campaign finance regulation, abortion, capital punishment and criminal sentencing.

Key Term

certiorari

A grant of the right of an appeal to be heard by an appellate court where that court has discretion to choose which appeals it will hear.

William Rehnquist served as an Associate Justice on the Supreme Court of the United States, and later as the 16^th Chief Justice of the United States. When Chief Justice Warren Burger retired in 1986, President Ronald Reagan nominated Rehnquist to fill the position. The Senate confirmed his appointment by a 65-33 vote and he assumed office on September 26, 1986.

William Rehnquist

Former Chief Justice William Rehnquist

Considered a conservative, Rehnquist favored a conception of federalism that emphasized the Tenth Amendment’s reservation of powers to the states. Under this view of federalism, the Supreme Court, for the first time since the 1930s, struck down an Act of Congress as exceeding federal power under the Commerce Clause. He won over his fellow justices with his easygoing, humorous and unpretentious personality. Rehnquist also tightened up the justices’ conferences, keeping them from going too long or off track. He also successfully lobbied Congress in 1988 to give the Court control of its own docket, cutting back mandatory appeals an certiorari grants in general.

In 1999, Rehnquist became the second Chief Justice to preside over a presidential impeachment trial, during the proceedings against President Bill Clinton. In 2000, Rehnquist wrote a concurring opinion in Bush v. Gore, the case that effectively ended the presidential election controversy in Florida, that the Equal Protection Clause barred a standard-less manual recount of the votes as ordered by the Florida Supreme Court.

The Rehnquist Court’s congruence and proportionality standard made it easier to revive older precedents preventing Congress from going too far in enforcing equal protection of the laws. One of the Court’s major developments involved reinforcing and extending the doctrine of sovereign immunity, which limits the ability of Congress to subject non-consenting states to lawsuits by individual citizens seeking money damages.

Rehnquist presided as Chief Justice for nearly 19 years, making him the fourth-longest-serving Chief Justice after John Marshall, Roger Taney and Melville Fuller. He is the eighth longest-serving justice in Supreme Court history.

The Roberts Court refers to the Supreme Court of the United States since 2005, under the leadership of Chief Justice John G. Roberts. It is generally considered more conservative than the preceding Rehnquist Court, as a result of the retirement of moderate Justice Sandra Day O’Connor and the subsequent confirmation of the more conservative Justice Samuel Alito in her place.

After the death of Chief Justice Rehnquist, Roberts was nominated by President George W. Bush, who had previously nominated him to replace Sandra Day O’Connor. The Senate confirmed his nomination by a vote of 78-22. Roberts took the Constitutional oath of office, administered by senior Associate Justice John Paul Stevens at the White House, on September 29, 2005, almost immediately after his confirmation. On October 3, he took the judicial oath provided for by the Judiciary Act of 1789, prior to the first oral arguments of the 2005 term.

In its first five years, the Roberts court issued major rulings on gun control. affirmative action, campaign finance regulation, abortion, capital punishment and criminal sentencing.

14.5: Federal Judicial Appointments

14.5.1: The Nomination Process

It is the president’s responsibility to nominate federal judges and the Senate’s responsibility to approve or reject the nomination.

Learning Objective

Explain how the nomination process represents the systems of checks and balances in the Constitution

Key Points

• The U.S. Constitution establishes “checks and balances” among the powers of the executive, legislative and judiciary branches. The nomination process of federal judges is an important part of this system.
• The Appointments Clause of the United States Constitution empowers the president to appoint certain public officials with the “advice and consent” of the U.S. Senate.
• .
• Certain factors influence who the president chooses to nominate for the Supreme Court: composition of the Senate, timing of the election cycle, public approval rate of the president, and the strength of interest groups.
• After the president makes a nomination, the Senate Judiciary Committee studies the nomination and makes a recommendation to the Senate.

Key Terms

veto

A political right to disapprove of (and thereby stop) the process of a decision, a law, etc.

judiciary

The court system and judges considered collectively, the judicial branch of government.

Senate Judiciary Committee

A standing committee of the US Senate, the 18-member committee is charged with conducting hearings prior to the Senate votes on confirmation of federal judges (including Supreme Court justices) nominated by the President.

Checks and Balances

One of the theoretical pillars of the United States Constitution is the idea of checks and balances among the powers of the executive, legislative and judiciary branches. For example, while the legislative (Congress) has the power to create law, the executive (president) can veto any legislation; an act that can be overridden by Congress. The president nominates judges to the nation’s highest judiciary authority (Supreme Court), but Congress must approve those nominees. The Supreme Court, meanwhile, has the power to invalidate as unconstitutional any law passed by the Congress. Thus, the nomination and appointment process of federal judges serves as an important component of the checks and balances process.

The Appointment Clause of the Constitution

The president has the power to nominate candidates for Supreme Court and other federal judge positions based on the Appointments Clause of the United States Constitution. This clause empowers the president to appoint certain public officials with the “advice and consent” of the U.S. Senate. Acts of Congress have established 13 courts of appeals (also called “circuit courts”) with appellate jurisdiction over different regions of the country. Every judge appointed to the court may be categorized as a federal judge with approval from the Senate.

The Nomination Process

The president nominates all federal judges, who must then be approved by the Senate . The appointment of judges to lower federal courts is important because almost all federal cases end there. Through lower federal judicial appointments, a president “has the opportunity to influence the course of national affairs for a quarter of a century after he leaves office.” Once in office, federal judges can be removed only by impeachment and conviction. Judges may time their departures so that their replacements are appointed by a president who shares their views. For example, Supreme Court Justice Souter retired in 2009 and Justice Stevens in 2010, enabling President Obama to nominate – and the Democratic controlled Senate to confirm – their successors. A recess appointment is the appointment, by the President of the United States, of a senior federal official while the U.S. Senate is in recess. To remain in effect a recess appointment must be approved by the Senate by the end of the next session of Congress, or the position becomes vacant again; in current practice this means that a recess appointment must be approved by roughly the end of the next calendar year.

Chief Justice Roberts

John G. Roberts, Jr., Chief Justice of the United States of America. Federal judges, such as Supreme Court Justices, must be nominated.

Choosing Supreme Court Justices

In nominating Supreme Court justices, presidents seek to satisfy their political, policy and personal goals. They do not always succeed, as justices sometimes change their views over time or may surprise the president from the start. The following are some other factors that can influence a president’s choice of Supreme Court nominee:

1. Senate composition: Whether the president’s party has a majority or a minority in the Senate is a factor. In 1990, when the Democrats had a majority, Republican President George H. W. Bush nominated the judicially experienced and reputedly ideologically moderate David H. Souter, who was easily approved.
2. Timing: The closer to an upcoming presidential election the appointment occurs, the more necessary it is to appoint a highly qualified, noncontroversial figure acceptable to the Senate. Otherwise, senators have an incentive to stall until after the election.
3. Public approval of the president: The higher the president’s approval ratings, the more nominating leeway the president possesses. However, even presidents riding a wave of popularity can fail to get their nominees past the Senate, as was the case with Richard Nixon and his failed nominations of Clement Haynesworth and G. Harrold Carswell in 1970. So lacking were Carswell’s qualifications that a senator defended him saying, “Even if he were mediocre, there are a lot of mediocre judges and people and lawyers. They are entitled to a little representation…and a little chance.”
4. Interest groups: Nominees must be acceptable to interest groups that support the president. They also must be invulnerable to being depicted in ways that would significantly reduce their chances of Senate approval.

Nominations go to the Senate Judiciary Committee, which usually holds hearings. Whether senators should concern themselves with anything more than the nominee’s professional qualifications is often debated. Arguably, “nothing in the Constitution, historical experience, political practice, ethical norms, or statutory enactments prohibits senators from asking questions that reveal judicial nominees’ views on political and ideological issues.” The next step for the Judiciary Committee is to vote on whether or not to send the nomination to the Senate floor. If it reaches the floor, senators then can vote to confirm or reject the nomination, or filibuster so that a vote is delayed or does not take place. Fewer than half of recent nominees to the federal appeals courts have been confirmed.

14.5.2: The Confirmation Process

To be appointed as a federal judge, nominees must be confirmed by the Senate after being interviewed by a Committee.

Learning Objective

Explain the confirmation process for nominees to the U.S. Supreme Court

Key Points

• In modern times, the confirmation process has attracted considerable attention from special-interest groups, many of which lobby senators to confirm or to reject a nominee depending on whether the nominee’s track record aligns with the group’s views.
• The modern practice of the Committee questioning nominees on their judicial views began with the nomination of John Marshall Harlan II in 1955. The nomination came shortly after the Court handed down the landmark Brown v. Board of Education decision.
• A simple majority vote is required to confirm or to reject a nominee. Once the Committee reports out the nomination, the whole Senate considers it. Rejections are relatively uncommon; the Senate has explicitly rejected twelve Supreme Court nominees in its history.
• Once the Senate confirms the nomination by an affirmative vote, the President must prepare and sign a commission and have the Seal of the United States Department of Justice affixed to the document before the new Justice can take office.

Key Terms

Senate Judiciary Committee

A standing committee of the US Senate, the 18-member committee is charged with conducting hearings prior to the Senate votes on confirmation of federal judges (including Supreme Court justices) nominated by the President.

interest groups

The term interest group refers to virtually any voluntary association that seeks to publicly promote and create advantages for its cause. It applies to a vast array of diverse organizations. This includes corporations, charitable organizations, civil rights groups, neighborhood associations, and professional and trade associations.

John Marshall Harlan II

An American jurist who served as an Associate Justice of the Supreme Court from 1955 to 1971.

Background

Federal judicial appointments must go through a confirmation process before they are approved. During this process, a committee called the Senate Judiciary Committee conducts hearings, questioning nominees to determine their suitability. At the close of confirmation hearings, the Committee votes on whether the nomination should go to the full Senate with a positive, negative, or neutral report.

In modern times, the confirmation process has attracted considerable attention from special-interest groups, many of which lobby senators to confirm or to reject a nominee depending on whether the nominee’s track record aligns with the group’s views.

The Committees and Confirmation Process

The Senate Judiciary Committee personally interviews nominees, a practice that is relatively recent and began in 1925. The modern practice of the Committee questioning every nominee on their judicial views began with the nomination of John Marshall Harlan II in 1955. The nomination came shortly after the Court handed down the landmark Brown v. Board of Education decision, and several Southern senators attempted to block Harlan’s confirmation – hence the decision to testify.

A simple majority vote is required to confirm or to reject a nominee. Once the Committee reports out the nomination, the whole Senate considers it. Rejections are relatively uncommon; the Senate has explicitly rejected only twelve Supreme Court nominees in its history.

It is also possible for the President to withdraw a nominee’s name before the actual confirmation vote occurs. This usually happens when the President feels that the nominee has little chance of being confirmed. Supreme Court nominations have caused media speculation about whether the judge leans to the left, middle, or right. One indication of the politicized selection process is how much time each nominee spends being questioned under the glare of media coverage. Before 1925, nominees were never questioned; after 1955, every nominee has been required to appear before the Senate Judiciary Committee and answer questions. The number of hours hours spent being grilled has increased from single digits (before 1980) to double digits today.

The U.S. Supreme Court

The United States Supreme Court, the highest court in the United States, in 2010. Top row (left to right): Associate Justice Sonia Sotomayor, Associate Justice Stephen G. Breyer, Associate Justice Samuel A. Alito, and Associate Justice Elena Kagan. Bottom row (left to right): Associate Justice Clarence Thomas, Associate Justice Antonin Scalia, Chief Justice John G. Roberts, Associate Justice Anthony Kennedy, and Associate Justice Ruth Bader Ginsburg.

Once the Senate confirms the nomination by an affirmative vote, the President must prepare and sign a commission and have the Seal of the United States Department of Justice affixed to the document before the new Justice can take office. It is this act of the President which officially commences the beginning of an individual Justice’s tenure.

13.2: The Organization of Bureaucracy

13.2.1: Cabinet Departments

Learning Objective

Describe the constitutional origin of the Cabinet and the shape of its growth Washington’s presidency

Key Points

• Cabinet members are appointed by the president and serve as the president’s primary advisors.
• Cabinet members carry out numerous domestic and foreign affairs.
• George Washington established the first cabinet by appointing four departmental leaders as his main advisors.

Key Terms

executive department

An executive organ that serves at the disposal of the president and normally acts as an advisory body to the presidency.

Cabinet

A governmental group composed of the most senior appointed officers of the executive branch of the federal government of the United States who are generally the heads of the federal executive departments.

line of succession

An ordered sequence of named people who would succeed to a particular office upon the death, resignation, or removal of the current occupant.

Example

• The attorney general is an example of a cabinet member, and oversees the executive Department of Justice.

The Cabinet of the United States consists of the highest-ranking appointed officers in the executive branch of the federal government: the secretaries of each of the 15 executive departments. These Cabinet members preside over bureaucratic operations and serve as advisors to the president. All secretaries are directly accountable to the president, and they do not have the power to enforce any policy recommendations outside of their department.

The president nominates secretaries to their offices, and the Senate votes to confirm them. Secretaries are not subject to elections or term limits, but most turnover when a new political party wins the presidency.

Structure of the Cabinet Departments

Each of the Cabinet departments is organized with a similar hierarchical structure. At the top of each department is the secretary (in the Department of Justice, the highest office is called the “attorney general,” but the role is parallel to that of the secretary of state, defense, etc.).

Beneath the secretary, each executive department has a deputy secretary. The deputy secretary advises and assists the secretary, and fills the Office of Secretary if it becomes vacant. The deputy secretary is nominated by the president, just as the secretary is.

Below the level of deputy secretary, departmental organization varies. Most departments have several under secretaries, who preside over specific branches of the organization rather than being accountable for the functioning of the entire department, as the secretary and deputy secretary are. Under secretaries are appointed by the president, but range in prestige depending on the size of the department they are employed in and the breadth of affairs they oversee.

Finally, each department has its own staff. Departmental staffs are not appointed by the president, but instead are hired by internal supervisors (such as under secretaries). Staff qualifications and duties range widely by department. For example, national park service employees are considered staff of the Department of the Interior, but some may work on policy in Washington, while others tend to conservation in Yellowstone. Likewise, military staff includes soldiers on active duty who are not administrative employees but are nonetheless under the purview of the Department of Defense.

Taken as a group, the executive departments employ over 4 million people and have an operating budget of over $2.3 trillion.

History of the Cabinet

The first president of the United States, George Washington, established the tradition of having a cabinet of advisors. The U.S. Constitution specifically calls for the creation of executive departments, but it only addresses the leaders of executive departments to specify that as unelected officials they must answer to the president and do not have the power to enforce their recommendations. George Washington thus began the practice of having a formal cabinet of advisors when he appointed Secretary of State Thomas Jefferson, Secretary of the Treasury Alexander Hamilton, Secretary of War Henry Knox, and Attorney General Edmund Randolph. 

The three oldest executive departments are the Department of State, the Department of War, and the Treasury, all of which were established in 1789. The Department of War has since been subsumed by the Department of Defense, and many other executive departments have been formed.

The Line of Succession

The secretaries are formally in the line of presidential succession, after the vice president, speaker of the house, and president pro tempore of the Senate. In other words, if the president, vice president, speaker, and president pro temopre were all incapacitated by death, resignation, or impeachment, the Cabinet members would ascend to the Office of President in a predetermined order. The order of the departments, and the roles of the secretaries of each department, is as follows:

• State: The Secretary of State oversees international relations.
• Treasury: The Secretary of the Treasury is concerned with financial and monetary issues.
• Defense: The Secretary of Defense supervises national defense and the armed forces.
• Justice: The Attorney General is responsible for law enforcement.
• Interior: The Secretary of the Interior oversees federal land and natural resource use.
• Agriculture: The Secretary of Agriculture advises policy on food, farming, and agricultural trade.
• Commerce: The Secretary of Commerce is concerned with economic growth.
• Labor: The Secretary of Labor is responsible for occupational safety and workplace regulation.
• Health and Human Services: The Secretary of Health and Human Services is charged with ensuring the health and well being of Americans.
• Housing and Urban Development: The Secretary of Housing and Urban Development administers affordable housing and city planning.
• Transportation: The Secretary of Transportation oversees transportation infrastructure and policies.
• Energy: The Secretary of Energy is responsible for research into energy sources and the handling of nuclear material.
• Education: The Secretary of Education oversees public schools.
• Veterans Affairs: The Secretary of Veterans Affairs coordinates programs and benefits for veterans
• Homeland Security: The Secretary of Homeland Security is responsible for domestic security measures

In addition to the secretaries of the established executive departments, there are some cabinet-level officers who are the heads of independent executive agencies. These agencies do not answer to the president directly and, therefore, there are no executive departments strictly speaking. Still, their heads are considered high ranking advisors to the president. These cabinet-level officers include the vice president, the chief of staff, the director of the Office of Management and Budget, the administrator of the Environmental Protection Agency, the trade representative, the ambassador to the United Nations, the chairman of the Council of Economic Advisors, and the administrator of the Small Business Administration.

Department of Justice Seal

The attorney general is the head of the Department of Justice, and is a prominent cabinet member.

13.2.2: Independent Agencies

Learning Objective

Differentiate between executive agencies and executive departments

Key Points

• Executive agencies operate as services and/or regulatory agencies and are distinct because they exist independently from other executive departments.
• In executive agencies, the president can terminate people’s positions only if there is proof of removal according to statutory provisions.
• Most executive agencies need to have bipartisan membership and presidents cannot just remove and rehire for positions.

Key Terms

executive department

An executive organ that serves at the disposal of the president and normally acts as an advisory body to the presidency.

executive agency

A permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions.

enabling act

A piece of legislation by which a legislative body grants an entity which depends on it for authorization or legitimacy the power to take certain actions.

Example

• The Federal Communication Commission (FCC) is an example of an executive agency, and acts as an outpost of the executive government to regulate communications technology and media in the U.S.

In the United States federal government, Congress and the President have the ability to delegate authority to independent executive agencies, sometimes called federal agencies or administrative agencies. These agencies are distinct from executive departments because they have some degree of independence from the President. In executive departments, department heads are nominated by the President and confirmed by Congress, and can be removed from their posts for political reasons. Department heads, who comprise the Cabinet, therefore often turn over when a new president is elected. For example, the Secretary of State is a high status position that a high ranking diplomat in the leading political party usually fills. Unlike in executive departments, the leaders of agencies can only be removed from office for corruption charges under statutory provisions. Even though the president appoints them, agency leadership is non-partisan, or independent from Presidential politics and election turn over.

The leaders of agencies often participate as members of commissions, boards, or councils with internal structures resembling tripartite government. That is, a single agency may “legislate” by producing regulations; “adjudicate” by resolving disputes between parties; and “enforce” by penalizing regulation violations. To illustrate this point, consider one independent agency — the Federal Communication Commission (FCC). The FCC oversees media in the United States. One notorious function of the FCC is to regulate decency on television. To carry out this function, the FCC sets regulations defining what television programming is decent and what is indecent; if a station is accused of violating these regulations, the complaint is brought to the FCC; if the FCC finds that the programming was a violation of regulations regarding decency, it may fine the station.

Other independent executive agencies include the CIA (Central Intelligence Agency), the NASA (National Aeronautics and Space Administration) and the EPA (Environmental Protection Agency). The CIA helps gather intelligence and provides national security assessments to policymakers in the United States. It acts as the primary human intelligence provider for the federal government. The National Aeronautics and Space Administration NASA, is a government agency responsible for the civilian space program as well as aeronautics and aerospace research. The EPA was created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress. EPA enforcement powers include fines, sanctions, and other measures. 

The U.S. Constitution does not explicitly reference federal agencies. Instead, these agencies are generally justified by acts of Congress designed to manage delineated government functions, such as the maintenance of infrastructure and regulation of commerce. Congress passes statutes called enabling acts that define the scope of agencies’ authority. Once created, agencies are considered part of the executive branch of government and are partly regulated by government parties. However, executive agencies have to remain nonpartisan.

Federal Communications Commission

The Federal Communications Commission (FCC) is one of many independent executive agencies.

13.2.3: Regulatory Commissions

Learning Objective

Use the work of the FDA as an example to describe the activity and mission of regulatory agencies more broadly

Key Points

• Independent regulatory agencies are situated in the executive branch of the government but are not directly under the control of the President.
• Regulatory agencies conduct investigations and audits to ensure that industries and organizations do not pose threats to public safety or well-being.
• Regulatory agencies are intended to be transparent, such that they are accountable to public oversight and legal review.

Key Terms

regulatory agency

A public authority or government agency responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity.

Food and Drug Administration

An agency of the United States Department of Health and Human Services, one of the United States federal executive departments, responsible for protecting and promoting public health.

Example

• The Food and Drug Administration (FDA) is an independent regulatory agency intended to promote public health by overseeing food and drug safety.

A regulatory agency is a body in the U.S. government with the authority to exercise authority over some area of human activity in a supervisory capacity. An independent regulatory agency is separate from the other branches of the federal government. These agencies are within the purview of the executive branch of government, but are internally regulated rather than subject to the direct control of the President.

Regulatory agencies exist to supervise the administrative functions of organizations for the benefit of the public at large. To carry out this function, regulatory agencies are composed of experts in a specific policy area of administrative law, such as tax or health codes. Agencies may carry out investigations or audits to determine if organizations are adhering to federal regulations.

To better understand how independent regulatory agencies function, let us consider the U.S. Food and Drug Administration (FDA). The FDA’s mission is to promote public health by regulating the production, distribution, and consumption of food and drugs. When a pharmaceutical company produces a new drug, the manufacturers must submit it to the FDA for approval. The FDA employs experts in pharmaceuticals and drug safety, who evaluate the potential benefits and consequences of the drug. Following reports on the safety of the drug, the FDA determines whether it can be distributed, to whom it can be distributed, and under what conditions it can be safely consumed. The FDA thus uses internal expertise to regulate the pharmaceutical industry.

Regulatory agencies are authorized to produce and enforce regulations by Congress, and are subject to Congressional and legal review as they carry out their functions. Congress may determine that regulatory agencies are obsolete, for example, and may therefore discontinue funding them. Similarly, Congress may choose to expand the authority of a regulatory agency in response to a perceived threat to public safety. Additionally, regulatory agencies are designed to be transparent, such that their decisions and activities are able to be evaluated by the public and by legal review boards.

Food and Drug Administration Regulations

The FDA sets regulations governing which drugs can be distributed over the counter and which require a prescription based on an expert evaluation of the drug’s effects.

13.2.4: Government Corporations

Learning Objective

Differentiate between a government-owned corporation, a government-sponsored enterprise, and organizations chartered by the government that provide public services

Key Points

• In many cases, the government owns a controlling share of a corporation’s stock but does not directly operate the corporation.
• Government-sponsored enterprises are financial services corporations that the government backs in order to provide low cost loans for economic development.
• Government-acquired corporations are those companies that come under government control as a result of unpaid debts or unfulfilled contracts, which are usually returned to private sector control after a time.

Key Terms

government corporation

a legal entity created by a government to undertake commercial activities on behalf of an owner government

government-sponsored enterprise

A group of financial services corporations created by Congress that are structured and regulated by the US government to enhance the availability and reduce the cost of credit to targeted borrowing sectors.

government-owned corporation

A legal entity created by a government to undertake commercial activities on behalf of an owner government; their legal status varies from being a part of government to being a private enterprise in which the government holds a majority of stock.

Example

• Fannie Mae and Freddie Mac are examples of government-sponsored enterprises that provide loans for mortgages and real estate investment.

A government-owned corporation, also known as a state-owned company, state enterprise, publicly owned corporation, or commercial government agency, is a legal entity created by a government to undertake commercial activities on behalf of the government. In some cases, government-owned corporations are considered part of the government, and are directly controlled by it. In other instances, government-owned corporations are similar to private enterprises except that the government is the majority stockholder. Government-owned agencies sometimes have public policy functions, but unlike other executive agencies, are primarily intended to bring in revenue.

In the United States, there is a specific subset of government-owned corporations known as government-sponsored enterprises (GSEs). GSEs are financial services corporations created by Congress to increase the availability of low cost credit to particular borrowing sectors. The first GSE in the United States was the Farm Credit System in 1916, which made loans available for agricultural expansion and development. Currently, the largest segment of GSEs operates in the mortgage borrowing segment. Fannie Mae, Freddie Mac, and the twelve Federal Home Loan Banks operate as independent corporations and provide loans for mortgages and real estate development. However, the government possesses sufficient stock to claim 79.9% ownership of the corporations, should it choose to do so.

In addition to the financial sector GSEs, the U.S. government has chartered corporations that are legally distinct from the government (unlike federal agencies) but that provide public services. These chartered corporations sometimes receive money from the federal government, but are largely responsible for generating their own revenue. Corporations in this category include the Corporation for Public Broadcasting, the National Fish and Wildlife Foundation, The National Park Foundation, and many others.

Lastly, the government sometimes controls government acquired corporations–corporations that were not chartered or created by the government, but which it comes to possess and operate. These corporations are usually controlled by the government only temporarily, often as the result of government seizure due to unpaid debts. For example, a delinquent taxpayer’s property may be repossessed by the government. Government acquired corporations are generally sold at auction or returned to the original controller once debts are repaid.

13.3: Functions of Bureaucracy

13.3.1: Promoting Public Welfare and Income Redistribution

Social welfare programs seek to provide basic social protections for all Americans.

Learning Objective

Identify key legislative milestones designed to promote public welfare

Key Points

• President Roosevelt implemented public welfare programs, such as Social Security, to mitigate the devastating effects of the Great Depression.
• President Johnson continued the effort to promote public welfare in the 1960s by implementing programs such as Medicaid and Medicare.
• Contemporary politicians commit themselves to promoting the public welfare through the passage of laws such as the Affordable Care Act.

Key Terms

Great Society

A set of domestic programs in the United States announced by President Lyndon B. Johnson at Ohio University and subsequently promoted by him and fellow Democrats in Congress in the 1960s. Two main goals of the Great Society social reforms were the elimination of poverty and racial injustice. New major spending programs that addressed education, medical care, urban problems, and transportation were launched during this period

New Deal

The New Deal was a series of economic programs enacted in the United States between 1933 and 1936. They involved presidential executive orders or laws passed by Congress during the first term of President Franklin D. Roosevelt. The programs were in response to the Great Depression, and focused on what historians call the “3 Rs”: Relief, Recovery, and Reform.

Affordable Care Act

A law promoted by President Obama and passed by Congress in 2010 to improve access to health care for Americans.

The American government is charged with keeping Americans safe and promoting their wellbeing. Americans vote for candidates whom they believe have their best interests in mind; American political candidates (and the bureaucracy they marshall) seek to implement policies that will support the welfare of the American public. This is primarily achieved through social service programing.

The United States has a long political history of seeking to implement policy to promote public welfare. One of the most well-known initiatives to improve public welfare in times of need was President Franklin D. Roosevelt’s response to the Great Depression. Following the stock market crash of 1929, President Roosevelt invested unprecedented governmental funds into the expansion of the executive bureaucracy in order to employ Americans and mitigate the extreme financial decline of the era. President Roosevelt’s program was called the New Deal and is partially credited with lifting America out of the Great Depression. Under the auspices of the New Deal, President Roosevelt implemented programs that have lasted to the present day, such as Social Security . Thirty years later, President Lyndon B. Johnson assisted with the implementation of his Great Society initiative. President Johnson’s programs weren’t in response to economic decline, but rather solely sought to improve the welfare of the American public. President Johnson sought to improve racial and economic equality. He did so through the establishment of programs such as Medicare and Medicaid– federal programs that exist to the present day that ensure certain levels of health care coverage for America’s poor and elderly.The Great Society initiative further established educational programs such as the National Endowment for the Arts and generally deployed the executive bureaucracy to better welfare programs for the American public at large.

More Security for the American Family

This image from the 1930s depicts a poster promoting the new Social Security program. Social Security exists to this day as a federal program to promote public welfare.

Current American politicians also attempt to ensure that programs exist to promote public welfare. Given downturn in the American economy since 2008, many public welfare programs have been cut due to lack of public resources. However, the federal government has, in some areas, reorganized funding to promote programs for public wellbeing. The gesture to improving the wellbeing of the public writ large is represented by President Obama’s 2010 law to increase public access to health insurance. This law is called the Affordable Care Act, but is more commonly known as Obamacare. Liberals and conservatives are divided on the merits of the law, but regardless of one’s political assessment of the law, it speaks to the government’s attempts to improve the wellbeing of the public.

13.3.2: Providing National Security

National security is the protection of the state through a variety of means that include military might, economic power, and diplomacy.

Learning Objective

Name the government departments and agencies responsible for national defense

Key Points

• Specific measures taken to ensure national security include using diplomacy to rally allies, using economic power to facilitate cooperation, maintaining effective armed forces, and using intelligence and counterintelligence services to detect and defeat internal and external threats.
• Within the United States, there are a variety of governmental departments and agencies responsible for developing policies to ensure national security.
• These organizations include the Department of Defense, the Department of Homeland Security, the Central Intelligence Agency, and the White House National Security Council.

Key Terms

counterintelligence

counterespionage

infrastructure

The basic facilities, services and installations needed for the functioning of a community or society

espionage

The act or process of learning secret information through clandestine means.

Example

• These organizations include the Department of Defense, the Department of Homeland Security, the Central Intelligence Agency, and the White House National Security Council.

Providing National Security

National security, a concept which developed mainly in the United States after World War II, is the protection of the state and its citizens through a variety of means, including military might, economic power, diplomacy, and power projection.

Specific measures taken to ensure national security include:

• using diplomacy to rally allies and isolate threats;
• marshaling economic power to facilitate or compel cooperation;
• maintaining effective armed forces;
• implementing civil defense and emergency preparedness measures (including anti-terrorism legislation);
• ensuring the resilience and redundancy of critical infrastructure; using intelligence services to detect and defeat or avoid threats and espionage, and to protect classified information;
• using counterintelligence services or secret police to protect the nation from internal threats.

There are a variety of governmental departments and agencies within the United States that are responsible for developing policies to ensure national security. The Department of Defense is responsible for coordinating and supervising all agencies and functions of the government concerned directly with the U.S. Armed Forces. The Department—headed by the Secretary of Defense—has three subordinate military departments: the Department of the Army, the Department of the Navy, and the Department of the Air Force. The Department of Homeland Security, established after the September 11, 2001 attacks, is responsible for working within the civilian sphere to protect the country from and respond to terrorist attacks, man-made accidents, and natural disasters.

The Central Intelligence Agency is part of the Executive Office of the President of the United States. It is responsible for providing national security intelligence assessments, performed by non-military commissioned civilian intelligence agents, to senior U.S. policymakers. The White House National Security Council is the principal forum used by the President for considering national security and foreign policy matters with his senior national security advisers, and Cabinet officials.

the Central Intelligence Agency

the Central Intelligence Agency, responsible for providing national security intelligence assessments

13.3.3: Maintaining a Strong Economy

Within the United States, there are numerous government departments and agencies responsible for maintaining a strong economy.

Learning Objective

Differentiate between the various departments and agencies responsible for the health of the economy

Key Points

• The Department of Commerce is the Cabinet department of the U.S. government concerned with promoting economic growth.
• The Federal Reserve is the central banking system of the United States, conducting the nation’s monetary policy, supervising and regulating banking institutions, maintaining the stability of the financial system, and providing financial services to U.S. and global institutions.
• The Federal Trade Commission promotes consumer protection and the elimination and prevention of anti-competitive business practices, such as coercive monopoly.

Key Terms

monopoly

An exclusive control over the trade or production of a commodity or service through exclusive possession.

currency

Money or other items used to facilitate transactions.

Within the United States, there are numerous government departments and agencies responsible for maintaining a strong economy.

The Department of Commerce is the Cabinet department of the U.S. government concerned with promoting economic growth. Among its tasks are gathering economic and demographic data for business and government decision-making, issuing patents and trademarks, and helping to set industrial standards. Organizations within the Department of Commerce include the Census Bureau, the Bureau of Economic Analysis, and the International Trade Administration.

The Department of the Treasury is an executive department and the treasury of the U.S. government. It prints and mints all paper currency and coins in circulation through the Bureau of Engraving and Printing and the United States Mint. The Department also collects all federal taxes through the Internal Revenue Service and manages U.S. government debt instruments. The Federal Reserve is the central banking system of the United States, which conducts the nation’s monetary policy, supervises and regulates banking institutions, maintains the stability of the financial system, and provides financial services to depository institutions, the U.S. government, and foreign official institutions.

the Federal Reserve

The seal of the Federal Reserve.

The Office of the United States Trade Representative is the government agency responsible for developing and recommending U.S. trade policy to the President, conducting trade negotiations at bilateral and multilateral levels, and coordinating trade policy within the government through the interagency Trade Policy Staff Committee (TPSC) and Trade Policy Review Group (TPRG). The Federal Trade Commission promotes consumer protection and the elimination and prevention of anti-competitive business practices, such as coercive monopoly.The Small Business Administration provides support to entrepreneurs and small businesses by providing loans, contracts, and counseling.

13.3.4: Making Policy

The actual development and implementation of policies are under the purview of different bureaucratic institutions.

Learning Objective

Differentiate between cabinet departments, independent executive agencies, government corporation, and regulatory agencies in making policy

Key Points

• Fifteen agencies are designated by law as cabinet departments, which are major administrative units responsible for specified areas of government operations.
• The remaining government organizations within the executive branch outside of the presidency are independent executive agencies, such as NASA, the EPA, and the SSA.
• Some agencies, such as the U.S. Postal Service and the national rail passenger system, Amtrak, are government corporations, which charge fees for services too far-reaching or too unprofitable for private corporations to handle.
• Another type of bureaucratic institution is a regulatory commission, an agency charged with writing rules and arbitrating disputes in a specific part of the economy.

Key Terms

regulatory

Of or pertaining to regulation.

bureaucratic

Of or pertaining to bureaucracy or the actions of bureaucrats.

Making Policy

The executive and legislative branches of the United States pass and enforce laws. However, the actual development and implementation of policies are under the purview of different bureaucratic institutions mainly comprised cabinet departments, independent executive agencies, government corporations, and regulatory agencies.

Fifteen agencies are designated by law as cabinet departments, which are major administrative units responsible for specified areas of government operations. Examples of cabinet departments include the Department of Defense, State, and Justice. Each department controls a detailed budget appropriated by Congress and has a designated staff. Each is headed by a department secretary appointed by the President and confirmed by the Senate. Many departments subsume distinct offices directed by an assistant secretary. For instance, the Interior Department includes the National Park Service, the Bureau of Indian Affairs, and the U.S. Geological Survey.

The remaining government organizations within the executive branch outside of the presidency are independent executive agencies. The best known include the National Aeronautics and Space Administration (NASA), the Environmental Protection Agency (EPA), and the Social Security Administration (SSA). Apart from a smaller jurisdiction, such agencies resemble cabinet departments. Their heads are confirmed by Congress, though they are appointed by and report directly to the President.

NASA

NASA is an example of an independent executive agency

Some agencies, such as the U.S. Postal Service and Amtrak (the national rail passenger system) are government corporations. They charge fees for services too far-reaching or too unprofitable for private corporations to handle. Ideally, they bring in enough funds to be self-sustaining. To help them make ends meet, Congress may give government corporations a legal monopoly over given services, provide subsidies, or both. Government corporations are more autonomous in policymaking than most agencies. For instance, the Postal Rate Commission sets rates for postage on the basis of revenues and expenditures.

Another type of bureaucratic institution is a regulatory commission, an agency charged with writing rules and arbitrating disputes in a specific part of the economy. Chairs and members of regulatory commissions are named by the president and confirmed by the Senate to terms of fixed length from which they cannot be summarily dismissed. Probably the most prominent regulatory commission currently in the news is the Federal Reserve Board.

13.3.5: Making Agencies Accountable

The institution responsible for ensuring that government agencies are held accountable is the Government Accountability Office (GAO).

Learning Objective

Describe the role the GAO plays in holding government agencies accountable

Key Points

• The GAO is the audit, evaluation, and investigative arm of the United States Congress and conducts financial and performance audits.
• Over the years, GAO has been referred to as “The Congressional Watchdog” and “The Taxpayers’ Best Friend” for its frequent audits and investigative reports that have uncovered waste and inefficiency in government.
• The GAO also establishes standards for audits of government organizations, programs, activities, and functions, and of government assistance received by contractors, nonprofit organizations, and other nongovernmental organizations.
• The GAO is headed by the Comptroller General of the United States, a professional and non-partisan position in the U.S. government.

Key Term

audit

An independent review and examination of records and activities to assess the adequacy of system controls, to ensure compliance with established policies and operational procedures, and to recommend necessary changes in controls, policies, or procedures

The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress. It is responsible for ensuring that government agencies are held accountable. The GAO’s auditors conduct not only financial audits, but also engage in a wide assortment of performance audits.

The Government Accountability Office

The GAO is the audit, evaluation, and investigative arm of the United States Congress.

Over the years, GAO has been referred to as “The Congressional Watchdog” and “The Taxpayers’ Best Friend” for its frequent audits and investigative reports that have uncovered waste and inefficiency in government. The news, media, and television often draw attention to GAO’s work by covering stories on the findings, conclusions, and recommendations in GAO reports. In addition, members of Congress frequently cite GAO’s work in statements to the press, congressional hearings, and floor debates on proposed legislation.

The GAO also establishes standards for audits of government organizations, programs, activities, and functions, and of government assistance received by contractors, nonprofit organizations, and other nongovernmental organizations. These standards, often referred to as Generally Accepted Government Auditing Standards (GAGAS), must be followed by auditors and audit organizations when required by law, regulation, agreement, contract, or policy. These standards pertain to auditors’ professional qualifications, the quality of audit effort, and the characteristics of professional and meaningful audit reports.

The GAO is headed by the Comptroller General of the United States, a professional and non-partisan position in the U.S. government. The Comptroller General is appointed by the President, with the advice and consent of the Senate, for a 15-year, non-renewable term. Since 1921, there have been only seven Comptrollers General, and no formal attempt has ever been made to remove a Comptroller General.

13.4: Bureaucratic Reform

13.4.1: Bureaucratic Reform

Bureaucratic reform in the U.S. was a major issue in the late 19th century and the early 20th century.

Learning Objective

Describe the key moments in the history of bureaucratic reform, including the Tenure of Office Acts, the Pendleton Act, the Hatch Acts, and the Civil Service Reform Acts.

Key Points

• The five important civil service reforms were the two Tenure of Office Acts of 1820 and 1867, the Pendleton Act of 1883, the Hatch Acts (1939 and 1940) and the CSRA of 1978.
• The Civil Service Reform Act (the Pendleton Act) is an 1883 federal law that established the United States Civil Service Commission, placing most federal employees on the merit system and marking the end of the so-called “spoils system”.
• The CSRA was an attempt to reconcile the need for improved performance within bureaucratic organizations with the need for protection of employees.

Key Terms

patronage

granting favours, giving contracts or making appointments to office in return for political support

spoils system

The systematic replacement of office holders every time the government changed party hands.

merit

Something deserving good recognition.

merit system

the process of promoting and hiring government employees based on their ability to perform a job, rather than on their political connections

Bureaucratic reform in the United States was a major issue in the late nineteenth century at the national level and in the early twentieth century at the state level. Proponents denounced the distribution of office by the winners of elections to their supporters as corrupt and inefficient. They demanded nonpartisan scientific methods and credentials be used to select civil servants. The five important civil service reforms were the two Tenure of Office Acts of 1820 and 1867, the Pendleton Act of 1883, the Hatch Acts (1939 and 1940), and the Civil Service Reform Act (CSRA) of 1978.

In 1801, President Thomas Jefferson, alarmed that Federalists dominated the civil service and the army, identified the party affiliation of office holders, and systematically appointed Republicans. President Andrew Jackson in 1829 began the systematic rotation of office holders after four years, replacing them with his own partisans. By the 1830s, the “spoils system” referred to the systematic replacement of office holders every time the government changed party hands.

The Civil Service Reform Act (the Pendleton Act) is an 1883 federal law that established the United States Civil Service Commission. It eventually placed most federal employees on the merit system and marked the end of the so-called “spoils system. ” Drafted during the Chester A. Arthur administration, the Pendleton Act served as a response to President James Garfield’s assassination by a disappointed office seeker.

Chester A. Arthur

The Pendleton Act was passed under Chester A. Arthur’s administration.

The new law prohibited mandatory campaign contributions, or “assessments,” which amounted to 50-75% of party financing during the Gilded Age. Second, the Pendleton Act required entrance exams for aspiring bureaucrats. One result of this reform was more expertise and less politics among members of the civil service. An unintended result was political parties’ increasing reliance on funding from business, since they could no longer depend on patronage hopefuls.

The CSRA became law in 1978. Civil service laws have consistently protected federal employees from political influence, and critics of the system complained that it was impossible for managers to improve performance and implement changes recommended by political leaders. The CSRA was an attempt to reconcile the need for improved performance with the need for protection of employees.

13.4.2: Termination

Bureaucratic reform includes the history of civil service reform and efforts to curb or eliminate excessive bureaucratic red tape.

Learning Objective

Describe the efforts undertaken to reform the civil service

Key Points

• A bureaucracy is a group of specifically non-elected officials within a government or other institution that implements the rules, laws, ideas, and functions of their institution. A bureaucrat is a member of a bureaucracy and can comprise the administration of any organization of any size.
• Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism, representation and democratic character of a bureaucracy, with a view to promoting better delivery of public goods and services, with increased accountability.
• Red tape is excessive regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents action or decision-making.
• The “cutting of red tape” is a popular electoral and policy promise. In the United States, a number of committees have discussed and debated Red Tape Reduction Acts.

Key Terms

civil service reform

Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism, representation and democratic character of a bureaucracy, with a view to promoting better delivery of public goods and services, with increased accountability.

bureaucracy

Structure and regulations in place to control activity. Usually in large organizations and government operations.

red tape

A derisive term for regulations or bureaucratic procedures that are considered excessive or excessively time- and effort-consuming.

Example

• The Pendleton Civil Service Reform of United States is a federal law established in 1883 that stipulated that government jobs should be awarded on the basis of merit. The act provided selection of government employees competitive exams, rather than ties to politicians or political affiliation. It also made it illegal to fire or demote government employees for political reasons and prohibits soliciting campaign donations on Federal government property.

Introduction

A bureaucracy is a group of specifically non-elected officials within a government or other institution that implements the rules, laws, ideas, and functions of their institution. In other words, a government administrative unit that carries out the decisions of the legislature or democratically-elected representation of a state. Bureaucracy may also be defined as a form of government: “government by many bureaus, administrators, and petty officials. A government is defined as: “the political direction and control exercised over the actions of the members, citizens, or inhabitants of communities, societies, and states; direction of the affairs of a state, community, etc.” On the other hand democracy is defined as: “government by the people; a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system”, thus not by non-elected bureaucrats.

A bureaucrat is a member of a bureaucracy and can comprise the administration of any organization of any size, though the term usually connotes someone within an institution of government. Bureaucrat jobs were often “desk jobs” (the French for “desk” being bureau, though bureau can also be translated as “office”), though the modern bureaucrat may be found “in the field” as well as in an office.

Civil Service Reform

A civil servant is a person in the public sector employed for a government department or agency. The term explicitly excludes the armed services, although civilian officials can work at “Defence Ministry” headquarters. Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism, representation and democratic character of a bureaucracy, with a view to promoting better delivery of public goods and services, with increased accountability. Such actions can include data gathering and analysis, organizational restructuring, improving human resource management and training, enhancing pay and benefits while assuring sustainability under overall fiscal constraints, and strengthening measures for public participation, transparency, and combating corruption. Important differences between developing countries and developed countries require that civil service and other reforms first rolled out in developed countries be carefully adapted to local conditions in developing countries.

The Problem of Bureaucratic Red Tape

Red tape is excessive regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents action or decision-making . It is usually applied to governments, corporations and other large organizations.Red tape generally includes filling out paperwork, obtaining licenses, having multiple people or committees approve a decision and various low-level rules that make conducting one’s affairs slower, more difficult, or both. Red tape can also include “filing and certification requirements, reporting, investigation, inspection and enforcement practices, and procedures. ” The “cutting of red tape” is a popular electoral and policy promise. In the United States, a number of committees have discussed and debated Red Tape Reduction Acts.

Bureaucratic Red Tape

Bundle of U.S. pension documents from 1906 bound in red tape.

Examples of Bureaucratic Reform in the United States

The Pendleton Civil Service Reform of United States is a federal law established in 1883 that stipulated that government jobs should be awarded on the basis of merit. The act provided selection of government employees competitive exams, rather than ties to politicians or political affiliation. It also made it illegal to fire or demote government employees for political reasons and prohibits soliciting campaign donations on Federal government property. To enforce the merit system and the judicial system, the law also created the United States Civil Service Commission. A crucial result was the shift of the parties to reliance on funding from business, since they could no longer depend on patronage hopefuls.

The Paperwork Reduction Act of 1980 is a United States federal law enacted in 1980 that gave authority over the collection of certain information to the Office of Management and Budget (OMB). Within the OMB, the Office of Information and Regulatory Affairs (OIRA) was established with specific authority to regulate matters regarding federal information and to establish information policies. These information policies were intended to reduce the total amount of paperwork handled by the United States government and the general public. A byproduct is that it has become harder to track internal transfers to tax havens in Consolidated Corporate Income Tax returns.

13.4.3: Devolution

Devolution is the statutory granting of powers from central government to government at a regional, local, or state level.

Learning Objective

Describe the relationship between a central government and a subordinate entity in possession of certain “devolved” powers

Key Points

• Devolution differs from federalism in that the devolved powers of the subnational authority may be temporary and ultimately reside in central government.
• In the United States, the District of Columbia is a devolved government. The District is separate from any state and has its own elected government.
• Local governments like municipalities, counties, parishes, boroughs and school districts are devolved. They are established and regulated by the constitutions or laws of the state in which they reside.

Key Term

statutory

Of, relating to, enacted or regulated by a statute.

Devolution is the statutory granting of powers from central government to government at a regional, local, or state level. The power to make legislation relevant to the area may also be granted. Devolution differs from federalism in that the devolved powers of the subnational authority may be temporary and ultimately reside in central government. Legislation creating devolved parliaments or assemblies can be repealed or amended by central government in the same way as any statute. Federal systems differ in that state or provincial government is guaranteed in the constitution.

The District of Columbia in the Unites States offers an illustration of devolved government. The District is separate from any state and has its own elected government, which operates much like other state with its own laws and court system. However, the broad range of powers reserved for the 50 states cannot be voided by any act of U.S. federal government. The District of Columbia is constitutionally under the control of the United States Congress, which created the current District government. Any law passed by District legislature can be nullified by Congressional action. Indeed, the District government itself could be significantly altered by a simple majority vote in Congress.

District of Colmbia

The District of Columbia is an example of devolved government.

In the United States, local governments are subdivisions of states, while the federal government, state governments and federally recognized American Indian tribal nations are recognized by the United States Constitution. Theoretically, a state could abolish all local governments within its borders.

Local governmental entities like municipalities, counties, parishes, boroughs and school districts are devolved. This is because they are established and regulated by the constitutions or laws of the state in which they reside. In most cases, U.S. state legislatures have the power to change laws that affect local government. The governor of some states may also have power over local government affairs.

13.4.4: Privatization

Privatization is the process of transferring ownership of a business from the public sector to the private sector.

Learning Objective

Differentiate between two different senses of privatization

Key Points

• Privatization can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
• Privatization has also been used to describe two unrelated transactions: the buying of all outstanding shares of a publicly traded company by a single entity, making the company private, or the demutualization of a mutual organization or cooperative to form a joint stock company.
• Outsourcing is the contracting out of a business process, which an organization may have previously performed internally or has a new need for, to an independent organization from which the process is purchased back as a service.
• Though the practice of purchasing a business function—instead of providing it internally—is a common feature of any modern economy, the term outsourcing became popular in America near the turn of the 21st century.

Key Terms

outsourcing

The transfer of a business function to an external service provider

privatization

The transfer of a company or organization from government to private ownership and control.

Example

• Privatization of government functions is evidenced in the administration of transportation, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years.

Introduction

Privatization can have several meanings. Primarily, it is the process of transferring ownership of a business, enterprise, agency, public service, or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management. Privatization has also been used to describe two unrelated transactions. The first is the buying of all outstanding shares of a publicly traded company by a single entity, making the company private. This is often described as private equity. The second is a demutualization of a mutual organization or cooperative to form a joint stock company.

Outsourcing is the contracting out of a business process, which an organization may have previously performed internally or has a new need for, to an independent organization from which the process is purchased back as a service. Though the practice of purchasing a business function—instead of providing it internally—is a common feature of any modern economy, the term outsourcing became popular in America near the turn of the 21^st century. An outsourcing deal may also involve transfer of the employees and assets involved to the outsourcing business partner. The definition of outsourcing includes both foreign or domestic contracting, which may include offshoring, described as “a company taking a function out of their business and relocating it to another country.”

Some privatization transactions can be interpreted as a form of a secured loan and are criticized as a “particularly noxious form of governmental debt. ” In this interpretation, the upfront payment from the privatization sale corresponds to the principal amount of the loan, while the proceeds from the underlying asset correspond to secured interest payments – the transaction can be considered substantively the same as a secured loan, though it is structured as a sale. This interpretation is particularly argued to apply to recent municipal transactions in the United States, particularly for fixed term, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years. It is argued that this is motivated by “politicians’ desires to borrow money surreptitiously,” due to legal restrictions on and political resistance to alternative sources of revenue, namely raising taxes or issuing debt.

Outsourcing in the United States

“Outsourcing” became a popular political issue in the United States, having been confounded with offshoring, during the 2004 U.S. presidential election. The political debate centered on outsourcing’s consequences for the domestic U.S. workforce. Democratic U.S. presidential candidate John Kerry criticized U.S. firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their “fair share” of U.S. taxes during his 2004 campaign, calling such firms “Benedict Arnold corporations. “

Criticism of outsourcing, from the perspective of U.S. citizens, generally revolves around the costs associated with transferring control of the labor process to an external entity in another country. A Zogby International poll conducted in August 2004 found that 71% of American voters believed that “outsourcing jobs overseas” hurt the economy while another 62% believed that the U.S. government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource.

Union busting is one possible cause of outsourcing . As unions are disadvantaged by union busting legislation, workers lose bargaining power and it becomes easier for corporations to fire them and ship their job overseas. Another given rationale is the high corporate income tax rate in the U.S. relative to other OECD nations, and the uncommonness of taxing revenues earned outside of U.S. jurisdiction. However, outsourcing is not solely a U.S. phenomenon as corporations in various nations with low tax rates outsource as well, which means that high taxation can only partially, if at all, explain US outsourcing. For example, the amount of corporate outsourcing in 1950 would be considerably lower than today, yet the tax rate was actually higher in 1950.

Union Busting

Pinkerton guards escort strikebreakers in Buchtel, Ohio, 1884.

It is argued that lowering the corporate income tax and ending the double-taxation of foreign-derived revenue (taxed once in the nation where the revenue was raised, and once from the U.S.) will alleviate corporate outsourcing and make the U.S. more attractive to foreign companies. However, while the US has a high official tax rate, the actual taxes paid by US corporations may be considerably lower due to the use of tax loopholes, tax havens, and “gaming the system. ” Rather than avoiding taxes, outsourcing may be mostly driven by the desire to lower labor costs (see standpoint of labor above). Sarbanes-Oxley has also been cited as a factor for corporate flight from U.S. jurisdiction.

13.4.5: Sunshine Laws

The Sunshine Laws enforce the principle of liberal democracy that governments are typically bound by a duty to publish and promote openness.

Learning Objective

Summarize the obligations that the Freedom of Information Act places on executive branch government agencies

Key Points

• They establish a right-to-know legal process by which requests may be made for government-held information to be received freely or at minimal cost, barring standard exceptions.
• In the United States the Freedom of Information Act was signed into law by President Lyndon B. Johnson on July 4, 1966. It went into effect the following year.
• The Freedom of Information Act (FOIA) is a federal freedom of information law that allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States government.
• The Act applies only to federal agencies. However, all of the states, as well as the District of Columbia and some territories, have enacted similar statutes to require disclosures by agencies of the state and of local governments, although some are significantly broader than others.
• The Electronic Freedom of Information Act Amendments of 1996 (E-FOIA) stated that all agencies are required by statute to make certain types of records, created by the agency on or after November 1, 1996, available electronically.
• A major issue in released documentation is government “redaction” of certain passages deemed applicable to the Exemption section of the FOIA. The extensive practice by the FBI has been considered highly controversial, given that it prevents further research and inquiry.

Key Term

redaction

The process of editing or censoring.

Introduction

Freedom of information laws by country detail legislation that gives access by the general public to data held by national governments. They establish a “right-to-know” legal process by which requests may be made for government-held information, to be received freely or at minimal cost, barring standard exceptions. Also variously referred to as open records, or sunshine laws in the United States, governments are also typically bound by a duty to publish and promote openness. In many countries there are constitutional guarantees for the right of access to information, but usually these are unused if specific support legislation does not exist.

Freedom of Information Act

In the United States the Freedom of Information Act was signed into law by President Lyndon B. Johnson on July 4, 1966 and went into effect the following year. In essence, The Freedom of Information Act (FOIA) is a federal freedom of information law that allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States government. The Act defines agency records subject to disclosure, outlines mandatory disclosure procedures and grants nine exemptions to the statute.

The act explicitly applies only to executive branch government agencies. These agencies are under several mandates to comply with public solicitation of information. Along with making public and accessible all bureaucratic and technical procedures for applying for documents from that agency, agencies are also subject to penalties for hindering the process of a petition for information. If “agency personnel acted arbitrarily or capriciously with respect to the withholding, [a] Special Counsel shall promptly initiate a proceeding to determine whether disciplinary action is warranted against the officer or employee who was primarily responsible for the withholding.” In this way, there is recourse for one seeking information to go to a federal court if suspicion of illegal tampering or delayed sending of records exists. However, there are nine exemptions, ranging from a withholding “specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy” and “trade secrets” to “clearly unwarranted invasion of personal privacy.”

The Electronic Freedom of Information Act Amendments were signed by President Bill Clinton on October 2, 1996. The Electronic Freedom of Information Act Amendments of 1996 (E-FOIA) stated that all agencies are required by statute to make certain types of records, created by the agency on or after November 1, 1996, available electronically. Agencies must also provide electronic reading rooms for citizens to use to have access to records. Given the large volume of records and limited resources, the amendment also extended the agencies’ required response time to FOIA requests. Formerly, the response time was ten days and the amendment extended it to twenty days.

Notable Cases

A major issue in released documentation is government “redaction” of certain passages deemed applicable to the Exemption section of the FOIA . Federal Bureau of Investigation (FBI) officers in charge of responding to FOIA requests have prevented further research by using extensive use of redaction of documents in print or electronic form. This has also brought into question just how one can verify that they have been given complete records in response to a request.

FBI Redaction

In the early 1970s, the US government conducted surveillance on ex-Beatle John Lennon. This is a letter from FBI director J. Edgar Hoover to the Attorney General. After a 25-year Freedom of Information Act Request battle initiated by historian Jon Wiener, the files were released. Here is one page from the file. This first release received by Wiener had some information missing — it had been blacked out presumably with magic marker — or what is termed “redacted”. A subsequent version was released which showed almost all of the previously blacked-out text.

This trend of unwillingness to release records was especially evident in the process of making public the FBI files on J. Edgar Hoover . Of the 164 files and about eighteen thousand pages collected by the FBI, two-thirds were withheld from Athan G. Theoharis and plaintiff, most notably one entire folder entitled the “White House Security Survey. “

J. Edgar Hoover

John Edgar Hoover (January 1, 1895 – May 2, 1972) was the first Director of the Federal Bureau of Investigation (FBI) of the United States. Appointed director of the Bureau of Investigation—predecessor to the FBI—in 1924, he was instrumental in founding the FBI in 1935, where he remained director until his death in 1972 at age 77. Hoover is credited with building the FBI into a large and efficient crime-fighting agency, and with instituting a number of modernizations to police technology, such as a centralized fingerprint file and forensic laboratories.

In the case of Scott Armstrong, v. Executive Office of the President, et al., the White House used the PROFS computer communications software. With encryption designed for secure messaging, PROFS notes concerning the Iran-Contra affair (arms-for-hostages) under the Reagan Administration were insulated. However, they were also backed up and transferred to paper memos. The National Security Council, on the eve of President George H.W. Bush’s inauguration, planned to destroy these records.

13.4.6: Sunset Laws

A sunset provision is a measure within a statute that provides that a law shall cease to be in effect after a specific date.

Learning Objective

Describe sunset clauses and several prominent examples of their use

Key Points

• In American federal law parlance, legislation that is meant to renew an expired mandate is known as a reauthorization act or extension act. Reauthorizations of controversial laws or agencies may be preceded by extensive political wrangling before final votes.
• The Sedition Act of 1798 was a political tool used by John Adams and the Federalist Party to suppress opposition. It contained a sunset provision ensuring that the law would cease at the end of Adams’ term so it could not be used against the Federalists.
• Several surveillance portions of the USA Patriot Act were set to originally expire on December 31, 2005. These were later renewed but expired again on March 10, 2006, and was renewed once more in 2010.
• The Congressional Budget Act governs the role of Congress in the budget process. Among other provisions, it affects Senate rules of debate during the budget reconciliation, not least by preventing the use of the filibuster against the budget resolutions.
• In the Economic Growth and Tax Relief Reconciliation Act of 2001 the US Congress enacted a phase-out of the federal estate tax over the following 10 years, so that the tax would be completely repealed in 2010.

Key Terms

mandate

An official or authoritative command; a judicial precept.

warrant

Authorization or certification; sanction, as given by a superior.

sedition

the organized incitement of rebellion or civil disorder against authority or the state

Sunset Laws

A sunset provision or clause in public policy is a measure within a statute, regulation, or other law that provides for the law to cease to have effect after a specific date, unless further legislative action is taken to extend the law. Most laws do not have sunset clauses and therefore remain in force indefinitely.

In American federal law parlance, legislation that is meant to renew an expired mandate is known as a reauthorization act or extension act. Extensive political wrangling before final votes may precede reauthorizations of controversial laws or agencies.

The Sedition Act of 1798 was a political tool used by John Adams and the Federalist Party to suppress opposition that contained a sunset provision. The authors ensured the act would terminate at the end of Adams’s term (the date the law would cease) so that Democratic Republicans against the Federalist Party could not use it.

John Adams

John Adams and his Federalist Party used a sunset provision in the Sedition Act of 1798 to ensure that the Sedition Act would cease once Adams was out of office.

Several surveillance portions of the USA Patriot Act were originally set to expire on December 31, 2005. These were later renewed, but expired again on March 10, 2006, and was renewed once more in 2010. The Patriot Act is a sunset law on wiretapping for terrorism cases, wiretapping for computer fraud and abuse, sharing of wiretap and foreign intelligence information, warranted seizure of voicemail messages, computer trespasser communications, nationwide service or warrants for electronic evidence, and privacy violation of civil liability.

The Congressional Budget Act governs the role of Congress in the budget process. Among other provisions, it affects Senate rules of debate during the budget reconciliation, not least by preventing the use of the filibuster against the budget resolutions. The Byrd rule was adopted in 1985 and amended in 1990 to modify the Budget Act and is contained in section 313. The rule allows Senators to raise a point of order against any provision held to be extraneous, where extraneous is defined according to one of several criteria. The definition of extraneous includes provisions that are outside the jurisdiction of the committee or that do not affect revenues or outlays.

In the Economic Growth and Tax Relief Reconciliation Act of 2001, the US Congress enacted a phase-out of the federal estate tax over the following 10 years, so that the tax would be completely repealed in 2010. However, while a majority of the Senate favored the repeal, there was not a three-fifths supermajority in favor. Therefore, a sunset provision in the Act reinstated the tax to its original levels on January 1, 2011 in order to comply with the Byrd Rule. As of April 2011, Republicans in Congress have tried to repeal the sunset provision, but their efforts have been unsuccessful. Uncertainty over the prolonged existence of the sunset provision has made estate planning more complicated.

13.4.7: Incentives for Efficiency and Productivity

Efficiency is the extent to which effort is used for a task and productivity is the measure of the efficiency of production.

Learning Objective

Summarize the Efficiency Movement and the institutions it, in part, bequeathed

Key Points

• The Efficiency Movement played a central role in the Progressive Era (1890-1932) in the United States.
• The result was strong support for building research universities and schools of business and engineering, municipal research agencies, as well as reform of hospitals and medical schools and the practice of farming.
• At the national level, productivity growth raises living standards because more real income improves people’s ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social environment programs.

Key Terms

operationalization

The act or process of operationalizing.

manifold

Exhibited at diverse times or in various ways.

Efficiency describes the extent to which time or effort is well used for the intended task or purpose for relaying the capability of a specific application of effort to produce a specific outcome effectively with a minimum amount or quantity of waste, expense or unnecessary effort.

The Efficiency Movement was a major movement in the United States, Britain and other industrial nations in the early 20^th century that sought to identify and eliminate waste in all areas of the economy and society and to develop and implement best practices. The concept covered mechanical, economic, social and personal improvement. The quest for efficiency promised effective, dynamic management rewarded by growth.

The movement played a central role in the Progressive Era in the US, where it flourished 1890-1932. Adherents argued that all aspects of the economy, society and government were riddled with waste and inefficiency. Everything would be better if experts identified the problems and fixed them. The result was strong support for building research universities and schools of business and engineering, municipal research agencies, as well as reform of hospitals and medical schools and the practice of farming. Perhaps the best known leaders were engineers Frederick Taylor (1856–1915, ), who used a stopwatch to identify the smallest inefficiencies, and Frank Gilbreth (1868–1924) who proclaimed there was always one best way to fix a problem.

Frederick Winslow Taylor

Frederick Winslow Taylor, a mechanical engineer by training, is often credited with inventing scientific management and improving industrial efficiency.

Productivity is a measure of the efficiency of production. Productivity is a ratio of production output to what is required to produce it. The measure of productivity is defined as a total output per one unit of a total input. In order to obtain a measurable form of productivity, operationalization of the concept is necessary. A production model is a numerical expression of the production process that is based on production data.

The benefits of high productivity are manifold. At the national level, productivity growth raises living standards because more real income improves people’s ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs. Productivity growth is important to the firm because more real income means that the firm can meet its obligations to customers, suppliers, workers, shareholders and governments and still remain competitive or even improve its competitiveness in the market place.

13.4.8: Protecting Whistleblowers

There exist several U.S. laws protecting whistleblowers, people who inform authorities of alleged dishonest or illegal activities.

Learning Objective

Describe whistleblowers and the protections afforded them under various laws

Key Points

• Alleged misconduct may be classified as a violation of a law, rule, regulation or a direct threat to public interest in the realms of fraud, health/safety violations and corruption.
• The 1863 United States False Claim Act encourages whistleblowers by promising them a percentage of damages won by the government. It also protects them from wrongful dismissal.
• Investigation of retaliation against whistleblowers falls under the jurisdiction of the Office of the Whistleblower Protection Program (OWPP) of the Department of Labor’s Occupational Safety and Health Administration (OSHA).
• Whistleblowers frequently face reprisal at the hands of the accused organization, related organizations, or under law.

Key Term

qui tam

A writ whereby a private individual who assists a prosecution can receive all or part of any penalty imposed.

A whistleblower is a person who tells the public or someone in authority about alleged dishonest or illegal activities occurring in a government department, private company or organization. The misconduct may be classified as a violation of a law, rule, regulation or a direct threat to public interest in the realms of fraud, health/safety violations and corruption. Whistleblowers may make their allegations internally or externally to regulators, law enforcement agencies or the media.

One of the first laws that protected whistleblowers was the 1863 United States False Claim Act, which tried to combat fraud by suppliers of the United States government during the Civil War. The act promises whistleblowers a percentage of damages won by the government and protects them from wrongful dismissal.

The Lloyd-La Follette Act of 1912 guaranteed the right of federal employees to furnish information to Congress. The first US environmental law to include employee protection was the Clean Water Act of 1972. Similar protections were included in subsequent federal environmental laws including the Safe Drinking water Act (1974), Energy Reorganization Act of 1974, and the Clean Air Act (1990) . In passing the 2002 Sarbanes-Oxley Act, the Senate Judiciary Committee found that whistleblower protections were dependent on the vagaries of varying state statutes.

Clean Air Act

The signing of the Clean Air Act, the first U.S. environmental law offering employee protection as a result of whistleblower action.

Whistleblowers frequently face reprisal at the hands of the accused organization, related organizations, or under law. Investigation of retaliation against whistleblowers falls under jurisdiction of the Office of the Whistleblower Protection Program (OWPP) of the Department of Labor’s Occupational Safety and Health Administration (OSHA). The patchwork of laws means that victims of retaliation must determine the deadlines and means for making proper complaints.

Those who report a false claim against the federal government and as a result suffer adverse employment actions may have up to six years to file a civil suit for remedies under the US False Claims Act. Under a qui tam provision, the original source for the report may be entitled to a percentage of what the government recovers from the offenders. The original source must be the first to file a federal civil complaint for recovery of the funds fraudulently obtained, while also avoiding publicizing the fraud claim until the Justice Department decides whether to prosecute the claim.

Federal employees could benefit from the Whistleblower Protection Act as well as the No-Fear Act, which made individual agencies directly responsible for the economic sanctions of unlawful retaliation.

12.2: The Organization and Institution of the Presidency

12.2.1: The Executive Office of the President

Learning Objective

Distinguish the various key positions in the Executive Office and the roles and responsibilities of each

Key Points

• The White House Chief of Staff is the highest-ranking employee of the White House Office inside the Executive Office of the President of the United States and is an Assistant to the President.
• The roles of the Chief of Staff are both managerial and advisory and can include the following: select key White House staff and supervise them; structure the white house staff; control the flow of people into the Oval Office; and advice the President on various issues.
• The White House Counsel’s role is to advise the President on all legal issues concerning the President and the White House.
• The White House Press Secretary is responsible for collecting information about actions and events within the president’s administration and issues the administration’s reactions to developments around the world.
• The Chief of Staff is assisted by one or more Deputy Chiefs of Staff.

Key Terms

white house chief of staff

The White House Chief of Staff is the highest-ranking employee of the White House Office inside the Executive Office of the President of the United States and is an Assistant to the President.

de facto prime minister

It is possible that a powerful Chief of Staff with a “hands-off” president can become a de facto Prime Minister. Such prime ministers exist in some governmental systems: The prime minister runs the government, while the president remains somewhat aloof from the political process, but personally handling policy matters.

white house press secretary

The White House Press Secretary is a senior White House official whose primary responsibility is to act as spokesperson for the government administration. The Press Secretary is responsible for collecting information about actions and events within the president’s administration and issues the administration’s reactions to developments around the world.

Example

• It is possible that a powerful Chief of Staff with a “hands-off” president can become a de facto Prime Minister. Such prime ministers exist in some governmental systems: The prime minister runs the government, while the president remains somewhat aloof from the political process, but personally handling policy matters. Richard Nixon’s first Chief of Staff, H.R. Haldeman, garnered a reputation in Washington for the iron hand he wielded in the position.

The Executive Office of the President (EOP) consists of the immediate staff of the President of the United States, as well as multiple levels of support staff reporting to the President. The EOP is headed by the White House Chief of Staff, currently Jacob Lew. The size of the White House staff has increased dramatically since 1939, and has grown to include an array of policy experts in various fields.

Chief of Staff

The White House Chief of Staff is an Assistant to the President, and is the highest-ranking employee of the White House Office inside the Executive Office of the President of the United States. The current White House Chief of Staff is Denis McDonough who took over the job from Jacob Lew in 2013.

Jacob Lew

The current White House Chief of Staff is Jacob Lew, who assumed the position on January 27, 2012, after William M. Daley resigned.

The duties of the White House Chief of Staff vary greatly from one administration to another; in fact, there is no legal requirement that the President even fill the position. However, since at least 1979, all Presidents have found the need for a Chief of Staff, who typically oversees the actions of the White House staff, manages the president’s schedule, and decides who is allowed to meet with the president. Because of these duties, the Chief of Staff has at various times been labeled “The Gatekeeper,” “The Power Behind the Throne,” and “The Co-President. “

The roles of the Chief of Staff are both managerial and advisory. the Chief of Staff may select key White House staff and supervise them; structure the White House staff; control the flow of people into the Oval Office; and advise the President on various issues.

A powerful Chief of Staff with a “hands-off” president can become a de facto Prime Minister. Such prime ministers exist in some governmental systems: The prime minister runs the government, while the president remains somewhat aloof from the political process, but personally handling policy matters. Richard Nixon’s first Chief of Staff, H.R. Haldeman, garnered a reputation in Washington for the iron hand he wielded in the position. By contrast, Andrew Card, President George W. Bush’s first Chief of Staff, was not thought to be as powerful. It has been speculated that Card was “overshadowed” by the influence of Karl Rove, the Senior Adviser and Deputy Chief of Staff, who was “the architect” of Bush’s political rise.

Deputy Chiefs of Staff

The Chief of Staff is assisted by one or more Deputy Chiefs of Staff. Under the Obama Administration, these roles are filled by Anita Decker Breckenridge, Deputy Chief of Staff for Operations and Kristie Canegallo, Deputy Chief of Staff for Implementation. During the George W. Bush Administration, Joel Kaplan held this title for Policy. Karl Rove preceded Kaplan in this role until April 19, 2006, when Joshua Bolten, the recently appointed Chief of Staff, added his former Deputy Director of the OMB to the Deputies list. Rove left the White House officially on August 31, 2007. Joe Hagin is the former Deputy Chief of Staff for Operations under George W. Bush.

Counsel

The White House Counsel is a staff appointee of the President of the United States. The Counsel’s role is to advise the President on all legal issues concerning the President and the White House. The current White House Counsel is W. Neil Eggleston since 2014. Although the White House Counsel offers legal advice to the President, the Counsel does so in the President’s official capacity and does not serve as the President’s personal attorney. Therefore, controversy has emerged over the scope of the attorney–client privilege between the Counsel and the President. It is clear, however, that the privilege does not apply in personal matters, such as impeachment proceedings; in such situations the President relies on a personal attorney for confidential legal advice.

Press Secretary

The White House Press Secretary is a senior White House official whose primary responsibility is to act as spokesperson for the administration. The Press Secretary is responsible for collecting information about actions and events within the president’s administration and issues statements regarding the administration’s reactions to developments around the world. The Press Secretary interacts with the media and deals with the White House press corps on a daily basis, generally in a daily press briefing. The current Press Secretary is Josh Earnest since 2014.

Jay Carney

Jay Carney is the current White House Press Secretary.

History of the Executive Office of the President

In 1939, during Franklin D. Roosevelt’s second term in office, the foundations of the modern White House staff were created. Based on the recommendations of a presidentially commissioned panel of political science and public administration experts, the Brownlow Committee, Roosevelt was able to get Congress to approve the Reorganization Act of 1939. The Act led to Reorganization Plan No. 1, which created the EOP, which reported directly to the president. The EOP encompassed two subunits at its outset: the White House Office (WHO) and the Bureau of the Budget, the predecessor to today’s Office of Management and Budget (OMB), which had been created in 1921 and originally located in the Treasury Department. It absorbed most of the functions of the National Emergency Council. The main job of the OMB is to assist the President to prepare the budget. The OMB also measures the quality of agency programs, policies, and procedures and to see if they comply with the President’s policies. In addition, the OMB oversees and coordinates the Administration’s procurement, financial management, information, and regulatory policies. In each of these areas, the OMB’s role is to help improve administrative management, to develop better performance measures and coordinating mechanisms, and to reduce any unnecessary burdens on the public.

From 1939 through the present, the situation changed dramatically. New units within the EOP were created, some by statute, some by executive order of the president. Among the most important are the Council of Economic Advisers (1946), the National Security Council and its staff (1947), the Office of the U.S. Trade Representative (1963), the Council on Environmental Quality (1970), the Office of Science and Technology Policy (1976), the Office of Administration (1977), and the Office of National Drug Control Policy (1989).

Under George W. Bush, additional units were added, such as the Office of Homeland Security (2001), which later became a cabinet department, and the Office of Faith-based and Community Initiatives (2001). Precise estimates as to the size and budget of the EOP are difficult to come by. Many people who work on the staff are “detailed” from other federal departments and agencies, and budgetary expenses are often charged elsewhere, for example Defense Department staff for the White House Military Office. Ballpark estimates indicate some 2,000 to 2,500 persons serve in EOP staff positions with policy-making responsibilities, with a budget of 300 to 400 million dollars.

12.2.2: The Cabinet

Learning Objective

Discuss the shape of the Cabinet of the United States and its role in government

Key Points

• All Cabinet members are nominated by the President and then presented to the Senate for confirmation or rejection by a simple majority. If they are approved, they are sworn in and then begin their duties.
• There is no explicit definition of the term “Cabinet” in either the U.S. Constitution, the United States Code, or the Code of Federal Regulations.
• Executive Schedule refers to the highest-ranked appointed positions in the executive branch of the U.S. government. The President of the United States, an elected official, appoints incumbents to these positions, most of them with the advice and consent of the Senate.

Key Terms

Cabinet

In parliamentary and some other systems of government, the group of ministers responsible for creating government policy and for overseeing the departments comprising the executive branch.

executive schedule

Executive Schedule refers to the highest-ranked appointed positions in the executive branch of the U.S. government. The President of the United States makes appointments to these positions, most with the advice and consent of the Senate.

Example

• The Secretary of State designate is reviewed and presented to the full Senate by the Senate Foreign Relations Committee. Hillary Rodham Clinton assumed the office of Secretary of State on January 21, 2009.

Introduction

The Cabinet of the United States is composed of the most senior appointed officers of the executive branch of the federal government of the United States, who are generally the heads of the federal executive departments. The existence of the Cabinet dates back to the first President of the United States, George Washington, who appointed a Cabinet of four men: Secretary of State Thomas Jefferson, Secretary of the Treasury Alexander Hamilton, Secretary of War Henry Knox, and Attorney General Edmund Randolph to advise him and to assist him in carrying out his duties.

All Cabinet members are nominated by the President and then presented to the Senate for confirmation or rejection by a simple majority. If they are approved, they are sworn in and begin their duties. Aside from the Attorney General and the Postmaster General (when it was a Cabinet position), they all receive the title of Secretary. Members of the Cabinet serve at the pleasure of the President, which means that the President may dismiss them or reappoint them (to other posts) at will. Members of the Cabinet direct their own departments; however, all of the power that they have derives from the President, in that while they may advise the President, they carry the President’s directives. In other words, the Cabinet may help shape policy, but they do not typically drive or direct policy.

In Federal Law and the Constitution

There is no explicit definition of the term “Cabinet” in either the U.S. Constitution, the United States Code, or the Code of Federal Regulations. There are occasional references to “cabinet-level officers” or “secretaries,” which when viewed in their context do refer to the “Heads of the Executive Departments.” Executive Schedule refers to the highest-ranked appointed positions in the executive branch of the U.S. government. The President of the United States, an elected official, appoints incumbents to these positions, most of them with the advice and consent of the Senate. They include members of the President’s Cabinet as well as other subcabinet policy makers. There are five pay rates within the Executive Schedule, usually denoted with a Roman numeral with I being the highest level and V the lowest.

The President of the United States has the authority to nominate members of his or her cabinet to the United States Senate for confirmation under Article II, Section II, Clause II of the United States Constitution.

U.S. Cabinet

President Barack Obama and Vice President Joe Biden pose with the full Cabinet for an official group photo in the Grand Foyer of the White House, July 26, 2012. These included U.S. Permanent Representative to the United Nations Susan Rice, Attorney General Eric H. Holder, Jr., Secretary of State Hillary Rodham Clinton, Defense Secretary Leon Panetta, Homeland Security Secretary Janet Napolitano, Health and Human Services Secretary Kathleen Sebelius.

Cabinet Positions

The Secretary of State designate is reviewed and presented to the full Senate by the Senate Foreign Relations Committee. John Kerry is the current Secretary of State for President Obama’s second term, replacing Hillary Clinton. The Secretary of the Treasury is reviewed by the Senate Finance Committee. Jack Lew is Secretary of the Treasury. Ashton Carter is Secretary of Defense. 

 The confirmation of the office of Attorney General is overseen by the Senate Judiciary Committee. Eric Holder, Obama’s first-term Attorney General was replaced by Loretta E. Lynch for the second term.

12.2.3: The Vice Presidency

Learning Objective

Distinguish between the Vice President’s constitutionally defined functions and the role the office has come to play

Key Points

• The Vice President is the first person in the presidential line of succession, and would ascend to the Presidency upon the death, resignation, or removal of the President.
• While the Vice President’s only constitutionally prescribed functions aside from Presidential succession relate to his role as President of the Senate, the office is commonly viewed as a component of the executive branch of the federal government.
• Under the Constitution, the Vice President is President of the United States Senate. In that capacity, he or she is allowed to vote in the Senate when necessary to break a tie.
• While Senate customs have created supermajority rules that have diminished this Constitutional power, the Vice President still retains the ability to influence legislation.
• In modern times, the Vice President rarely presides over day-to-day matters in the Senate; in his place, the Senate chooses a President pro tempore (or “president for a time”) to preside in the Vice President’s absence; the Senate normally selects the longest-serving senator in the majority party.
• The Twenty-Fifth Amendment of the U.S. Constitution provides that should the president die or become disabled while in office, the “powers and duties” of the office are transferred to the Vice President.

Key Terms

vice president

A deputy to a president, often empowered to assume the position of president on his death or absence

twenty-fifth amendment

The Twenty-fifth Amendment (Amendment XXV) to the United States Constitution deals with succession to the Presidency and establishes procedures both for filling a vacancy in the office of the Vice President, as well as responding to Presidential disabilities.

president pro tempore

The President pro tempore is the second-highest-ranking official of the United States Senate. The United States Constitution states that the Vice President of the United States is the President of the Senate, despite not being a member of the body, and that the Senate must choose a president pro tempore. By a long-standing tradition which has been observed consistently since the 81st Congress, the president pro tempore is the most senior senator in the majority party.

Example

• As President of the Senate, the Vice President has two primary duties: to cast a vote in the event of a Senate deadlock and to preside over and certify the official vote count of the U.S. Electoral College. For example, in the first half of 2001, the Senators were divided 50-50 between Republicans and Democrats and Dick Cheney’s tie-breaking vote gave the Republicans the Senate majority.

Introduction

The Vice President of the United States holds a public office created by the United States Constitution. The vice president, together with the president of the United States, is indirectly elected by the people through the Electoral College to a four-year term of office. The vice president is the first person in the presidential line of succession, and would ascend to the presidency upon the death, resignation, or removal of the president. While the vice president’s only constitutionally prescribed functions, aside from presidential succession, relate to his role as President of the Senate, the office is commonly viewed as a component of the executive branch of the federal government. The current vice president is former U.S. Senator Joseph Biden.

Official Portrait of Joe Biden

Official portrait of Vice President of the United States Joe Biden.

Four Vice-Presidents

Four Vice Presidents: L-R, outgoing Pres. Lyndon B. Johnson (the 37th vice president); incoming Pres. Richard Nixon (36th); Everett Dirksen; Spiro Agnew, incoming vice president (39th); and the outgoing Vice President Hubert Humphrey (38th), January 20, 1969.

Under the Constitution, the vice president is President of the United States Senate. In that capacity, he or she is allowed to vote in the Senate, when necessary, to break a tie. While Senate customs have created supermajority rules that have diminished this constitutional power, the vice president still influences legislation. According to the Twelfth Amendment, the vice president presides over the joint session of Congress when it convenes to count the vote of the Electoral College.

Origin

The creation of the Office of Vice President was a direct consequence of the Electoral College. Delegates to the Philadelphia Convention gave each state a number of presidential electors equal to that state’s combined share of House and Senate seats. Yet, the delegates were worried that each elector would only favor his own state’s favorite son candidate, resulting in deadlocked elections that would produce no winners. To counter this presumed difficulty, the delegates gave each presidential elector two votes, required that at least one of those votes be for a candidate from outside the elector’s state, and mandated that the winner of the election obtain an absolute majority with respect to the total number of electors.

With these rules in place, the delegates hoped each electors’ second vote would go to a statesman of national character However, fearing electors might throw away their second vote to bolster their favorite son’s chance of winning, the Philadelphia delegates specified that the runner up in the election would become vice president. Creating this new office imposed a political cost on discarded votes and, thus, required that electors cast their second ballots.

Roles of the Vice-President

As President of the Senate, the vice president has two primary duties: to cast a vote in the event of a Senate deadlock and to preside over and certify the official vote count of the U.S. Electoral College. For example, in the first half of 2001, the Senators were divided 50-50 between Republicans and Democrats and Dick Cheney’s tie-breaking vote gave the Republicans the Senate majority. In modern times, the vice president rarely presides over day-to-day matters in the Senate; in his place, the Senate chooses a president pro tempore (or “president for a time”) to preside in the vice president’s absence; the Senate normally selects the longest-serving senator in the majority party. The president pro tempore has the power to appoint any other senator to preside and, in practice, junior senators from the majority party are assigned the task of presiding over the Senate most of the time.

The President of the Senate also presides over counting and presentation of the votes of the Electoral College. This process occurs in the presence of both houses of Congress, generally on January 6 of the year following a U.S. presidential election. In this capacity, only four vice presidents have been able to announce their own election to the presidency: John Adams, Thomas Jefferson, Martin Van Buren, and George H. W. Bush. By contrast, Richard Nixon presided over the process but also officially announced the election of his 1960 opponent, John F. Kennedy.

Twenty-Fifth Amendment

The U.S. Constitution provides that should the president die or become disabled while in office, the “powers and duties” of the office are transferred to the vice president. Initially, it was unclear whether the vice president actually became the new president or merely an acting president. This was first tested in 1841 with the death of President William Henry Harrison. Harrison’s Vice President, John Tyler, asserted that he had succeeded to the full presidential office, powers, and title and declined to acknowledge documents referring to him as “acting president. ” Despite some strong calls against it, Tyler took the oath of office as the tenth president. Gerald Ford was the first vice president selected by this method, after the resignation of Vice President Spiro Agnew in 1973; after succeeding to the Presidency, Ford nominated Nelson Rockefeller as vice president.

John Tyler

John Tyler was the first Vice President to assume the presidency following the death of his predecessor. In doing so, he insisted that he was the president, not merely an acting president.

12.2.4: The First Spouse

Learning Objective

Describe the evolution of the role of the First Lady

Key Points

• The use of the title First Lady to describe the spouse or hostess of an executive began in the United States. In the early days of the United States, there was not a generally accepted title for the wife of the president.
• The role of the First Lady has evolved over the centuries. She is, first and foremost, the hostess of the White House. She organizes and attends official ceremonies and functions of state either along with, or in place of, the president.
• The Office of the First Lady of the United States helps the First Lady carry out her duties as hostess of the White House, and is also in charge of all social and ceremonial events of the White House.
• The current First Lady is Michelle Obama, wife of President Barack Obama.

Key Term

first lady of the united states

The First Lady of the United States is the hostess of the White House. Because this position is traditionally filled by the wife of the president of the United States, the title is most often applied to the wife of a sitting president.

Example

• Over the course of the 20th century it became increasingly common for first ladies to select specific causes to promote, usually ones that are not politically divisive. Lady Bird Johnson pioneered environmental protection and beautification; Pat Nixon encouraged volunteerism and traveled extensively abroad; Betty Ford supported women’s rights; Rosalynn Carter aided those with mental disabilities; Nancy Reagan founded the Just Say No drug awareness campaign; Barbara Bush promoted literacy; Hillary Rodham Clinton sought to reform the healthcare system in the U.S.; and Laura Bush supported women’s rights groups and encouraged childhood literacy. Michelle Obama has sought to tackle childhood obesity.

Introduction

The First Lady of the United States is the hostess of the White House. This position is traditionally filled by the wife of the President of the United States. The current First Lady is Michelle Obama , wife of President Barack Obama. At present, there are four living former first ladies: Rosalynn Carter, wife of Jimmy Carter; Barbara Bush, wife of George H. W. Bush; Hillary Rodham Clinton, wife of Bill Clinton; and Laura Bush, wife of George W. Bush .

Four First Ladies

Laura Bush and former first ladies, from left, Rosalynn Carter, then-Senator Hillary Clinton, and Barbara Bush, at the dedication ceremony for the William J. Clinton Presidential Center and Park in Little Rock, Arkansas, November 18, 2004.

Michelle Obama

Michelle Obama, official White House portrait.

Origins of First Lady

The use of the title First Ladyto describe the spouse or hostess of an executive began in the United States. In the early days of the United States, there was not a generally accepted title for the wife of the president.

The earliest known written evidence of the title is from the November 3, 1863, diary entry of William Howard Russell, in which he recalled gossip about “the First Lady in the Land,” referring to Mary Todd Lincoln. The title first gained nationwide recognition in 1877, when newspaper journalist Mary C. Ames referred to Lucy Webb Hayes as “the First Lady of the Land” while reporting on the inauguration of Rutherford B. Hayes. The frequent reporting on the activities of Lucy Hayes helped spread use of the title outside Washington. A popular 1911 comedic play by playwright Charles Nirdlinger, titled The First Lady in the Land, popularized the title further. By the 1930s it was in wide use. Use of the title later spread from the United States to other nations.

Roles of First Lady

The position of the First Lady is not an elected one, carries no official duties, and receives no salary. Nonetheless, first ladies have held a highly visible position in U.S. government. The role of the First Lady has evolved over the centuries. She is, first and foremost, the hostess of the White House. She organizes and attends official ceremonies and functions of state either along with, or in place of, the president.

Over the course of the 20^th century it became increasingly common for first ladies to select specific causes to promote, usually ones that are not politically divisive . It is common for the First Lady to hire a staff to support these activities. Lady Bird Johnson pioneered environmental protection and beautification; Pat Nixon encouraged volunteerism and traveled extensively abroad; Betty Ford supported women’s rights; Rosalynn Carter aided those with mental disabilities; Nancy Reagan founded the Just Say No drug awareness campaign; Barbara Bush promoted literacy; Hillary Rodham Clinton sought to reform the healthcare system in the U.S.; and Laura Bush supported women’s rights groups and encouraged childhood literacy. Michelle Obama has sought to tackle childhood obesity.

First Ladies at Ronald Reagan Presidential Library

First Ladies Nancy Reagan, Barbara Bush (standing, left to right), Lady Bird Johnson, Pat Nixon, Rosalynn Carter, and Betty Ford (seated, left to right) at the dedication of the Ronald Reagan Presidential Library, November 1991.

Office of the First Lady

The Office of the First Lady of the United States helps the First Lady carry out her duties as hostess of the White House, and is also in charge of all social and ceremonial events of the White House. The First Lady has her own staff that includes the White House Social Secretary, a chief of staff, a press secretary, a chief floral designer, and an executive chef. The Office of the First Lady is an entity of the White House Office, which is part of the Executive Office of the President.

12.3: The President’s Many Roles

12.3.1: Chief Executive

Chief Executive is a term commonly used to refer to Presidential powers given by the Constitution.

Learning Objective

Identify the nature of the powers granted to the President in Article II of the Constitution

Key Points

• The president has many official and unofficial roles. The formal powers and duties of the president are outlined in Article II of the Constitution.
• As Chief Executive the president can: implement policy, supervise the executive branch of government, prepare executive budget for submission to congress, and appoint and remove executive officials.
• The head of government is the chief officer of the executive branch of a government, often presiding over a cabinet. In presidential republics or absolute monarchies, the head of government may be the same person as the head of state, who is often also called a president or a monarch.

Key Terms

head of government

The chief officer of the executive branch of a government, often presiding over a cabinet; usually called Prime Minister (in a parliamentary system) or President (in a presidential system).

chief executive

The president of the United States.

Introduction

The president has many official and unofficial roles. The formal powers and duties of the president are outlined in Article II of the Constitution. Although the Constitution grants far fewer explicit powers to the president in Article II than it does to Congress in Article I, the ambiguity and vagueness of Article II have made it possible for presidents to expand their authority greatly beyond that specifically listed in the Constitution. The two passages in the Constitution that have provided the basis for the expansion of presidential authority are Article II, Section 1, which grants “the executive Power” to the president, and Section 3, which makes the president responsible for the enforcement of federal laws: “He shall take Care that the Laws be faithfully executed.” As a result, “unofficial” presidential roles have evolved through both history and tradition.

As Chief Executive

Chief Executive is a term used for certain gubernatorial offices, expressing the nature of their job being analogous to a head of government. It is commonly used to refer to Presidential powers given by the constitution. As Chief Executive the president can: implement policy, supervise the executive branch of government, prepare an executive budget for submission to congress, and appoint and remove executive officials .

Obama Administration and Foreign Policy

President Barack Obama acts as the chief executive of the federal government of the United States.

As Head of Government

Head of government is the chief officer of the executive branch of a government, often presiding over a cabinet. In a parliamentary system, the head of government is often styled prime minister, chief minister, premier, etc. In presidential republics or absolute monarchies, the head of government may be the same person as the head of state, who is often also called a president or a monarch.

In a parliamentary system, the head of state is normally a different person from the head of government. This is in contrast to a presidential system in a democracy, where the head of state often is also the head of government, and most importantly: the executive branch does not derive its democratic legitimacy from the legislature. The Parliamentary system can be contrasted with a presidential system which operates under a stricter separation of powers, whereby the executive does not form part of, nor is appointed by, the parliamentary or legislative body. In such a system, congresses do not select or dismiss heads of governments, and governments cannot request an early dissolution as may be the case for parliaments. Since the legislative branch has more power over the executive branch in a parliamentary system, a notable amount of studies by political scientists have shown that parliamentary systems show lower levels of corruption than presidential systems of government.

12.3.2: Commander-in-Chief

A commander-in-chief is the person exercising supreme command authority of a nation’s military forces; in the US, this person is the president.

Learning Objective

Explain the President’s position as commander-in-chief

Key Points

• Civilian control of the military is a doctrine in military and political science that places ultimate responsibility for a country’s strategic decision-making in the hands of the civilian political leadership, rather than professional military officers.
• The current commander-in-chief of the United States Armed Forces is Barack Obama, the 44th person to hold the position since Grover Cleveland served two non- consecutive terms as President of the United States.
• Since 1949, the Secretary of Defense, a civil officer appointed by the President with the advice and consent of the Senate, is by statute second in command over those armed forces which are part of the Department of Defense: the Army, Navy, Air Force, and the Marine Corps.
• The Chairman of the Joint Chiefs of Staff, the U.S. chief of defense equivalent, may assist the President and Secretary of Defense in the exercise of their command functions, but the Chairman himself does not independently exercise command over any combatant forces.

Key Terms

commander-in-chief

A commander-in-chief is the person exercising supreme command authority over a nation’s military forces or significant element of those forces.

civilian control of the military

Civilian control of the military is a doctrine in military and political science that places ultimate responsibility for a country’s strategic decision-making in the hands of the civilian political leadership, rather than professional military officers.

chairman of the joint chiefs of staff

The Chairman of the Joint Chiefs of Staff, the U.S. chief of defense equivalent, may assist the President and Secretary of Defense in the exercise of their command functions, but the Chairman himself does not independently exercise command over any combatant forces.

Introduction

A commander-in-chief is the person exercising supreme command authority of a nation’s military forces or significant element of those forces. As a practical term it refers to the military competencies that reside in a nation-state’s executive, Head of State and/or Head of Government. Often, a given country’s commander-in-chief need not be or have been a commissioned officer or even a veteran, and it is by this legal statute that civilian control of the military is realized in states where it is constitutionally required. Civilian control of the military is a doctrine in military and political science that places ultimate responsibility for a country’s strategic decision-making in the hands of the civilian political leadership, rather than professional military officers.

According to Article II, Section 2, Clause I of the Constitution, the President of the United States is commander-in-chief of the United States Armed Forces. The current commander-in-chief of the United States Armed Forces is Barack Obama, the 44^th person to hold the position since Grover Cleveland served two non consecutive terms as President of the United States.

U.S. President as Commander in Chief

The amount of military detail handled by the President in wartime has varied dramatically. Abraham Lincoln was deeply involved in overall strategy and in day-to-day operations during the American Civil War, 1861–1865; historians have given Lincoln high praise for his strategic sense and his ability to select and encourage commanders such as Ulysses S. Grant.

President Abraham Lincoln as Commander-in-Chief

President Abraham Lincoln, as commander-in-chief of the United States Armed Forces, with Allan Pinkerton and Major General John A. McClernand after the Battle of Antietam, 1862.

On the other hand, Woodrow Wilson paid very little attention to operational military details of World War I and had very little contact with General John J. Pershing, who commanded the armies in the field. As President throughout much of World War II, Franklin D. Roosevelt, on the domestic front, used his fireside chats and the press to explain and justify his difficult wartime decisions abroad. Harry S. Truman believed in a high amount of civilian leadership of the military, making many tactical and policy decisions based on the recommendations of his advisors— including the decision to use nuclear weapons on Japan, to commit American forces in the Korean War, and to terminate Douglas MacArthur from his command.

Douglas MacArthur in Manila

An immensely popular hero of World War II, General Douglas MacArthur’s public insistence on the need to expand the Korean War, over the objections of President Harry S. Truman, led to the termination of his command.

Secretary of Defense

Since 1949, the Secretary of Defense, a civil officer appointed by the President with the advice and consent of the Senate, is by statute second in command over those armed forces which are part of the Department of Defense: the Army, Navy, Air Force, and the Marine Corps. The operational branch of the chain of command runs from the President to the Secretary of Defense, and from the Secretary of Defense down to the combatant commanders of the unified combatant commands. The Chairman of the Joint Chiefs of Staff, the U.S. chief of defense equivalent, may assist the President and Secretary of Defense in the exercise of their command functions, but the Chairman himself does not independently exercise command over any combatant forces.

12.3.3: Head of State

The President of the United States of America is the head of state and head of government of the United States.

Learning Objective

Summarize the various roles performed by the President as Head of State

Key Points

• Head of State is a term used in constitutional law, international law, political science, and diplomatic protocol to designate an official who holds the highest ranked position in a state. This official has the vested or implied powers to act as the chief public representative of a sovereign state.
• A presidential system is a system of government where an executive branch is led by a president who serves as both head of state and head of government. In such a system, this branch exists separately from the legislature, to which it is not responsible and which it cannot dismiss.
• In presidential systems, such as that of the United States, appointments are nominated at the President’s sole discretion, but this nomination is often subject to parliamentary confirmation.
• In presidential systems the head of state often formally reports to the legislature on the present national status, as in the State of the Union address in the United States of America.

Key Terms

head of state

The chief public representative of a nation having duties, privileges and responsibilities varying greatly depending on the constitutional rules; a monarch in a monarchy, and often styled president in a republic, but variations such as collegiality exist.

presidential system

A presidential system is a system of government where an executive branch is led by a president who serves as both head of state and head of government. In such a system, this branch exists separately from the legislature, to which it is not responsible and which it cannot, in normal circumstances, dismiss.

Example

• As head of state, the president can fulfill traditions established by previous presidents. William Howard Taft started the tradition of throwing out the ceremonial first pitch in 1910 at Griffith Stadium, Washington, D.C., on the Washington Senators’ Opening Day. Every president since Taft, except for Jimmy Carter, threw out at least one ceremonial first ball or pitch for Opening Day, the All-Star Game, or the World Series, usually with much fanfare.

Introduction

The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces. Head of State is a term used in constitutional law, international law, political science, and diplomatic protocol to designate an official who holds the highest ranked position in a state and has the vested or implied powers to act as the chief public representative of a sovereign state. Heads of state in most countries are natural persons holding an office, however in some countries the head of state position is held by a body of persons .

World Head of States 1889

“The World’s Sovereigns”: A photo montage made in Europe in 1889 with the main heads of state in the world. As head of state, it is the job of each of these leaders to represent their countries.

A presidential system is a system of government where an executive branch is led by a president who serves as both head of state and head of government . In such a system, this branch exists separately from the legislature, to which it is not responsible and which it cannot, in normal circumstances, dismiss. Presidential systems are a notable feature of constitutions in the Americas, including those of the Argentina, Brazil, Colombia, El Salvador, Mexico and Venezuela; this is generally attributed to the strong influence of the United States in the region, and as the United States Constitution served as an inspiration and model for the Latin American wars of independence of the early 19^th century.

George Washington

George Washington, the first President of the United States, set the precedent for an executive head of state in republican systems of government.

Presidential governments make no distinction between the positions of head of state and head of government, both of which are held by the president. Many parliamentary governments have a symbolic head of state in the form of a president or monarch. That person is responsible for the formalities of state functions, or in cases where the head of state has reserve powers, the “hands off” ensuing of a functional parliament, while the constitutional prerogatives of head of government are generally exercised by the prime minister.

Head of State in the United States

In the 1870s, in the aftermath of the impeachment of President Andrew Johnson and his near-removal from office, it was speculated that the United States, too, would move from a presidential system to a semi-presidential or even parliamentary one. Under this new system, the Speaker of the House of Representatives would become the real center of government as a quasi-prime minister. This did not in fact happen. The presidency, having been damaged by three late nineteenth and early twentieth century assassinations, and one impeachment, reasserted its political dominance by the early twentieth century through such figures as Theodore Roosevelt and Woodrow Wilson.

In presidential systems, such as that of the United States, appointments are nominated by the President’s sole discretion, but this nomination is often subject to parliamentary confirmation (in the case of the US, the Senate has to approve cabinet nominees and judicial appointments by simple majority). Moreover, in presidential systems, the president often has the power to fire ministers at his sole discretion. In the United States, convention calls for cabinet secretaries to resign on their own initiative when called to do so.

Legislative Roles

It is usual that the head of state, particularly in parliamentary systems as part of the symbolic role, is the one who opens the annual sessions of the legislature, e.g. the annual State Opening of Parliament with the Speech from the Throne in Britain. Even in presidential systems the head of state often formally reports to the legislature on the present national status, e.g. the State of the Union address in the United States of America.

Ceremonial Roles

As head of state, the president can fulfill traditions established by previous presidents. William Howard Taft started the tradition of throwing out the ceremonial first pitch in 1910 at Griffith Stadium, Washington, D.C., on the Washington Senators’ Opening Day. Every president since Taft, except for Jimmy Carter, threw out at least one ceremonial first ball or pitch for Opening Day, the All-Star Game, or the World Series, usually with much fanfare .

Wilson opening day 1916

U.S. President Woodrow Wilson throws out the ball on opening day of baseball season, 1916.

During a state visit by a foreign head of state, the president typically hosts a State Arrival Ceremony held on the South Lawn, a custom begun by John F. Kennedy in 1961. This is followed by a state dinner given by the president which is held in the State Dining Room later in the evening.

12.3.4: Chief Diplomat

The appointment power of the President allows him or her to appoint and receive ambassadors around the world.

Learning Objective

Explain the President’s role as chief diplomat

Key Points

• Diplomacy is the art and practice of conducting negotiations between representatives of groups or states. In an informal or social sense, diplomacy is the employment of tact to gain strategic advantage or to find mutually acceptable solutions to a common challenge.
• The President is the nation’s chief diplomat; they have the power make treaties that are then subject to ratification by the Senate.
• It is generally accepted that they have the President has the power as a result of their constitutional authority to “send and receive ambassadors. ” This is generally known as the “appointment power” of the presidency.
• Along with naming judges, presidents appoint ambassadors and executive officers. If Congress is not in session, presidents can make temporary appointments known as recess appointments without Senate confirmation, good until the end of the next session of Congress.

Key Terms

recess appointments

Along with naming judges, presidents appoint ambassadors and executive officers. These appointments require Senate confirmation. If Congress is not in session, presidents can make temporary appointments known as recess appointments without Senate confirmation, good until the end of the next session of Congress.

appointment power

The appointment power of the presidency refers to the president’s constitutional authority to appoint and receive ambassadors to and from other countries.

diplomacy

The art and practice of conducting international relations by negotiating alliances, treaties, agreements, etc., bilaterally or multilaterally, between states and sometimes international organizations or even between policies with varying statuses, such as those of monarchs and their princely vassals.

Example

• Informal diplomacy has been used for centuries to communicate between powers. Most diplomats work to recruit figures in other nations who might be able to give informal access to a country’s leadership. Such informal diplomacy was practiced by former US Presidents Jimmy Carter and Bill Clinton and by the former Israeli diplomat and minister Yossi Beilin.

Introduction

Diplomacy is the art and practice of conducting negotiations between representatives of groups or states. It usually refers to international diplomacy, the conduct of international relations through the intercession of professional diplomats with regard to issues of peacemaking, trade, war, economics, culture, environment and human rights. International treaties are usually negotiated by diplomats prior to endorsement by national politicians. In an informal or social sense, diplomacy is the employment of tact to gain strategic advantage or to find mutually acceptable solutions to a common challenge, one set of tools being the phrasing of statements in a nonconfrontational, or polite manner.

U.S. President as Chief Diplomat

Although the Constitution does not explicitly grant presidents the power to recognize foreign governments, it is generally accepted that they have this power as a result of their constitutional authority to “send and receive ambassadors. ” This is generally known as the “appointment power” of the presidency. Because the acts of sending an ambassador to a country and receiving its representative imply recognition of the legitimacy of the foreign government involved, presidents have successfully claimed exclusive authority to decide which foreign governments are recognized by the United States. It follows, then, that they have the power to terminate relations with other nations as well.

Along with naming judges, presidents appoint ambassadors and executive officers. These appointments require Senate confirmation. If Congress is not in session, presidents can make temporary appointments known as recess appointments without Senate confirmation, good until the end of the next session of Congress.

Although not constitutionally provided, presidents also sometimes employ “executive agreements” in foreign relations. These agreements frequently regard administrative policy choices germane to executive power; for example, the extent to which either country presents an armed presence in a given area, how each country will enforce copyright treaties, or how each country will process foreign mail. However, the 20th century witnessed a vast expansion of the use of executive agreements, and critics have challenged the extent of that use as supplanting the treaty process and removing constitutionally prescribed checks and balances over the executive in foreign relations. Supporters counter that the agreements offer a pragmatic solution when the need for swift, secret, and/or concerted action arises.

Informal Diplomacy

Informal diplomacy has been used for centuries to communicate between powers. Most diplomats work to recruit figures in other nations who might be able to give informal access to a country’s leadership. On some occasion a former holder of an official position continues to carry out an informal diplomatic activity after retirement. In some cases, governments welcome such activity, for example as a means of establishing an initial contact with a hostile state of group without being formally committed. In other cases, however, such informal diplomats seek to promote a political agenda different from that of the government currently in power. Such informal diplomacy is practiced by former US Presidents Jimmy Carter and (to a lesser extent) Bill Clinton and by the former Israeli diplomat and minister Yossi Beilin.

James Carter Presidential Portrait

Jimmy Carter served as the thirty-ninth President of the United States from 1977 to 1981.

12.3.5: Chief Legislator

As chief legislator, the president may suggest, request, and insist that Congress enact laws he believes are needed.

Learning Objective

Assess the significance of the Line Item Veto for executive power

Key Points

• As chief legislator, the president shapes policy. The Constitution is reticent about the president’s role in legislating, yet the relationship between Congress and the executive is the most important aspect of the U.S. system of government.
• The president may suggest, request, and insist that Congress enact laws he believes are needed. He can attempt to influence Congress through promises of patronage and favors.
• In 1996, Congress attempted to enhance the president’s veto power with the Line Item Veto Act. The legislation empowered the president to sign any spending bill into law while simultaneously striking certain spending items within the bill.
• In Clinton v. City of New York (1998), the U.S. Supreme Court ruled such a legislative alteration of the veto power to be unconstitutional.

Key Terms

line item veto act

The Line Item Veto Act of 1996 enacted a line-item veto for the Federal government of the United States, but its effect was brief because the act was overturned after judicial review.

clinton v. city of new york

In Clinton v. City of New York (1998), the U.S. Supreme Court ruled the Line Item Veto Act’s expansion of veto power to be unconstitutional.

veto

A political right to disapprove of (and thereby stop) the process of a decision, a law, etc.

pocket veto

a legislative maneuver in lawmaking that allows a president or other official to unilaterally stop a bill by taking no action

Chief Legislator

The president has many official and unofficial roles. The formal powers and duties of the president are outlined in Article II of the Constitution. As chief legislator, the president shapes policy. The Constitution is reticent about the president’s role in legislating, yet the relationship between Congress and the executive is the most important aspect of the U.S. system of government. The president can gather information from the bureaucracy, present a legislative agenda to Congress, and go to the American public for support for his legislative agenda.

President Barack Obama Signing Legislation

President Barack Obama signs legislation in the Oval Office, Dec. 22, 2010. (Official White House Photo by Pete Souza)

The president may suggest and request that Congress enact laws he believes are needed. He can attempt to influence Congress through promises of patronage and favors. He stays in touch with Congress formally through written messages and informally through private meetings, parties, and phone calls. When the president receives legislation, he decides whether to veto it, use the pocket veto, sign it, or do nothing. If the president does nothing, then if Congress is still in session ten days later it becomes law.

In 1996, Congress attempted to enhance the president’s veto power with the Line Item Veto Act. The legislation empowered the president to sign any spending bill into law while simultaneously striking certain spending items within the bill, particularly any new spending, any amount of discretionary spending, or any new limited tax benefit. Once a president had stricken the item, Congress could pass that particular item again. If the president then vetoed the new legislation, Congress could override the veto by the ordinary method of a two-thirds vote in both houses. In Clinton v. City of New York (1998), the U.S. Supreme Court ruled such a legislative alteration of the veto power to be unconstitutional.

12.3.6: Political Party Leader

The president is largely responsible for dictating the legislative agenda of his political party.

Learning Objective

Describe roles that the President plays above and beyond serving as the nation’s chief executive

Key Points

• The Constitution’s Ineligibility Clause prevents the president from simultaneously being a member of Congress. Therefore, the president cannot directly introduce legislative proposals for consideration in Congress.
• Nevertheless, the president can take an indirect role in shaping legislation, especially if the president’s political party has a majority in one or both houses of Congress.
• The modern presidential campaign begins before the primary elections, which the two major political parties use to clear the field of candidates before their national nominating conventions, where the most successful candidate is made the party’s nominee for president.

Key Term

ineligibility clause

The Constitution’s Ineligibility Clause prevents the president from simultaneously being a member of Congress. Therefore, the president cannot directly introduce legislative proposals for consideration in Congress.

Example

• The president can take an indirect role in shaping legislation, especially if the president’s political party has a majority in one or both houses of Congress. For example, the president or other officials of the executive branch may draft legislation and then ask senators or representatives to introduce these drafts into Congress.

Introduction

The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces. Since the founding of the United States, the power of the president and the federal government have grown substantially, and each modern president, despite possessing no formal legislative powers beyond signing or vetoing congressionally passed bills, is largely responsible for dictating the legislative agenda of his party and the foreign and domestic policy of the United States .

Obama Taking Oath of Office

After winning the 2008 presidential election, Barack Obama was sworn into office on January 20, 2009.

As Legislative Facilitator

The Constitution’s Ineligibility Clause prevents the president from simultaneously being a member of Congress. Therefore, the president cannot directly introduce legislative proposals for consideration in Congress. However, the president can take an indirect role in shaping legislation, especially if the president’s political party has a majority in one or both houses of Congress. For example, the president or other officials of the executive branch may draft legislation and then ask senators or representatives to introduce these drafts into Congress. The president can further influence the legislative branch through constitutionally mandated, periodic reports to Congress. These reports may be either written or oral, but today are given as the State of the Union Address, which often outlines the president’s legislative proposals for the coming year.

Campaigns and Nomination

The modern presidential campaign begins before the primary elections, which the two major political parties use to clear the field of candidates before their national nominating conventions, where the most successful candidate is made the party’s nominee for president. Typically, the party’s presidential candidate chooses a vice presidential nominee, and this choice is rubber stamped by the convention. Nominees participate in nationally televised debates, and while the debates are usually restricted to the Democratic and Republican nominees, third party candidates may be invited, such as Ross Perot in the 1992 debates. Nominees campaign across the country to explain their views, convince voters, and solicit contributions. Much of the modern electoral process is concerned with winning swing states through frequent visits and mass media advertising drives.

11.2: Organization of Congress

11.2.1: Party Leadership in the House

Learning Objective

Explain in detail the power of the Speaker of the House, the Majority Leader and the Party Whip

Key Points

• The current House Majority Leader is Republican Kevin McCarthy, while the current House Minority Leader is Democrat Nancy Pelosi. The current House Majority Whip is Republican Steve Scalise, while the current House Minority Whip is Democrat Steny Hover.
• The Majority Leader’s duties and prominence vary depending upon the style of the Speaker of the House and the political climate within the majority caucus.
• The Minority Leader of the House serves as floor leader of the opposition party and is the counterpart to the Majority Leader.

Key Terms

Speaker of the House

the presiding officer (chair) of the House of Representatives

minority leader

the floor leader of the second largest caucus in a legislative body; the leader of the opposition

majority leader

a partisan position in a legislative body; often the chief spokesperson for the party in power, who sets the floor agenda and oversees the committee chairmen

Party leaders and whips of the United States House of Representatives are elected by their respective parties in a closed-door caucus by secret ballot. The party leaders are also known as floor leaders. The U.S. House of Representatives does not officially use the term “Minority Leader” although the media frequently does. Instead, the House uses the terms “Republican Leader” or “Democratic Leader” depending on which party holds a minority of seats.

The current House Majority Leader is Republican Kevin McCarthy, while the current House Minority Leader is Democrat Nancy Pelosi. The current House Majority Whip is Republican Steve Scales, while the current House Minority Whip is Democrat Steny Hoyer. The Majority Leader’s duties and prominence varies depending upon the style of the Speaker of the House and the political climate within the majority caucus.

House Majority Leader Kevin McCarthy

The Speaker of the House and the Majority Leader

The House Majority Leader’s duties and prominence vary depending upon the style and power of the Speaker of the House. Typically, the Speaker does not participate in debate and rarely votes on the floor. In some cases, Majority Leaders have been more influential than the Speaker, notably Tom DeLay who was more prominent than Speaker Dennis Hastert. In addition, Speaker Newt Gingrich delegated to Dick Armey an unprecedented level of authority over scheduling legislation on the House floor. As presiding office of the House of Representatives, the Speaker holds a variety of powers over the House but usually delegates them to another member of the majority party.

The Speaker in the United States, by tradition, is the head of the majority party in the House of Representatives, outranking the Majority Leader. However, despite having the right to vote, the Speaker usually does not participate in debate and rarely votes. The Speaker is responsible for ensuring that the House passes legislation supported by the majority party. In pursuing this goal, the Speaker may use his or her power to determine when each bill reaches the floor. They also chair the majority party’s steering committee in the House. While the Speaker is the functioning head of the House majority party, the same is not true of the President pro tempore of the Senate, whose office is primarily ceremonial and honorary. The Speaker may designate any member of the House to act as Speaker pro tempore and preside over the House. During important debates, the Speaker pro tempore is ordinarily a senior member of the majority party who may be chosen for his or her skill in presiding. At other times, more junior members may be assigned to preside to give them experience with the rules and procedures of the House. The Speaker may also designate a Speaker pro tempore for special purposes, such as designating a Representative whose district is near Washington, DC to sign enrolled bills during long recesses.

The Minority Leader

The Minority Leader of the House serves as floor leader of the opposition party and is the counterpart to the Majority Leader. Unlike the Majority Leader, the Minority Leader is on the ballot for Speaker of the House when Congress convenes. If the Minority Leader’s party takes control of the House and the party officers are all re-elected to their seats, the Minority Leader is usually the party’s top choice for Speaker for the next Congress, while the Minority Whip is typically in line to become Majority Leader. The Minority Leader usually meets with the Majority Leader and the Speaker to discuss agreements on controversial issues.

The floor leaders and whips of each party are elected by their respective parties in a closed-door caucus by secret ballot. The Speaker-elect is also chosen in a closed-door session although they are formally installed in their position by a public vote when Congress reconvenes.

11.2.2: Party Leadership in the Senate

Learning Objective

Summarize the leadership structure in the Senate

Key Points

• Each party is led by a floor leader who directs the legislative agenda and is augmented by an Assistant Leader and several other officials who work together to manage the floor schedule of legislation, enforce party discipline, oversee efforts to elect new Senators, and maintain party unity.
• The titular, non-partisan leaders of the Senate itself are the Vice President of the United States, who serves as President of the Senate, and the President pro tempore, the most senior most member of the majority who theoretically presides in the absence of the Vice President.
• Unlike committee chairmanships, leadership positions are not traditionally conferred on the basis of seniority but are elected in closed-door caucuses.

Key Terms

seniority

refers to the number of years one member of a group has been a part of the group, or the political power attained by position within the United States Government

titular

One who holds a title.

caucus

A meeting, especially a preliminary meeting, of persons belonging to a party, to nominate candidates for public office, or to select delegates to a nominating convention, or to confer regarding measures of party policy; a political primary meeting.

The party leadership of the United States Senate refers to the officials elected by the Senate Democratic Caucus and the Senate Republican Conference to manage the affairs of each party in the Senate. Each party is led by a floor leader who directs the legislative agenda of his caucus in the Senate, and who is augmented by an Assistant Leader or Whip, and several other officials who work together to manage the floor schedule of legislation, enforce party discipline, oversee efforts to elect new Senators, and maintain party unity.

The titular, non-partisan leaders of the Senate itself are the Vice President of the United States, who serves as President of the Senate, and the President pro tempore, the most senior member of the majority who theoretically presides in the absence of the Vice President.

Capitol Hill

Capitol Hill, where bills become laws.

Unlike committee chairmanships, leadership positions are not traditionally conferred on the basis of seniority, but are elected in closed-door caucuses.

Since January 3, 2007, the Democratic Party has constituted a majority in the Senate. The Senate Majority Leader is Harry Reid (Nevada) and serves as leader of the Senate Democratic Conference and manages the legislative business of the Senate. The Senate Majority Whip is Dick Durbin (Illinois) who manages votes, communicates with individual senators, and ensures passage of bills relevant to the agenda and policy goals of the Senate Democratic Conference. Since January 3, 2007, the Republican Party has constituted the minority of the Senate. Mitch McConnell (Kentucky) is the Senate Minority Leader and Jon Kyl (Arizona) is the Senate Minority Whip.

11.2.3: Bicameralism

Learning Objective

Describe bicameralism and the Founding Fathers’ understanding of its role in American federalism

Key Points

• The Founding Fathers of the United States favored a bicameral legislature. The idea was to have the Senate be wealthier and wiser. The Senate was created to be a stabilizing force, elected not by mass electors, but selected by the State legislators.
• A conference committee is appointed when the two chambers cannot agree on the same wording of a proposal, and consists of a small number of legislators from each chamber. This tends to place much power in the hands of only a small number of legislators.
• State legislators chose the Senate and senators had to possess a significant amount of property in order to be deemed worthy and sensible enough for the position.
• As part of the Great Compromise, the Founding Fathers developed a form of bicameralism in which the upper house would have states represented equally, and the lower house would have them represented by population.

Key Terms

Great Compromise

An agreement reached during the Constitutional Convention of 1787 that in part defined the legislative structure and representation that each state would have under the US Constitution. It called for a bicameral legislature, along with proportional representation in the lower house, but required the upper house to be weighted equally between the states.

bicameral

Having, or pertaining to, two separate legislative chambers or houses.

Bicameralism

In government, bicameralism is the practice of having two legislative or parliamentary chambers comprise bills. Bicameralism is an essential and defining feature of the classical notion of mixed government. Bicameral legislatures tend to require a concurrent majority to pass legislation. A conference committee is appointed when the two chambers cannot agree on the same wording of a proposal that consists of a small number of legislators from each chamber. This tends to place much power in the hands of only a small number of legislators. Whatever legislation, if any, the conference committee finalizes must then be approved in an unamendable “take-it-or-leave-it” manner by both chambers.

The Founding Fathers of the United States favored a bicameral legislature. The idea was to have the Senate be wealthier and wiser. The Senate was created to be a stabilizing force, elected not by mass electors, but selected by the State legislators. Senators would be more knowledgeable and more deliberate—a sort of republican nobility—and a counter to what Madison saw as the “fickleness and passion” that could absorb the House.

Capitol Hill

The U.S. has a bicameral legislature in Congress, consisting of the House of Representatives and the Senate

State legislators chose the Senate and senators had to possess a significant amount of property in order to be deemed worthy and sensible enough for the position. In fact, it was not until the year 1913 that the Seventeenth Amendment was passed, which “mandated that Senators would be elected by popular vote rather than chosen by the State legislatures. ” As part of the Great Compromise, they invented a new rationale for bicameralism in which the upper house would have states represented equally, and the lower house would have them represented by population.

During the 1930s, the Legislature of the State of Nebraska was reduced from bicameral to unicameral with the 43 members that once comprised that state’s Senate. One of the arguments used to sell the idea at the time to Nebraska voters was that by adopting a unicameral system, the perceived evils of the conference committee process would be eliminated. During his term as Governor of Minnesota, Jesse Ventura proposed converting the Minnesotan legislature to a single chamber with proportional representation, as a reform that he felt would solve many legislative difficulties and impinge upon legislative corruption. Ventura argued that bicameral legislatures for provincial and local areas were excessive and unnecessary, and discussed unicameralism as a reform that could address many legislative and budgetary problems for states.

11.2.4: Legislative Agendas

Learning Objective

Differentiate between two uses of the word agenda

Key Points

• A political agenda is a set of issues and policies laid out by an executive or cabinet in government that tries to influence current and near-future political news and debate.
• In parliamentary procedure, an agenda is not binding upon an assembly unless its own rules make it so, or unless it has been adopted as the agenda for the meeting by majority vote at the start of the meeting.
• If an agenda is binding upon an assembly and a specific time is listed for an item, that item cannot be taken up before that time, and must be taken up when that time arrives even if other business is pending.

Key Terms

town meeting

a form of direct democratic rule, used primarily in portions of the United States since the 17th century, in which most or all the members of a community come together to legislate policy and budgets for local government

docket

A short entry of the proceedings of a court; the register containing them; the office containing the register.

adjourn

Temporarily ending an event with intentions to complete it at another time or place.

An agenda is a list of meeting activities in the order in which they are to be taken up, by beginning with the call to order and ending with adjournment. It usually includes one or more specific items of business to be discussed. It may, but is not required to, include specific times for one or more activities. An agenda may also be called a “docket. “

A political agenda is a set of issues and policies laid out by an executive or cabinet in government that tries to influence current and near-future political news and debate. In parliamentary procedure, an agenda is not binding upon an assembly unless its own rules make it so or unless it has been adopted as the agenda for the meeting by majority vote at the start of the meeting. Otherwise, it is merely for the guidance of the chair.

If an agenda is binding upon an assembly, and a specific time is listed for an item. That item cannot be taken up before that time and must be taken up when that time arrives even if other business is pending. If it is desired to do otherwise, the rules can be suspended for that purpose.

Gerald Ford Papers

Gerald Ford set the Republican legislative agenda.

The political agenda while shaped by government can be influenced by grassroots support from party activists at events, such as a party conference, and can even be shaped by non-governmental activist groups which have a political aim. Increasingly, the mass media can have an effect in shaping the political agenda through its news coverage of news stories. A political party can be described as shaping the political agenda or setting the political agenda if its promotion of certain issues gains prominent news coverage. For example, at election time, if a political party wants to promote its polices and gain prominent news coverage in order to increase its support.

11.2.5: The Committee System

Learning Objective

Describe the committee system, its growth, and that growth’s effect on Congress’s power

Key Points

• Committees monitor on-going governmental operations, identify issues suitable for legislative review, gather and evaluate information and recommend courses of action to their parent body.
• Congressional committees provide invaluable informational services to Congress by investigating and reporting about specialized subjects.
• Since 1761, the growing autonomy of committees has fragmented the power of each congressional chamber as a unit. This centrifugal dispersion of power has, without doubt, weakened the Legislative Branch relative to the other branches of the federal government.
• Today the Senate operates with 20 standing and select committees. These select committees, however, are permanent in nature and are treated as standing committees under Senate rules.

Key Term

Ways and Means

The Committee of Ways and Means is the chief tax-writing committee of the United States House of Representatives

A congressional committee is a legislative sub-organization in the U.S. Congress that handles a specific duty. Committee membership enables members to develop specialized knowledge of the matters under their jurisdiction. Committees monitor on-going governmental operations, identify issues suitable for legislative review, gather and evaluate information and recommend courses of action to their parent body. It is neither expected nor possible that a member of Congress be an expert on all matters and subject areas that come before Congress. Congressional committees provide invaluable informational services to Congress by investigating and reporting about specialized subjects.

Most legislation is considered by standing committees which have jurisdiction over a particular subject such as Agriculture or Appropriations. The House has twenty standing committees; the Senate has sixteen. Standing committees meet at least once each month. Almost all standing committee meetings for transacting business must be open to the public unless the committee votes, publicly, to close the meeting. A committee might call for public hearings on important bills. Each committee is led by a chair who belongs to the majority party and a ranking member of the minority party. Witnesses and experts can present their case for or against a bill. Then, a bill may go to what’s called a mark-up session where committee members debate the bill’s merits and may offer amendments or revisions. Committees may also amend the bill, but the full house holds the power to accept or reject committee amendments. After debate, the committee votes whether it wishes to report the measure to the full house. If a bill is tabled then it is rejected. If amendments are extensive, sometimes a new bill with amendments built in will be submitted as a so-called clean bill with a new number.

Congress divides its legislative, oversight, and internal administrative tasks among approximately 200 committees and subcommittees. Within assigned areas, these functional subunits gather information, compare and evaluate legislative alternatives, identify policy problems and propose solutions, select, determine, and report measures for full chamber consideration, monitor executive branch performance and investigate allegations of wrongdoing. While this investigatory function is important, procedures such as the House discharge petition process are so difficult to implement that committee jurisdiction over particular subject matter of bills has expanded into semi-autonomous power.

Since 1761, the growing autonomy of committees has fragmented the power of each congressional chamber as a unit. Over time, this system proved ineffective, so in 1816 the Senate adopted a formal system of 11 standing committees with five members each. With the advent of this new system, committees are able to handle long-term studies and investigations, in addition to regular legislative duties. With the growing responsibilities of the Senate, the committees gradually grew to be the key policy-making bodies of the Senate, instead of merely technical aids to the chamber.

By 1906, the Senate maintained 66 standing and select committees—eight more committees than members of the majority party. The large number of committees and the manner of assigning their chairmanships suggests that many of them existed solely to provide office space in those days before the Senate acquired its first permanent office building, the Russell Senate Office Building. By May 27, 1920, the Russell Senate Office Building had opened, and with all Senate members assigned private office space, the Senate quietly abolished 42 committees. Today the Senate operates with 20 standing and select committees. These select committees, however, are permanent in nature and are treated as standing committees under Senate rules.

Russell Senate Office Building

The Russell Senate Office Building houses several Congressional staff members, including those on the United States Senate Committees on Armed Services, Rules and Administration, Veterans’ Affairs, and others.

The first House Committee was appointed on April 2, 1789 to prepare and report such standing rules and orders of proceeding as well as the duties of a Sergeant-at-Arms to enforce those rules. Other committees were created as needed, on a temporary basis, to review specific issues for the full House. The House relied primarily on the Committee of the Whole to handle the bulk of legislative issues. The Committee on Ways and Means followed on July 24, 1789 during a debate on the creation of the Treasury Department over concerns of giving the new department too much authority over revenue proposals. The House felt it would be better equipped if it established a committee to handle the matter. This first Committee on Ways and Means had 11 members and existed for just two months. It later became a standing committee in 1801, a position it still holds today.

Ways and Means Committee Logo

The Ways and Means Committee has been an important committee in the U.S. since 1789

11.2.6: The Staff System

Learning Objective

Differentiate between the roles of different congressional staff; in the Congressional Research Service, Congressional Budget Office, and Government Accountability Office

Key Points

• In the year 2000, there were approximately 11,692 personal staff, 2,492 committee staff, 274 leadership staff, 5,034 institutional staff, 3,500 GAO employees, 747 CRS employees, and 232 CBO employees.
• Every Representative hired 14 staff members, while the average Senator hired 34. In 2000, Representatives had a limit of 18 full-time and four part-time staffers, while Senators had no limit on staff.
• Majority and minority members hire their own staff except for two committees in each house: the Committee on Standards of Official Conduct and the Permanent Select Committee on Intelligence in the House, and the Select Committee on Ethics and Senate Select Committee on Intelligence in the Senate.

Key Terms

Congressional Research Service

The Congressional Research Service (CRS), known as Congress’s think tank, is a public policy research arm of the United States Congress.

Congressional Budget Office

The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides economic data to Congress.

Government Accountability Office

The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress.

appropriation

Public funds set aside for a specific purpose.

Congressional staff are employees of the United States Congress or individual members of Congress. The various types of congressional staff are as follows: personal staff, who work for individual members of Congress; committee staff, who serve either the majority or minority on congressional committees; leadership staff, who work for the speaker, majority and minority leaders, and the majority and minority whips; institutional staff, who include the majority and minority party floor staff and non-partisan staff; and the support agency staff, who are the non-partisan employees of the Congressional Research Service (CRS), Congressional Budget Office (CBO), and Government Accountability Office (GAO).

Russell Senate Office Building

The Russell Senate Office Building houses several Congressional staff members, including those on the United States Senate Committees on Armed Services, Rules and Administration, Veterans’ Affairs, and others.

In the year 2000, there were approximately 11,692 personal staff, 2,492 committee staff, 274 leadership staff, 5,034 institutional staff, 747 CRS employees, and 232 CBO employees, and 3,500 GAO employees. Every Representative hired 14 staff members, while the average Senator hired 34. Representatives had a limit of 18 full-time and four part-time staffers, while Senators had no limit on staff.

Each congressional committee has a staff of varying size. Appropriations for committee staff are made in annual legislative appropriations bills. Majority and minority members hire their own staff, with the exception of two committees in each house: the Committee on Standards of Official Conduct and the Permanent Select Committee on Intelligence in the House, and the Select Committee on Ethics and the Senate Select Committee on Intelligence in the Senate. These committees have a single staff.

In 2000, House committees had an average of 68 staff, and Senate committees an average of 46. Committee staff includes staff directors, committee counsel, committee investigators, press secretaries, chief clerks and office managers, schedulers, documents clerks, and assistants.

11.2.7: The Caucus

Learning Objective

Differentiate between two different types of political caucus

Key Points

• The term caucus is often used to discuss procedures implemented by states, including Iowa and Texas, to select presidential nominees.
• Depending on how the caucus is organized, the caucus system may require voters to publicly announce the candidates they support. Voters have the option to draft resolutions introduced at later divisional caucuses or conventions.
• A caucus can also be a sub-grouping of officials who convene to advocate, agitate, lobby or vote collectively on policy.

Key Term

bicameral

Having, or pertaining to, two separate legislative chambers or houses.

A caucus is a meeting of supporters or members of a political party or movement. Members of a political party or subgroup may meet to coordinate actions, choose group policy or nominate candidates for various offices.The term caucus is often used to discuss procedures implemented by states, including Iowa and Texas, to select presidential nominees. . Since 1980, caucuses have become an important component of the nomination process.

Iowa Caucus

The Iowa Caucus is the first major electoral event of the nominating process for President of the United States.

Despite a Democratic Party rule that delegates are allocated proportionally rather than “winner takes all,” some caucus groups decide individually how to allocate their group’s delegates. Discussion of party rules is not necessarily part of the caucus experience, while few rules govern the actual process. In the “winner-take-all” scenario, a group’s delegate allocation may be reported as unanimous while ignoring minority votes. Depending on how the caucus is organized, the caucus system may require voters to publicly announce the candidates they support. Voters have the option to draft resolutions introduced by delegates at later divisional caucuses or conventions.

A caucus can also be a sub-grouping of officials with shared affinities or ethnicities. These officials convene to advocate, agitate, lobby or to vote collectively on policy. At the congressional and legislative levels, Democratic and Republican members organize themselves into a caucus.

There can also be smaller caucuses in a legislative body, including those that are multi-partisan or bicameral. One of the best-known is the Congressional Black Caucus, a group of African-American congressmen. Another prominent example is the Congressional Hispanic Caucus, whose members advance issues affecting Hispanics. In a different vein, the Congressional Internet Caucus is a bipartisan group promoting the growth and advancement of the Internet. Other congressional caucuses like the Out of Iraq Caucus strive to achieve political goals, generally organized around a single issue.

11.2.8: Congressional Districts

Learning Objective

Describe what determines the quantity and boundaries of congressional districts

Key Points

• The boundaries of districts often shift with each redistricting. Over time, the region and demographics represented in a district can change substantially.
• As of the 2000 census, the average population per district is 646,946 people. California, with 53 districts, has the most. States with only one district include Alaska, Delaware, Montana, North Dakota, South Dakota, Vermont, and Wyoming.
• Alaska is the district with the greatest area and New York’s 15th district has the smallest area. Montana’s district has the largest number of people (905,316) and Wyoming has the fewest number of people (495,304). Delaware is the oldest district.

Key Terms

apportion

To divide and distribute portions of a whole.

apportionment

The act of apportioning or the state of being apportioned

Congressional Districts

The quantity (apportionment) and boundaries (redistricting) of districts are determined after each census, although in some cases states have changed the boundaries more than once per census. The census is used to gauge each state’s population and thus, proportional need for representation. Due to the shifts in population a state may gain or lose congressional districts. For example, since the 2000 census, Nebraska has had three districts, but it used to have as many as six. Texas currently has 32 districts, but will be adding 4 due to reapportionment as a result of the 2010 census. Other states will lose districts since the number of congressional seats has been set at 435 by statute.

The boundaries of districts often shift with each redistricting. Over time, the region and demographics represented in a district can change substantially. Furthermore, districts sometimes retain the same boundaries while changing their district numbers.

U.S. District Map

This map shows the U.S. Congress House Districts for the 110th-112th Congresses.

As of the 2000 census, the average population per district is 646,946 people. California had the most, at 53 districts. States with only one district include Alaska, Delaware, Montana, North Dakota, South Dakota, Vermont, and Wyoming. Alaska, Delaware, and Wyoming are the only states that have never had more than one district. Alaska is the district with the greatest area and New York’s 15^th district has the smallest area. Montana’s district has the largest number of people (905,316) and Wyoming has the fewest number of people (495,304). Delaware is the oldest district; It has had the same geographical borders since 1789.

11.3: The Legislative Function of Congress

11.3.1: How a Bill Becomes Law

A bill is introduced by a member of the legislature, read through, debated, and then passed to become a law.

Learning Objective

Explain the process by which a bill becomes a law through the legislative and executive branches of government

Key Points

• In the US system, where the executive is formally separated from the legislature, all bills must originate from the legislature.
• In the U.S. Congress, a system of committees considers law relating to each policy area jurisdictions. The committee system is a way to provide for specialization, or a division of the legislative labor.
• At the second reading the general merits of the bill are considered. The committee reports to the legislature and further amendments are proposed. A third reading debate occurs and the bill is submitted.
• Bills passed by the legislature usually require the approval of the executive to become law. The legislature often has the power to override the veto of the executive by means of a supermajority. Any branch at anytime may decline the proposed bill.

Key Term

fiat

An authoritative command or order to do something; an effectual decree.

How a Bill Becomes Law

A bill is introduced by a member of the legislature. While mechanisms exist to allow other members of the legislature to introduce bills, these are subject to strict timetables and usually fail unless a consensus is reached. In the U.S. system, where the executive is formally separated from the legislature, all bills must originate from the legislature.

Bills can be introduced through leave and government motion. Leave is when a motion is brought before the house asking that leave be given to bring in a bill. The legislator has 10 minutes to propose a bill, which can then be considered by the House on a day appointed for the purpose. While this rule still exists in the rules of procedure of the U.S. Congress, it is seldom used. A government motion occurs in jurisdictions where the executive can control legislative business a bill may be brought in by executive fiat.

A system of committees considers law relating to each policy area jurisdictions in the U.S. Congress. Thousands of bills are introduced in every session of Congress and no single member can possibly be adequately informed on all the issues that arise. The committee system is a way to provide for specialization, or a division of the legislative labor. Committees usually have the final say on pieces of legislation and only very rarely are deprived of control of a bill; although this kind of action is allowed in the rules of each chamber.

Capitol Hill

The U.S. has a bicameral legislature in Congress, consisting of the House of Representatives and the Senate

House and Senate Committees

A congressional committee is a legislative sub-organization in the United States Congress that handles a specific duty. Committee membership enables members to develop specialized knowledge of the matters under their jurisdiction. Congress divides its legislative, oversight, and internal administrative tasks among approximately 200 committees and subcommittees.

There are three main types of committees—standing, select or special, and joint. In the House of Representatives, there are 21 permanent committees, and 20 in the United States Senate. Four joint committees operate with members from both houses on matters of mutual jurisdiction and oversight. Committees in the House of Representatives generally have more members, due its larger size, as compared to the smaller 100-member Senate. Senate rules fix the maximum size for many of its committees, while the House determines the size and makeup of each committee every new Congress.

Bills are generally considered through a number of readings. This refers to the historic practice of the clerical officers of the legislature reading the contents of a bill to the legislature. While the bill is no longer read, the motions on the bill still refer to this practice.

At the second reading the general merits of the bill are considered. After which, the bill is referred to a committee, considering the bill line by line proposing amendments. The committee reports to the legislature, at which stage further amendments are proposed. Finally a third reading debate at which the bill as amended is considered in its entirety. The process is repeated in the other house, before the Bill is submitted to the executive for approval.

Bills passed by the legislature usually require the approval of the executive to become law. The need to receive approval can be used as a political tool by the executive and its refusal is known as a veto. The legislature often has the power to override the veto of the executive by means of a supermajority. Any branch at anytime may decline the proposed bill.

11.3.2: Committee Deliberation

Deliberation is a process of thoughtfully weighing options, usually prior to voting, emphasizing the use of logic and reason.

Learning Objective

Identify the significance of committee deliberation in the legislative process

Key Points

• In deliberative democracy the aim is for both elected officials and the general public to use deliberation rather than power-struggle as the basis for their vote and is a form of democracy in which deliberation is central to decision making.
• Deliberative democracy differs from traditional democratic theory in that authentic deliberation, not mere voting, is the primary source of legitimacy for the lawmaking processes.
• A deliberative assembly is an organization comprising members who use parliamentary procedure to make decisions. A committee is a small deliberative assembly subordinate to a larger deliberative assembly.

Key Term

subordinate

Placed in a lower class, rank, or position.

Deliberation and Democracy

Deliberation is a process of thoughtfully weighing options, usually prior to voting. Deliberation emphasizes the use of logic and reason as opposed to power-struggle, creativity, or dialogue. Group decisions are generally made after deliberation through a vote of those involved.

In deliberative democracy the aim is for both elected officials and the general public to use deliberation rather than power-struggle as the basis for their vote. Deliberative democracy is a form of democracy in which deliberation is central to decision making. It adopts elements of both consensus decision-making and majority rule. Deliberative democracy differs from traditional democratic theory in that authentic deliberation, not mere voting, is the primary source of legitimacy for the lawmaking processes.

Capitol Hill

Capitol Hill, where bills become laws.

Debate in the U.S. Congress

Each bill goes through several stages in each house including consideration by a committee and advice from the Government Accountability Office. Most legislation is considered by standing committees which have jurisdiction over a particular subject such as Agriculture or Appropriations. The House has twenty standing committees; the Senate has sixteen. Standing committees meet at least once each month. Almost all standing committee meetings for transacting business must be open to the public unless the committee votes, publicly, to close the meeting. A committee might call for public hearings on important bills. Each committee is led by a chair who belongs to the majority party and a ranking member of the minority party. Witnesses and experts can present their case for or against a bill. Then, a bill may go to what’s called a mark-up session where committee members debate the bill’s merits and may offer amendments or revisions. Committees may also amend the bill, but the full house holds the power to accept or reject committee amendments. After debate, the committee votes whether it wishes to report the measure to the full house. If a bill is tabled then it is rejected. If amendments are extensive, sometimes a new bill with amendments built in will be submitted as a so-called clean bill with a new number. Both houses have procedures under which committees can be bypassed or overruled but they are rarely used. Generally, members who have been in Congress longer have greater seniority and therefore greater power.

A bill which reaches the floor of the full house can be simple or complex and begins with an enacting formula such as “Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. ” Consideration of a bill requires, itself, a rule which is a simple resolution specifying the particulars of debate—time limits, possibility of further amendments, and such. Each side has equal time and members can yield to other members who wish to speak. Sometimes opponents seek to recommit a bill which means to change part of it. Generally, discussion requires a quorum, usually half of the total number of representatives, before discussion can begin, although there are exceptions. The house may debate and amend the bill; the precise procedures used by the House and Senate differ. A final vote on the bill follows.

Once a bill is approved by one house, it is sent to the other which may pass, reject, or amend it. For the bill to become law, both houses must agree to identical versions of the bill. If the second house amends the bill, then the differences between the two versions must be reconciled in a conference committee, an ad hoc committee that includes both senators and representatives sometimes by using a reconciliation process to limit budget bills. Both Houses use a budget enforcement mechanism informally known as pay-as-you-go or paygo which discourages members from considering acts which increase budget deficits. If both houses agree to the version reported by the conference committee, the bill passes, otherwise it fails. In this respect, this is how bills “die” in committees.

The Constitution specifies that a majority of members known as a quorum be present before doing business in each house. However, the rules of each house assume that a quorum is present unless a quorum call demonstrates the contrary. Since representatives and senators who are present rarely demand quorum calls, debate often continues despite the lack of a majority.

11.3.3: Debate

Debate is contention in argument and a method of interactive representational argument, and often occurs in Congress.

Learning Objective

Discuss the role that debate plays in the United States Congress

Key Points

• Debate is a broader form of argument than deductive reasoning, which only examines whether a conclusion is a consequence of premises, and factual argument, which only examines what is or isn’t the case, or rhetoric, which is a technique of persuasion.
• Though logical consistency, factual accuracy and emotional appeal to the audience are important elements of the art of persuasion, in debating, one side often prevails over the other side by presenting a superior context and framework of the issue, which is far more subtle and strategic.
• Debating is commonly carried out in many assemblies of various types to discuss matters and to make resolutions about action to be taken, often by a vote.

Key Terms

filibuster

A delaying tactic, especially the use of long, often irrelevant speeches given in order to delay progress or the making of a decision, especially on the floor of the US Senate.

rhetoric

The art of using language, especially public speaking, as a means to persuade.

Debate is contention in argument, dispute, controversy, and discussion. It is a method of interactive and representational argument. Debate is a broader form of argument than deductive reasoning, which only examines whether a conclusion is a consequence of premises, and factual argument, which only examines what is or isn’t the case, or rhetoric, which is a technique of persuasion. Debates are often organized for purely competitive purposes.

The use of debate in Congress often occurs when a new bill is introduced, especially if that bill is controversial. Senators may debate a bill. In the Senate, Senators sometimes use this rule to filibuster a bill—that is, continue debating a bill endlessly so that it cannot be voted on. The only way to end a filibuster is for three-fifths of all Senators to vote for a cloture resolution, which ends all debate and brings the bill up for voting. Use of the filibuster tends to be controversial. Whichever party is in the majority tends to call its use “obstructionism,” while the other side sees it as an important check on the majority.

Because of its size, the House relies heavily upon fixed rules and strict timetables for debate. When bills are debated on the floor of the House, each party’s leader is allocated a fixed amount of time to present their argument for or against the bill, and they can delegate this time to members of their party as they see fit. During House debates, it is common for representatives to “yield their time” to one another. Times for debate and other procedures are set by the House Rules Committee, which is generally considered to be one of the most powerful committees in Congress.

Congressional Records

The Congressional Records contain sections of verbatum congressional debates.

11.3.4: Conference Committee

A conference committee is a committee of Congress appointed by the House and Senate to resolve disagreements on a particular bill.

Learning Objective

Explain the function of the conference committee in the legislative process

Key Points

• The conference committee is usually composed of the senior Members of the standing committees of each House that originally considered the legislation.
• Conference committees exist to draft a compromise bill that both houses can accept. Both houses of Congress must eventually pass the identical legislation for the bill to become law.
• Each house determines the number of conferees from its house. The number of conferees need not be equal from each side. In order to conclude its business, a majority of both House and Senate delegations to the conference must indicate their approval by signing the conference report.
• The authority to appoint conferees lies in the entire House, and the entire Senate can appoint conferees by adopting a debatable motion to do so, but leadership has increasingly exercised authority in the appointment of conferees.
• The conference committee produces a conference report melding the work of the House and Senate into a final version of the bill and the conference report also includes a joint explanatory statement of the conference committee.

Key Terms

standing committee

a committee established by an official and providing for its scope and power

chair

Chairperson.

joint committee

a Congressional committee consisting of Members of both Houses and having jurisdiction over matters of joint interest

conference committee

a joint committee of a bicameral legislature, which is appointed by, and consists of, members of both chambers to resolve disagreements on a particular bill

A conference committee is a committee of Congress appointed by the House of Representatives and Senate to resolve disagreements on a particular bill. The conference committee is usually composed of the senior members of the standing committees of each house that originally considered the legislation.

Conference committees operate after the House and the Senate have passed different versions of a bill. Conference committees exist to draft a compromise bill that both houses can accept. Both houses of Congress must eventually pass the identical legislation for the bill to become law. The two houses can reach that identical product through the process of amendments between Houses, where the House passes the Senate bill with a House amendment, or vice versa. Thus most major bills become law through using a conference committee.

After one house passes a bill, the second house will often pass the same bill, with an amendment representing the second house’s work product. The second house will then send a message to the first house, asking the first house to concur with the second house’s amendment. If the first house does not like the second house’s amendment, then the first house can disagree with the amendment of the second house, request a conference, appoint conferees, and send a message to that effect to the second house. The second house then insists on its amendment, agrees to a conference, and appoints conferees.

Each house determines the number of conferees from its house. The number of conferees need not be equal from each side. In order to conclude its business, a majority of both House and Senate delegations to the conference must indicate their approval by signing the conference report.

The authority to appoint conferees lies in the entire House, and the entire Senate can appoint conferees by adopting a debatable motion to do so. But leadership have increasingly exercised authority in the appointment of conferees. The House and Senate may instruct conferees, but these instructions are not binding on conferees.

Conference committees can be extremely contentious, particularly if the houses are controlled by different parties . House rules require that one conference meeting be open to the public, unless the house, in open session, votes that a meeting will be closed to the public. But apart from this one open meeting, conference committees usually meet in private and are dominated by the Chairs of the House and Senate Committees.

John Boehner

Speaker of the House John Boehner (R), seen here with President Barack Obama during the 2011 State of the Union, called for a conference committee to discuss new tax policies that were introduced to the house in 2011. Critics say he used the conference committees to stall the passing of any tax compromises.

House and Senate rules forbid Conferees from inserting into their report matter not committed to them by either house, but conference committees sometimes do introduce new matter. In such a case, the rules of each house provide that a Member may object through a point of order, although each house has procedures under which it can vote to waive the point of order. The house provides a procedure by which the offending provision may be stricken from the bill. Formerly, the Senate required a Senator to object to the whole bill as reported by the conference committee. If the objection was well founded, the Presiding Officer ruled and a Senator could appeal the ruling of the Chair. If the appeal was sustained by a majority of the Senate, it had precedential effect, eroding the rule on the scope of conference committees.

The conference committee produces a conference report melding the work of the House and Senate into a final version of the bill. A conference report proposes legislative language as an amendment to the bill and also includes a joint explanatory statement of the conference committee. This explanatory statement provides one of the best sources of legislative history on the bill.

Once a bill has been passed by a conference committee, it goes directly to the floor of both houses for a vote, and is not open to further amendment. In the first house to consider the conference, a Member may move to recommit the bill to the conference committee. But once the first house has passed the conference report, the conference committee is dissolved and the second house to act can no longer recommit the bill to conference.

11.3.5: Presidential Action

The Ineligibility Clause prevents the President from being a member of Congress and cannot directly introduce legislative proposals.

Learning Objective

Identify the role of the President in drafting and passing bills into federal law

Key Points

• The President can take an indirect role in shaping legislation, especially if the president’s political party has a majority in Congress.
• According to Article II, Section 3, Clause 2 of the Constitution, the president may convene either or both houses of Congress.
• The President cannot directly introduce legislative proposals for consideration in Congress.

Key Term

adjourn

Temporarily ending an event with intentions to complete it at another time or place.

The President of the United States has limited legislative powers. The Constitution’s Ineligibility Clause prevents the President from simultaneously being a member of Congress. Therefore, the president cannot directly introduce legislative proposals for consideration in Congress. However, the president can take an indirect role in shaping legislation, especially if the president’s political party has a majority in one or both houses of Congress.

For example, the president or other officials of the executive branch may draft legislation and then ask senators or representatives to introduce these drafts into Congress. The president can further influence the legislative branch through constitutionally mandated, periodic reports to Congress. These reports may be either written or oral, but today are given as the State of the Union address, which often outlines the president’s legislative proposals for the coming year.

In the 20^th century critics began charging that too many legislative and budgetary powers have slid into the hands of presidents that should belong to Congress. As the head of the executive branch, presidents control a vast array of agencies that can issue regulations with little oversight from Congress. One critic charged that presidents could appoint a virtual army of ‘czars’ each wholly unaccountable to Congress yet tasked with spearheading major policy efforts for the White House. Presidents have been criticized for making singing statements when signing congressional legislation about how they understand a bill or plan to execute it. This practice has been criticized by the American Bar Association (ABA, ) as unconstitutional. Conservative commentator George Will wrote of an increasingly swollen executive branch and the eclipse of Congress.

American Bar Association

Union Trust Building, Washington D.C.Home to the American Bar Association’s Branch office

According to Article II, Section 3, Clause 2 of the Constitution, the president may convene either or both houses of Congress. If both houses cannot agree on a date of adjournment, the president may appoint a date for Congress to adjourn.

11.4: The Budgeting Function of Congress

11.4.1: The Budgeting Process

Each year, the President of the United States submits his budget request to Congress.

Learning Objective

Describe the key components of the budget process and the current fiscal position of the United States

Key Points

• The Budget of the United States Government often begins as the President’s proposal to the U.S. Congress which recommends funding levels for the next fiscal year, beginning October 1.
• Several government agencies provide budget data and analysis. These include the Government Accountability Office (GAO), Congressional Budget Office, the Office of Management and Budget (OMB) and the U.S. Treasury Department.
• Social Security, Medicare, and Medicaid expenditures are funded by more permanent Congressional appropriations and so are considered mandatory spending.
• During 2011, the U.S. spent more on its military budget than the next 13 countries combined.
• The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30.

Key Terms

Public Debt

The United States public debt is the money borrowed by the federal government of the United States through the issuing of securities by the Treasury and other federal government agencies.

budget

The amount of money or resources earmarked for a particular institution, activity, or time-frame.

Example

• The military budget of the United States during FY 2011 was approximately $740 billion in expenses for the Department of Defense (DoD), $141 billion for veteran expenses, and $48 billion in expenses for the Department of Homeland Security, for a total of $929 billion.

Introduction

The Budget of the United States Government often begins as the President’s proposal to the U.S. Congress which recommends funding levels for the next fiscal year, beginning October 1. However, Congress is the body required by law to pass a budget annually and to submit the budget passed by both houses to the President for signature. Congressional decisions are governed by rules and legislation regarding the federal budget process. Budget committees set spending limits for the House and Senate committees and for Appropriations subcommittees, which then approve individual appropriations bills to allocate funding to various federal programs.

Several government agencies provide budget data and analysis. These include the Government Accountability Office (GAO), Congressional Budget Office, the Office of Management and Budget (OMB) and the U.S. Treasury Department. These agencies have reported that the federal government is facing a series of important financing challenges. In the short-run, tax revenues have declined significantly due to a severe recession and tax policy choices, while expenditures have expanded for wars, unemployment insurance and other safety net spending. In the long-run, expenditures related to healthcare programs such as Medicare and Medicaid are projected to grow faster than the economy overall as the population matures.

Major Expenditure Categories

During FY 2012, the federal government spent $3.54 trillion on a budget or cash basis, down $60 billion or 1.7% vs. FY 2011 spending of $3.60 trillion. Major categories of FY 2012 spending included: Medicare & Medicaid ($802B or 23% of spending), Social Security ($768B or 22%), Defense Department ($670B or 19%), non-defense discretionary ($615B or 17%), other mandatory ($461B or 13%) and interest ($223B or 6%). Social Security spending increased versus 2011 while Defense, Medicare and Medicaid spending fell.

Social Security, Medicare, and Medicaid expenditures are funded by more permanent Congressional appropriations and so are considered mandatory spending. Social Security and Medicare are sometimes called “entitlements,” because people meeting relevant eligibility requirements are legally entitled to benefits, although most pay taxes into these programs throughout their working lives. Some programs, such as Food Stamps, are appropriated entitlements. Some mandatory spending, such as Congressional salaries, is not part of any entitlement program. Mandatory spending accounted for 57.4% of total federal outlays in FY2012, with net interest payments accounting for an additional 6.3%. In 2000, these were 53.2% and 12.5%, respectively.

Other Expenditures

The military budget of the United States during FY 2011 was approximately $740 billion in expenses for the Department of Defense (DoD), $141 billion for veteran expenses, and $48 billion in expenses for the Department of Homeland Security, for a total of $929 billion. Much of the costs for the wars in Iraq and Afghanistan have not been funded through regular appropriations bills, but through emergency supplemental appropriations bills. As such, most of these expenses were not included in the budget deficit calculation prior to FY2010. Some budget experts argue that emergency supplemental appropriations bills do not receive the same level of legislative care as regular appropriations bills. During 2011, the U.S. spent more on its military budget than the next 13 countries combined.

Non-defense discretionary spending is used to fund the executive departments (e.g., the Department of Education) and independent agencies (e.g., the Environmental Protection Agency), although these do receive a smaller amount of mandatory funding as well. Discretionary budget authority is established annually by Congress, as opposed to mandatory spending that is required by laws that span multiple years, such as Social Security or Medicare.

The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30. Since 1970, the U.S. federal government has run deficits for all but four years (1998–2001) contributing to a total debt of $16.1 trillion as of September 2012.

Public Debt

The United States public debt is the money borrowed by the federal government of the United States through the issuing of securities by the Treasury and other federal government agencies. US public debt consists of two components: Debt held by the public includes Treasury securities held by investors outside the federal government, including that held by individuals, corporations, the Federal Reserve System and foreign, state and local governments. Individuals, corporations, the Federal Reserve System and foreign, state and local governments.

Debt held by government accounts or intragovernmental debt includes non-marketable Treasury securities held in accounts administered by the federal government that are owed to program beneficiaries, such as the Social Security Trust Fund. Debt held by government accounts represents the cumulative surpluses, including interest earnings, of these accounts that have been invested in Treasury securities.

11.4.2: Preparing the Budget

The Office of Management and Budget (OMB) performs key tasks in preparing the presidential budget request that is submitted to Congress.

Learning Objective

Summarize the key role played by the Office of Management and Budget in shaping the President’s budget request

Key Points

• The OMB’s primary mission is to assist the president in overseeing the preparation of the federal budget and to supervise the administration of that budget in executive branch agencies.
• Tasks undertaken by the OMB, in order to help the president generate a budget, include evaluating the effectiveness of agency programs, policies, and procedures, and assessing competing funding demands among agencies.
• The fact that the organizational structure of the OMB, and its staff, remain unchanged regardless of which party occupies the White House, facilitates the budget process.

Key Terms

Office of Management and Budget

The largest office within the Executive Office of the President, the OMB is in charge of overseeing the preparation of the federal budget and the administering of that budget within the federal branch.

legislation

Law which has been enacted by legislature or other governing body

budget

The amount of money or resources earmarked for a particular institution, activity, or time-frame.

Introduction

A great deal of preparation goes into the president’s budget request submission, which is entitled, Budget of the U.S. Government. Before it is submitted, the president spends months working with the Office of Management and Budget (OMB) to formulate this budget request . The Office of Management and Budget is the largest office within the Executive Office of the President. The OMB’s primary mission is to assist the president as he or she supervises the preparation of the federal budget. It is also responsible, later, for administering that budget to executive branch agencies.

U.S. Office of Management and Budget Seal

The Office of Management and Budget plays a key role in preparing the president’s budget request to Congress.

OMB’s Responsibilities

In order to aid the president in generating a budget submission, the OMB evaluates the effectiveness of various agency programs, policies, and procedures. The OMB also assesses competing funding demands among agencies in order to decide upon funding priorities. In preparation for submitting a final presidential budget request to Congress, the OMB also ensures that reports from individual agencies, along with any rules, testimony, and proposed legislation, are consistent with the president’s budget request and administration policies.

OMB’s Structure

The structure of the OMB facilitates the preparation of the budget and the later submission of that budget to Congress. OMB staff provide the Executive Office of the President with vital continuity, because they are among the several hundred career professionals that remain in their positions regardless of which party occupies the White House. The largest offices of the OMB are the four Resource Management Offices. Staff members from these offices are assigned to monitor federal agencies or topical areas, like issues associated with U.S. Navy warships. They perform in-depth program evaluations and review federal agency budget requests to decide which resource requests will be sent to Congress under the president’s budget. In addition to these departments, staff members from the Office of General Counsel, the Office of Legislative Affairs, the Budget Review Division, and the Legislative Reference Division provide important support for the general operations of the OMB.

11.4.3: The Election Year Budget

Budget proposals during election years are usually politicized to gain votes and increase constituency support.

Learning Objective

Summarize the various conflicts that can plague the federal budget

Key Points

• The Budget of the United States Government often begins as the President’s proposal to the U.S. Congress which recommends funding levels for the next fiscal year, beginning October 1.
• The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30.
• The debate between the executive and the House has carried on into the presidential election, in which incumbent Democrat President Obama’s spending policies are compared against those of Republican vice-presidential candidate and current House Budget Committee chairman, Paul Ryan.
• While both executive and House budget plans focus on deficit reduction, they differ in their changes to taxation, entitlement programs, defense spending, and research funding.

Key Terms

budget

The amount of money or resources earmarked for a particular institution, activity, or time-frame.

budget deficit

the difference between government revenues and spending, in which the government is spending more than it’s earning

fiscal

Related to the treasury of a country, company, region, or city, particularly to government spending and revenue.

deficit

A situation wherein, or amount whereby, spending exceeds government revenue.

Example

• Since 1970, the U.S. federal government has run deficits for all but four years (1998–2001) contributing to a total debt of $16.1 trillion as of September 2012

Introduction

The Budget of the United States Government often begins as the President’s proposal to the U.S. Congress which recommends funding levels for the next fiscal year, beginning October 1. However, Congress is the body required by law to pass a budget annually and to submit the budget passed by both houses to the President for signature. Congressional decisions are governed by rules and legislation regarding the federal budget process. Budget committees set spending limits for the House and Senate committees and for Appropriations subcommittees, which then approve individual appropriations bills to allocate funding to various federal programs.

Understanding Deficits and Debt

The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30. Since 1970, the U.S. federal government has run deficits for all but four years (1998–2001) contributing to a total debt of $16.1 trillion as of September 2012 .

Revenue and Expense to GDP Chart 1993 – 2008

Tax and Spend percent GDP in United States 1981-2012,

Many of the debates surrounding the United States federal budget center around competing macroeconomic schools of thought. In general, Democrats favor the principles of Keynesian economics to encourage economic growth via a mixed economy of both private and public enterprise, a welfare state, and strong regulatory oversight. Conversely, Republicans generally support applying the principles of either laissez-faire or supply-side economics to grow the economy via small government, low taxes, limited regulation, and free enterprise.

Election-Year Budgets

The 1996 United States federal budget was the United States federal budget to fund government operations for the fiscal year 1996, which was October 1995 – September 1996. This budget was the first to be submitted after the Republican Revolution in the 1994 midterm elections. Disagreements between Democratic President Bill Clinton and Republicans led by Speaker of the House Newt Gingrich led to the United States federal government shutdown of 1995 and 1996.

U.S. President Bill Clinton

Official White House photo of President Bill Clinton, President of the United States.

The failure of Congress and the President to enact the remaining appropriations legislation led to government shutdowns during November 13–19, 1995 and December 15, 1995 through January 6, 1996. The shutdowns were triggered by the expiration of continuing resolutions. The first shutdown caused the furlough of about 800,000 federal employees, while the second affected 284,000 due to additional appropriations bills enacted in the interim.

Paul Ryan

Rep. Paul Ryan is former head of the House Budget Committee, but now serves as the Speaker of the House.

The Obama Administration’s Budget Plans

The Obama administration’s 2012 budget request focused on reducing annual deficits to more sustainable levels by making certain cuts in spending while continuing to support areas that would promote long-term economic growth, such as education and clean energy. The plan did not contain proposals to rein in spending on entitlement programs expected to increase the deficit in future years, like Medicare, Medicaid, and Social Security. The 2012 budget plan was a shift from the Obama administration’s previous strategy of using increased government spending to stimulate the economy. Instead, the budget request was projected to reduce government deficits by 1.1 trillion dollars over the next ten years. Republicans have criticized the president’s plan for not going far enough to reduce future deficits.

The 2016 budget plan President Obama proposed requested 4 trillion in fiscal year 2016. His proposal called for 74 billion in additional discretionary spending above the sequestration caps set in place. The additional spending would be about evenly split between defense and non-defense discretionary programs.

This budget request is President Obama’s first on-time budget proposal since 2011. It included more than $1.15 trillion in discretionary spending, an increase of about 2 percent relative to 2015 enacted levels. 

The president proposed $60 billion over 10 years for a new initiative that would allow students to attend community college for up to two years tuition free and would again provide expanded Head Start and universal pre-kindergarten.

The budget also includes $478 billion in additional infrastructure spending over the next six years, which would pay for surface transportation improvements such as roads and bridges. The president proposes to pay for this through various tax reforms.

11.4.4: Budget Resolutions

The budget resolution serves as a blueprint for the actual appropriations process and provides Congress with some control over the process.

Learning Objective

Summarize the aims and shape of Congress’s annual budget resolution

Key Points

• The budget resolution establishes budget totals, allocations, entitlements, and sometimes includes reconciliation instructions to certain House or Senate committees. Federal spending is apportioned among 20 functional categories such as national defense, agriculture, and transportation.
• The budget resolution sets spending ceilings for the Congressional committees with jurisdiction over spending.
• The budget resolution is created in response to the president’s budget request according to the Congressional Budget and Impoundment Control Act of 1974.
• No penalty exists if the budget resolution is not completed by April 15th or if it is not completed at all.

Key Terms

appropriations

In law and government, appropriation (from Latin appropriare, “to make one’s own,” later “to set aside”) is the act of setting apart something for its application to a particular usage to the exclusion of all other uses. It typically refers to the legislative designation of money for particular uses in the context of a budget or spending bill.

fiscal

Related to the treasury of a country, company, region, or city, particularly to government spending and revenue.

budget resolution

In the United States Congress, a budget resolution is a legislation in the form of a concurrent resolution setting forth the congressional budget. The budget resolution establishes various budget totals, allocations, and entitlements. It may include reconciliation instructions to designated House or Senate committees.

Congress must create an annual budget resolution in response to the President’s budget request according to the Congressional Budget and Impoundment Control Act of 1974 (also known as the Congressional Budget Act) . The budget resolution must cover the time span of a minimum of five fiscal years, which includes the upcoming fiscal year plus the four following fiscal years. The budget resolution establishes budget totals, allocations, entitlements, and sometimes includes reconciliation instructions to certain House or Senate committees. Federal spending is apportioned among 20 functional categories such as national defense, agriculture, and transportation.

Nixon Departing the White House after His Resignation

The Congressional Budget and Impoundment Control Act of 1974 (Congressional Budget Act), created during the Nixon administration, established the current budget resolution process.

The budget resolution also sets spending ceilings for the Congressional committees that have jurisdiction over spending. Even though the budget resolution covers at least five fiscal years, the House and Senate Committees on Appropriations receive allocations only for the upcoming fiscal year because appropriations measures are annual. After the appropriations committees receive their spending ceilings, they are responsible for dividing the amount among their respective subcommittees.

The budget resolution binds Congress, but it is not law since it is not sent to the President. It does not provide budget authority or change the level of revenues. Instead, the budget resolution serves as a blueprint for the actual appropriations process and provides Congress with some control over this process.

April 15^th is the target date for congressional adoption of the budget resolution set by the Congressional Budget Act. However, Congress has frequently not met this target date since the fiscal year 1977. In some instances, Congress has not adopted a budget resolution. No penalty exists if the budget resolution is not completed by April 15^th or if it is not completed at all. However, some enforceable spending ceilings cannot be established until the budget resolution is completed. The Congressional Budget Act also prohibits House and Senate floor consideration of appropriations measures for the upcoming fiscal year before the budget resolution is completed. However, the House can bypass this prohibition after May 15^th and the Senate can bypass it by adopting a motion to waive the rule by majority vote.

11.4.5: Authorization and Appropriation

Authorizations and appropriations functions are separate in principle, but this separation is often imperfect in reality.

Learning Objective

Differentiate between authorization and appropriation

Key Points

• Authorization acts establish, continue, or modify agencies or programs.
• Appropriations acts provide new budget authority for programs, activities, and agencies that have been authorized by authorization committees.
• The separation of authorization and appropriation functions are enforced through House and Senate rules that divide committee jurisdiction between authorization and appropriations bills.
• The separation between authorization and appropriations measures is imperfect: prohibited language in appropriations bills can still be passed, some authorized programs receive no funding, and some unauthorized programs do receive funding.

Key Terms

appropriation

Public funds set aside for a specific purpose.

budget resolution

In the United States Congress, a budget resolution is a legislation in the form of a concurrent resolution setting forth the congressional budget. The budget resolution establishes various budget totals, allocations, and entitlements. It may include reconciliation instructions to designated House or Senate committees.

authorization

Permission, possibly limited, to spend funds for a specific budgetary purpose.

The budget resolution adopted by Congress provides a blueprint for later authorization and appropriations measures. These measures are distinct from each other and perform different functions. Authorization acts establish, continue, or modify agencies or programs. For instance, an authorization act could establish or modify programs within a federal department. Authorization acts also authorize subsequent appropriations for specific agencies and programs, often setting spending ceilings for them. Meanwhile, appropriations acts provide new budget authority for programs, activities, and agencies that have been authorized by authorization committees.

The separation of authorization and appropriation functions are enforced through House and Senate rules that divide committee jurisdiction between authorization and appropriations bills . Points of order also prohibit certain provisions in appropriations measures. For instance, the House and Senate prohibit language in appropriations bills that provides appropriations not authorized by law, also known as unauthorized appropriations. An unauthorized appropriation is a new budget authority for agencies or programs either without authorization or where the budget authority exceeds the authorized ceiling. Language in an appropriations bill that provides legislation on the bill is additionally prohibited. In other words, language in appropriations measures cannot change existing law; legislation is solely the jurisdiction of legislative committees.

House Appropriations Committee Logo

Appropriations committees are distinct from authorization committees in principle, but the division is often imperfect in reality.

In reality, the separation between authorization and appropriation measures is imperfect. Authorization for many programs has long since expired, but these programs still receive appropriated amounts. Other authorized programs receive no appropriated funds at all. Meanwhile, the aforementioned language prohibitions in appropriations bills sometimes gets passed in the bills either because no one raised a point of order or the House and Senate waived the rules.

11.5: The Oversight Function of Congress

11.5.1: Investigation

Congressional oversight is the review, monitoring, and supervision of federal agencies, programs, activities, and policy implementation.

Learning Objective

Name several key enumerated powers that imply oversight authority

Key Points

• Congressional oversight refers to oversight by the United States Congress of the Executive Branch, including the numerous U.S. federal agencies. Congressional oversight refers to the review, monitoring, and supervision of federal agencies, programs, activities, and policy implementation.
• Congress’s oversight authority derives from its implied powers in the Constitution, public laws, and House and Senate rules. It is an integral part of the American system of checks and balances.
• Congress could not reasonably or responsibly exercise these powers without knowing what the executive was doing; how programs were being administered, by whom, and at what cost; and whether officials were obeying the law and complying with legislative intent.
• Oversight also is derived from the many and varied express powers of the Congress in the Constitution. Congress could not reasonably exercise its powers without knowing what the executive was doing; how programs were being administered, by whom, and at what cost.

Key Terms

enumerated powers

The enumerated powers are a list of items found in Article I, Section 8 of the U.S. Constitution that set forth the authoritative capacity of Congress. In summary, Congress may exercise the powers that the Constitution grants it, subject to explicit restrictions in the Bill of Rights and other protections in the Constitution.

implied powers

They are those powers authorized by a legal document (from the Constitution) which, while not stated, seem to be implied by powers expressly stated.

congressional oversight

Congressional oversight refers to oversight by the United States Congress of the Executive Branch, including the numerous U.S. federal agencies.

Introduction

Congressional oversight refers to oversight by the United States Congress of the Executive Branch, including the numerous U.S. federal agencies. Congressional oversight refers to the review, monitoring, and supervision of federal agencies, programs, activities, and policy implementation. Congress exercises this power largely through its congressional committee system. However, oversight, which dates to the earliest days of the Republic, also occurs in a wide variety of congressional activities and contexts. These include authorization, appropriations, investigative, and legislative hearings by standing committees; specialized investigations by select committees; and reviews and studies by congressional support agencies and staff.

Arthur Andersen Witnesses

Arthur Andersen witnesses testify at the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce House of Representatives (107th Congress) hearing on January 24, 2002.

Congress’s oversight authority derives from its implied powers in the Constitution, public laws, and House and Senate rules. It is an integral part of the American system of checks and balances.

Report on the Organization of Congress

Oversight is an implied rather than an enumerated power under the U.S. Constitution. The government’s charter does not explicitly grant Congress the authority to conduct inquiries or investigations of the executive, have access to records or materials held by the executive, or to issue subpoenas for documents or testimony from the executive.

There was little discussion of the power to oversee, review, or investigate executive activity at the Constitutional Convention of 1787 or later in the Federalist Papers, which argued in favor of ratification of the Constitution. The lack of debate was based on the view that oversight and its attendant authority were inherent powers of representative assemblies, which enacted public law.

Oversight also is derived from the many and varied express powers of the Congress in the Constitution. It is implied in the legislature’s authority, among other powers and duties, that it can appropriate funds, enact laws, raise and support armies, provide for a Navy, declare war, and impeach and remove from office the president, vice president, and other civil officers. Congress could not reasonably or responsibly exercise these powers without knowing what the executive was doing; how programs were being administered, by whom, and at what cost; and whether officials were obeying the law and complying with legislative intent.

The U.S. Constitution

Although the Constitution grants no formal, express authority to oversee or investigate the executive or program administration, oversight is implied in Congress’s array of enumerated powers. The legislature is authorized to appropriate funds; raise and support armies; provide for and maintain a navy; declare war; provide for organizing and calling forth the national guard; regulate interstate and foreign commerce; establish post offices and post roads; advise and consent on treaties and presidential nominations (Senate); and impeach (House) and try (Senate) the President, Vice President, and civil officers for treason, bribery, or other high crimes and misdemeanors. Reinforcing these powers is Congress’s broad authority “to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”

Activities and Training

Although the Constitution grants no formal, express authority to oversee or investigate the executive or program administration, oversight is implied in Congress’s array of enumerated powers. The legislature is authorized to appropriate funds; raise and support armies; provide for and maintain a navy; declare war; provide for organizing and calling forth the national guard; regulate interstate and foreign commerce; establish post offices and post roads; advise and consent on treaties and presidential nominations (Senate); and impeach (House) and try (Senate) the President, Vice President, and civil officers for treason, bribery, or other high crimes and misdemeanors. Reinforcing these powers is Congress’s broad authority “to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”

11.5.2: Oversight

Oversight of various federal agencies is one of Congress’ enumerated powers.

Learning Objective

Describe the source and nature of Congress’s oversight function.

Key Points

• The authority to oversee the executive comes from the constitutional powers. Congress could not carry them out reasonably or responsibly without knowing what the executive is doing.
• Reinforcing these oversight powers is Congress’s broad authority to make all laws that shall be necessary and proper for carrying into execution the foregoing powers, all other powers vested by this Constitution in the government, or in any Department or Officer in the government.
• Besides these general powers, numerous statutes direct the executive to give information to or consult with Congress.
• Oversight occurs through a wide variety of congressional activities and avenues. Some of the most publicized are the comparatively rare investigations by select committees into major scandals or into executive branch operations gone awry.

Key Term

subcommittee

A committee formed by an existing committee.

Example

• The Congressional Budget Act of 1974 (P.L. 93-344) allowed committees to conduct program evaluation themselves or contract out for it; strengthened GAO’s role in acquiring fiscal, budgetary, and program-related information; and upgraded GAO’s review capabilities.

Background

Although the Constitution grants no formal, express authority to oversee or investigate the executive or program administration, oversight is implied in Congress’s array of enumerated powers. The legislature is authorized to appropriate funds, raise and support armies, provide for and maintain a navy, declare war, provide for organizing and calling forth the national guard, regulate interstate and foreign commerce, establish post offices and post roads, advise and consent on treaties and presidential nominations (Senate), and impeach (House) and try (Senate) the President, Vice President, and civil officers for treason, bribery, or other high crimes and misdemeanors. Reinforcing these powers is Congress’s broad authority to make all laws that will be necessary to carry out execution the foregoing powers, all other powers vested by this Constitution in the government, or in any Department or Officer in the government.

The authority to oversee is derived from these constitutional powers. Congress could not carry them out reasonably or responsibly without knowing what the executive is doing; how programs are being administered, by whom, and at what cost; and whether officials are obeying the law and complying with legislative intent. The Supreme Court has legitimated Congress’s investigative power, subject to constitutional safeguards for civil liberties.

Statutes

The necessary and proper clause of the Constitution also allows Congress to enact laws that mandate oversight by its committees, grant relevant authority to itself and its support agencies, and impose specific obligations on the executive to report to or consult with Congress, and even seek its approval for specific actions. Broad oversight mandates exist for the legislature in several significant statutes.

Besides these general powers, numerous statutes direct the executive to furnish information to or consult with Congress. For example, the Government Performance and Results Act of 1993, requires agencies to consult with Congress on their strategic plans and report annually on performance plans, goals, and results. In fact, more than 2,000 reports are submitted each year to Congress by federal departments, agencies, commissions, bureaus, and offices. Inspectors general (IGs), for instance, report their findings about waste, fraud, and abuse. and their recommendations for corrective action, periodically to the agency head and Congress. The IGs are also instructed to immediately issue special reports concerning particularly serious problems to the agency head, who transmits them unaltered to Congress within seven days.

House and Senate Chamber rules also reinforce the oversight function. House and Senate rules, for instance, provide for “special oversight” or “comprehensive policy oversight,” respectively, for specified committees over matters that relate to their authorizing jurisdiction. In addition, House rules direct each standing committee to require its subcommittees to conduct oversight or to establish an oversight subcommittee for this purpose. House rules also call for each committee to submit an oversight agenda, listing its prospective oversight topics for the ensuing Congress, to the House Committee on Government Reform, which compiles and prints the agendas.

The House Government Reform Committee and the Senate Governmental Affairs Committee, which have oversight jurisdiction over virtually the entire federal government, are authorized to review and study the operation of government activities to determine their economy and efficiency and to submit recommendations based on GAO reports. In addition, House rules require that the findings and recommendations from the Government Reform Committee be considered by authorizing panels, if presented to them in a timely fashion.

Activities and Avenues

Oversight occurs through a wide variety of congressional activities and avenues. Some of the most publicized are the comparatively rare investigations by select committees into major scandals or into executive branch operations gone awry. Examples include temporary select committee inquiries into: China’s acquisition of U.S. nuclear weapons information, in 1999; the Iran-Contra affair, in 1987; intelligence agency abuses, in 1975-1976, and “Watergate,” in 1973-1974. The precedent for this kind of oversight goes back two centuries: in 1792, a special House committee investigated the defeat of an Army force by confederated Indian tribes.

Congress Hall Committee Room Marie Antoinette

One of several committee rooms in Congress Hall, in Philadelphia, PA. The room is located on the second floor, on the west side of the building, adjacent to the Senate chamber. The view is looking toward the front of the building. The portrait of Marie Antoinette, by Élisabeth Vigée-Lebrun (1788), was presented as a gift from the French monarch following the American Revolution.

11.5.3: Advice and Consent

Advice and consent is a power of the Senate to be consulted on and approve treaties signed by the president.

Learning Objective

Describe the origins and development of the Senate’s “advise and consent” powers

Key Points

• The term “advice and consent” first appears in the United States Constitution in Article II, Section 2, Clause 2, referring to the Senate’s role in the signing and ratification of treaties.
• Typically, a congressional hearing is held to question the appointee. For a treaty, a two-thirds vote of the Senate is required anyway; thus, a filibuster could only delay passage.
• Several framers of the U.S. Constitution believed that the required role of the Senate is to advise the president after the nomination.
• Under the Twenty-fifth Amendment, appointments to the Office of Vice President are confirmed by a majority vote in both Houses of Congress, instead of just the Senate.

Key Term

consent

To express willingness, to give permission.

Example

• The actual motion adopted by the Senate when exercising the power is “to advise and consent,” which shows how initial advice on nominations and treaties is not a formal power exercised by the Senate. For appointments, a majority of senators are needed to pass a motion “to advise and consent”, but unless the appointment has the support of three-fifths of senators, a filibuster blocking the passage of the motion is possible.

Background

In the United States, advice and consent is a power of the United States Senate to be consulted on and approve treaties signed and appointments made by the President of the United States to public positions, including Cabinet secretaries, federal judges, and ambassadors . This power is also held by several state Senates, which are consulted on and approve various appointments made by the state’s chief executive, such as some statewide officials, state departmental heads in the Governor’s cabinet, and state judges (in some states).

John Roberts Confirmation Hearings

Under the Constitution, the Senate have advice and consent on any nominations made by the President to the Supreme Court of the United States. Here, the Senate Judiciary Committee confirmation hearings of John Roberts to be Chief Justice of the Supreme Court of the United States, 2005.

Constitutional Provision

Article II, Section 2, paragraph two of the United States Constitution states: “The President shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. “

The term “advice and consent” first appears in the United States Constitution in Article II, Section 2, Clause 2, referring to the Senate’s role in the signing and ratification of treaties. This term is then used again, to describe the Senate’s role in the appointment of public officials, immediately after describing the president’s duty to nominate officials .

Advice and Consent

Senators also have the power of “advice and consent” over other authorities in the federal or state governments.

The founding fathers of the United States included the language as part of a delicate compromise concerning the balance of power in the federal government. Many delegates preferred to develop a strong executive control vested in the president, while others, worried about authoritarian control, preferred to strengthen the Congress. Requiring the president to gain the advice and consent of the Senate achieved both goals without hindering the business of government.

Under the Twenty-fifth Amendment, appointments to the Office of Vice President are confirmed by a majority vote in both Houses of Congress, instead of just the Senate.

Historical Development of Power

Several framers of the U.S. Constitution believed that the required role of the Senate is to advise the president after the nomination. Roger Sherman believed that advice before nomination could still be helpful. Likewise, President George Washington took the position that pre-nomination advice was allowable but not mandatory. The notion that pre-nomination advice is optional has developed into the unification of the advice portion of the power with the “consent” portion, although several presidents have consulted informally with senators over nominations and treaties.

Use today

The actual motion adopted by the Senate when exercising the power is “to advise and consent,” which shows how initial advice on nominations and treaties is not a formal power exercised by the Senate. For appointments, a majority of senators are needed to pass a motion “to advise and consent,” but unless the appointment has the support of three-fifths of senators, a filibuster blocking the passage of the motion is possible. Typically, a congressional hearing is held to question the appointee. For a treaty, a two-thirds vote of the Senate is required anyway; thus, a filibuster could only delay passage.

11.5.4: Impeachment and Removal from Office

Impeachment is an expressed power that allows for formal charges against a civil officer of government for crimes committed in office.

Learning Objective

Differentiate between the roles played by the House and Senate in impeachment proceedings.

Key Points

• Impeachment is analogous to indictment in regular court proceedings. Trial by the other house is analogous to the trial before judge and jury in regular courts. Typically, the lower house of the legislature will impeach the official and the upper house will conduct the trial.
• Impeachment proceedings may be commenced by a member of the House of Representatives on their own initiative, either by presenting a listing of the charges under oath or by asking for referral to the appropriate committee.
• The Senate enters judgment on its decision, whether that be to convict or acquit. A copy of the judgment is filed with the Secretary of State. Upon conviction, the official is automatically removed from office and may also be barred from holding future office.

Key Terms

impeachment

the act of impeaching a public official, either elected or appointed, before a tribunal charged with determining the facts of the matter.

indictment

An official formal accusation for a criminal offence or the process by which it is brought to a jury.

Example

• A United States federal judge named Walter Nixon was convicted of committing perjury before a grand jury. He refused to resign from office even after he had been incarcerated. Nixon was subsequently impeached by the United States House of Representatives. The matter was referred to the United States Senate for a vote on Nixon’s removal.

Background

Impeachment in the United States is an expressed power of the legislature that allows for formal charges against a civil government officer for crimes committed in office. The actual trial on those charges, and subsequent removal of an official on conviction on those charges, is separate from the act of impeachment itself.

The Senate as a Court of Impeachment for the Trial of Andrew Johnson

The Impeachment of Andrew Johnson

Impeachment is analogous to indictmentin regular court proceedings. Trial by the other house is analogous to the trial before judge and jury in regular courts. Typically, the lower house of the legislature will impeach the official and the upper house will conduct the trial.

At the federal level, Article II of the United States Constitution (Section 4), states that the President, Vice President, and all civil officers of the United States shall be removed from office on impeachment for, and in conviction of, treason, bribery, or other high crimes and misdemeanors. The House of Representatives has the sole power of impeaching, while the United States Senate has the sole power to try all impeachments. The removal of impeached officials is automatic upon conviction in the Senate.

The House of Representatives

Impeachment proceedings may be commenced by a member of the House of Representatives on their own initiative, either by presenting a listing of the charges under oath or by asking for referral to the appropriate committee. Non-members may trigger the impeachment process. For example, when the Judicial Conference of the United States suggests a federal judge be impeached, a charge of what actions constitute grounds for impeachment may come from a special prosecutor, the President, a state or territorial legislature, grand jury, or by petition.

The House debates the resolution and at the conclusion may consider the resolution as a whole or vote on each article of impeachment individually. A simple majority of those present and voting is required for each article or the resolution as a whole to pass. If the House votes to impeach, managers (typically referred to as House managers, with a lead House manager) are selected to present the case to the Senate. Recently, managers have been selected by resolution, while historically the House would occasionally elect the managers or pass a resolution allowing the appointment of managers at the discretion of the Speaker of the United States House of Representatives. These managers are roughly the equivalent of the prosecution/district attorney in a standard criminal trial.

Also, the House will adopt a resolution in order to notify the Senate of its action. After receiving the notice, the Senate will adopt an order notifying the House that it is ready to receive the managers. Then the House managers appear before the bar of the Senate and exhibit the articles of impeachment. After the reading of the charges, the managers return and make a verbal report to the House.

Senate

The proceedings unfold in the form of a trial, with each side having the right to call witnesses and perform cross-examinations. The House members, who are given the collective title of managers during the course of the trial, present the prosecution case. The impeached official has the right to mount a defense with his own attorneys as well. Senators must also take an oath or affirmation that they will perform their duties honestly and with due diligence (as opposed to the House of Lords in the Parliament of the United Kingdom, who vote upon their honor). After hearing the charges, the Senate usually deliberates in private. Conviction requires a two-thirds majority.

The Senate enters judgment on its decision, whether that is to convict or acquit. A copy of the judgment is filed with the Secretary of State. Upon conviction, the official is automatically removed from office and may also be barred from holding future office. The removed official is also liable to criminal prosecution. The President may not grant a pardon in the impeachment case, but may in any resulting criminal case.

11.5.5: Senate Confirmation

Senate confirmation is required for certain presidential appointments stated under the Constitution.

Learning Objective

Describe the significance of the Senate’s role in presidential appointments

Key Points

• Under the United States Constitution and law of the United States, certain federal positions appointed by the president of the United States require confirmation (advice and consent) of the United States Senate.
• United States Supreme Court Justices are appointed by the president and confirmed by the Senate. In theory, this procedure allows both the executive and legislative branches to have some power over the judiciary and thus check the judicial branch’s power.
• The principle of checks and balances allows branches of government to be isolated from each other so that no branch has total power over all functions of government…an attack on or abuse of power by individuals of a single branch will not lead to tyranny or the fall of the entire government.

Key Term

checks and balances

A system for multiple parties wherein each has some control over the actions of each of the others.

Senate Confirmation

Background

Under the United States Constitution and law of the United States, certain federal positions appointed by the president of the United States require confirmation (advice and consent) of the United States Senate. These positions are referred to as Presidential Appointment with Senate confirmation (PAS).

PAS positions, as well as other types of federal government positions, are published in the United States Government Policy and Supporting Positions (Plum Book), which are released after each United States presidential election.

Senate Confirmation and Checks and Balances

United States Supreme Court Justices are appointed by the president and confirmed by the Senate. In theory, this procedure allows both the executive and legislative branches to have some power over the judiciary and thus check the judicial branch’s power. However, following confirmation by the Senate, all Supreme Court justices hold office for life unless they are impeached or they voluntarily retire. Because justices serve for life, their appointments can be politically controversial if they are perceived to have been appointed to implement or serve a more partisan agenda.

John Roberts Confirmation Hearings

Under the Constitution, the Senate have advice and consent on any nominations made by the President to the Supreme Court of the United States. Here, the Senate Judiciary Committee confirmation hearings of John Roberts to be Chief Justice of the Supreme Court of the United States, 2005.

The principle of checks and balances allows branches of government to be isolated from each other so that no branch has total power over all functions of government. As such, an attack on or abuse of power by individuals of a single branch will not lead to tyranny or the fall of the entire government. The judicial branch, however, holds the potential to nullify laws approved by the legislative branch, disregard the executive branch, and, (in essence) control the rule of law in the United States in accordance to the opinions of its sitting justices.

11.6: Congressional Elections

11.6.1: Eligibility of Congressmen

Sections 2 and 3 of Article 1 of the Constitution describe the qualifications for membership in the House of Representatives and the Senate.

Learning Objective

Compare the qualifications for membership in the House and Senate

Key Points

• The Senate has 100 members, elected for six year terms in dual-seat constituencies, two from each state. One-third are renewed every two years. The group of the Senate seats that is up for election during a given year is known as a class.
• The House of Representatives has 435 members, elected for two year terms in single-seat constituencies. House of Representatives elections are held every two years on the first Tuesday after November 1 in even years, correlated with presidential elections..
• Article I, Section 2 of the Constitution sets three qualifications for representatives. Each representative must (1) be at least twenty-five years old, (2) have been a citizen of the United States for the past seven years, and (3) be an inhabitant of the state they represent.
• The constitutional requirements of Article I, Section 2 for election to Congress are the maximum requirements that can be imposed on a candidate.
• Article I, Section 3 of the Constitution sets three qualifications for senators: (1) they must be at least 30 years old, (2) they must have been citizens of the United States for at least the past nine years, and (3) they must be inhabitants of the states they seek to represent.
• The Fourteenth Amendment to the United States Constitution disqualifies from the Senate any federal or state officers who had taken the requisite oath to support the Constitution, but later engaged in rebellion or aided the enemies of the United States.

Key Terms

u.s. house of representatives

The U.S. House of Representatives has 435 members, elected for two year terms in single-seat constituencies. House of Representatives elections are held every two years on the first Tuesday after November 1 in even years, correlated with presidential elections. House elections are first-past-the-post elections that elect a Representative from each of 435 House districts which cover the United States.

delegate

A person authorized to act as representative for another; in politics, a party representative allocated to nominate a party candidate.

u.s. senate

The U.S. Senate has 100 members, elected for six year terms in dual-seat constituencies, two from each state. One-third are renewed every two years.

Example

• The Senate is the sole judge of a senator’s qualifications. During its early years, however, the Senate did not closely scrutinize the qualifications of its members. As a result, three senators who failed to meet the age qualification were nevertheless admitted to the Senate: Henry Clay (aged 29 in 1806), Armistead Thomson Mason (aged 28 in 1816), and John Eaton (aged 28 in 1818). Such an occurrence, however, has not been repeated since. In 1934, Rush D. Holt, Sr. was elected to the Senate at the age of 29; he waited until he turned 30 (on the following June 19) to take the oath of office. In 1972, Joe Biden was elected to the Senate shortly before his 30th birthday, but he reached his 30th birthday in time for the swearing-in ceremony for incoming senators in January 1973.

Introduction

The U.S. Senate has 100 members, elected for six year terms in dual-seat constituencies, two from each state. One-third are renewed every two years. The group of the Senate seats that is up for election during a given year is known as a class. The three classes are staggered so that only one of the three groups is renewed every two years. Until the Seventeenth Amendment to the Constitution in 1913, Senators were elected by state legislatures, not the electorate of states. The age of candidacy to be a Senator is 30.

Capitol Hill

Capitol Hill, where bills become laws.

111th US Senate class photo

A class photo of the 111th United States Senate.

The U.S. House of Representatives has 435 members, elected for two year terms in single-seat constituencies. House of Representatives elections are held every two years on the first Tuesday after November 1 in even years, correlated with presidential elections. House elections are first-past-the-post elections that elect a Representative from each of 435 House districts which cover the United States. Special House elections can occur if a member dies or resigns during a term . The delegates of the territories of American Samoa, District of Columbia, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands are also elected. The age of candidacy to be a Representative is 25.

Barack Obama meets with Nancy Pelosi, Steny Hoyer & George Miller

President Barack Obama meets with Speaker Nancy Pelosi, House Majority Leader Steny Hoyer, and House Education and Labor Committee Chair Rep. George Miller, in the Oval Office Wednesday, May 13, 2009. House Energy and Commerce Committee Chair Rep. Henry Waxman, and House Ways and Means Committee Chair Rep. Charlie Rangel also attended the meeting but are not in the photo.

Qualifications in the House

Article I, Section 2 of the Constitution sets three qualifications for representatives. Each representative must (1) be at least twenty-five years old, (2) have been a citizen of the United States for the past seven years, and (3) be (at the time of the election) an inhabitant of the state they represent. Members are not required to live in the district they represent, but they traditionally do. The age and citizenship qualifications for representatives are less than those for senators. The constitutional requirements of Article I, Section 2 for election to Congress are the maximum requirements that can be imposed on a candidate. Therefore, Article I, Section 5, which permits each House to be the judge of the qualifications of its own members does not permit either House to establish additional qualifications. Likewise a State cannot establish additional qualifications.

Qualifications in the Senate

Article I, Section 3 of the Constitution sets three qualifications for senators: (1) they must be at least 30 years old, (2) they must have been citizens of the United States for at least the past nine years, and (3) they must be inhabitants of the states they seek to represent at the time of their election. The age and citizenship qualifications for senators are more stringent than those for representatives. In Federalist No. 62, James Madison justified this arrangement by arguing that the “senatorial trust” called for a “greater extent of information and stability of character. “

The Senate is the sole judge of a senator’s qualifications. During its early years, however, the Senate did not closely scrutinize the qualifications of its members. As a result, three senators who failed to meet the age qualification were nevertheless admitted to the Senate: Henry Clay (aged 29 in 1806), Armistead Thomson Mason (aged 28 in 1816), and John Eaton (aged 28 in 1818). Such an occurrence, however, has not been repeated since. In 1934, Rush D. Holt, Sr. was elected to the Senate at the age of 29; he waited until he turned 30 (on the following June 19) to take the oath of office. In 1972, Joe Biden was elected to the Senate shortly before his 30^th birthday, but he reached his 30^th birthday in time for the swearing-in ceremony for incoming senators in January 1973.

It is important to mention disqualification procedures in Congress. Under the Fourteenth Amendment, a federal or state officer who takes the requisite oath to support the Constitution, but later engages in rebellion or aids the enemies of the United States, is disqualified from becoming a representative. This post-Civil War provision was intended to prevent those who sided with the Confederacy from serving. However, disqualified individuals may serve if they gain the consent of two-thirds of both houses of Congress.

11.6.2: The Power of Incumbency

The incumbent is the existing holder of a political office who normally has a structural advantage over challengers during an election.

Learning Objective

Summarize the advantages the incumbents have in campaigns

Key Points

• The incumbent is the existing holder of a political office who normally has a structural advantage over challengers during an election for multiple reasons.
• A race without an incumbent is known as an open seat because of the lack of incumbency advantage and they are the most contested races in an election.
• The anti-incumbency factor is when incumbency leads to the downfall of the incumbent.
• An anti-incumbent vote is one exercised against elected officials currently in power.

Key Terms

incumbency

the state of holding an office or title

reapportionment

Reassignment of representation in a legislature, especially of U.S. House of Representative seats, in accord with changes in the census population determination.

The incumbent is the existing holder of a political office. It is usually used in reference to elections where races can often be defined as being between an incumbent and non-incumbents. Incumbents have structural advantages over challengers during elections. The percentage of incumbents who win reelection after seeking it in the U.S. House of Representatives has been over 80% for more than 50 years, and is often over 90%. Additionally, shifts in congressional districts due to reapportionment or other longer-term factors may make it more or less likely for an incumbent to win re-election over time. A race without an incumbent is referred to as an open seat because of the lack of incumbency advantage and they are the most contested races in an election.

Longtime House Incumbent, Ben Cardin

Current Senator Ben Cardin was a longtime incumbent in the House of Representatives, serving from 1987 to 2007.

When newcomers vie to fill an open office, voters tend to compare and contrast the candidates’ qualifications, positions on issues and personal characteristics in a relatively straightforward way. Incumbents traditionally win their party’s nomination to run for office and unseating an incumbent during a primary elections is very difficult. The timing of elections may be determined by the incumbent instead of a set schedule. The incumbent often has more name recognition because of their previous work in the office they occupy. Incumbents have easier access to campaign finance and government resources that can be indirectly used to boost a campaign.

In general, incumbents have structural advantages over challengers during elections. The timing of elections may be determined by the incumbent instead of a set schedule. For most political offices, the incumbent often has more name recognition due to their previous work in the office. Incumbents also have easier access to campaign finance, as well as government resources (such as the franking privilege) that can be indirectly used to boost a campaign. An election (especially for a legislature) in which no incumbent is running is often called an open seat; because of the lack of incumbency advantage, these are often amongst the most hotly contested races in any election.

In the United States, incumbents traditionally win their party’s nomination to run for office. Unseating an incumbent president, senator or other figure during a primary election is very difficult, and even in the general election, incumbents have a very strong record. For instance, the percentage of incumbents who win reelection after seeking it in the U.S. House of Representatives has been over 80% for over 50 years, and is often over 90%.

However, there exist scenarios in which the incumbency factor itself leads to the downfall of the incumbent. Popularly known as the anti-incumbency factor, situations of this kind occur when the incumbent has proven himself not worthy of office during his tenure and the challenger demonstrates this fact to the voters. An anti-incumbent vote is one exercised against elected officials currently in power. It allows the voters to register their discontent with sitting government officials, particularly when protesting against certain actions taken by the government or the elected officials in question. An anti-incumbency factor can also be responsible for bringing down incumbents who have been in office for many successive terms in spite of performance indicators, simply because the voters are convinced by the challenger of a need for change. Nick Panagakis, a pollster, coined what he dubbed the “incumbent rule” in 1989—that any voter who claims to be undecided towards the end of the election will probably end up voting for the challenger.

Voters first have to consider the records and antecedents of the incumbent. Only if they decide to “fire” the incumbent do they begin to evaluate whether the challenger is an acceptable alternative. At the same time, if the challenger is determined to be completely unacceptable, voters might reluctantly vote for the incumbent. There are situations in which the incumbency factor leads to the downfall of the incumbent. This is known as the anti-incumbency factor. Situations of this kind occur when the incumbent has proven himself unworthy of the office during his tenure and the challenger convincingly demonstrates this fact to the voters. An anti-incumbency factor can also be responsible for voting out incumbents who have been in office for many successive terms in spite of performance indicators, simply because the voters are convinced by the challenger of a need for change.

11.6.3: Congressional Terms and Term Limits

Members of the Senate may serve unlimited six-year terms and members of the House may serve unlimited two-year terms.

Learning Objective

Summarize the attempts to impose term limits on Senators and Representatives

Key Points

• Under the Constitution, members of the United States Senate may serve an unlimited number of six-year terms and members of the House of Representatives may serve an unlimited number of two-year terms.
• In the 1990s, reformers put congressional term limits on the ballot and the main Republican Party platform was to pass legislation setting term limits in Congress.
• A proposed amendment limited members of the Senate to two six-year terms and members of the House to six two-year terms. The amendment was never passed.

Key Terms

amendment

An addition to and/or alteration to the Constitution.

referendum

A direct popular vote on a proposed law or constitutional amendment.

Congressional Terms and Term Limits

Under the Constitution, members of the United States Senate may serve an unlimited number of six-year terms and members of the House of Representatives may serve an unlimited number of two-year terms.

Capitol Hill

Capitol Hill, or the Capitol Building, houses the United States Congress.

Reformers during the early 1990s used referendums to put congressional term limits on the ballot in 24 states. Voters in eight of these states approved the congressional term limits by an average electoral margin of two to one. In the elections of 1994, part of the Republican platform was to pass legislation setting term limits in Congress. After winning the majority, they brought the constitutional amendment to the House floor. The amendment limited members of the Senate to two six-year terms and members of the House to six two-year terms. However, constitutional amendments require a two-thirds majority and the votes to impose term limits on Congress fell short of that number.

In May 1995, the United States Supreme Court ruled 5-4 in U.S. Term Limits, Inc. v. Thornton (1995). The ruling says that states cannot impose term limits on their federal Representatives or Senators. The U.S. Term Limits was the largest private organization pushing for Congressional term limits. Earlier that year, the Congress had given the Court assurance that the Justices would be acting only against state statutes, not overturning an act of Congress.The hopes of some that Congress would self-impose term limits had abruptly come to an end.

With the Republicans holding 230 seats in the House, three versions of the amendment got well under 200 votes, while the 12 year term-limits managed a bare majority in the House of 227-204, well short of the requisite two-thirds majority (290 votes) required to pass a constitutional amendment. Defeated in Congress and overridden by the Supreme Court, this populist uprising was brought to a halt for the purpose of reforming the federal government. The term limits intended simultaneously to reform legislatures remain in fifteen states.

In 2007, Professor Larry J. Sabato revived the debate over term limits by arguing in A More Perfect Constitution that the success and popularity of term limits at the state level suggests that they should be adopted at the federal level as well. He specifically put forth the idea of congressional term limits and suggested a national constitutional convention be used to accomplish the amendment, since the Congress would be unlikely to propose and adopt any amendment that limits its own power.

11.6.4: Candidates for Congressional Elections

Congressional elections determine the structure and makeup of the House of Representatives and Senate.

Learning Objective

Describe the relationship between House elections and the Presidential term cycle

Key Points

• The House of Representatives has 435 members, elected for a two year term in single-seat constituencies. House of Representatives elections are held every two years on the first Tuesday after November 1 in even years.
• House elections occur every two years, correlated with presidential elections or halfway through a President’s term. Typically, when a House election occurs in the same year as a presidential election, the party of the presidential winner will gain seats.
• An increasing trend has been for incumbents to have an overwhelming advantage in House elections, and since the 1994 election, an unusually low number of seats has changed hands in each election.
• The Senate has 100 members, elected for a six year term in dual-seat constituencies (2 from each state), with one-third being renewed every two years.
• Elections to the Senate are held on the first Tuesday after the first Monday in November in even-numbered years, Election Day, and coincide with elections for the House of Representatives. Senators are elected by their state as a whole.

Key Terms

senate

The composition and powers of the Senate are established in Article I of the U.S. Constitution. Each U.S. state is represented by two senators, regardless of population. Senators serve staggered six-year terms. The chamber of the United States Senate is located in the north wing of the Capitol, in Washington, D.C., the national capital.

house of representatives

The United States House of Representatives is one of the two houses of the United States Congress. The major power of the House is to pass federal legislation that affects the entire country, although its bills must also be passed by the Senate and further agreed to by the U.S. President before becoming law.

Example

• Due to gerrymandering, fewer than 10% of all House seats are contested in each election cycle. Over 90% of House members are reelected every two years, due to lack of electoral competition.

Congressional elections

Elections to Congress take place every two years. Congress has two chambers in Capitol Hill . Although the two-party system preserves the dominance of the Republican and Democratic parties, there is no direct relationship between congressional party discipline and election years. The support and backing of the parties is not necessary and sufficient to win elections. However, candidates no longer have a congressional party discipline like in other historical times.

Capitol Hill

Capitol Hill, where bills become laws.

Senate elections

The Senate has 100 members, elected for a six year term in dual-seat constituencies (2 from each state), with one-third being renewed every two years. The group of the Senate seats that is up for election during a given year is known as a “class”; the three classes are staggered so that only one of the three groups is renewed every two years. Until the Seventeenth Amendment to the United States Constitution in 1913, Senators were elected by state legislatures, not the electorate of states.

Originally, senators were selected by the state legislatures, not by popular elections. By the early years of the 20^th century, the legislatures of as many as 29 states had provided for popular election of senators by referendums. Popular election to the Senate was standardized nationally in 1913 by the ratification of the 17^th Amendment.

Elections to the Senate are held on the first Tuesday after the first Monday in November in even-numbered years, Election Day, and coincide with elections for the House of Representatives. Senators are elected by their state as a whole. In most states, a primary election is held first for the Republican and Democratic parties, with the general election following a few months later. Ballot access rules for independent and minor party candidates vary from state to state. The winner is the candidate who receives a plurality of the popular vote. In some states, runoffs are held if no candidate wins a majority.

House of Representatives Elections

The House of Representatives has 435 members, elected for a two year term in single-seat constituencies. House of Representatives elections are held every two years on the first Tuesday after November 1 in even years. House elections are first-past-the-post elections that elect a Representative from each of 435 House districts which cover the United States. Special House elections can occur between if a member dies or resigns during a term. The delegates of the territories of American Samoa, District of Columbia, Guam, the Northern Mariana Islands, Puerto Rico and the United States Virgin Islands are also elected.

House elections occur every two years, correlated with presidential elections or halfway through a President’s term. Typically, when a House election occurs in the same year as a presidential election, the party of the presidential winner will gain seats. On the other hand, there is a historical pattern that the incumbent president’s party loses seats in elections that are held in the middle of a presidential term. This may be because the President’s popularity has slipped since election, or because the President’s popularity encouraged supporters to come out to vote for him in the presidential election, but these supporters are less likely to vote when the President is not up for election.

As the redistricting commissions of states are often partisan, districts are often drawn which benefit incumbent . An increasing trend has been for incumbents to have an overwhelming advantage in House elections, and since the 1994 election, an unusually low number of seats has changed hands in each election. Due to gerrymandering, fewer than 10% of all House seats are contested in each election cycle. Over 90% of House members are reelected every two years, due to lack of electoral competition. Gerrymandering of the House, combined with the divisions inherent in the design of the Senate and of the Electoral College, result in a discrepancy between the percentage of popular support for various political parties and the actual level of the parties’ representation.

US House Balance OverTime

Chart shows the percentage of the United States House of Representatives held by various parties from 1789 until 2004. (as elected in the biennial elections) Occasionally terms are applied in a slightly anachronistic way, such as for Federalists and Democratic-Republicans in the first few years on the Congress, or for Whigs during Jackson’s presidency. Notable features include the near absence of minor parties, and the narrowness of the current majority by historical standards.

2016 Congressional Elections

A total of 469 seats in the U.S. Congress (34 Senate seats and all 435 House seats) are up for election on November 8, 2016.

The big questionof the 2016 congressional election cycle is whether or not the Democratic Party will be able to regain control of the Senate. In order to take the chamber back, Democrats will need to gain five seats in 2016. The majority of vulnerable seats are held by Republican incumbents, many of whom are freshmen who were swept into office in the Republican wave of 2010. Additionally, Democrats only have 10 seats to defend in 2016, while 24 Republican incumbents are up for re-election.

11.7: How Congressmen Decide

11.7.1: Political Parties

Political parties serve to coordinate, assist and provide resources for members of congress and political candidates.

Learning Objective

Describe the history of political parties and their role in Congress

Key Points

• Political parties are one of the most enduring political institutions in the US, and with recent increases in the partisan nature of congress political parties are playing a increased role in US democracy.
• There is little mention of political parties in the US constitution, or any other founding documents, and many of the country’s founder opposed political parties expecting them to be divisive.
• In congress political parties serve to coordinate, assistant and provide resources for members of congress and political candidates.
• Since the 1990s there has been a stronger control by congressional party leaders on individual members including higher rates of party voting. Members of congress now routinely vote with their party at rates as high as 60 or 70 percent.
• The increase in party power also means that bipartisan collaboration between members of congress is less likely.

Key Terms

caucus

A meeting, especially a preliminary meeting, of persons belonging to a party, to nominate candidates for public office, or to select delegates to a nominating convention, or to confer regarding measures of party policy; a political primary meeting.

bipartisan

relating to, or supported by two groups, especially by two political parties

party voting

The type of voting that describes when voters cast their vote based on their self-identification with a particular political party.

Political Parties

Political parties are one of the most enduring political institutions in the US, and with recent increases in the partisan nature of congress political parties are playing a increased role in US democracy.

Political parties are one of the main coordinating bodies in Congress. With hundreds of individual members the party’s caucus or conference helps to bring together like-minded politicians and constituents, coordinate election efforts, set legislative priorities, and determine who will receive important committee appointments.

History of Political Parties

The Democrat and Republican parties have dominated the political landscape in the US for quite some time now. However, this has not always been the case, and the current political parties have also changed significantly over this time.

There is little mention of political parties in the US constitution, or any other founding documents. Many of the country’s founder opposed political parties, expecting them to be divisive. However, by the 1790s two parties the Federalists and Republicans had been established. These parties were separated by preferences for either a strong or weak central government.

Each of today’s major parties have made various changes throughout their existence, even as their name may have remained the same. For example it was a Republican-led congress that initiated the Civil War amendments that officially outlawed slavery in the US and gave citizenship and voting rights to formerly enslaved people and their ancestors. However, by the 1960s in was Democratic politicians who moved forward Civil Rights legislation. Today we are seeing another shift in the Republican Party with the increased influence of the Tea Party social movement within the leadership of the party.

Political Parties in Congress

In Congress political parties serve to coordinate, assistant and provide resources for members of congress and political candidates. Parties control primary elections which are the main means through which candidates can get on ballots. They also control committee appointments, and since the 1990s there has been a stronger control by congressional party leaders on individual members including higher rates of party voting. Members of congress now routinely vote with their party at rates as high as 60 or 70 percent. In addition to increasing the power of party leadership it means that bipartisan collaboration between members of congress is less likely.

Nancy Pelosi

Nancy Pelosi is the leader of the House Democrats and the first women to be Speaker of the House.

This rise in party power also means that the experiences of members of the majority versus minority party will be quite different. Majority party members will have many positive powers to pass legislation to support their own ideology and constituencies. However, minority party members will have to rely on negative powers such as blocking legislation in committees, or using filibuster techniques.

Coalitions

To deal with a situation in which no clear majorities appear through general elections, parties either form coalition cabinets, supported by a parliamentary majority, or minority cabinets which may consist of one or more parties. Cabinets based on a coalition with majority in a parliament, ideally, are more stable and long-lived than minority cabinets. While the former are prone to internal struggles, they have less reason to fear votes of non-confidence. Majority governments based on a single party are typically even more stable, as long as their majority can be maintained.

Coalition cabinets are common in countries in which a parliament is proportionally representative, with several organized political parties represented. It usually does not appear in countries in which the cabinet is chosen by the executive rather than by a lower house, such as in the United States (however, coalition cabinets are common in Brazil). In semi-presidential systems such as France, where the president formally appoints a prime minister but the government itself must still maintain the confidence of parliament, coalition governments occur quite regularly. In the United States, political parties are best described as coalitions.

11.7.2: Constituency

Each member of Congress has a responsibility to their constituents because they decide if a congressional member will be re-elected.

Learning Objective

Identify the rules and duties of members of Congress while they are in office, and the factors that shape how they vote on bills

Key Points

• Each member of the U.S. Congress is elected by voters in their home district. These voters are members of Congress’ constituency.
• Each member has a special responsibility to their constituents because these are the only voters who get to decide if a congressional member will be re-elected.
• Districts are reevaluated after each 10 year census and redrawn as needed to adjust to population changes. However, this is not a completely neutral process. The practice of gerrymandering has been used to insure that one party or the other will have an easier time winning elections.
• All members of Congress maintain constituency offices which are home bases where staff can keep in touch with local concerns, activists, and interests.
• Members of Congress also attempt to maintain support with constituency members by using their influence in Congress to gain support for local projects such as new, lucrative construction projects.

Key Terms

pork barrel

The appropriation of government spending for localized projects secured solely or primarily to bring money to a representative’s district

gerrymandering

The practice of redrawing electoral districts to gain an electoral advantage for a political party.

Constituency

Each member of the U.S. Congress is elected by voters in their home district. These voters are a part of congress’ constituency. Each congressional member has a special responsibility to their constituents because these are the only voters who get to decide if a member will be re-elected.

Models of Representation: The Delegate vs. Trustee Model

Representatives can act in two models of representation: as delegates or trustees. The delegate model of representation is a model of a representative democracy. In this model, constituents elect their representatives as delegates for their constituency. These delegates act only as a mouthpiece for the wishes of their constituency, and have no autonomy from the constituency. This model does not provide representatives the luxury of acting in their own conscience. Essentially, the representative acts as the voice of those who are (literally) not present.

On the other hand, the trustee model of representation is a model for how we should understand the role of representatives, and is frequently contrasted with the delegate model of representation. Constituents elect their representatives as ‘trustees’ (or ‘entrust’ them) for their constituency. These ‘trustees’ have sufficient autonomy to deliberate and act in favor of the greater common good and national interest, even if it means going against the short-term interests of their own constituencies. The model provides a solution to the problem of uninformed constituents who lack the necessary knowledge on issues to take an educated position. By contrast in the delegate model, the representative is expected to act strictly in according to a mandate from the represented.

House of Representatives Districts

Members of the House of Representatives are elected to represent districts that range in size from the 905,316 people representing the entire state of Montana to 495,304 which represents the entire state of Wyoming. Most states have multiple representatives.

Districts are generally reevaluated after each 10 year census. The districts are redrawn as needed to adjust to population changes. However, this is not a completely neutral process. The practice of gerrymandering has been used to insure that one or the other party will have an easier time winning elections by creating districts that hold a majority of voters likely to vote for one party or the other. Looking at the maps of congressional districts it is obvious that some districts are far from uniform. The more complicated shapes on the map might be a result of gerrymandering.

U.S. Congress House Districts

This map shows the boundaries for the U.S. Congress housing districts.

Senate Seats

U.S. Senators simply represent their states. There are two senators per state. Therefore, the constituency in smaller states such as Wyoming might be able to gain disproportionate influence.

Local Concerns

All members of congress maintain constituency offices, which are home bases where staff can keep in touch with local concerns, activists, and interests. Members of Congress will pay a great deal of attention to their constituency’s concerns. Congressional members will often attempt to maintain support with constituency members through practices such as pork barrel politics. This practice is when members will use their influence in Congress to gain support for local projects such as new lucrative construction projects.

11.7.3: Interest Groups, Lobbyists, and PACs

Interest groups attempt to influence Members of Congress in a variety of ways, such as lobbying and financing campaigns using PACs.

Learning Objective

Describe how outside groups work to shape policy at the federal level through the use of interest groups, lobbyists, and PACs.

Key Points

• Interest group represent people or organizations with common concerns and interests. These groups work to gain or retain benefits for their members, through advocacy, public campaigns, and even lobbying governments to make changes in public policy.
• Interest groups may take on a variety of strategies including public education, encouraging public participation, and providing education and special information for civil servants and politicians.
• Interest groups are also involved in actives such as lobbying to directly persuade decision makers in Congress along with members of the executive branch.
• PACs are organized groups that work on election campaigns both for specific parties and ballot initiatives. These groups pool donations to redistribute to candidates, parties and other PACs.
• Super PACs can also spend unlimited amounts of money advocating for or against a candidate or issue, but may not donate to, or coordinate with, a particular campaign.

Key Term

lobbyist

A person remunerated to persuade (to lobby) politicians to vote in a certain way or otherwise use their office to effect a desired result.

Interest Groups, Lobbyists, and PACs

Interest groups represent people or organizations with common concerns and interests. These groups work to gain or retain benefits for their members through advocacy, public campaigns, and lobbying governments to make changes in public policy. There are a wide variety of interest groups representing a variety of constituencies including business, labor, consumers, other governments, and various single issue groups.

Interest groups may take on a variety of strategies including public education, encouraging public participation, and providing education and special information for civil servants and politicians. However, interest groups are also involved in activities such as lobbying and forming PACs, which has led to concerns that some groups and even individuals might have disproportionate influence on Congress.

Lobbyists

There are over twelve thousand registered lobbyists in Washington, but only a handful of those have the influence and connections needed to consistently influence policy. Lobbyists work for a wide variety of groups, ranging from individual companies and non-profit organizations, to other governments and large coordinated councils representing whole industries, labor movements, or consumers. Lobbyists work to directly persuade decision makers in Congress along with members of the executive branch.

The impact of lobbyists is unclear, but many believe they can influence public policy. One example is the strength and influence of the National Rifle Association (NRA), who are advocates for gun rights. They also oppose gun regulations and legislation that infringe on the privacy of gun owners in the United States, who has one of the most lenient gun regulations in the Global North.

Political Action Committees (PACs)

PACs are organized groups that work on election campaigns often on behalf of specific parties and ballot initiatives. These groups pool donations to redistribute to candidates, parties, and other PACs. Federal Election Commission (FEC) regulations limit the amount of money PACs can donate to any one campaign or party, and there are limits to the amount of money they can receive from any one donor.

PACs can be connected to existing organizations such as business, labor or trade organizations or non-connected, usually rallying around a single issue or ideology.

While PACs have existed since the 1940s, the 2010 SpeechNow.org v. Federal Election Commission decision of the Supreme Court created a new form of PAC. They are officially known as independent expenditure-only committees, but better known as Super PACs . These groups can raise money without limits in from individuals, organizations, and large donors such as corporations or labor unions. Super PACs can also spend unlimited amounts of money advocating for or against a candidate or issue, but may not donate to, or coordinate with, a particular campaign.

Stephen Colbert

Political satirist Stephen Colbert has started his own Super PAC to draw attention to these organizations.

The SpeechNow.org case built on the decision in the Citizens United v. Federal Election Commission case earlier in 2010, which held that the First Amendment right to free speech meant that legislatures could not limit independent political spending by corporations and unions.

The 2012 election cycle is the first presidential election to be held under the new rules. Before the campaigns even ended, the Super PACs had outspent the top ten PACs from 2008 by at least tenfold. A large majority of Super PAC donations also come from wealthy individual donors. By October 2012, the top 100 individual Super PAC donors donated 80% of all Super PAC funds, yet made up fewer than 4% of all donors.

Information and Watchdogs

Critics of Super PACs are concerned that these groups can, in effect, “buy” elections. If elected, the candidates may then feel a special obligation to these wealthy donors and organizations. Several groups now exist to track the connections between Members of Congress, lobbyists, and campaign financing. Some of these groups include the Center for Responsive Politics and the OpenCongress.org website.

11.7.4: Switching Parties

Though uncommon, a member of Congress switch parties for either ideological or pragmatic reasons.

Learning Objective

List several well-known cases of senators switching parties

Key Points

• Political parties provide various benefits to Members of Congress and so it is fairly uncommon for a Member of Congress to cross over parties.
• Some Members might cross over due to ideological differences with their party, or more pragmatic reasons such as power gain or reelection in the Senate.
• Various politicians who have crossed parties have found both success and failure.

Key Term

primary

A primary election; a preliminary election to select a political candidate of a political party.

Crossing Over of Parties

Political Parties provide various benefits to Members of Congress, including some election support, support in Congress, and positions on various committee. Political parties also serve as ideological homes for Members, and voters are often more attached to a party than to any given candidate. For these reasons, it is fairly uncommon for a Member of Congress to cross over parties, but it is not unheard of.

A member might switch parties, or “cross the floor,” for a number of reasons. Some members might switch due to ideological differences with their party. This was the case with Senator Strom Thurmond who, in 1964, switched from the Democratic to Republican party in opposition to the Civil Rights Bills. Others switch for more pragmatic reasons, such as to gain more power in Congress or to gain reelection. Richard Shelby, a relatively conservative Democrat Senator switched to the Republican Party in 1994 after they gained a majority in the Senate, and went on receive high profile committee appointments.

Crossing over can cause difficulties. For example, when Ben Nighthorse Campbell crossed to the Republican party after being elected as a Democratic Senator, much of his Congressional staff quit. Others who have crossed over have found success: Senator Joe Lieberman served as a Democrat and even ran as the Democratic Vice Presidential nominee in 2000, but after losing the Democratic primary in his home state of Connecticut, ran and was elected as an Independent. He eventually supported the 2008 Republican presidential ticket.

Joe Lieberman and John McCain

Senator Lieberman was a Democrat, then crossed over as an Independent, then endorsed a Republican presidential candidate.

12: The Presidency