Why You Need This New Edition Six good reasons why you should buy this new edition of Understanding Public Policy I. A ne:N chapter discusses changes in the American health care $)'Stem, including Medicare for the aged, Medicaid for the disadvantaged, and SCHIP for children, as well as the conditions inspiring a more comprehensive reform. Providing a modem focus on major policy issues such as our nation's health care system, this ne:N chapter encourages you to think critically and analyze whether the system can be transformed by a rational-comprehensive plan. 2. New discussions on the Wall Street bailout, the TA RP program, the stimulus package, mort gage modification, and ne:N financial regulations give you the opportunity to study current events in the context of your course. 3. New discussions of the various economic policies of the Obama administration have been added to exemplify the administration's move away 1rom the traditional incremental model, as evident through the growth of federal funding. A discussion of a balanced budget amendment to the Constitution allows you to formulate and discuss your own ideas regarding economic policy. 4. Discussions on the policy effects oft he Republican capture of control of the House of Representatives, including tax compromises. environmental regulations, and immigration reform, allow you to analyze a current policy issue using the concepts you read in the text. 5. The defense policy chapter now describes the Obama administration's shift in priorities 1rom Iraq to Afghanistan. Ne:N information on the combination of U.S. troops with NATO fon:es as well as the question of when to use military fon:es allows you to discuss your opinions on the same policy questions facing our government leaders. 6. Added coverage of state policies in the federalism chapters exposes you to the policy varia tion among states and the resulting state challenges to national policies, including state medical marijuana laws, Arizona's immigration law, and new health care policies. PEARSON FEDERAL POLICY -MAKING INSTITUTIONS I I The Constitution I I I I Legislative Executive Judicial Branch Branch Branch I THE PRESIDENT Executive Office of the President White House Chief of Staff Office of Management and Budget Council of Economic Advisers Office of National AIDS Policy Council of Environmental Quality Office of National Drug Control Policy Domestic Policy Council Office of Science & Technology National Economic Council President's Foreign Intelligence Board National Security Council Office of the United States Trade Office of Administration Representative Office of Faith-Based and Community Initiatives Office of Homeland Security National Intelligence Director THE VICE PRESIDENT I I I I I I AGRICULTURE COMMERCE DEFENSE EDUCATION ENERGY DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT I I I I I HOUSING AND HEALTH AND HOMELAND URBAN- INTERIOR JUSTICE HUMAN SERVICES SECURITY DEVELOPMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT I I I I I VETERANS LABOR STATE TRANSPORTATION TREASURY AFFAIRS DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT INDEPENDENT ESTABLISHMENTS AND GOVERNMENT CORPORATIONS African Development Foundation Federal Housing Finance Board National Foundation on the Arts and Pension Benefit Guaranty Corporation Central Intelligence Agency Federal Labor Relations Authority the Humanities Postal Rate Commission Commodity Future.o Trading Commi&rion Federal Maritime Commission National Labor Relations Board Railroad Retirement Board Conmmer Product Safety Commi&rion Federal Mediation and Conciliation Service National Mediation Board Securitie~ and Exchange Commi&rion Corporation for National and Federal Mine Safety and Health National Railroad Pa..enger Corporation Selective Service System Community Service Review Commission (Amtrak:) Small Bosine~~ Administration Defense Nuclear Facilities Safety Board Federal Reserve System National Science Foundation Social Security Administration Environmental Protection Agency Federal Retirement Thrift Investment Board National Transportation Safety Board Tenne.,ee Valley Authority Equal Employment Opporturnity Federal Trade Commission Nuclear Regulatory Commission Trade and Development Agency Commission General Services Administration Occupational Safety and Health U.S. Arms Control and Disarmament Agency Export-Import Bank of the U.S. Inter-American Foundation Review Commission U.S. Commission on Civil Rights Farm Credit Administration Merit Systems Protection Board Office of Government Ethics U.S. Information Agency Federal Communications Commission National Aeronautics and Space Administration Office of Personnel Management U.S. International Development Federal Deposit Insurance Corporation National Archives and Records Administration Office of Special Counsel Cooperation Agency Federal Election Commission National Capital Planning Commission Panama Canal Commission U.S. International Trade Commission Federal Emergency Management Agency National Credit Union Administration Peace Corps U.S. Postal Service Assistant Editor: Stephanie Chaisson Cover Designer: Suzanne Behnke Director of Development: Eileen Calabro Cover Art: StillfxNeer Executive Marketing Manager: Wendy Gordon Senior Manufacturing Buyer: Dennis J. Para Media Editor: Lisa Dotson Printer/Binder: Quebecor World Book Services Production Manager: S.S. Kulig Cover Printer: Lehigh-Phoenix Color Corp. Project Coordination, Text Design, and Electronic Page Makeup: PreMediaGlobal Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text and also on page 368. Library of Congress Cataloging-in-Publication Data Dye, Thomas R. Understanding public policy/ Thomas R. Dye. - 14th ed. p.cm. Includes bibliographical references and index. ISBN-13: 978-0-205-23882-8 (alk. paper) ISBN-10: 0-205-23882-3 (alk. paper) 1. Political planning-United States. 2. United States-Politics and government. 3. Policy sciences. I. Title. JK468.P64D95 2013 320.60973---dc23 2011045837 Copyright© 2013, 2011, 2008, 2005 by Pearson Education, Inc. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake St., Upper Saddle River, NJ 07458, or you may fax your request to 201-236-3290. 10 9 8 7 6 5 4 3 2 l~WT-16 15 14 13 12 PEARSON ISBN-13: 978-0-205-23882-8 www.pearsonhighered.com ISBN-10: 0-205-23882-3 Preface Policy analysis is concerned with "who gets what" in politics and, more important, "why" and "what difference it makes." We are concerned not only with what policies governments pursue, but why governments pursue the policies they do, and what the consequences of these policies are. Political Science, like other scientific disciplines, has developed a number of concepts and models to help describe and explain political life. These models are not really competitive in the sense that any one could be judged as the "best." Each focuses on separate elements of politics, and each helps us understand different things about political life. We begin with a brief description of eight analytic models in political science and the paten~ tial contribution of each to the study of public policy: Process model Group model Institutional model Elite model Rational model Public choice model Incremental model Game theory model Most public policies are a combination of rational planning, incrementalism, competition among groups, elite preferences, public choice, political processes, and institutional influences. Throughout this volume we employ these models, both singly and in combination, to describe and explain public policy. However, certain chapters rely more on one model than another. The policy areas studied are: Criminal justice Energy and Environment Welfare Civil rights Health Care Defense policy Education Homeland security Economic policy International trade Tax policy and immigration In short, this volume is not only an introduction to the study of public policy but also an in~ traduction to the models political scientists use to describe and explain political life. NEW TO THIS EDITION The fourteenth edition of Understanding Public Policy focuses on the policy challenges confronting the Obama administration. Can America's health care system be transformed according to a rational~comprehensive plan? A new chapter describes earlier incremental changes in health care-Medicare for the aged, xi xii Preface Medicaid for the poor, and SCHIP for children-and then describes the conditions inspiring more comprehensive reform. Prior to health care reform, many working Americans and their dependents, roughly 15 percent of the population, were without health insurance. The cost of health care in America consumes a larger share of the nation's economic resources (about 15 percent of the gross domestic product) than in any other country. Yet the United States ranks well below other nations in many common measures of national health, including life expectancy and infant mortality. The Pa tient Protection and Affordable Care Act of 2010 represents a rational-comprehensive approach to transforming health care in America. The health care chapter covers the Act's individual mandate, employer mandate, Medicaid expansion, health-care exchanges, taxes and costs. It also describes the controversies surrounding "Obamacare," notably the constitutionality of the individual mandate. The economic policies of the Obama administration defy the traditional incremental model. The economic chapter describes the Wall Street bailout, the TARP program, the stimulus package, mortgage modification, and new financial regulations. But the demise of the incremental model is especially evident in the explosive growth of federal spending under President Obama and the resulting unprecedented annual federal deficits. The chapter describes the recommendations of the president's deficit reduction commission-recommendations ignored by the president-as well as Republican efforts to cut federal spending. The chapter ends with a discussion of a balanced bud get amendment to the Constitution. The policy effects of the Republican capture of control of the House of Representatives in the midterm congressional elections of 2010 are reflected in several chapters. The tax chapter describes the tax compromise package in the "lame duck" session of Congress in 2010, in which President Obama was obliged to give up his efforts to raise the top marginal income tax rate to 39.6 percent. The energy and environment chapter describes the demise of the comprehensive "cap and trade" program in the Congress, as well as the attempts by the Environmental Protection Agency to achieve by regulation what the Obama administration was unable to achieve by legisla tion, namely the regulation of carbon dioxide emissions. The international trade and immigration chapter describes the gridlock over immigration reform, and the president's inability to win the enactment of the Dream Act. The institutional model is strengthened with added coverage of state policies in the federalism chapter. Federalism allows policy variation among the states, notably in educational spending, the cost liest function of state government. And states display a wide variation in tax policies, including dif ferences in their reliance on income versus sales taxation. Federalism also envisions conflict between the national government and states. The chapter covers federal intervention in traditional state policy domains with grants-in-aid, preemptions, and mandates. But it also covers state challenges to national policies, including state medical marijuana laws, Arizona's immigration law, and state opposition to "Obamacare." Direct democracy, in the form of the initiative and referenda, is available only in state and local government. State referenda voting provides information on popular policy preferences. The defense policy chapter describes the Obama administration's shift in priorities from Iraq to Afghanistan. The announced mission in Afghanistan is not nationbuilding but rather to "dis rupt, dismantle, and defeat" Al Qaeda. The transition to Afghan security control "will begin in 2011 and conclude in 2014." U.S. troops are combined with NATO forces in an International Se curity Assistance Force (ISAF) committed primarily to counterinsurgency operations in Afghani stan. The chapter also continues the discussion of when to use military force: U.S. intervention in Libya illustrates the contrast between advocates of using force only when vital interests of the United States are at stake, versus Obama's justification of using force for the humanitarian purpose of protecting the civilian population of Libya. Finally, the homeland security chapter describes the Obama administration's reversal of its ear lier decisions to close the Guantanamo prison and to try terrorists in civilian courts. The Obama Preface xiii administration now argues that it has the authority to hold enemy combatants who pose a danger to national security until the cessation of hostilities. The president has also ordered new military commission trials for certain Guantanamo detainees, including the self-proclaimed mastermind of the 9/11 attacks, Kalid Sheikh Mohammed. I wish to thank the following reviewers for their helpful comments: Michael Bordelon, Hous ton Baptist University; Euel Elliott, University of Texas at Dallas; Kim Geron, California State University-East Bay; Jon D. Holstine, American Military University; Jesse Horton, San Anto nio College; Kathryn Mohrman, Arizona State University; Ira Reed, Trinity University, Wash ington D.C.; Bruce Rocheleau, Northern Illinois University; Jessica Ice, Florida State University; Chad Long, St. Edwards University; Olga Smiranova, Eastern Carolina University; Minzi Su, Tennessee State University. Thomas R. Dye GIVE YOUR STUDENTS CHOICES In addition to the traditional printed text, Understanding Public Policy, 14th Edition is available in the following format to give you and your students more choices-and more ways to save. The CourseSmart eTextbook offers the same content as the printed text in a convenient on line format-with highlighting, online search, and printing capabilities. Visit www.coursesmart. com to learn more. MySearch Lab® MySearchLab is an interactive website that features an eText, access to the EBSCO Content Select database and multimedia, and step-by-step tutorials which offer complete overviews of the entire writing and research process. MySearchLab is designed to amplify a traditional course in numerous ways or to administer a course online. Additionally, MySearchLab offers course specific tools to enrich learning and help students succeed. • eText: Identical in content and design to the printed text, the Pearson eText provides access to the book wherever and whenever it is needed. Students can take notes and highlight, just like a traditional book. The Pearson eText is also available on the iPad for all registered users of MySearchLab. • Flashcards: These review important terms and concepts from each chapter online. Students can search by chapters or within a glossary and also access drills to help them prepare for quizzes and exams. Flashcards can be printed or exported to your mobile devices. • Chapter-specific Content: Each chapter contains Learning Objectives, Quizzes, Media, and Flashcards. These can be used to enhance comprehension, help students review key terms, prepare for tests, and retain what they have learned. To order this book with MySearchLab access at no extra charge, use ISBN 0205861164. Learn more at www.mysearchlab.com INSTRUCTOR RESOURCES A comprehensive Instructor's Manual and Test Bank, as well as a PowerPoint Presentation will accompany this new edition of Understanding Public Policy. These resources are available for down load at www.pearsonhighered.com/irc (access code required). Expandfng the Scope of Publtc Polfc:y President Barack Obama signs the Patient Protection and Affordable Care Act in the East Room of the White House, March 30, 2010. This health care reform bill greatly expands the scope of public policy in America. Under the Obama Administration, federal government spending has increased from about 20 percent of the gross domestic product (GOP) to over 25 percent The nation's state and local governments combined add about 13 percent, for a total size of government of approximatew 37 percent of the GOP. (IC Brooks Kraft:/Corbis) Policy Analysis What Governments Do, Why They Do It, and What Difference It Makes WHAT IS PUBLIC POLICY? This book is about public policy. It is concerned with what governments do, why they do it, and what dif~ ference it makes. It is also about political science and the ability of this academic discipline to describe, analyze, and explain public policy. Definition of Policy Public policy is whatever governments choose to do or not to do.1 Governments do many things. They regulate conflict within society; they organize society to carry on conflict with other societies; they distrib~ ute a great variety of symbolic rewards and material services to members of the society; and they extract money from society, most often in the form of taxes. Thus, public policies may regulate behavior, organize bureaucracies, distribute benefits, or extract taxes--or all of these things at once. Policy Expansion and Government Growth Today people expect government to do a great many things for them. Indeed there is hardly any personal or societal problem for which some group will not demand a government solution-that is, a public policy designed to alleviate personal discomfort or societal unease. Over the years, as more and more Americans turned to government to resolve society's problems, government grew in size and public policy expanded in scope to encompass just about every sector of American life. Throughout most of the twentieth century, government grew in both absolute size and in relation to the size of the national economy. The size of the economy is usually measured by the gross domes~ tic product (GDP), the sum of all the goods and services produced in the United States in a year (see Figure 1-1). Government spending amounted to only about 8 percent of the GDP at the beginning of the last century, and most governmental activities were carried out by state and local governments. Two world wars, the New Deal programs devised during the Great Depression of the 1930s, and the growth of the Great Society programs of the 1960s and 1970s all greatly expanded the size of government, particularly 3 4 Chapter 1 Policy Analysis 50 1944 Great Society World War II World Federal Government Expenditures 1910 1930 1950 1970 1990 2000 2010 Year FIGURE 1-1 The Growth of Government The size of government can be measured in relation to the size of the economy. Total federal, state, and Local government spending now exceeds 37 percent of the GDP, the size of the economy. *Estimate from Budget of the United States Government 2012. the federal government. The rise in government growth relative to the economy leveled off during the Reagan presidency (1981-1989). The economy in the 1990s grew faster than government spending, resulting in a modest decline in the size of government relative to the economy. Federal spending costs less than 20 percent of the GDP. The Obama Administration brought about a dramatic increase in federal spending, much of it in response to the "Great Recession" of 2008-2009. Federal spending in 2009 soared to 28 per~ cent of the GDP; this spending included a "stimulus" package designed to jumpstart the economy (see Chapter 10). But it is expected that continued increases in federal spending under President Barack Obama will keep federal spending close to 25 percent of the GDP, the highest figure since World War II. The nation's 50 state governments and 87,000 local governments (cities, counties, towns and townships, school districts, and special districts) combined to account for over 12 per~ cent of the GDP. Total government spending-federal, state, and local-now amounts to about 37 percent ofGDP. Scope of Public Policy Not everything that government does is reflected in governmental expenditures. Regulatory activity, for example, especially environmental regulations, imposes significant costs on individu~ als and businesses; these costs are not shown in government budgets. Nevertheless, government spending is a common indicator of governmental functions and priorities. For example, Figure 1-2 indicates that the federal government spends more on senior citizens-in Social Security and Medicare outlays-than on any other function, including national defense. Federal welfare and health programs account for substantial budget outlays, but federal financial support of education