Public Policy Chapters 7 and 8

balance of trade

An economic goal related to the role of the United States in an international economy; examines the value of a nation’s exports compared to its imports.

consumer price index (CPI)

An economic statistic used to measure the inflation rate. The index is calculated by examining percentage price changes for a typical market basket of goods.

entitlement program

A program in which payment obligations are determined by the law that created it, not by the budget associated with that program. Under entitlement programs, any person who meets the eligibility requirements is entitled to receive benefits from the program.

fiscal policy

A term that describes the taxing and spending tools at the government’s disposal to influence the economy.

full employment

A goal of economic policy generally defined as the lowest level of unemployment that can be sustained in light of the structure of the overall economy. Also described as the condition in which everyone who wishes to work at the prevailing wage rates can find a job.

line-item veto

A budgeting tool that allows chief executives to delete specific items from an appropriations bill without rejecting the whole bill.

monetary policy

A tool used by the Federal Reserve Board to influence economic policy goals; it attempts to control economic fluctuations (through tools such as changes to the reserve requirement) by controlling the amount of money in circulation, also referred to as the money supply.

national debt

The accumulation of all of the deficits the nation has run historically.

progressive tax

A tax that is based on the philosophy that higher earners should pay higher taxes both in terms of actual dollars and as a percentage of income.

regressive tax

A tax that, when applied, taxes all individuals at the same rate regardless of their income or socioeconomic standing.

supply-side economics

An economic theory that states that the government can increase economic growth by cutting taxes, especially for the richest individuals.

tax expenditures

Tax subsidies, such as an investment credit or deduction, designed to favor a particular industry, activity, or set of persons. Called an expenditure because such a subsidy reduces government revenue and thus is like spending money. Also sometimes called corporate welfare.

American Recovery and Reinvestment Act of 2009

A law that gave money and tax cuts to create jobs and help the economy recover from a recession.

Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm- Rudman-Hollings)

A law that aimed to reduce the federal deficit by setting limits on government spending and requiring automatic cuts if those limits were exceeded.

Budget Enforcement Act of 1990

A law that set rules to control government spending and deficits by limiting discretionary spending and requiring new policies to be paid for.

Congressional Budget and Impoundment Control Act of 1974

A law that created the congressional budget process and limited the president’s ability to withhold approved funds.

Economic Recovery Tax Act of 1981

A law that cut taxes to encourage economic growth and investment.

affordable care act

enacted in 2010, which significantly altered health care policy in the United States and also deeply divided the nation over its expansion of the federal role in health care.

Children’s Health Insurance Program (CHIP)

A program that helps to ensure that children living in poverty have medical coverage. The federal government provides the states with funds, which the states match. States are free to set eligibility levels.

fee-for-service

The traditional way to pay for medical services, whereby the patient or health insurer pays for the services rendered with no restraint on overall costs. Managed care programs are offered as an alternative.

health maintenance organization (HMO)

A form of managed care in which an individual chooses or is assigned to a health care provider network that contracts with physicians to deliver health care services. HMOs promote cost- effective health care by negotiating lower fees with health care providers, limiting access to expensive services, and often emphasizing preventive health care.

managed care

A variety of efforts to organize and manage health care services —for example, through HMOs. Designed as one way to contain rising health care costs that had soared under the old, unrestrained “fee-for-service” system.

Medicaid

A federal–state health insurance program that assists the poor and disabled. The federal government sets standards for services and pays about half the cost. States pay the rest and set standards for eligibility and overall benefit levels.

Medicare

A national health insurance program for senior citizens. Covers basic medical care for those age sixty-five and older and for others with permanent disabilities, diabetes, or end-stage renal disease…. Medicare Part A (Hospital Insurance) covers inpatient hospital stays, skilled nursing, hospice, and some home health care, usually premium-free if you worked 10+ years. Part B (Medical Insurance) covers doctor services, outpatient care, medical supplies, and preventive services for a monthly premium

merit good

A good or service to which people are entitled as a right. Some argue that health care should be considered a merit good and as such be provided by either employers or government regardless of ability to pay.

national health insurance

A common health care policy in industrialized nations in which the national government provides health insurance to all citizens. Also called a single-payer system.

patients’ rights

A privilege of patients to see medical specialists or have a specific medical treatment or to sue their health care provider in order to gain those services or be compensated for their loss. This became a legal issue when a 1974 federal law (ERISA) allowed such suits in federal court only.

portability

A health care right guaranteed by a 1996 federal law in which employees can take their guaranteed insurance coverage with them (i.e., the insurance is portable) if they change jobs.

preferred provider organization (PPO)

An alternative to a health maintenance organization in which enrollees have a financial incentive to use physicians on an approved list but may opt to see other health professionals (preferred providers) at a higher cost.

preventative health care

The promotion of health and prevention of disease in individuals through such actions as routine screening for serious diseases,

better treatment of chronic illnesses, improved health care education, and more attention to the role of diet, exercise, smoking, and other lifestyle choices.

public health agencies

Government-established agencies to counter the threat of infectious diseases or unsafe food and to support medical research.

single-payer insurance

A common health care policy in industrialized nations in which the national government provides health insurance to all citizens. Also called national health insurance.

third-party payers

In health care policy, refers to insurance companies, employers, governments, or other parties that pay for most health care expenses.

Tricare

A health insurance program offered by the U.S. Department of Defense. Includes substantial benefits for retirees with at least twenty years of military service when they become eligible for Medicare.

veterans’ health care system

A medical system designed to serve the needs of American veterans by providing primary medical care, specialized care, and other medical and social services, such as rehabilitation.

Balanced Budget Act of 1997

A law that reduced federal spending and aimed to balance the budget, including cuts to programs like Medicare.

Children’s Health Insurance Program Reauthorization Act of 2009

A law that expanded and funded health insurance for low-income children.

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

A law that lets people keep their health insurance for a limited time after losing their job or leaving work.

Employee Retirement Income Security Act of 1974 (ERISA)

A law that sets rules to protect workers’ retirement and health benefit plans.

Health Insurance Portability and Accountability Act of 1996 (HIPAA)

A law that protects patient health information and allows people to keep health insurance when changing jobs.

Health Security Act

A proposed 1993 plan to reform healthcare and provide universal coverage, but it was not passed into law.

Medicare Prescription Drug, Improvement, and Modernization Act of 2003

A law that added prescription drug coverage (Medicare Part D) and expanded Medicare benefits.

Patient Protection and Affordable Care Act of 2010

A law that expanded health insurance coverage, lowered costs, and required most people to have insurance.

Social Security Act Amendments of 1965

A law that created Medicare and Medicaid to provide health insurance for the elderly and low-income individuals.

Veterans’ Health Care Eligibility Reform Act of 1996

A law that expanded and simplified eligibility for veterans to receive healthcare through the VA system.

economic policy

Programs/policies to affect economic conditions

Goals of Economic Policy

Economic Growth, Low Levels of Unemployment, Low Levels of Inflation, Positive Balance of Trade, Managing Deficits and Debt, Interrelationships of Economic Goals

Tools of Economic Policy

Fiscal Policy, Monetary Policy, Regulation, Incentives, Subsidies, Support, Tax Policy

Budget Process Assumptions and Planning

• Setting budget’s major taxing/spending goals.

• Assumptions about country’s economic conditions.

• Conditions can change after implementation.

Budget Process Agency Budget Development

• Preparing estimates for funding.

• Budget preparation begins with bureaus/subagencies.

• Incrementalism.

Budget Process OMB Budget Review

• Office of Management and Budget (OMB).

• Hearings, each agency defends budget.

• Agency heads unhappy with OMB.

• President/White House advisors complete review.

Budget Process Congressional Review

• House and Senate Budget Committees.

• Concurrent budget resolution.

• Congress passes, bill to president.

• Line-item veto.

Budget Process Budget Execution and Control

• Agencies spend money, implement programs.

• Government Accountability Office (GAO).

• Ensuring money spent legally, properly.

• GAO reports findings to Congress.