Politics and Public Policymaking for AP U.S. Government

Economic Policy

Economic policy can have a profound effect on national elections. The president and Congress are held responsible for the economic "health" of the nation. Economic policy involves improving the overall economic health of the nation through government spending and taxation policies.

Raising Revenue

The government raises revenue through the collection of taxes. The federal government collects individual income taxes, corporate income taxes, social insurance taxes, excise taxes, customs duties, and estate and gift taxes. The government also raises revenue through the sale of government securities by the Federal Reserve and through the collection of fees for services provided, such as patents.

Government Spending

Government spending may be discretionary or nondiscretionary (mandatory). Discretionary spending is spending about which government planners may make choices, while nondiscretionary spending is required by existing laws for current programs. In recent years the percentage of non-discretionary spending has grown while the percentage of discretionary spending has decreased. Discretionary spending includes defense spending, education, student loans, scientific research, environmental cleanup, law enforcement, disaster aid, and foreign aid. Nondiscretionary spending includes interest on the national debt and social welfare and entitlement programs such as Social Security, Medicare, Medicaid, veterans' pensions, and unemployment insurance. A large stimulus package was enacted in the first months of the Obama presidency.

The Federal Budget

The federal budget indicates the amount of money the federal government expects to receive and authorizes government spending for a fiscal (12-month period) year. The fiscal year for the federal government is from October 1 to September 30. The process of preparing the federal budget takes about 18 months and involves several steps:

• proposals—Each federal agency submits a detailed estimate of its needs for the coming fiscal year to the Office of Management and Budget (OMB).
• executive branch—The OMB holds meetings at which representatives from the various agencies may explain their proposal and try to convince the OMB that their needs are justified. The OMB works with the president's staff to combine all requests into a single budget package, which the president submits to Congress in January or February.
• Congress—Congress debates and often modifies the president's proposal. The Congressional Budget Office (CBO) provides Congress with economic data. Congressional committees hold hearings, analyze the budget proposals, and by September offer budget resolutions to their respective houses (which must be passed by September 15). The Appropriations Committee for each house submits bills to authorize spending.
• president—Congress sends appropriations bills to the president for approval. If no budget is approved, Congress must pass temporary emergency funding or the government will shut down.

Foreign and Defense Policy

Foreign policy involves all the strategies and procedures for dealing with other nations. One of the purposes of foreign policy is to maintain peaceful relations with other countries through diplomatic, military, or trade relations. The process of carrying out foreign policy is accomplished through foreign relations. Defense policy is the role that the military establishment plays in providing for the defense of the nation.

The President and Foreign Policy

The president is often considered the leader in the development of foreign policy. Presidential authority for foreign policy originates from the constitutional powers, historical precedent, and institutional advantages of the executive. The president is commander-in-chief of the armed forces, negotiates treaties and executive agreements, and appoints foreign ambassadors, ministers, and consuls. Historically, presidents have often issued foreign policy statements (for example, the Monroe Doctrine and the Truman Doctrine) that have not passed through the legislative process but which set the tone for foreign policy. Executive agreements, or pacts between the president and heads of state of foreign countries, do not require Senate ratification. Also, the president can often respond more quickly than Congress when a national crisis requires quick action (for example, the attack on Pearl Harbor or the events of September 11, 2001).

The Department of State

The Department of State is the major organization for carrying out foreign policy. The secretary of state reports directly to the president with advice about foreign policy matters. The secretary of state also supervises the diplomatic corps of ambassadors, ministers, and consuls. The State Department is organized into bureaus, each specializing in a region of the world.

The Department of Defense (DoD)

The Department of Defense provides military information to the president. The secretary of defense advises the president on troop movements, military installations, and weapons development. Because the secretary of defense is a civilian, the Joint Chiefs of Staff, composed of a chairman and the highest-ranking military officer in the Army, Navy, Air Force, and Marines, also provide advice on military matters.

The National Security Council (NSC)

The National Security Council is part of the Executive Office of the President. Membership includes the president, vice president, the secretaries of state and defense, chairman of the Joint Chiefs of Staff, director of the Central Intelligence Agency, and the president's national security advisor.

The United States Information Agency

The United States Information Agency helps keep the world informed about America, the American way of life, and American views on world problems through information centers around the world. It also sponsors the "Voice of America" radio programs that are broadcast around the world.

The Central Intelligence Agency

The Central Intelligence Agency is responsible for gathering secret information essential to national defense. Although the CIA is an independent agency, it operates within the executive branch to gather information, analyze that information, and brief the president and the National Security Council.

Congress and Foreign Policy

Congress also plays a major role in the development of foreign policy. It is the responsibility of the Senate Foreign Relations Committee and the House Committee on Foreign Affairs to make recommendations to Congress and the president on foreign relations. The Senate must approve all treaties between the United States and foreign nations by a two-thirds vote, and all nominations for ambassadors by majority vote. Congress has the power to declare war and must approve spending for national defense.

Current Issues in Foreign Policy

Current foreign policy issues include:

• nuclear proliferation—With only a few nations having nuclear capabilities, how do we prevent possible enemies from gaining access to nuclear technology that might someday be used against the United States or our allies?
• terrorism—How does the United States defend itself against possible terrorist attacks? What role will the Department of Homeland Security play in intelligence gathering, border security, immigration, and holding, questioning, and prosecuting suspected terrorists?
• international trade—Trade can be used as a tool of foreign policy by providing military or economic aid or by reducing or eliminating tariffs through trade agreements such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO).
• how to manage conflicts abroad—During the presidency of George W. Bush many criticized the United States for its "go it alone" policy. Should President Obama and subsequent presidents do more to create alliances and agreements with other nations?

Review questions for this study guide can be found at:

Politics and Public Policymaking Review Questions for AP U.S. Government