The Federal Courts and Economic Policymaking

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The Federal Courts and Economic PolicymakingChapters 15-16

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Chapter 15 The Federal Courts

Copyright © 2011, 2010 Pearson Education, Inc. All rights reserved.

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+Judicial Policymaking

Courts can apply policy-making power of the courts as they comply with the Constitution through Interpretation Application

Judicial ReviewPower of the judicial branch to declare

unconstitutional the actions of the other two branches or their individual units


+Judicial Policymaking

The Role of Courts and Judges There is controversy over the leeway that courts should have in exercising

their rights of constitutional interpretation Strict construction

holds that the document should be interpreted narrowly

Judicial restraint Loose construction

holds that the Constitution can be interpreted broadly

Judicial activism


+Political History of the Supreme Court

Chief Justice John Marshall Marbury v. Madison (1803) McCulloch v. Maryland (1819)

Chief Justice Roger Taney Dred Scott v. Sandford (1857) Plessy v. Ferguson (1896)

Chief Justice Earl Warren Brown v. Board of Education (1954)

Chief Justice Warren Burger Roe v. Wade (1973)


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+The Lower Federal Courts

District Courts - Trial court level95 U.S. district courts with judges appointed by

the president and confirmed by the Senate Original jurisdiction

Includes both civil and criminal cases Criminal case

Legal dispute dealing with an alleged violation of a penal law

Civil case

Conflict between two parties


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+The Lower Federal Courts

U.S. Circuit Courts of Appeal Primary intermediate-level appellate courts 13 courts of appeal Courts of appeal have only appellate

jurisdictionHearing cases in panels of

three judges White House generally takes more care with

nominations to the courts of appeal than it does with district court selections.


+The U.S. Supreme Court

Highest court in the country Number of justices at the discretion of Congress A chief justice and 8 associate justicesJurisdiction

Constitution sets Court’s original jurisdictionStatutory law sets Court’s appellate jurisdiction

Selection of justices Presidents look for appointees who share their

political philosophyMust be confirmed by Senate


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Deciding to decide Makes policy from the cases that the justices themselves choose to

hear and decide Test Cases Rule of Four

Deciding the case Supreme Court deals with cases it chooses to hear:

1. Without oral arguments: per curiam opinion.2. Full treatment: one justice assigned to prepare the majority

opinion, other justices may write concurring or dissenting

opinions.


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Implementation Higher courts develop policy Lower courts interpret the rulings Government agencies implement rulings

Impact Greatest impact is when the Court issues a clear decision

in a well-publicized case and its position enjoys strong support from other branches and units of government, interest groups, and public opinion


+Power, Politics, and the Courts

How much influence do federal courts have in the policymaking process?

How responsive are they to public concerns?

Restrictions on the federal courts Both the Constitution and the law check judicial power. Other branches can change the law or the Constitution. The Court depends on the cooperation and compliance of other units of

government and private parties to implement their decisions.


+Break!

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Chapter 16Economic

Policymaking


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+The Goals of Economic Policy

Economic policy reflects the priorities of policymakers. Often disagreement over economic policy goals

Fund government servicesEncourage/discourage

private-sector activityRedistribute incomePromote economic growth

with stable prices


+Revenues: How the Government Raises Money

The federal government has many sources of revenue: Individual Income Taxes Estate Taxes Payroll Taxes

(Social Security & Medicare) Corporate Income Taxes Excise Taxes


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+Tax Issues and Proposed Reforms

Tax Burden and Tax Fairness Individual income tax is progressive. Payroll taxes are regressive.

State and local taxes tend to be regressive.

Tax Reform

Flat Tax Value Added Tax (VAT)National Sales Tax


+Deficits and the Debt

Budget deficit = amount of money by which budget expenditures exceed budget receipts

Budget surplus = sum by which budget receipts exceed annual expenditures

Budget receipts equal budget expenditures = balanced budget

National debt = accumulated indebtedness of government

2010: federal budget receipts were $2.2 trillion compared with outlays of $3.5 trillion, for a deficit of $1.3 trillion. National debt grew by $1.3 trillion


+Expenditures: How the Government Spends Money

Healthcare

Medicare (45 million people) and Medicaid (58 million people)

Social SecurityCreated in 1935 to supplement retirement

Expanded to include dependents as well as the disabled

Currently: a tax on workers to provide benefits to elderly and disabled


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National Defense3rd largest category of federal expenditures Includes defense dept. along with parts of other

agencies

Income Securitywelfare programs (with the exception of Medicaid)

Earned Income Tax Credit (EITC)Food StampsSupplemental Security Income (SSI)Temporary Assistance for Needy Families (TANF)


Expenditures: How the Government Spends Money

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+Fiscal Policymaking

Ground Rules for Budgeting Budget is initiated by executive branch a year and a half before

the start of the fiscal year. Mandatory spending = expenditures mandated by law including

entitlements, contractual obligations, and interest on the debt. Discretionary spending = expenditures not mandated by law

including spending for education, defense, foreign aid, highway construction.


+Fiscal Policymaking

The Budget Process November: 11 months before the beginning of the fiscal

year, budget process starts in Congress. March: OMB sends spending level guidelines to executive

branch agencies, followed by negotiation.s January: President presents budget to Congress

Divided according to taxing and spending measures and referred to appropriate committees.

The spending side of the budget requires the enactment of both authorization and appropriation bills.

In studying the budgetary process, political scientists use the incremental model of budgeting.


+Monetary Policymaking and the Role of the Fed

Federal Reserve Board the “Fed” Independent regulatory commission, sets

monetary policy. Benchmark interest rates are the Fed’s main

lever to adjust the level of aggregate demand in the economy.


Scott J. Ferrell/Congressional Quarterly/Alamy

+Making Economic Policy

Important elements of the environment for economic policymaking are

public opinionthe strength of the economy party control of the executive and

legislative branches of government. Agenda Setting Policy Formulation, Adoption, and Legitimation Policy Implementation, Evaluation, and Change
