Introduction to Government in the United States
Introduction to Government in the United States POLI 100
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Ch 7 Gucci Gulch Reagan Regan Baker Darman and Dennis Thomas met on the night of Nov 22nd when the bill would be nished by the Ways and Means Committee 0 Decided to write a letter and call ranking Republicans on the Committee early to show their support 0 Thomas convinced Regan to hold off on the call and support till they saw the bill because so many of the House Republicans were unhappy Regan nally gave Baker a promise of the president39s support of the process if no further changes were made 0 Darman would read a statement after markup the bill was changed though so the nal vote was put off and Treasury went ten days without word from the president Dec 3rd roll call vote was nally held and only 5 of 13 Republicans supported it 0 Republicans were mad when support for the bill didn t come from Reagan House republicans had been sti ed and were then asked to support the awkward taX bill in the beginning but then the president seemingly pulled the rug from under them 0 Some democrats and lobbyist groups worked against the bill during this vulnerable time but some like the TaX Reform Coalition and CEO TaX Group worked for it o Reagan began to push for it on his Saturday radio address and in letters to House representatives 0 The rule vote was an easy way to attack the bill since not many liked the repeal of taX free pensions and Republican Whip Lott organized an quotarmyquot to convince others to vote against the rule and succeeded The Republicans didn39t expect overwhelming defeat of the rule vote The president needed to give Tip O Neil a list of 50 republican votes for him to bring it back up for a vote 0 The only rule O Neill would change was the effective date Jan 1 1986 87 0 President talked to House Republican Conference and met lots of opposition individually called representatives until they got the fty and then O Neill convened a meeting of the Rules Committee where they decided to bring it up for a vote the next day 0 70 republicans supported the bill in the rules committee vote Bill was passed in the House without a roll call vote Most thought the bill would die in the Senate Discussion Questions During the rst rules committee vote were representatives voting for or against the bill or for or against their treatment by other politicians What does this show about the political process Why did so many people work so hard to pass this bill if as stated at the end of the chapter even Rostenkowski thought it would die in the Senate Summary In the beginning of the chapter the Ways and Means committee is very close to nishing the tax reform bill Baker and Darman meet with President Reagan to discuss the bill and succeed in gaining his support for it Unfortunately that support quickly disappears when the President does not give any kind of public announcement of his opinion on the bill for ten days leading many to believe the white house is dropping the bill Without direct presidential support many Republicans backed away from the taX reform bill After ten days President Reagan publically backs the taX reform bill but he does not choose between the Rostenkowski bill or a another bill that had been put together by the Ways and Means Republicans further weakening the Presidents taX reform stance At this point the bill did not have much chance of passing in the House with most House Republicans against the bill and House Democrats from oil and heavy industry states opposing it as well Before the bill could be voted on The Rules Committee must approve a rule to be voted on in the House The Rules committee decided on a rule stated that all federal retirees get taxfree payments from their pension plans in the first three years after retiring This directly affects congressman because they receive this taX free benefit on their pension The rule didn t pass with a vote of 223202 due to Trent Lott s whip team putting pressure on House members to vote against the bill Rostenkowski asks the Speaker of the House O Neill for a second vote and he agrees on the condition that Rostenkowski must get fifty House Republican signatures in support of the bill Fifty votes are secured after President Reagan meets with several House Republicans and gains their support After a second vote the rule is passed 256 to 171 and the taX reform bill is passed in a voice vote Questions 1 If Republican president Ronald Reagan supports taX reform why are his fellow Republican representatives trying so hard to keep the new taX bill from passing in the House 2 For many important bills the House conducts a voice vote and then a recorded vote is taken for accuracy Why did the Republicans allow the new taX reform bill something of huge importance to pass with only a voice vote Chapter 3 of Gucci Gulch This chapter begins with Reagan asking the Treasury Department to overhaul the nation s tax laws To do this Reagan met with 10 advisors in supersecret meetings Treasury Secretary Regan was placed in charge of spearheading this new tax plan Regan used to be the chief executive of Merrill Lynch so he was thrilled to have another opportunity to rattle the business community Regan had a fabled ego and was though of as Reagan s yesman The president had a general interest in tax reform but gave no guidance on the form he thought it should take Ronal Pearlman and Charles McLure were also made a large impact on the reform and Regan adopted most of their proposals with few exceptions They believed that all income should be treated equally and therefore taxed equally They hoped to create a neutral tax system that did not in uence private decisions Overall they though taxes were for revenue not social change On top of everything Pearlman and McLure wanted to repeal generous tax credits and accelerated depreciated write offs from the Reagan Revolution in 1981 Their main opponent was Manuel Johnson who believed tax incentives helped boost the economy After months of quite debating McLure s plan prevailed Reagan s only provision was that the tax plan be revenue neutral meaning it did not increase or decrease the national deficit In his State of the Union speech the president called for a simple fair tax plan that was good for the economy The options they were debating but did not choose were a consumeincome tax where taxes only came from consumption rather than savings and Value Added Tax VAT which is a tax charged on the difference between a commodity s price before taxes and the cost of its production The instead had to worry about bracket creep where tax payers are put into a higher tax bracket without their income changing Another obstacle they had to deal with was double taxation of corporations which was fixed by deductions for the payouts In order to raise revenue Regan targeted tax free fringebenefits such as life insurance child care education aide and a partial exception for healthcare Individual Retirement Accounts were spared After everything the creators of the plan expected 25 to be the highest tax rate Instead it was 37 and the overall was 162837 To create a more aesthetically pleasing plan 152535 Regan accepted a 150 billion dollar tax increase Tax reform had turned into simple tax cutting Reagan leaks the info of the plan at a Sperling Breakfast with Budge Sperling Once news of the plan hit the papers the president realized it would have to be released ahead of schedule to prevent further leaks When taken to the White House however the Chief Economic Advisor said the plan was terrible and reform almost stopped right then and there Discussion Questions 1 Which deduction elimination was the least fair 2 Should President Reagan have had more input in the process Treasury Secretary Donald T Regan joined ten advisors to come up with a plan for overhauling the nation s tax laws 0 The new proposal was more radical than any ever contemplated at such a high level of government It swept away hundreds of special interest tax breaks and eliminated the investment incentives that were championed by President Reagan in 1981 o Regan kept the group isolated and the meetings secret Regan had been chief executive of Merrill Lynch and an avid backer of investment take breaks With the new proposal he made a remarkable transformation as he rejected his previous views 0 Merrill Lynch under Regan became one of the first Wall Street firms to go public o In the late 1970 s Regan s Merrill Lynch changed the nature ofthe business world forever by allowing clients to write checks against their brokerage accounts quotHe was often open to persuasion by others who did have firm and unequivocal beliefs because quotat heart he was a contrarianquot 0 He is famous for the saying quotThe Horse You Rode In Onquot as part of quotfuck you and the horse you rode in onquot o Regan had a fabled ego in that he craved the public spotlight White House Chief of StaffJames Baker wanted nothing to do with Regan s plan in large part because he did not want details to leak out and create controversy during the reelection campaign but also because neither he nor others on the White House stafftook the effort too seriously 0 For this reason Regan was rewriting the nation s tax laws in a complete political vacuum Two men in particular had the secretary s ear Ronald Pearlman and Charles McLure o quotThe theory behind the tax plan prepared by Pearlnman and McLure was this All income should be treated equally by the tax systen regardless of where it comes from what form it takes or what it is used forquot o The two men were convinced that the neutral tax system a system that does not influence private decisions is the only way to go o The tax code should be returned to its original purpose to raise revenue for the government not to engineer the economy or promote social change 0 Regan compares the tax plan to quotslaying a lot of dragons The hardest part of Regan s plan was huge business investment incentives that President Reagan himself signed into law in 1981 Pearlman and McLure were determined that their plan repealed both the generous investment tax credit and the accelerated depreciation write offs o The two men believed that business giveaways were a major cause ofthe proliferation oftax shelters and they enabled many companies to pay nothing on their federal income tax forms Manuel Johnson an opponent of McLure and Pearlman proposed a powerful new system of39 quot quot called I 39 cquot which would allow the entire cost of an equipment purchase by a business to be written off in a single yeah 0 But John s plan was too expensive and would cost the government hundreds of billions of dollars in forgone tax revenues o McLure s proposal of completely reversing the administration s position in 1981 won Charls Walker promoted the consumed income tax which is a way to free business investment from all taxation this type of tax would only tax income that is used for consumption not income that is saved or invested o This tax system died out very soon Value added tax is a sort of sales tax imposed at the national level to supplement the income tax 0 This tax system also died out very soon The cornerstone of the treasury s ambitious plan was to adjust or index various portions of the tax code to take account of inflation The average taxpayer had felt the consequences through quotbracket creepquot which pushed taxpayers into higher tax brackets even though their incomes adjusted for inflation were unchanged 0 Treasury tax experts wanted to go far beyond that They wanted to adjust everything for inflation capital gains depreciation even interest payments and interest deductions o Regan also decided to eliminate special gains rate altogether Tax experts proposed large increases in so called standard deduction used by those taxpayers who do not itemize their deductions They also proposed to expand the earned income credit which gave some working poor a tax refund and to increase personal exemption for each family member 0 To propose a tax deduction to corporations for 50 percent of the dividends they paid out 0 Companies could provide benefits to their employees but under the proposal the benefits would be taxed as income 0 Proposed to wipe out entertainment expense deductions President Reagan made it certain that the tax reform would not harm the home mortgage deductions Regan proposed the largest corporate tax increase ever 150 billion He was able to cut individual tax rates and individual tax bills 0 Questions Why was the elimination of huge business investment incentives such a big deal What were the pros and cons of eliminating it What were some of the mistakes Regan made in focusing on economics instead of politics 0quot PWN WNFD The Presidency A paradoxical office What does it take to be a good president Presidential character Presidential roles a Constitutional b through custom and usage Presidential power a Foreign b Domestic Trends in public opinion The uniqueness of the presidency Great presidents Organizing the presidential office Barber Three distinct political roles 1 rhetoric talkingspeech making 2 personal relations convincing and persuading 3 homework learning Style world view and character style the president39s habitual way of performing the three political roles rhetoric personal relations and homework world view the way the president understands the world politically relevant beliefs particularly conceptions of social causality human nature and the central moral conflicts of the time character way person orients him or her self to life basic ego strength Barber39s Classification Scheme Active Passive Positive ActivePositive PassivePositive Negative ActiveNegative PassiveNegative Barber39s Classification Scheme Active Passive Positive Happy Happy Long hours Short hours 10 Tries to keep it 9 to 5 Negative Burdened Burdened Long hours Short hours Active Problem Solving Works flexibly and rationally Desirable 1 Jefferson Positive Negative Power Hungry Rigid in the face of crisis Worst 4 Adams Passive Love Seeking Too Dependent on Advisors Next to Worst 3 Madison Duty Motivated Effective at creating stability Close Second Best 2 Washington Positive Nega ve Active Rational Mastery F Roosevelt Truman Kennedy Ford Carter Bush 1 Clinton Kerry Obama McCain Jefferson Power Seeking Johnson Nixon Wilson Hoover Gore Adams Passive Love Seeking Taft Harding Reagan Bush 2 Madison Duty Motivated Eisenhower Coolidge Washington Trends in Public Opinion Atypical curve that is not really typical of anyone ZO JgtCJgtltITI Elect Midl Elec1 Mid2 End2 Time PRESIDENT OBAMA Jab Ratings 2009 50 7 21 31 41 51 51 71 an 50 Vonn 50 40 30 20 7 Disapprove 10 7 pongrepOrf com 0 11 2 3 41 5 n m aw 91 101 11 Some agreed upon great Presidents in historical order 1 Washington stabilized office 2 Jefferson expanded to full political system 3 Jackson popular presidency 4 Lincoln preserved union expanded role of president especially in wartime 5 T Roosevelt mobilized public opinion first environmentalist trust buster 6 Wilson world leader mobilized public opinion power concentrator F Roosevelt government becomes economic manager world leader US became 1 l THE JUDICIARY 1 2 3 What is judicial discretion and why is it important 4 0 What is the historical foundation for the role ofjudges in the United States Types of cases Do judicial decisions have real political consequence How do interests groups attempt to influence courts and their decisions Does the role of the court make sense from the perspective of democratic theory How is the federal court system organized What are the sources and limitations of Supreme Court power in the US The current composition of the Supreme Court WNFDP PWN A list of some areas ofjudicial impact Economic reach of federal government School and societal integration Right to abortion Various other protections of speech and privacy Rights of defendants Property rights Environmental quality Employment rights Gender rights Manufacturer and corporate liability Role of religion in public life Power of the individual US states Legitimate control of money in campaigns The winner in the 2000 election Organization of Federal Courts Lowest level District court a over 90 district courts with over 500 judges b has original jurisdiction in most cases Middle level Appellate court US Courts oprpeals or Circuit Courts There are 12 judicial circuits 3 or more judges are assigned per circuit All cases are heard by at least a panel of three judges No case comes other than through appeal Supreme Court Hears cases either by original jurisdiction or through appeal or certification Mostly Court s discretion Who is on the Supreme Court Breyer 193872 Clinton Ginsberg 193377 Clinton Kagan 196050 Obama Sotomayor 195456 Obama Kennedy 193674 Reagan Roberts 195555 Bush 2 Alito 195060 Bush 2 Scalia 193674 Reagan Thomas 194862 Bush 1 Modleft Modleft ModIeft ModIeft Modright RightFar right Farright Farright Farright Bureaucracy 1 NFDFN P N What are the characteristics of a bureaucracy Why bureaucracy Popular ambivalence What do public bureaucracies do Organization of US bureaucracy The principal agent problem How is the US bureaucracy held accountable Characteristics of a bureaucracy 1 Hierarchically organized 2 Specialization specific tasks 3 Qualification and competence as the basis of recruitment and promotion eg degree or other certification needed for many jobs 4 Institutionalization of procedures rules to be followed 5 Career identification eg teacher engineer accountant machinist etc Implementation Take congressional and presidential policy and develop rules and procedures for putting them into effect Administration Handling day to day problems of executing policy and providing services Regulation Taking broad grants of power given by Congress to control various activities such as advertising product safety interest rates and environmental quality Bureaucratic Accountability PrincipalAgent problems The principal is the person or group who delegates to another person or group the agent a particularjob or task A principalagent problem is quotHow does the principal control the behavior of the agent when the agent is more knowledgeablequot FOREIGN POLICY A An Overview Values Roles Instruments The logic of free trade and the concept of comparative advantage 4 What makes a nation strong 5 The US as an international actor 6 7 ooN The distribution of power in the modern world Current challenges What are some of the principal goals and some of the challenges facing the United States Principal goals Economic prosperity and internal security a stable and favorable trading environment b strong internal economy c no threat of unwanted military influence or of external terrorism Enhancement of quotdemocratic valuesquot in the world Challenges a limited list 1 5 NQFquot Preserving a good economic environment for US a Avoiding severe currency problems b Keeping the world reasonably secure c Keeping trade active d Keeping the US labor force employed e Maintaining access to critical resources Avoiding terrorist activity in the US particularly nuclear terrorism Avoiding the development of an antiAmerican antidemocratic regime in Russia Keeping China progressing along a capitalist and hopefully democratic course Avoiding severe environmental degradation worldwide Defeating alQaeda Successfully ending the wars in Iraq and Afghanistan Controlling Iran and quite separately controlling North Korea Wealth in the US 1 Wealth and equality 2 Poverty 3 The politics of wealth distribution 4 The consequences of wealth distribution Share of Aggregate Income Received by Each Fifth of Households 1970 1980 1990 2000 2008 Change 80 to 08 Lowest 41 42 38 36 34 83 2nd 108 102 96 89 86 80 3rd 174 168 159 148 147 84 4th 245 247 240 230 233 95 Highest 433 441 466 498 500 115 Source wwwcensusgovhheswwwincomehistinch02ar Median and Mean Income in 2008 dollars 1980 1990 2000 2008 Household Median Mean Income Income 44059 52401 47819 59731 52500 71436 50303 68424 Change 1980 to 2008 114 130 Per Capita Mean Income 19373 22976 27939 26934 139 Poverty rates 1970 1979 1987 1993 1996 1999 2001 2003 2006 2008 Overall 126 116 135 151 137 118 117 125 123 132 Old 246 152 122 122 108 97 101 102 94 97 Young 149 160 200 220 202 169 163 176 174 180 Poverty rates in 2006 by age level 05 207 517 161 1824 178 2534 123 3544 95 4554 78 5559 81 6064 97 6574 86 75 103 Poverty Rates In 2008 by Race amp Hispanic Origin White Black Hispanic not any Hispanic race 82 245 215 Per Capita GDP 2007 UN statistics based on current prices posted June 2009 Luxembourg 108217 240 Norway 82465 183 Denmark 57257 127 Switzerland 56579 126 Sweden 49873 111 United Kingdom 45549 101 United States 45047 100 Canada 43368 96 Germany 40162 89 France 40090 89 Japan 34225 76 Per Capita GDP 2005 UN statistics based on current prices Luxembourg 7 8442 188 Norway 63960 153 Switzerland 5045 1 121 Denmark 47641 114 United States 41768 100 Sweden 39561 95 United Kingdom 36851 88 Canada 35073 84 Japan 35593 85 France 34128 82 Germany 33800 81 Final exam 1 Between 70 and 80 The bulk of the final will be based on material in the last 3 chapters the last 4 lectures and the last two weeks of newspaper article 2 You are responsible for every question asked on prior exams 3 You are also responsible for big theme questions dealing with the efficiency of the US political system Filibuster really super majority influence on pivotal voter O O 0 0 Median Senator I I 1 5 o Senator Location Q 0 00 w 0 C 0 Median Senator 0 Senator Location I I I I O 0 cm O i i 39 60th Senator 41st SenatorE Median Senator I 1 5 o Senator Location I o t 39 O 0 Cm O i i 39 60th Senator 41st SenatorE Median Senator I 1 5 o Senator Location Status Quo Dominant I I E 00 0 O 0 41st Senatori 60th Senator Median Senator I 5 o Senator LocatIon Status Quo Dominant 39 Q 00quot 0 O 0 41st Senatori 60th Senator Median Senator I 5 o Senator LocatIon Status Quo on Left Status Quo on Right 41st Dominant I60th Dominant 41 st SenatorE Median Senator l 5 o Senator Location N Smith Section 613 Friday 9 AM Gucci Gulch Ch 4 Chapter 4 of Showdown at Gucci Gulch is one of the most important chapters in the novel Chapter 4 marks the transition from discussion to action in the novel At the beginning of the chapter the notion of tax reform is still on the planning table with Treasury I being the brainchild of James Baker taking the lead It is not at the top of anyone s plate following the transition into the second Reagan administration However the urgency of tax reform will soon change The chapter begins with a massive transition with Donald Regan becoming Chief of Staff at the White House while James Baker becomes Secretary of the Treasury The change brings tax reform to the front bench at last The switch will prove necessary as Baker is a politician in the treasury Thus he is able to judge tax reform based on how it will be absorbed by the public With Regan in the White House the administration now has someone with plans for tax reform very close to the epicenter In his state ofthe union address President Reagan calls for the overhaul of the tax system Though Treasury is a strong bill it must be adjusted accordingly in order to satisfy the President and both sides of Congress The majority of the chapter focuses on exactly which tax exemptions should be kept and which should be scrapped Some exemptions like those for disabled veteran s pensions will be kept Others giving breaks to big business will be scrapped There is a divide among big business about the tax exemptions some favoring them others opposing them One large debate is whether to keep tax shelters for the oil and natural gas industry one which has been attacked by other presidents before but which is strongly opposed by Vice President Bush due to the fact that much support comes from Oil companies and their owners In reality there is a larger error of 150 billion dollars in the bill which leads to substantial panic among the bill s creators in the sense that the main objective of the bill has been corrupted The main objective is in fact to keep revenue neutral However the problem is rectified and with that tax reform has begun Discussion Questions 1 Do you find it necessary to give tax exemptions to some organizations such as those for disabled veterans and not to others like large corporations 2 Though the book gives a brief explanation why do you think that there was a divide among big business on the debate over tax shelters The beginning of chapter four brought forth a great reversal of roles within President Regan s internal staff and cabinet Treasury Secretary Regan switched roles with Chief of Staff Baker in 1985 an agreement met by both characters in order help further tax reform With Regan as Chief of Staff he would be better situated to secure the president s blessing for reform and Baker s I 39 for I quot 39 U near 39 I legislative feats improved the odds for winning congressional approval for some sort of reform Also Baker was exhausted N Smith Section 613 Friday 9 AM from his job as Secretary of State In moving to Treasury Baker brought along Darman who balanced out Baker and was the perfect back room strategist to help with tax reform despite his arrogant and egotistical personality After switching roles Baker went to Capitol Hill for a Confirmation hearing with Finance Committee to understand their sentiments about tax reform The overall consensus was pro tax breaks and the Finance committee viewed tax code as a tool for molding economy and society to their liking At the same time Regan as Secretary of State was working through efforts to quash his boss s concerns about corporate taxes by arguing that only the corporations that escaped taxes in the past would face a tax increase This persuaded President Reagan to be in favor oftax reform but before the President would meet with the Treasury and before the Congress would enact the Treasury 1 there needed to be some changes Interesting enough many liberal reformers were heaping praise upon the plan for tax reform In private a few key members of Congress wanted to negotiate a quotrecookedquot deal for tax reform This included Senator Bradley Gephardt Kemp Kasten Rostenkowski Duncan Packwood and Long Many ofthe congressmen brought with them their own special interests for tax reform While Pearlman and McLure were still working on tax reform they felt demoralized in the new group and relationships between Pearlman and Darman were tense Johnson on the other hand welcomed the change in Treasury structure because they were more willing to deal with his own ideas about the reform As the list of givebacks to special interest lengthened the Treasury Department ran up against its most persistent problem revenue shortages Since President Regan insisted in revenue neutrality many of the proposals such as Packwood s fringe benefit proposal Treasury 1 s oil and gas provisions and Johnson s insistence on depreciation write offs all had to be balanced by revenue made up somewhere This was the hardest test of the new proposal Finally on April 23 roles switched as Baker Darman and Pearlman met with Regan and Reagan to discuss the new plan After the first meeting a conflict aroused when the tax experts discovered the plan would add 150 billion to the nation s budget deficit over the next five years a cost in which Pearlman was blamed In the end new plan was much less pure reform than Treasury I It retained many tax breaks brought down the top tax rate dramatically to 35 percent but was in full support and approval by the President Discussion Questions 1 Why was it so important for the budget to be revenue neutral 2 The changes to the tax reform bill seemed to make the reform more lenient but do you believe it was necessary to change the bill for special interests 3 How did the reversal of roles between Baker and Regan affect the dynamics of tax reform Civil Rights 1 African Americans Some critical court cases Some critical congressional actions 2 Affirmative action 3 Women Civil Rights of African Americans Plessy v Fergurson 1896 Separate but equal Missouri ex rel Gaines v Canada 1938 Must be available in the state Sweatt v Painter 1950 Must be equal Brown v Board of Education of Topeka 1954 Separate inherently unequal Swann v CharlotteMecklenberg Board of Ed 1971 Busing appropriate remedy for unequal distribution of students eliminate to extent practical Fed District Court 1999 Key Congressional Actions Note in 1964 ten years after Brown less than 1 of black children in the south were going to school with whites 1964 Civil rights act dealt predominantly with accommodation and jobs but also included provisions for withholding federal funding if evidence of state supported discrimination existed 1965 Voting Rights Act Extended 19701975 1982 2006 1968 Housing Affirmative Action Regents of California v Bakke 1978 affirmative action okay but quotas are not US Steel v Weber 1979 affirmative action okay if past history of discrimination exists Wards Cove v Atonio 1989 burden of proof placed on the employee reversed by congressional action in 1991 Missouri v Jenkins 1995 Overturned past precedent that in instances where historical discrimination exists that farreaching measures were allowed to counteract the effects of that discrimination Gratz v Bollinger amp Grutter v Bollinger 2003 Univ of Michigan affirmative action permissible but explicit point system not allows Must have compelling government interest Parents Involved in Community Schools v Seattle School District No 1 etal enhancing racial balance in public high schools is not sufficient justification for admissions that are in part based on race Privacy Reproductive Control Big steps in favor of more individual control Grisswald v Connecticut 1965 right to contraception via marital privacy Roe v Wade 1973 abortion as a privacy right Small steps toward less individual control Webster v Reproductive Health Services 1989 state can limit abortion facilities available Planned parenthood v Casey 1992 established abortion as a quotqualifiedquot as opposed to an absolute right Gonzales v Carhart 2007 reversed prior court decision and supported Congress39s right to ban Partial Birth Abortions Attitudes on Affirmative Action 2008 2009 2010 Need to continue 287 281 313 Gone on too long 564 556 509 Not needed 149 163 178 By Race in 2010 Whole White Black Class Need to continue 210 690 313 Gone on too long 579 276 509 Not needed 211 34 178 Attitudes on Abortion Never permitted rape incest m39s life Need established Personal choice 2008 95 278 242 385 2009 83 306 217 393 2010 102 284 218 396 Abortion by Gender 2010 Never permitted Rape incest mother s life Need established Personal choice Male Female 112 308 262 318 96 269 191 443 Whole Class 102 284 219 395 Chapter 6 The Phoenix Project Rostenkowski thought of tax reform as a quotphoenix project after the mythological creature that rose from the ashes ofits own destruction He stuck to this idea throughout the process realizing that the tax reform would have to go up in ames before it could be rebuilt The bank vote was the last straw that tax reform needed to come crashing to its destruction Rostenkowski realized that nobody really wanted tax reform but no one wanted to be labeled as being sold out to special interests so the committee members had to stay on board with tax reform in the end The choice was between the interest groups they had always supported and the tax reform that no one wanted There was a constant back and forth fight between Rostenkowski and the members of the Ways and Means Committee who he had to rely on to create a reform At times Rostenkowski had to bribe compromise bargain or threaten members of the committee to get tax reform moving in the right direction State and local tax deductions proved to be one of the biggest issues that members of the committee were willing to stand up and fight for and therefore the main issue standing in the way of reform In order for Rostenkowski to allow the state and local deductions to remain in effect he would have to raise the top tax percentage from 35 to about 37 With this small change the committee almost lost the president s approval of the bill having to go back into committee and try and figure out a way to keep the top tax bracket at 35 Rostenkowski made a bargain with members of his committee they could keep the local and state tax deductions if the bank vote was repealed This compromise was willingly accepted and the phoenix began to rise out of the ashes Part of the problem behind the actions of Rostenkowski in the Ways and Means Committee was the blatant separation of the Republicans from the Democrats when it came to policies The Republicans felt left out of the whole process and this created resentments against the bill they didn t feel they had any part in making The Republicans at the end of the chapter did not prevent the bill from happening The final bill was finished at 330 AM with life insurance fringes staying tax free all of the local and state deductions intact and no major tax breaks for the banks Questions 1 Do you agree with Rostenkowski s quotphoenixquot idea of tax reform Was it necessary for the reformation process to burn itself out so that the committee could finally begin to change the tax law 2 What exactly were the local and state deductions that everyone was so willing to fight to keep CHAPTER 5 Gucci Gulch A week before President Reagan s televised plea for the taX reform Dan Rostenkowski was asked to deliver the Democrat Party s response by the House Speaker At first he didn t want to do it but changed his mind so that no senator would steal his spotlight Because Dan Rostenkowski had a tough demeanor and wasn t great at speeches his speech writer John Sherman hired a media consultant named Joseph Rothstein to transform the Ways and Means Chairman into a man for the people Mr Rostenkowski performed brilliantly on air and as he finished his speech he told the nation to send letters of support to ROSTY Rostenkowski s gamble to support the president and taX reform paid off although he received some criticism from Chicago businessmen He held firm due to many setbacks for taX reform in the years prior to 1985 Rostenkowski wished to be in baseball but his father called him from to join politics in Chicago He quickly rose through the ranks in politics to become in the youngest member of the Illinois House youngest member of the State Senate and elected to the US House from the 8 District of Illinois in 1958 He moved to Washington politics as an errand boy for Richard Daley his mentor and mayor of Chicago After becoming the Ways and Means Chairman he helped write taX laws and dispense committee assignments before being chosen to second Hubert Humphrey as the vice president of Lyndon Johnson During the seventies Rostenkowski in a new role of the Democratic deputy whip became known for his abilities to get votes taX policies and revenge He learned the art of controlling a committee to side in his favor He resumed his post as Chairman if Ways and Means after Reagan was elected to office After reading over the Treasury bill Rostenkowski and his staff found the bill wasn t revenue neutral it added 12 billion to the deficit over a period of five years kept almost all taX breaks for oil companies and more benefits for higher income taxpayers Baker and Darman gave Rostenkowski to create a taX bill draft by the August congressional recess The chairman and his staff realized there was little to support in the reform The reform also made many enemies particularly in New York on deductions for state and local tax payments and with interest groups His staff worked to maintain the top tax rate of 35 removing low income families from incometax rolls retaining mortgageinterest deductions keeping the reform revenue neutral and improving the trade deficit The committee received much help from Bradley who lobbied the tax reform with major members of the House However in drafting sessions known as markups the committee didn t seem to want to abandon any reform proposals Finally an amendment to allow banks to maintain their biggest taX break submitted by Senator Flippo destroyed drafting session It made a huge hole in the taX plan lost 76 billion dollars in revenue and showed the discontent of the Democrats and Republicans in the committee This victory for a tax break almost destroyed tax reform because it made this tax reform proposal just like previous attempts Why did the committee during markups not want to accept any reform proposals Page 124 o Lobbying pressure 0 Hoping to maintain the tax breaks of their constituents 0 Freedom to fiddle with the proposal How was the Flippo Amendment so disastrous to what Rostenkowski and the committee were trying to achieve with the taX reform o Showed apathy in the area of making taX reform o Showed the Republican felt that they were left out of the process 0 The amendment was the antithesis for true reform by giving a major industry its taX breaks ltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgt Dan Rostenkowski the chairman of the Ways and Means Committee is the major player in this chapter He is called to step up and address the public in a response to President Reagan s address about taX reform He is immediately seen as a supporter which is very important for the Democratic Party Chapter 5 gives an overview of the process of Rostenkowski proposing different methods of taX reform and members of the Committee rejected many of his ideas Committee members formed alliances with various lobbyists and businesses which made it difficult for progress to be made on the bill due to House members having to work to please the businesses they were backing as well The issue of dealing with the budget deficit was addressed multiple times and the difficulty of upholding all of President Reagan s demands about the reform was also encountered Overall the chapter closes with Rostenkowski s bill being stalled during the Drafting Session in October after Ronnie Flippo s bank amendment successfully passed the committee vote proving that Rostenkowski was losing control of his committee and changes needed to be made if he was ever going to get enough support from the members to pass his bill Discussion Questions 1 The President was very insistent on dropping the top individual taX rate down to 35 from 50 Do you agree with this decision even though in order to remain revenue neutral the money lost from this decreased percentage would have to be made up for somewhere else a Fquot Yes because he intended on the revenue being made up for in the taxes that businesses will have to pay after the tax breaks are eliminated It appealed to the public or at least the working lower class people who were continually paying taxes that they couldn t escape like the big businesses and the wealthy 2 Do you think that the Committee voting to pass the bank amendment was a wise choice Were there bene ts to it being passed despite the obvious disadvantage of slowing down the process of passing the taX reform that Rostenkowski was advocating a Fquot Passing the amendment brought attention to the fact that the bill was not popular anymore It would take a lot of compromising and negotiating to get a taX reform bill that had enough support to pass through the House kind of like a wakeup call to Rostenkowski about the reality of the bill It bene ted those who were against the taX reform because they were able to slow down the bill by getting this bank amendment passed ltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgtltgt Chairman Dan Rostenkowski the top House taxwriter supported President Reagan and the taX reform O O O The risks were high there was little support bad history of democratic responses to Reagan addresses The speech was to blame republicans for making mess of system and encourage democrats to join and support Reagan With the help of the speech writer Rothstein Rostenkowski embraces his burly demeanor The chairman and his staff gradually realized that even though Treasury I stood little chance of enactment it made taX reform into a major issues that was not likely to go away Rostenkowski had to work with the president so that the bill would not die in the House Rostenkowski became known as a politician who plays hardball 0 After the death of his mentor Rostenkowski o In 1980 when Reagan came into of ce Rostenkowski chose to get the chairmanship of Ways and Means I Stands at the cortex of two worlds One is the world of government and its awesome power of taxation the second is the business world Baker and Darman s bill had elements of mirrors and if you wan to be that hard about it intellectual dishonesty One problem was that there was no bindingcontract rule a tradition in tax legislation 0 Baker de ed Rostenkowski because it retained all the tax breaks for oil and gas drillers and it gave bigger tax cuts to upperincome taxpayers than to middle income taxpayers Hardly anyone seemed to think that they might have something to gain by lowering rats In may 1985 the once tax reform supporting politician Gephardt sided with several tax reform opponents and supported a proposal that would have used the revenue raised by a stiffened minimum tax to reduce budget de cits father than help tax reforms effort to lower tax rates Consultants were available to study almost any potential problem the tax plan might create Wealthy New Yorkers doled out more than 15 million to protect their precious writeoff because business interests would be hurt o It became New York v the rest of the US So the NYC began to accumulate a national base of support 0 state and local issue was especially controversial and would probably require some sort of compromise Either tax rates would have to rise above the level they recommended or business tax breaks would have to be curtailed even more than the Treasury request I Kriegel and Chlopak convinced others in the coalition to adopt a no compromise strategy September was a month of rising complaints of the tax reform o Rostenkowski s members were beginning to form political marriages that if successful might block his bill 0 Baker added his own impedient by outlining four issues on which he said the president would not compromise lines drawn in the sand I Reducing the top individual tax rate to 35 from the existing 50 removing lowincome families from the incometax rolls retaining the mortgageinterest deductions and keeping the entire proposal revenue neutral compared with existing law Could not see the reason for turning the tax code inside out without raising some revenue to attack the nation s number one problem budget de cits After a rejected tax reform in September Rostenkowski turned to Bill Bradley 0 Bradley tried to in uence members of the House in such an overt way This is extraordinary because the Senate considers itself the upper chamber and members think of themselves as superior Drafting sessions are called markups Outside the first drafting sessions lobbyists and assistants lled the halls o Allegiances made it dif cult for ways and means members to be goo reformers O o On October 2 the proposed plan was cast aside 0 Baker sensing serious trouble for tax overhaul encourages republicans to support the chairman s package 0 The Flippo amendment was adopted and ripped a gaping hole in the Rostenkowski tax plan What was the Flippo amendment To help commercial banks Why is there such controversy between Republicans and Democrats in terms of the taX reform being passed Taxation and economic policy Basic models for organizing an economy Fiscal and monetary policy Tax policy Major sources of revenue and major expenditures The budget process Types of policy distributive redistributive and regulatory The policy process lron triangles and issue networks 9 Current account balances FDPTJ WN 00 Fiscal policy is the use of government spending in combination with tax policy for the purpose of influencing the overall performance of the national economy Monetary policy is the use of government s ability to control the supply and availability of money for the purpose of influencing the overall performance of the national economy Techniques of monetary control Two principal techniques 1 Reserve requirementsthe reserves member banks must maintain against their deposits in Federal Reserve banks 2 Discount rate the interest rate at which the Federal Reserve lends money to commercial banks