United States Government: Democracy in Action

Chapter 21: Social and Domestic Policy

Chapter Overviews

[logo] Essential Question
How does politics affect social and domestic policies, and how do those policies affect your economic choices, your education, and even the air you breathe?

Section 1 Business and Labor Policy
The government promotes, regulates, and protects business. It promotes free trade but also uses tariffs to protect American industries from foreign competition. The federal government provides aid to businesses through tax incentives, government loans or credit subsidies, free services, and direct cash payments for goods and services considered vital to the general public. The Department of Commerce promotes business interests and aids small businesses.

Until the late 1800s, the government followed a laissez-faire approach to the economy. The rise of huge monopolies resulted in the Interstate Commerce Act, the Sherman Antitrust Act, and the Clayton Antitrust Act. Congress has passed other regulatory laws to protect consumers and ensure fair product standards. Workers joined unions to bargain collectively for better working conditions and wages. At first, the government favored business over labor unions. During the New Deal, government guaranteed labor's right to bargain collectively and to strike. Today, federal laws set minimum wages and maximum working hours and prohibit child labor.

Section 2 Agriculture and Environment
The federal government supports American agriculture because farming is vital to the nation. The chief functions of the Department of Agriculture are to help farmers market their produce, stabilize farm prices through price supports and subsidies, conserve land, and promote research in agricultural science. The Department of Agriculture also has helped rural areas obtain electricity and telephone services. The Farmers Home Administration provides loans for farmers to buy land, livestock, seeds, equipment, and fertilizer.

Beginning in the 1950s, the federal government passed legislation to clean up the air and water. The Environmental Protection Agency was charged with enforcing a host of environmental regulations. Air and water pollution laws have improved the country's air quality and waterways. New laws require federal funding before imposing additional environmental requirements on state and local governments.

Rachel Carson's The Silent Spring alerted the public to the dangers of DDT. Awareness about the declining quality of the environment and energy costs led the government to put environmental issues on its policy agenda. Competing interest groups lobby to shape energy policy. Some want to drill for oil in protected areas to keep energy costs low and reduce dependence on Middle Eastern oil. Others argue for finding new energy sources that will protect the environment.

Section 3 Health and Public Assistance
The Great Depression changed the federal government's role in the economy. The Social Security Act created a social insurance system that includes Social Security payments, Medicare, and unemployment insurance taken as payroll taxes. Public assistance programs include Supplemental Security Income, food stamps, Medicaid, and Temporary Assistance for Needy Families. As the baby boomer population ages, the Social Security system will face challenges in providing its payments.

The largest percentage of federal government spending on health goes for Medicare and Medicaid. Other health programs include medical care for veterans and their families and research programs. The Food and Drug Administration tests food and drug products for safety.

Section 4 Education, Housing, and Transportation
The federal government plays an ever-increasing role in providing aid to local schools and colleges. More funds have been allotted as the educational scores of American students have fallen below European and Asian students. Several government-sponsored mortgage programs promote building and purchasing homes. Urban renewal programs supply federal aid for cities to rebuild deteriorating areas. Public housing programs were intended to provide low rents for low-income Americans. Many of the public housing projects faced serious problems, however, and the government gave state and local officials more control over housing decisions.

In 1966 Congress created the Department of Transportation to coordinate national transportation policies and programs. It oversees safety in aviation, federal highway programs, and the development of mass transit systems.