POLS 1001 FINAL EXAM QUESTIONS & ANSWERS
(Social Security) Greenspan commission appointed in 1981:
oOfficial name: National Commission on Social Security Reform
oSocial Security faced a financing crisis
• Job was to study it and make recommendations
oReport became the basis for the Social Security Amendments of 1893 - Answer -
Greenspan Commission
Social security amendments or 1983 demanded sacrifice of just about everyone
- 6 month delay in cost-of-living adjustment
- accelerated a scheduled increase in payroll tax
- potential taxation of Social Security benefits
- Raised the age if eligibility for unreduced retirement benefits
Assumes that it is desirable to leave the basic structure of Social Security intact
- Payroll tax increase
- Increased payroll tax threshold
- Increase the retirement age
- Trim benefits by reducing the rate at which they grow
Private accounts:
Would allow employees to invest in certain percentage of payroll taxes
- Government cannot access these funds
- Invest in mutual funds, stocks, bonds - Answer -Payroll tax
(Welfare Reform) Meaningful reform requires spending more money than the public
thinks is necessary or than congress wants to spend
-Education, job training, "workforce" placements
-Requires tax increase, larger budget deficit, or spending cuts
-Most changes are therefore underfunded - Answer -Money Trap
Case against private accounts:
Transition costs: the double payment problem
• Quick transition means the current generation must fund the retirements of both the
current elderly and themselves
• Both a financial and political problem - Answer -Double Payment Problem
(WELFARE REFORM) Personal responsibility and Work Opportunity Reconciliation Act
(1996)
o Major retrenchment of welfare policy
• Abolished Aid to families with Dependent Children (AFDC) and replaced it with
Temporary Assistance for Needy Families (TANF)
• Strict work requirements and time limits
• Increased authority for state governments - Answer -PRWORA
, Dual Clientele Trap:
Welfare serves two constituencies
o Children: deserving of assistance
o Custodial parents: doubts about deservingness
• Never married mothers, racial minorities
Officials cannot take the politically popular step of helping poor children without the
politically unpopular step of helping their custodial trap - Answer -Dual Clientele Trap
"end welfare as we know it"
o Bill Clinton campaign slogan in 1992
o Philosophy of work and personal responsibility allowed him to seize the moral high
ground
o Neutralized what had been difficult issue for Democratic candidates
o Guaranteed that reform would be on the agenda
(politics of welfare) - Answer -"end welfare as we know it"
A Nation at Risk (education policy)
• National Commission on Excellence in Education (1983)
o Scathing indictment of American System
o Focus: excellence, international competition
o Faulty education system eroding the economy
o Encouraged policymakers and the public to be more open to bold innovative ideas
• Declining public confidence in the existing system - Answer -A Nation At Risk
Procedure through which fiscal bills that do not increase long-term deficits can
circumvent (part of Affordable Care Act, Democrats get creative) - Answer -
Reconciliation
Many key provisions of Affordable Care Act didn't take place until later (key Provision)
Imposition of the "individual mandate"
All US citizens must have health insurance coverage "credits, subsidies are provided)
Most polarizing element of the law, key element of the constitutionality debate -
Answer -Individual Mandate
Actions that affect interest rates by varying the supply of money
oFalling rates lead to more spending and more borrowing: economic growth
oRising interest rates lead to less spending and less borrowing: economic slowdown
Monetary policy and be changed quickly - Answer -Monetary Policy
•Key policymaker in monetary policy
•The country's central bank
•Established 1913
• fed chair has been called the second most powerful person in the US
Dependence of the Fed
Main sources
(Social Security) Greenspan commission appointed in 1981:
oOfficial name: National Commission on Social Security Reform
oSocial Security faced a financing crisis
• Job was to study it and make recommendations
oReport became the basis for the Social Security Amendments of 1893 - Answer -
Greenspan Commission
Social security amendments or 1983 demanded sacrifice of just about everyone
- 6 month delay in cost-of-living adjustment
- accelerated a scheduled increase in payroll tax
- potential taxation of Social Security benefits
- Raised the age if eligibility for unreduced retirement benefits
Assumes that it is desirable to leave the basic structure of Social Security intact
- Payroll tax increase
- Increased payroll tax threshold
- Increase the retirement age
- Trim benefits by reducing the rate at which they grow
Private accounts:
Would allow employees to invest in certain percentage of payroll taxes
- Government cannot access these funds
- Invest in mutual funds, stocks, bonds - Answer -Payroll tax
(Welfare Reform) Meaningful reform requires spending more money than the public
thinks is necessary or than congress wants to spend
-Education, job training, "workforce" placements
-Requires tax increase, larger budget deficit, or spending cuts
-Most changes are therefore underfunded - Answer -Money Trap
Case against private accounts:
Transition costs: the double payment problem
• Quick transition means the current generation must fund the retirements of both the
current elderly and themselves
• Both a financial and political problem - Answer -Double Payment Problem
(WELFARE REFORM) Personal responsibility and Work Opportunity Reconciliation Act
(1996)
o Major retrenchment of welfare policy
• Abolished Aid to families with Dependent Children (AFDC) and replaced it with
Temporary Assistance for Needy Families (TANF)
• Strict work requirements and time limits
• Increased authority for state governments - Answer -PRWORA
, Dual Clientele Trap:
Welfare serves two constituencies
o Children: deserving of assistance
o Custodial parents: doubts about deservingness
• Never married mothers, racial minorities
Officials cannot take the politically popular step of helping poor children without the
politically unpopular step of helping their custodial trap - Answer -Dual Clientele Trap
"end welfare as we know it"
o Bill Clinton campaign slogan in 1992
o Philosophy of work and personal responsibility allowed him to seize the moral high
ground
o Neutralized what had been difficult issue for Democratic candidates
o Guaranteed that reform would be on the agenda
(politics of welfare) - Answer -"end welfare as we know it"
A Nation at Risk (education policy)
• National Commission on Excellence in Education (1983)
o Scathing indictment of American System
o Focus: excellence, international competition
o Faulty education system eroding the economy
o Encouraged policymakers and the public to be more open to bold innovative ideas
• Declining public confidence in the existing system - Answer -A Nation At Risk
Procedure through which fiscal bills that do not increase long-term deficits can
circumvent (part of Affordable Care Act, Democrats get creative) - Answer -
Reconciliation
Many key provisions of Affordable Care Act didn't take place until later (key Provision)
Imposition of the "individual mandate"
All US citizens must have health insurance coverage "credits, subsidies are provided)
Most polarizing element of the law, key element of the constitutionality debate -
Answer -Individual Mandate
Actions that affect interest rates by varying the supply of money
oFalling rates lead to more spending and more borrowing: economic growth
oRising interest rates lead to less spending and less borrowing: economic slowdown
Monetary policy and be changed quickly - Answer -Monetary Policy
•Key policymaker in monetary policy
•The country's central bank
•Established 1913
• fed chair has been called the second most powerful person in the US
Dependence of the Fed
Main sources
