GOVERNMENTmrbextermueller.weebly.com/uploads/5/0/0/8/50085613/chapter_21.pdf · Yosemite Valley is preserved by the government. 574-583 CH21S1-860053 12/3/04 ... that government regulation

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Impact of Policy National policy affects your economic decisions, your education, your health, and much more.This chapter describes the important policy choices that your governmentmakes. It also examines how political issues affect social and domestic policy.

To learn more about how social and domestic policy is

established, view the Democracy In Action Chapter 21 video lesson:

Social and Domestic Policies

Chapter Overview Visit the United StatesGovernment: Democracy in Action Web siteat gov.glencoe.com and click on Chapter21–Overview to preview chapter information.

GOVERNMENT

★ ★ ★ ★ ★ ★ ★ ★ ★ ★

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http://www.gov.glencoe.com

CHAPTER 21: SOCIAL AND DOMESTIC POLICY 575

The Federal Trade Commission is just oneof many government agencies involved inregulating the American economy. Al-though free enterprise is the foundation

of the American economic system, ours is a mixedeconomy—a system in which the governmentboth supports and regulates private enterprise.

Promoting and Protecting Business

Regulating business is a relatively recentfunction of the federal government, dating

back slightly more than 100 years. The active pro-motion and protection of business, however, hasbeen a major activity of United States governmentsince George Washington was president. Wash-ington’s secretary of the treasury, AlexanderHamilton, claimed that emerging American man-ufacturers needed protection from foreign com-petition. He first proposed a protective tariff in1791, but Congress shelved the request. After theWar of 1812, British goods flooded Americanmarkets, threatening to destroy newly created in-dustries. A member of Parliament in 1816 ex-plained Britain’s advantage:

“It was well worth while to incur a lossupon the first exportation, in order, by theglut, to stifle in the cradle, those risingmanufactures in the United States, whichthe war has forced into existence, contraryto the natural course of things.”—Henry Brougham, Esq., 1816

The United States responded to this threat withhigher tariffs.

Free Trade In recent years the federal gov-ernment has emphasized lower tariffs and pro-moted free trade for many items. The NorthAmerican Free Trade Agreement (NAFTA),

Business and Labor PolicyS e c t i o n 1S e c t i o n 1

Scholarship ScamsWASHINGTON, D.C., SEPTEMBER 1996

The Federal Trade

Commission (FTC)

has issued a consumer

alert about crooked

scholarship offers. The

FTC cautions that

fraudulent companies

are promising students

scholarships in return

for an up-front fee.

Most offer a money-

back guarantee but

make it difficult to get a refund. Some companies ask

for a checking account number, “to confirm the stu-

dent’s eligibility,”and then debit the account without

the student’s consent. Many scholarship services

charge a fee, but the FTC advises that a legitimate

company will never guarantee a scholarship.

Successful recipient of

legitimate scholarship

Reader’s Guide

Key Termsmixed economy, laissez-faire, trust, monopoly, interlocking directorate, oligopoly, securities, collective bargaining, injunction

Find Out■ What are the overall aims of United States

business policy regarding competition and consumers?

■ How did the federal government help unions to organize and grow?

Understanding ConceptsFree Enterprise Are government regulations consistent with the principle of free enterprise? Explain your answer.

Yosemite Valley is preserved by the government.▲

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annual tax returns. A second is government loans,or credit subsidies, that provide funds for busi-nesses at low interest rates. A third type of subsidyis free services, such as weather information, cen-sus reports, and other information valuable tobusinesses across the nation. Finally, the govern-ment provides direct cash payments to businesseswhose products or services are considered vital tothe general public. Businesses in the field of trans-portation often receive this type of subsidy.

Commerce Department Aid to BusinessA separate department of the executive branch, theDepartment of Commerce, was formed in 1913 forthe sole purpose of promoting business interests.Congress mandated that the department “foster,promote, and develop the foreign and domesticcommerce of the United States.”

The main functions of the Commerce Depart-ment are to provide information services, financialassistance, and research and development services.Several agencies within the Commerce Depart-ment supply businesses with valuable informationand subsidies, particularly the Bureau of the Cen-sus, which provides important economic data tobusinesses.

Help for Small Businesses Because compe-tition is important to the free-enterprise system,the federal government tries to help small busi-nesses. An important independent executiveagency outside the Commerce Department thataids businesses is the Small Business Administra-tion (SBA). In addition to offering credit subsidies,the SBA gives free advice and information to smallbusiness firms.

Regional offices of the SBA offer government-sponsored classes on sound management practicesfor owners of small businesses. Businesses mayalso seek advice from the SBA on how to overcometheir problems, and the SBA also conducts pro-grams to help women and minorities in business.

Regulating BusinessSome Americans believe that governmentregulation of the economy is at best a mixed

blessing. These people usually agree with the fol-lowing sentiments expressed by economist ArthurB. Laffer:

576 CHAPTER 21: SOCIAL AND DOMESTIC POLICY

Trade Policy Many Americans, especially supporters of labor unions, have strongly opposed NAFTA. Supporters of NAFTA, however,believe that the agreement will lower costs for consumers and expand U.S. markets.Why are labor unions opposed to NAFTA?

Against NAFTA

signed by Canada, Mexico, and the United States in1993, was designed to gradually eliminate trade re-strictions among the trading partners beginning in1994. The United States plays a leading role in pro-moting free trade around the world.

Consumers benefit from the lower cost ofmany imported goods. Although current rates areat an all-time low, tariffs are still used to protectAmerican industries from foreign competition.The government also restricts some productsthrough quotas, or limits on the number that maybe imported.

Types of Federal Subsidies Today the fed-eral government provides four types of subsidies,or aids to business. One is tax incentives that allowbusinesses to deduct certain expenses from their

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“Those who advocate, in their desperation,more government to solve the problems ofour society are demonstrably wrong. . . .The solution rests in less—not more—government! ” —Arthur B. Laffer

Writer Victor Kamber expressed the oppositepoint of view. In Kamber’s opinion:

“Many Americans have forgotten that we setup regulatory agencies in the first place toprotect the public interest. Industries con-sidered vital to the public—such as trans-portation, food, finance, communications,and nuclear power—were regulated inorder to provide the public a steady flow ofsafe products in a stable environment.”—Victor Kamber, July 1984

Whether a person agrees with one point ofview or the other sometimes depends upon wheth-er the person is being regulated or is benefiting

from the regulation. Nevertheless, federal regula-tion of economic activity springs from a constitu-tional provision.

Constitutional Basis of Regulation TheConstitution grants Congress the power to “layand collect taxes” for the general welfare and to“regulate commerce . . . among the several states.”Most regulatory laws enacted in the twentieth cen-tury are based upon these two powers.

The commerce clause in Article I, Section 8,1

provides the primary constitutional basis for gov-ernment regulation of the economy. The Foundersdesigned this clause to allow the federal govern-ment to control interstate commerce, eliminatingone major deficiency of the Articles of Confedera-tion. Over the years the Supreme Court has broad-ened the interpretation of interstate commerce toinclude a wide variety of economic activities. Forexample, interstate commerce today covers the


See the following footnoted materials in the Reference Handbook:1. The Constitution, pages 774–799.

Henry B. Gonzalez

Making a DifferenceMaking a Difference After serving for 36 years,81-year-old Democratic representative Henry B.

Gonzalez retired in 1997. Gonzalez arrived on Capitol Hill in 1961 where he quickly earneda reputation as an unpredictablemaverick who often refused towork within established tradi-tions. In his hometown, however,he is celebrated as a defender ofthe downtrodden. Raul Yzaguirre,president of the National Councilof La Raza, summarized Gonza-lez’s character: “He was a pioneer. In the bad old ‘40s and

‘50s, political courage to standup to segregation and racismwas not real evident. HenryB. stood out like a giant.”

Gonzalez is creditedwith crafting tough savings-

and-loan bailout legislation

and pushing an overhaul ofbanks’ deposit insurance system.His passionate commitment,though, was in ensuring afford-able housing for the poor.

When some Democratic lead-ers tried to topple Gonzalez fromhis ranking spot on the Bankingand Finance Committee, Gonza-lez’s supporters rallied. JosephKennedy of Massachusetts pro-nounced, “What are we going todo, take away a ranking member-ship from a guy who is a folk heroamong Democrats?” Gonzalezmade a masterful speech in hisown defense, saying, “I say toyou, I have served with honor and integrity and success. I havenever failed myself and I havenever failed you.” Gonzalez received two standing ovationsand retained his seat.

Texas state seal

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production and transportation of goods, commu-nications, mining, and the sale of stocks andbonds. Citing the commerce clause, Congress haspassed many laws regulating these activities. More-over, the meaning of regulation has changed overthe years. Besides restricting certain activities, reg-ulation now includes prohibiting, promoting, pro-tecting, assisting, and establishing standards formany aspects of interstate commerce.

Demand for Reform Until the late 1800s, thefederal government for the most part took ahands-off, or laissez-faire, approach to the econo-my. The states passed the few regulations that lim-ited business activities. Businesses were generallysmall, locally owned, and primarily served localmarkets.

By the late 1800s, the American economy hadchanged. Huge corporations dominated Americanindustry. Rapid industrialization was accompa-nied by many abuses. Business combinations con-solidated control of several industries in the handsof a few giant corporations that squeezed smallercompanies out of business. Americans questionedthe fairness of a system that allowed railroads to

charge higher rates for farmers than for manufac-turers. Because of these abuses, Americans beganto demand government regulation of business.

Congress responded by passing the InterstateCommerce Act in 1887. This act established thefirst federal regulatory agency, the Interstate Com-merce Commission (ICC), and placed certain lim-its on the freight rates railroad companies charged.Congress later passed two measures to control cor-porations that threatened to destroy competition.

The Sherman and Clayton Antitrust ActsIn the late 1800s, the trust became a popular formof business consolidation. In a trust several corpo-rations combined their stock and allowed a boardof trustees to run the corporations as one giant en-terprise. The trustees could set production quotas,fix prices, and control the market, thereby creatinga monopoly. A monopoly is a business that con-trols so much of a product, service, or industrythat little or no competition exists.

The Standard Oil Trust organized by John D.Rockefeller was an example of such a trust. In 1879it controlled the production and sale of 90 percentof the oil refined in the United States. The Stan-dard Oil Trust consisted of several oil companieswhose stock was held by a single board of trustees.The chief stockholder and trustee was Rockefellerhimself. At the time, monopolistic trusts like Rock-efeller’s dominated many industries.

Congress’s first attempt to halt monopoliescame in 1890 with the passage of the Sherman An-titrust Act. The first two sections of the act statedthe following:

“Every contract, combination in the form oftrust or otherwise, or conspiracy, in re-straint of trade or commerce among theseveral states, or with foreign nations ishereby declared illegal.

Every person who shall monopolize, orattempt to monopolize, or combine or con-spire with any other person or persons tomonopolize any part of the trade or com-merce among the several states . . . shall beguilty of a misdemeanor.”—Sherman Antitrust Act, 1890

Today, violating the second section of the ShermanAntitrust Act is a felony.


Monopoly Money The most high-profile antitrust case in recent years wasagainst Microsoft. The federal governmentaccused Bill Gates’s computer-softwarecompany of unfair competition: forcing buyersof Microsoft’s Windows operating system touse its packaged Web browser rather thancompetitors’ browsers. A U.S. district judgedeclared Microsoft a monopoly, ordered abreakup of the company, and imposedpenalties and restrictions. An appeals courtoverturned the breakup order but retained therest of the anti-Microsoft rulings. Still, mostexperts believe Microsoft came out a winner.

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The language of the act did not specify whatrestraint of trade meant. The Sherman AntitrustAct, therefore, proved difficult to enforce. It was,however, successfully enforced in one notable case. In 1906 the federal government charged theStandard Oil Company with violating the first two sections of the act. Convicted, the company ultimately appealed to the Supreme Court, whichupheld the conviction and ordered the company to be split into a number of smaller companies.For the first time in the nation’s history, the gov-ernment declared a major trust illegal.

Despite the conviction, the trend toward larg-er and larger business combinations continued.Then in 1914 Congress passed the Clayton An-titrust Act to clarify the Sherman Act. The ClaytonAct prohibited charging high prices in an areawhere little competition existed, while at the sametime charging lower prices in an area with strongcompetition. The act also said businesses could not buy stock in other corporations in order to reduce competition. Finally, the act addressed thecontrol of companies by outlawing interlockingdirectorates—a circumstance in which the samepeople served on the boards of directors ofcompeting companies.

Enforcing the Antitrust Laws In the sameyear that Congress passed the Clayton Act, it estab-lished the Federal Trade Commission (FTC), anindependent regulatory agency, to carry out theprovisions of the Clayton Act. The commissionmay define unfair competitive practices, issue or-ders to halt these practices, examine corporatepurchases of stock, and investigate trade practices.Since its creation the FTC’s duties have expanded.Today the FTC has many responsibilities in addi-tion to enforcing the Clayton Act. These includeenforcing laws that prohibit false advertising andrequiring truthful labels on textiles and furs. TheFTC also regulates the packaging and labeling ofcertain consumer goods, requires full disclosure ofthe lending practices of finance companies and re-tailers who use installment plans, and checks con-sumer credit agencies.

Despite additional antitrust legislation passedsince the Clayton Act, a few large corporationsdominate several industries. Today, instead oftrusts and monopolies, economic power belongsto oligopolies. An oligopoly exists when a few

firms dominate a particular industry. By the 1990sabout 50 multibillion-dollar companies controlledapproximately one-third of the manufacturing capacity in the United States.

Enforcing the country’s antitrust laws is the responsibility of the Antitrust Division of the Department of Justice. Working with the FederalTrade Commission, this division has the power tobring suit against suspected violators of antitrustlaws.

Consumer ProtectionBesides antitrust laws, Congress has passedother regulatory laws protecting consumers

and ensuring fair product standards. Congress hasalso established independent regulatory agenciesthat protect consumers or regulate certain eco-nomic activities. These regulatory agencies are in-dependent in the sense that they are largely beyondthe control of the executive branch.

To maintain this independence, Congress de-cided that each agency would have from 5 to 11members, each appointed by the president andconfirmed by the Senate. Normally the term ofeach of the commissioners is long enough to pre-vent a president from appointing enough newmembers to control the agency. The president mayremove a member only for certain reasons speci-fied by Congress.

The types of independent regulatory agenciesvary widely. Such agencies range from the FederalReserve System, established in 1913, to the Con-sumer Product Safety Commission, established in 1972.

Consumer Protection Laws Before 1900many corporations were not overly concernedabout whether their products were healthful orsafe. Some truly deplorable practices were com-mon in the food processing and drug industries.Some companies mislabeled foods and sold foodscontaminated by additives. Other foods such asmeat were tainted because of the unsanitary con-ditions in processing plants. Consumers wereduped into buying medicines that were oftenworthless and sometimes dangerous.

Shortly after the turn of the century, UptonSinclair, in his book The Jungle, described condi-tions in a meatpacking house. He wrote:


574-583 CH21S1-860053 12/4/04 12:00 AM Page 579

The Food and Drug Adminis-tration (FDA) is responsible forprotecting the public from poorlyprocessed and improperly labeledfoods and drugs. Scientists at FDAlaboratories inspect and test pre-pared food, cosmetics, drugs, andthousands of other products everyyear. Agents from the FDA inspectfactories, food processing plants,and drug laboratories. They alsocheck labels for accuracy. If aproduct fails to meet FDA stan-dards, the FDA may force it off themarket.

Protection Against FalseAdvertising The Federal TradeCommission (FTC) protects con-sumers from misleading andfraudulent advertising. The FTChas the power to review the adver-tising claims made about all prod-ucts sold in interstate commerce.It may determine whether an ad-vertisement for a product is falseor unfair. If it is, the FTC canorder a company to change the adto comply with FTC standards. Asa result of one FTC ruling, ciga-

rette manufacturers must place a health warningon cigarette packages. According to another FTCregulation, all manufacturers must clearly list thecontents of packaged products on the label.

Consumers and Product Safety Booksand articles about the ways in which consumersare cheated and deceived in the marketplace havealways been popular. One such book acceleratedconsumer activism in the 1960s. In 1965 RalphNader warned about poorly designed automobilesthat were “unsafe at any speed.” Nader became aleader in the consumer movement.

As a result of this movement, Congress createdthe Consumer Product Safety Commission(CPSC) in 1972. Its purpose was to protect con-sumers against “unreasonable risk of injury fromhazardous products.” To reduce consumer risks,the CPSC investigates injuries caused by merchan-dise, such as lawn mowers, kitchen appliances,


Disability and the Workplace

T oday disabled people have re-course against discrimination ineducation, housing, transporta-

tion, and employment. The Ameri-cans with Disabilities Act (ADA) saysthat remedies under the Civil RightsAct of 1964 apply to ADA employ-ment cases. The ADA bans inquiriesabout disabilities for job applicants.Also, employees are to be provided“reasonable accommodations” necessary to assist them indoing their jobs. The act also forbids employers to pay work-ers with disabilities less than nondisabled persons who dothe same work and forbids discrimination in promotions.

Make a List What would be “reasonable accommodations”for a person in a wheelchair working in a tall office building?

A C T I V I T YA C T I V I T Yarticipating

I N G O V E R N M E N T articipating

I N G O V E R N M E N T

Free from discrimination

“There would be meat stored in great pilesin rooms; and the water from leaky roofswould drip over it, and thousands of ratswould race about it. . . . These rats werenuisances, and the packers would put poi-soned bread out for them; they would die,and then rats, bread, and meat would gointo the hoppers together.”—Upton Sinclair, 1906

In addition to Sinclair’s stinging condemna-tion, magazine articles about similar conditionsaroused public indignation. As a result, Congresspassed the Pure Food and Drug Act in 1906 tomake it illegal for a company engaged in interstatecommerce to sell contaminated, unhealthful, orfalsely labeled foods or drugs. The Meat InspectionAct, also passed in 1906, provided for federal in-spection of all meatpacking companies that soldmeats across state lines.

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toys, and sports equipment. It then establishesstandards of safety for each type of consumerproduct. If any product fails to meet these stan-dards, the CPSC can order it off the market.

Regulating the Sale of Stocks The Securi-ties and Exchange Commission (SEC) has regu-lated the trading of securities, or stocks and bonds,since its creation during the Great Depression.Today the SEC regulates the nation’s securities is-sued by public utility companiesand requires all corporations thatissue public stock to file regularreports on their assets, profits,sales, and other financial data.These reports must be madeavailable to investors so that theymay judge the true value of acompany’s stock offerings.

Corporate accounting scan-dals became big news in 2001when the Enron Corporationdeclared bankruptcy. This was,at the time, the largest singlebankruptcy in American history.Employees lost their jobs, andmillions of dollars in stock in-vestment disappeared.

Investigation of Enron andseveral other corporations re-vealed that fraudulent accounting designed toartificially inflate stock value hid these firms’ in-herent weaknesses and created the appearance ofcorporate success. The failure of the Securities and Exchange Commission to identify this prob-lem led to the passage of the Sarbanes-Oxley Act of2002, which required, in part, that chief executiveofficers and chief financial officers of publiclytraded companies personally sign SEC reports andpay monetary penalties if improper accounting islater discovered.

Government and LaborAs large corporations multiplied in the late1800s, the relationship between employer

and employee became strained. National corpora-tion grew more impersonal, and cooperation dete-riorated. Federal laws were created to regulate therelationship between employers and employees.

Protecting Unions and Workers The firstnationwide union was organized in the 1850s.Under pressure from employers, and without sup-port from the federal government, early unionsfailed to survive for very long. The first successfulnational labor organization, the American Federa-tion of Labor, was founded in the 1880s.

Workers organized unions and elected leadersto represent them in negotiations with employersfor labor contracts that specified wages, hours,

and working conditions. Thispractice of negotiating labor con-tracts is known as collectivebargaining.

Employers generally refusedto negotiate with unions. As aresult, unions often resorted tostrikes to try to obtain conces-sions. Between 1881 and 1905,American unions called about37,000 strikes.

For many years, the govern-ment favored business over laborunions. Federal troops and statemilitia broke up some strikes. Thecourts even used the ShermanAntitrust Act, originally intendedto regulate business, to prohibitunion activities as being in “re-straint of trade.”

The government’s attitude toward labor beganto change in the early 1900s. The Clayton AntitrustAct, passed in 1914, included a provision that laborunions were not to be treated as “conspiracies inrestraint of trade.” Before the 1930s employerswere often successful in challenging laws that reg-ulated wages and working conditions. In 1937,however, the Supreme Court heard an appeal of acase in which a state had written a minimum wagelaw to protect women and children.

West Coast Hotel v. Parrish Elsie Parrish, ahotel employee, brought suit to recover the differ-ence between the wages paid her and the mini-mum wage. The hotel owner claimed that the lawdeprived the employer of freedom of contract. TheSupreme Court, however, upheld the minimum


A warehouse worker’s union membership material

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wage set by the Industrial Welfare Committee ofthe state of Washington, saying:

“The exploitation of a class of workers whoare in an unequal position with respect tobargaining power and are thus relativelydefenseless against the denial of a livingwage is not only detrimental to theirhealth and well-being, but casts a directburden for their support upon the commu-nity. . . . The community may direct itslawmaking power to correct the abuse.”—Chief Justice Charles Evans Hughes, 1937

Today laws set minimum wages and maxi-mum working hours and prohibit child labor.In addition, the Department of Labor, establishedin 1913, provides employment offices and job-training programs for people in search of a job,collects helpful data, and offers unemployment insurance.

Labor Laws of the 1930s The greatest gainsof organized labor occurred during the Great De-pression of the 1930s with the passage of revolu-tionary labor laws. These laws, passed underPresident Roosevelt’s New Deal, are often called

“labor’s bill of rights.” They guaranteed labor’sright to bargain collectively and strike, and gener-ally strengthened labor unions.

In 1932 Congress passed the Norris-LaGuardia Act that gave workers the right to joinunions and to strike. It outlawed yellow-dog con-tracts, which forced workers to sign contractsagreeing not to join a union. The act also restrict-ed the use of federal court injunctions againstlabor unions. Injunctions—court orders to pre-vent an action from taking place—were often is-sued to force striking unions back to work.

In 1935 Congress passed the Wagner Act,guaranteeing the right of all workers to organizeand bargain collectively. To achieve this goal, thelaw prohibited employers from engaging in certain“unfair labor practices.” According to the WagnerAct, employers could not refuse to bargain collec-tively with recognized unions, interfere in unionorganization, or discharge or otherwise punish aworker because of union activities.

To enforce these prohibitions, the Wagner Actcreated the National Labor Relations Board(NLRB). The board had power to supervise elec-tions to determine which union a group of work-ers wanted to represent it. The NLRB could alsohear labor’s complaints and issue “cease and


Critical Thinking The number of people in the labor force has more than doubled since 1950. How would you describe the trend in labor union membership?

Source: U.S. Bureau of the Census, Bureau of Labor Statistics, 2001.*Figures for people 16 years or older

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desist” orders to end unfair labor practices. Underthe Wagner Act, unions gained tremendously inmembership and strength.

Regulating Unions Soon after the passage ofthe Wagner Act, business leaders began to protestthat labor unions were growing too powerful. Crit-ics of the Wagner Act claimed that it was one-sidedand too favorable to labor. They complained thatmany workers were being forced to join unionsagainst their wills. Also, employers were beingforced to hire only union workers. To avoid strikesemployers had to agree to establish a closed shop.In a closed shop, only members of a union may behired. Responding to these criticisms, Congresspassed the Taft-Hartley Act in 1947.

The purpose of the Taft-Hartley Act was to re-store the balance between labor and management.It was the federal government’s first attempt to reg-ulate certain practices of large unions. The act re-quired unions to give 60 days’ notice before callinga strike. This “cooling-off period” was intended toprovide additional time for labor and manage-ment to settle their differences. The act also re-stored limited use of injunctions. In strikes thatendanger the nation, the president may obtain aninjunction to stop the strike for 80 days. Accordingto the Taft-Hartley Act, employers may sue unionsfor damages inflicted during a strike.

While the act prohibited the closed shop, it didpermit the union shop. In a union shop, workers

are required to join a union soon after they havebeen hired (but not before). Under the law, unionshops can be formed if a majority of workers votefor them. They cannot be formed, however, in anystate that has passed a “right-to-work” law. Right-to-work laws are state labor laws that prohibit bothclosed shops and union shops. They provide thatall workplaces be open shops where workers mayfreely decide whether or not to join a union.

Protecting Union Members Labor unionshave not always acted in the best interests of theirmembers. In 1957, for example, a Senate investi-gating committee found that some leaders of thepowerful Teamsters Union had misused and, insome cases, stolen funds. The same leaders wereaccused of associating with gangsters and racke-teers and of having used bribery, threats, and vio-lence against those who tried to challenge them.

These widely publicized labor scandals led tothe passage of the Landrum-Griffin Act of 1959.This law made misusing union funds a federalcrime. The Landrum-Griffin Act also protectedunion members from being intimidated by theirleaders. It was also helpful in eliminating fraud inunion elections. The act included a “bill of rights”for union members. This guaranteed the right ofmembers to nominate and vote by secret ballot inunion elections, to participate and speak freely atunion meetings, to sue their union for unfair prac-tices, and to examine union records and finances.

Sect ion 1 AssessmentSect ion 1 Assessment

Free Enterprise Interstate commerce dependson an adequate system of highways funded bythe federal government. Find out about high-way construction plans in your area. Create abulletin board display with a map of the plannedconstruction and pertinent financial information.

Checking for Understanding1. Main Idea Use a graphic organizer like the one

below to identify three laws passed by Congressthat resulted in the growth of labor unions.

2. Define mixed economy, laissez-faire, trust, mo-nopoly, interlocking directorate, oligopoly, securi-ties, collective bargaining, injunction.

3. Identify Sherman Antitrust Act, Clayton AntitrustAct, Wagner Act, Taft-Hartley Act.

4. What are the government’s main goals regardingcompetition and consumers?

Critical Thinking5. Identifying Central Issues What general problem

do the Federal Trade Commission, the Securitiesand Exchange Commission, and the ConsumerProduct Safety Commission address?


Growth of Labor Unions

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The federal government has always en-couraged American agriculture. In 1790about 95 percent of the American peoplelived in rural areas, and most Americans

were farmers. Farming remained the major occu-pation until after the early 1900s. Today, however,less than 2 percent of the American people arefarmers. The United States is an urban nation withmore than 75 percent of the people residing intowns and cities.

From 1935 to the present, the number of farmsin the United States has declined from 6.8 millionto about 2 million because small family farms aredisappearing. The average farm today is just under500 acres, more than twice as large as the averagefarm of 30 years ago. Large corporate farms aremaking agriculture big business.

While the total number of farms has de-creased, farm output per work hour has increasedalmost every year. In 1900 one farmer could feedabout 7 people. Now the average farmer can feedapproximately 80 people.

The Federal Government and the Farmer

Despite the transition from a rural to anurban nation, the federal government has

strongly encouraged American agriculture. Be-cause farming is so vital to the nation, govern-ments at the federal, state, and local levelsprovide support and assistance to farmers.

Early Agricultural Legislation In 1862Congress passed three acts that were importantto farmers. One law created the Department of Agriculture. In the beginning the chiefpurpose of this department was to show farm-ers how to improve and modernize their agricultural methods. In 1889 the Departmentof Agriculture was elevated to cabinet-levelstatus.

Agriculture and EnvironmentS e c t i o n 2S e c t i o n 2

Lamb Roasts PurchasedWASHINGTON, D.C., FEBRUARY 14, 2000

The U.S. Department of

Agriculture (USDA)

announced plans to assist

sheep and lamb producers

by purchasing up to $15

million worth of lamb

roasts over the next three

years. Lamb meat imports

have contributed to a sur-

plus and to falling prices of

lamb meat. The USDA’s

purchase should remove

excess lamb from the mar-

ket, boost prices, and help U.S. lamb products re-

main competitive with foreign ones. The USDA’s

Agricultural Marketing Service (AMS) will distrib-

ute the roasts through food banks and other food

nutrition programs.

Supported by thegovernment


Reader’s Guide

Key Termsprice supports, acreage allotment, marketing quotas

Find Out■ How does American farm policy attempt to

stabilize farm prices?■ What is the working relationship between the

federal government and localities in carryingout environmental policy?

Understanding ConceptsCivic Participation What can citizens do to helpprotect the environment?

584-589 CH21S2-860053 12/4/04 12:01 AM Page 584

The second law, the Morrill Act, aided North-ern states by granting them millions of acres offederal land to establish state-operated colleges ofagriculture. The third law, the Homestead Act, gaveland to those willing to farm it.

Farm Problems In the 1920s the nation’sfarms faced serious problems. A historian’s viewcreates a bleak picture:

“The high tariff enacted by the Republicansafter World War I helped destroy the farmer’sEuropean market; the changing diet of theAmerican family and immigration restric-tions curtailed the farmer’s market at home.Low crop prices, threats of foreclosures,an inadequate credit supply, soil erosion,locusts, droughts, sharecropping, tenantfarming and migrant farming complete thedismal picture of farm conditions in theUnited States prior to the New Deal.”—John H. Cary, 1981

As farm prices continued to decline, thou-sands of farmers lost their land. During the firstyears of the Great Depression, conditions becameworse. Then in 1933 a huge dust storm sweptacross the Great Plains and carried the area’s soilacross the Midwest, even darkening the sky in NewYork. One account in the Saturday Evening Post de-scribed the scene in South Dakota:

“When the wind died and the sun shoneforth again, it was a different world.There were no fields, only sand driftinginto mounds. . . . In the farmyard, fences,machinery, and trees were gone, buried.The roofs of sheds stuck out through driftsdeeper than a man is tall.”—R.D. Lusk, November 1933

Responding to this disastrous situation, Presi-dent Roosevelt’s New Deal legislation set out toraise the price of farm products by limiting the pro-duction of certain crops that were in oversupply.


Critical Thinking Farms in the United States had a total net income of more than $45 billion in 2000. What generalization can you make about farming in the southern half of the country versus farming in the northern half?

Source: U.S. Bureau of the Census, Statistical Abstract of the United States: 2002 (Washington D.C.: 2002).

WA

OR

CA

AK

HI

NV

ID

MT

WY

UT

AZ NM

CO

TX

OK

KS

NE

SD

NDMN

WI

IA

MO

AR

LAMS AL GA

FL

SC

NCTN

KYWV VA MD

DENJ

CTRI

MA

MENHVT

NY

PAOHIN

MI

IL

1–4 billion

more than 4 billion

700 million –1 billion

400–700 million

100–400 million

less than 100 million

Net Farm Income, 2000 (in dollars)

Farming in the United StatesFarming in the United States

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The Commodity Credit Corporation holds thesurplus crops in government storage facilities untilthe market price goes up and the crop can be sold.It also uses surplus crops in welfare programs, forschool lunches, and for famine relief overseas.Even so, from time to time, huge surpluses of someproducts have accumulated when market pricesstayed at a low level.

In order to avoid large surpluses every year,the government has adopted the idea of acreage restriction, or acreage allotment. In this pro-gram, officials in the Department of Agricultureestimate the probable demand for a crop in worldand national markets. Then they estimate thenumber of acres that will produce that amount.Based on these estimates, the government assignsfarmers acreage allotments and pays supportprices for only the crops grown on the assignednumber of acres.

When a crop has been overproduced and largesurpluses threaten to lower prices, the governmentturns to marketing quotas, or marketing limits.Aided by Department of Agriculture officials,farmers set up marketing quotas among them-selves and agree to market only an assigned portionof their overproduced crop.

Not all observers agree with the governmentpractices of having price supports and farm subsi-dies. In the early 1990s critics said the Departmentof Agriculture was overgrown and its overlappingagencies were not efficient. In 1994 Congress responded to Agriculture secretary Mike Espy’sproposal to reorganize the department. The result-ing reorganization created the Farm ServiceAgency that consolidated conservation programsand reduced the department’s budget. The samelegislation that created the Farm Service Agencyalso made participation in a federal crop insuranceprogram mandatory for farmers who took part infederal price supports.

Promoting Conservation Conserving thenation’s land and forests is a vital responsibility of agencies in the Department of Agriculture.The Forest Service has restored millions of acres of forests used for outdoor recreation, timber,and for wildlife habitat. The Soil ConservationService works through 3,000 soil conservation dis-tricts and with farmers to manage conservation problems.


Under the Agricultural Adjustment Act (AAA), thegovernment paid farmers for not producing theirusual amount of corn, wheat, hogs, and other com-modities. It also provided loans to help farmerskeep their land. Although the Supreme Court de-clared the AAA unconstitutional in 1936, Congressquickly passed a similar act that overcame theCourt’s objections.

Aid for Farmers TodayThe Department of Agriculture providesmany services to farmers. The chief func-

tions are to help farmers market their produce, sta-bilize farm prices, conserve land, and promoteresearch in agricultural science.

The Department of Agriculture also hashelped develop rural areas. Rural ElectrificationAdministration loans brought electricity and tele-phone service to many rural areas. The FarmersHome Administration was established to provideloans for farmers to buy land, livestock, seeds,equipment, and fertilizer, to build homes, to digwells, and to obtain disaster relief.

Marketing Services Several agencies of theDepartment of Agriculture are concerned withhelping farmers find buyers for their crops. TheAgricultural Marketing Service advises farmers onthe demand for crops, current prices, and trans-portation methods. It also performs market re-search to help farmers know when and where tosell their products. The Foreign Agricultural Ser-vice promotes the sale of American farm goods inforeign markets.

Programs for Stabilizing Prices The fed-eral government has tried several methods for pre-venting farm prices from falling below a certainlevel. The current approach involves the coordina-tion of three programs—price supports, acreageallotments, and marketing quotas. The Commod-ity Credit Corporation (CCC) administers theseprograms.

Under the program of price supports, Con-gress establishes a support price for a particularcrop. The CCC then lends the farmer money equalto the support price for the crop. If the actual mar-ket price falls below the support price, the farmerrepays the loan with the crop.

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Protecting the EnvironmentFor many years the federal government didnot set environmental policy. State and local

governments developed few controls over air,water, land, and other natural resources.

Beginning in the 1950s, the federal govern-ment reacted to public concern over the deterio-rating environment. The federal governmentpassed legislation to clean up the air and water. In1970 Congress issued a series of sweeping environ-mental laws. The Environmental ProtectionAgency (EPA) was created and charged with en-forcing a host of regulations. Most of the regula-tions mandated changes in business andoperations to comply with the law, but Congressprovided no federal funds to states, localities, andbusinesses to pay for the improvements.

Air Pollution Policies Congress first ex-pressed concern about air pollution as early as1955 when it passed the Air Pollution Act. This act,however, was limited to promoting research on airquality and to providing technical assistance tostates and communities.

In the 1960s Congress passed stronger laws re-quiring states to set clean-air standards and to pre-

pare plans for their enforcement. The 1970 CleanAir Amendments established the EnvironmentalProtection Agency (1970), giving the federal gov-ernment power to enforce air quality standards.

The 1990 Clear Air Act mandated reductionsin emissions. As a result, air quality in the UnitedStates improved between 1990 and 1999. Smog,sulfur dioxide, and carbon monoxide concentra-tions all declined. In 1992 the Kyoto Protocol waspresented at an international conference to setglobal greenhouse emissions standards. The UnitedStates initially ratified the agreement. The Bushadministration, however, announced in May 2001that it would not implement the agreement, claim-ing it was an ineffective solution that exemptedtoo many developing countries and would dam-age the nation’s economy.

Water Pollution Policies The Water Pollu-tion Control Act of 1948 first provided for federaltechnical assistance to the states, but, as with theearly pollution laws, the act was weak. Congresspassed stronger measures. The Water Quality Im-provement Act of 1970 prohibited the discharge ofharmful amounts of oil and other dangerous ma-terials into navigable waters. The law concernedsuch pollution sources as ships, onshore refineries,

Environmental ProtectionThe nation’s chief source ofair pollution is the automo-bile. Do you think more lawsshould be enacted to forceAmericans to use publictransportation? Explain.

Past In the post-World War II era, the auto-mobile became an indispensable part of Americans’ lives. Cars waited in a traffic jam on a Pasadena, California freeway in 1958.

Present For many decades automobiles andfactories have spewed pollutants into the air. In2000 the EPA reported that nearly 62 millionAmericans lived in areas where the air was considered unhealthy as opposed to 150 millionin 1990.

▲

Toxins in the Air

▲

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and offshore oil drilling platforms. It also provid-ed for extensive control over pesticide drainageinto the Great Lakes.

The major legislation to end water pollutionwas the Water Pollution Control Act of 1972. It setthe goal of completely eliminating the discharge ofpollutants into the nation’s waterways. Under theact all polluters dumping waste into waterways—cities, industries, or farmers—needed a permit.The EPA’s responsibility was to study each dump-ing location to monitor the dumper’s compliancewith regulations. Many lawsuits involving the EPAresulted. On the one hand, environmentalists suedbecause they thought the EPA was too permissiveabout dumping. On the other hand, industriessued the EPA, arguing that the agency was unrea-sonable in its standards.

In the decades since the Act’s passage, the lawhas been changed and amended to enable it toremain effective. In 1981 treatment plant capa-bilities were improved. In 1987 a new fundingsystem was put in place to make it easier for statesto comply with the Act’s standards. Separate laws

have also had an impact on thegovernment’s efforts to ensurepollution-free water. For exam-ple, in 1990 an agreement be-tween the United States andCanada ensured better waterquality in the Great Lakes.

Unfunded Mandates TheEPA issued hundreds of regula-tions to implement environ-mental laws. As costs grew eachyear, state and local leadersbegan to complain about theseunfunded mandates, programsordered but not paid for by fed-eral legislation. The local shareof environmental costs escalatedfrom 76 percent of $35 billion in 1981 to a projected 82 percentof nearly $48 billion in 2000.Steven Walker, air quality chiefin Albuquerque, New Mexico,said, “It seems like every No-vember from now to [forever]there’s some deadline we have to meet.”

Pressured by state and local governments andby businesses, Congress reviewed unfunded man-dates in 1996. New laws restricted the ability of thefederal government to impose additional require-ments on state and local governments withoutproviding funds to pay for them. The problem hasnot been solved, however, since existing mandatesremain in place.

Energy and the EnvironmentIn the 1950s most Americans were not fa-miliar with terms like energy crisis, environ-

mental pollution, and ecology. In the 1970s thedeclining quality of the environment and the di-minishing supply of cheap energy forced the na-tional government to place these importantmatters high on its policy agenda.

The Native Americans living in this land andthe settlers who came later found abundant natur-al resources—unending forests, clear lakes andrivers, rich deposits of metals. As the country grew,Americans developed increasingly sophisticated


Regulating Pollution Polystyrene booms float on a pond nearMoonstone Beach, Rhode Island, in an effort to contain oil spilledfrom a barge. Environmentalists worry that the oil spill and result-ing pollution will upset the delicate ecosystem in the area. Doyou think the power to regulate air and water quality shouldbelong to the federal or state governments? Why?

Polluting America’s Waterways

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technologies to use these resources to build astrong industrial nation. They gave little thoughtto the possibility that these resources might be de-pleted or that the careless exploitation of resourcescould have a serious impact on the environment.

By the early 1960s, however, the costs becameobvious. Many rivers and lakes were dirty. Smog en-gulfed major cities, oil spills polluted the beaches,and the heavy use of pesticides endangered wildlife.

In the winter of 1973–1974, Americans foundthemselves in an energy crisis. Arab countries cutoff shipments of oil because the United States hadsupported Israel during an Arab-Israeli war. In-dustries dependent on oil laid off workers. Manygas stations closed, and long lines formed at theones that were open. States lowered speed limits,and people set thermostats lower to save energy.

The federal government responded with emer-gency legislation, but many people called for along-term solution. As the government fashioned anew energy policy in the mid-1970s to meet futureenergy crises, people began to recognize the costs ofa cleaner environment and conflicts among interestgroups with different goals. Americans discoveredthat preserving clean air might require them todrive cars with pollution-control devices that madethe cars more costly to buy and operate. Oil com-panies wanted to drill for more offshore oil, whileenvironmentalists believed that such drilling posedtoo great a risk to the marine environment.

In 1991, the head of the Department of Energyoutlined the goals of a national energy strategy:

“We want to chart a course of diplomatic,commercial, regulatory, and technologicalpolicy that will reduce U.S. vulnerability tofuture disruptions in oil markets, improvethe environment, and increase economicefficiency.” —James D. Watkins, 1991

Competing interest groups such as energycompanies, conservation organizations, andconsumer advocates, however, have struggled toshape new policies and programs that reflect theirparticular concerns. This competition was illus-trated in the struggle to open oil drilling opera-tions near the Arctic National Wildlife Refuge.This area near the coast of Alaska is home to apotentially large source of North American oil thatmight reduce the United States’s dependence on oilfrom overseas. The Refuge, however, is also hometo an abundance of wildlife, and so environmentalgroups have worked to prevent the George W. Bushadministration’s efforts to begin drilling for oil inthis area.

Sect ion 2 AssessmentSect ion 2 Assessment

Civic Participation Choose a conservationproject that you can do in your community. Youmight “adopt” a park, a pond, or a roadside toclean up and to keep attractive. Share yourideas with the class in the form of a proposalpresentation.


below to compare clean air legislation of the1950s, 1960s, and 1990s.

2. Define price supports, acreage allotment, marketing quotas.

3. Identify Department of Agriculture, Environmen-tal Protection Agency, unfunded mandates.

4. How does the federal government attempt tostabilize farm prices?

Critical Thinking5. Predicting Consequences Analyze the economic

and environmental effects of recent air andwater pollution legislation.


Student Web Activity Visit the United StatesGovernment: Democracy in Action Web site atgov.glencoe.com and click on Chapter21–Student Web Activities for an activity aboutagriculture and environment.

GOVERNMENT

1950s 1960s 1990s

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Today the government is interested inAmericans’ health. Well into the 1900s thehardships of ill health, old age, poverty,and physical disability were private mat-

ters. For needy Americans local and state govern-ments provided very limited help in the form oforphanages, almshouses, and poor farms. Mostpeople in need depended on themselves and onchurches and private charitable organizations.

The Great Depression of the 1930s changedpublic attitudes. During that decade the nationalgovernment started two types of programs: socialinsurance and public assistance.

The Impact of the DepressionAfter the stock market crash of 1929, theAmerican economy continued to slump

badly month after month for the next several years. Unemployment increased from about 3 percent of the nation’s workforce in 1929 to al-most 25 percent in 1933. The song “Brother, CanYou Spare a Dime?” expressed the mood of theearly 1930s. Almost overnight, unemployment,hunger, and poverty became massive nationalproblems.

New Deal Programs As the Depressiondeepened, private charities and local and stategovernments could not cope with the problemsof the poor. To ease the nation’s suffering, Presi-dent Franklin D. Roosevelt proposed and Con-gress passed the Social Security Act in 1935. Thisact was the first of many government-supportedsocial insurance, public assistance, and health-care programs. The government envisionedthese programs as long-term ways to providesome economic security for all citizens.

Today the United States has two kinds of so-cial programs. Social insurance programs aredesigned to help elderly, ill, and unemployedcitizens. Public assistance programs distributepublic money to poor people. The government

Health and Public AssistanceS e c t i o n 3S e c t i o n 3

Drug Use Down Among Youth WASHINGTON, D.C., AUGUST 21, 2000

The Substance Abuse

and Mental Health

Administration released its

annual National House-

hold Survey on Drug

Abuse today. According to

Dr. Donna E. Shalala, the

secretary of health and

human services, the study’s

most important finding is

that drug use has dropped

among young people aged

12 to 17. “Most of our

young people are getting the message that drugs are

not the stuff of dreams, but the stuff of nightmares,”

Dr. Shalala said. More discouraging were the study’s

revelations about tobacco use. In 1998 about 800,000

people under 18 started smoking cigarettes.“We have

a long way to go—miles to go—in our journey to a

drug free America,” commented Dr. Shalala.

Promoting an anti-

smoking message


Reader’s Guide

Key Termssocial insurance, public assistance, unemploymentinsurance

Find Out■ What is the purpose of Social Security, and

how does it operate?■ What are the most recent changes in federal

public assistance programs?

Understanding ConceptsFederalism How do the states and federal government work together to provide unemploy-ment insurance and public assistance?

590-596 CH21S3-860053 12/4/04 12:01 AM Page 590

uses general tax revenues to pay for these pro-grams. Unlike social insurance, public assistancedoes not require recipients to contribute to thecost of the programs.

Social Insurance ProgramsThe Social Security Act and its later amend-ments created a social insurance system

with three main components. The first componentis Social Security, or Old Age, Survivors, and Disability Insurance (OASDI). The second com-ponent is a health-insurance program calledMedicare, and the third is unemployment insurance.

The Social Security Administration adminis-ters OASDI from its huge headquarters in Balti-more and from 1,300 local offices around thecountry. The Health Care Financing Administra-tion manages the Medicare program. Both of these agencies are important units within theDepartment of Health and Human Services. TheDepartment of Labor runs the unemployment insurance program.

Social Security More than 90 percent ofAmerican workers participate in the Social Securi-ty system. Employers and employees contribute tothe system equally, while self-employed personspay their own Social Security tax. Retirees, sur-vivors, disabled persons, and Medicare recipientsare eligible for benefits. Survivors are spouses andchildren of deceased people covered by Social Se-curity. Medicare provides health insurance for per-sons 65 or older.

Changing the System In 1981 the Social Security system faced a severe cash shortage asoutgoing payments rose faster than incomingpayroll taxes. In 1983 Congress passed a law that included a gradual rise in the retirement age from65 to 67 by the year 2027. It also required that Social Security benefits of some retired peoplewith higher incomes be subject to federal incometax. The law required federal workers to join Social Security, increased the Social Security pay-roll tax, and deferred cost-of-living increases to retirees.


*1989Source: Encyclopedia Britannica, 2001 Book of the Year (Chicago: Encyclopedia Britannica, 2001).

The majority of governments around the world provide some kind of social benefits for their citizens. Which country listed here provides the fewest number of programs?

Critical Thinking

Social Spending

CountryPercent of total

government spending, 1997Family

allowancesUnemploymentWork

injurySickness and

maternity

Old age, invalidity, and death

35.3

8.5

24.9

18.1

3.7

3.4*

28.8

36.8

Australia

Colombia

Israel

Mexico

Thailand

United Kingdom

United States

Zimbabwe

COMPARING GovernmentsCOMPARING Governments

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Many experts believe that despite the changesCongress made in 1983, Social Security will faceeven worse cash shortages within a few decades asincreasing numbers of older Americans retire.How to reform the system became a major issue inthe 2000 presidential election. Republican candi-date George W. Bush proposed allowing people toinvest a portion of their Social Security payrolltaxes in stocks and bonds. Democratic candidateAl Gore called for maintaining the current level ofguaranteed benefits by supplementing the SocialSecurity payroll taxes with money from the gener-al income tax. Any major changes in the systemwill require congressional action. Peter G. Peter-son, who served on a bipartisan commission onentitlements, said:

“The costs of Social Security and Medicarealone are projected to rise to between 35and 55 percent of taxable payroll by 2040.. . . Balancing the budget by 2002 is a low-impact warm-up exercise compared withthe grueling iron-man challenge that liesahead when 76 million boomers retire.”—Peter G. Peterson

Henry J. Aaron, an economist at the Brookings Institution, expressed a different point of view:

“Social Security does have a projecteddeficit over 75 years, but it can be easilymanaged. . . . Modest benefit reductionsand small tax increases imposed graduallycan bring revenues and expenditures intobalance. The main factor driving up thecombined cost of Medicare and Social Security is . . . growth in per capita med-ical costs.” —Henry J. Aaron

Medicare In 1965 Congress added Medicareto the Social Security program. The basic Medicareplan pays a major share of the total hospital billsfor more than 30 million senior citizens.

A second portion of the Medicare program isvoluntary. For those who choose to pay an extraamount, Medicare also helps pay doctors’ bills andcosts of X rays, surgical dressings, and so on. Nearlyall the people covered by the basic plan are enrolledin the voluntary portion of the Medicare plan.

Unemployment Insurance The 1935 SocialSecurity Act also set up unemployment insuranceprograms for people who are out of work. Underthese programs, federal and state governments co-operate to provide the needed help.

Workers in every state are eligible to receiveunemployment payments if their employers dis-miss them from their jobs. To fund the program,employers pay a tax to the federal government.Then, when workers are involuntarily laid off, theymay apply for weekly benefits from a state, not afederal, employment office.

Public Assistance ProgramsFederal government public assistance pro-grams began during the Depression. Al-

though the federal government provides most ofthe money for these programs from general taxrevenues, state and local welfare agencies actuallyrun the programs. The major public assistanceprograms are: Supplemental Security Income(SSI), food stamps, Medicaid, and the Job Oppor-tunities and Basic Skills program (JOBS). A pro-gram called Aid to Families with DependentChildren ended in 1996 with the passage of amajor welfare-reform bill.

Supplemental Security Income (SSI) Setup by Congress in 1974, Supplemental Security In-come brought together under federal control allstate programs for the aged, the blind, and the dis-abled. Under the original Social Security Act, thestates had administered these programs, and bene-fits and procedures varied greatly from state tostate. SSI sought to simplify these programs andstreamline the administration of benefits.

The Social Security Administration runs theprogram. The federal government makes a monthlypayment to anyone who is 65 or older, who is blindor disabled, or who has little or no regular income.

Food Stamps President Kennedy started thefood stamp program by executive order in 1961.Congress created a food stamp system by law in 1964. The purpose of the food stamp programwas to increase the food-buying power of low-in-come families and help dispose of America’s sur-plus agricultural production. When the program started, approximately 367,000 people received


590-596 CH21S3-860053 12/4/04 12:02 AM Page 592

food stamps. By 2002 more than 19 million Amer-icans received food stamps at a cost to the govern-ment of over $20 billion.

Medicaid Congress established the Medicaidprogram in 1965 as part of the Social Security sys-tem. Medicaid is designed to help pay hospital,doctor, and other medical bills for persons withlow incomes. General federal, state, and local taxesfund this program that aids more than 35 millionpeople at a cost of over $150 billion each year.

Some observers have noted that both Medic-aid and Medicare contribute to rising hospital andmedical costs. Because the government pays themedical bills, neither the patients nor doctors orhospitals have an incentive under this program totry to keep costs down.

Aid to Families with Dependent ChildrenAid to Families with Dependent Children was de-signed during the Depression. It helped families inwhich the main wage earner died, was disabled, orleft the family. A family with dependent childrenwas eligible for AFDC assistance if its income wastoo low according to criteria set by the state.

In its early years, about 75 percent of those re-ceiving aid were children of fathers who had diedor been disabled. By the 1990s more than 80 per-cent of the children receiving aid had fathers whohad either deserted their families or who had nevermarried the mothers of the children. The 1994Census Bureau report on poverty showed thatmore than 21 percent of the nation’s childrenunder the age of 18 were living in poverty despitethe government’s efforts under AFDC.

The AFDC program was sharply criticized.Some critics argued that the program promotedhaving babies outside of marriage. They alsoclaimed that it promoted fatherless families by en-couraging men to leave their families in order tomake their children eligible for aid. Over the yearsCongress attempted to modify the program, but itremained controversial.

The Need for Reform Few people denied thatsociety had a responsibility to help care for its dis-advantaged, sick, and disabled. At the same time,for many different reasons few political leaders andcitizens were happy with the public assistance sys-tem. After more than 30 years of rapidly increasing

program costs, the level of poverty remained highin the United States. In 2002 more than 34 millionpeople, or 12.1 percent of Americans, were livingin poverty.

Much of the public frustration over the welfaresystem stemmed from reports of welfare fraud andthe cycle of dependence that developed amongmany welfare recipients. Many single parents onwelfare had few strong incentives to work. Mini-mum-wage jobs provided less income than thewelfare system, and working often meant payingadditional day care expenses.

Congress first responded to calls for welfarereform in the Family Support Act of 1988. Itrequired states by 1990 to implement welfare-to-work programs aimed at helping people get offthe welfare rolls. The federal government promisedto pay a share of the costs of education and jobtraining. This program also included a provisionthat welfare recipients who took jobs and got offthe welfare rolls would continue to be eligible for subsidized child care and health benefits forone year.


Federally Funded Programs A New Yorkerdemonstrates to show his support for federallyfunded health-care programs. Why would somecitizens feel it was necessary to activelyshow their support for Medicaid?

Fighting for Support

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Sweeping Changes in Welfare In the 1992election campaign President Clinton vowed to“end welfare as we know it.” In the 1994 elections,Republicans proposed broad welfare changes intheir “Contract With America.” Although the pres-ident and Congress supported reform, it took twoyears to enact compromise legislation. After veto-ing two previous Republican-sponsored bills anddespite objections by liberals in his own party, thepresident signed a major welfare overhaul. On July31, 1996, he announced:

“Today we have an historic opportunity to make welfare what it was meant to be: a second chance, not a way of life. . . .I believe we have a duty to seize the opportunity it gives us to end welfare as we know it.”—President Bill Clinton

The bill ended Aid to Families with DependentChildren (AFDC), a cash welfare program. It re-placed AFDC with the Temporary Assistance forNeedy Families (TANF) program. TANF provideslump-sum payments to the states and gives stateswide authority to design and operate their ownwelfare programs. The bill, however, placed several

restrictions on the states’ use of federal welfarefunding. It established work requirements forwelfare recipients and placed time limits on fami-lies’ eligibility for welfare assistance. The billauthorized a reduction in the food stamp programspending and placed limits on food stamp benefitsavailable to people without children. The federalgovernment agreed to provide $14 billion over thefollowing six years for child-care services to fami-lies on welfare. The goal of TANF was to make thisaid a temporary solution to sustain families untilpermanent work and self-sufficiency was reestab-lished. Welfare from the federal government wasno longer intended to be viewed as a long-termsolution.

Promoting Public HealthIn 1792 Secretary of the Treasury AlexanderHamilton urged Congress to provide hospi-

tal care for “sick and disabled seamen.” Congressresponded by establishing the United States PublicHealth Service. Today the government is deeply in-volved in promoting public health.

Health Programs Today the largest percent-age of federal government spending on health goesfor the Medicare and Medicaid programs. In addi-


Changes in AdministrativeAgencies President Clintonsigned a tough welfare-reformbill in 1996 that requires morewelfare recipients to find work.Clinton stated that governmenthas a role in creating opportuni-ties for employment of citizensthrough education and job train-ing. Analyze the effects ofwelfare reform legislationpassed by Republicans in Congress and PresidentClinton.

Transforming the Welfare System

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tion to these, however, the government operatesseveral programs designed to promote and protectpublic health. The Department of Defense, for ex-ample, provides hospital and other medical carefor active and retired American military personneland their families. In addition, the Veterans Ad-ministration (VA) operates medical, dental, andhospital care programs for needy veterans.

The Public Health Service, which is now a partof the Department of Health and Human Services,operates research, grant, and action programs de-signed to promote the health of all citizens. Feder-al agencies, such as the Centers for Disease Control(CDC), work to control the spread of infectious dis-eases such as tuberculosis, AIDS, diphtheria, malar-ia, typhus, and the flu. In 2001, terrorists sent lettersthrough the mail containing anthrax—a dangeroustype of bacteria. The CDC helped detect and con-tain the spread of anthrax. The incident led the De-partment of Health and Human Services to create anew Office of Public Health Preparedness to coordi-nate the nation’s response to health emergencies.

Food and Drug Protection The Food andDrug Administration (FDA) tests samples of foodand drug products in its laboratories. The agencyhas the power to ban or withdraw from distribu-tion drugs it finds unsafe or ineffective. As a result,the FDA often finds itself involved in controversy.Some doctors, for example, claim FDA policiesmake it almost impossible for the public to receive

Sect ion 3 Re v iewSect ion 3 Re v iewSect ion 3 AssessmentSect ion 3 Assessment

Public Policy Interview three senior citizenswho have used Medicare. Ask the following: Howdoes the Medicare system benefit you? Whatproblems have you had with the system? Whatimprovements could be made to Medicare?Compare your answers with your classmates.


below to show who is eligible for Social Securitybenefits and Supplemental Security Income.

2. Define social insurance, public assistance, unemployment insurance.

3. Identify Medicare, Medicaid.4. How did the welfare overhaul in 1996 affect Aid

to Families with Dependent Children (AFDC)?

Critical Thinking5. Predicting Consequences Research the ethical

arguments over stem cell research. Analyze theinformation and predict consequences of usingor not using stem cells in research.


Social Security Supplemental Security

the benefits of certain drugs. Sometimes peoplesuffering from a particular disease, such as canceror AIDS, will travel outside the United States to ob-tain drugs permitted elsewhere.

In contrast, some consumer protection groupsbelieve the FDA is not tough enough in banningdrugs and food additives that may be harmful.Clearly, the FDA has a difficult job. It must protectthe public from dangerous substances while notdenying them the drugs they need.

Stem Cell Research Because the federal gov-ernment funds scientific research, public policy af-fects what some scientists may or may not do. InAugust 2001, President Bush decided to address thecontroversial issue of embryonic stem cell research.In the hope of finding cures for many diseases, sci-entists wanted the federal government to fund re-search that used cells from human embryos leftover from couples seeking in-vitro fertilization.

While some scientists viewed them as “clumpsof microscopic cells,” religious ethicists said thatout of respect for human life, stem cells producedin a laboratory should not be treated simply as“property.” Some religious groups saw the cells asthe moral equivalent of a “person.”

The president said federal funds could be usedfor research using the existing 60 or more lines ofstem cells that had been taken from embryos.However, he would not permit the government tofund research that destroyed additional embryos.

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596

Background of the CaseIn the mid-1980s Congress concluded that a

lack of uniformity in the minimum drinking ageamong the states was contributing to a nationalhighway safety problem. A Presidential Commissionon Drunk Driving appointed to examine alcohol-re-lated accidents on the nation’s highways had con-cluded that the lack of uniformity in the minimumdrinking ages set by the states created “an incen-tive to drink and drive” because “young personscommute to border states where the drinking age is lower.” Congress passed a law in 1984 directingthe secretary of transportation to withhold 5 per-cent of federal highway funds from those statesthat did not adopt 21 years old as the minimumdrinking age. South Dakota, a state that permitted19-year-olds to purchase alcohol, challenged thelaw as a violation of the Constitution.

The Constitutional IssueArticle I, Section 8, of the Constitution gives

Congress the authority to “lay and collect Taxes,

Duties, and Excises to pay the Debts and providefor the common Defence and general Welfare ofthe United States.” In carrying out this spendingpower the Supreme Court had ruled in a 1936case, United States v. Butler, that Congress couldattach conditions on the receipt of federal funds.

South Dakota recognized Congress could setsome conditions on those who received federal dol-lars. However, South Dakota argued that the Twen-ty-first Amendment barred Congress from requiringthe states to raise the drinking age to 21 years old.The amendment, South Dakota claimed, “grantsthe states virtually complete control over whether to permit importation or sale of liquor and how tostructure the liquor distribution system.” SouthDakota also argued that setting a minimum drink-ing age was clearly within the “core powers” re-served to the states by the amendment. The sec-retary of transportation conceded that the amend-ment did give the states authority to impose limitson the sale of alcohol. However, he argued, it didnot give states the power to allow sales Congresswanted to stop in order to promote the importantnational goal of safety on interstate highways.

Questions to Consider1. Did the congressional requirement to raise the

drinking age contribute to a national goal?2. Would South Dakota violate anyone’s constitu-

tional rights by making the drinking age 21 inorder to get the federal funds?

You Be the JudgeIn your analysis, was the Twenty-first Amend-

ment an “independent constitutional bar” that pre-vented Congress from putting the condition of aminimum drinking age on federal highway fundsgiven to the states? Explain your answer.

Debating the CaseDebating the Case

Drinking and driving is a serious nationalproblem. Congress tried

to deal with this problem when it required states to raise their legaldrinking age to 21 as a condition for getting federal highway funds.Does the Constitution allow Congress to set such restrictions on federalgrants to the states? The Court addressed this in South Dakota v. Dole.

South Dakotav. Dole, 1987

CASES TO DEBATE

Students Against Driving Drunk

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Providing for public education was one ofthe main powers the Constitution re-served for the states. For many years thestates left the primary responsibility of

providing for public education with local govern-ments. Connecticut created the first school fund in1795 with money from the sale of public lands. In-diana set up the first modern public school systemin 1816.

Public Education ProgramsToday public education in the United Statesis a huge enterprise. In most states elemen-

tary and high school education remains a local re-sponsibility under state guidelines. The basicadministrative unit for public schools is the localschool district.

Federal Aid to Education While public ed-ucation remains under local control, the federalgovernment plays an ever-increasing role, pro-viding aid to local schools in several forms. In arecent year, the federal government contributedmore than $1.3 billion in direct aid to local pub-lic schools and almost $12 billion of additionalfunds to be distributed through the states. Thefederal government provides even more supportfor higher education—about $17.6 billion to in-stitutions of higher learning in a recent year.

Aid to Public Schools Congress began to provide aid for specific educational activitiesin the schools with the Smith-Hughes Act of1917. This act set up matching grants to thestates for teaching courses in agriculture andhome economics. Since then Congress haspassed several laws directed toward other as-pects of elementary and secondary education.

Education, Housing, and Transportation

S e c t i o n 4S e c t i o n 4


Female Coaches Lose BROOKLYN, NEW YORK, APRIL 1997

Female coaches have

not fully shared in

the women’s sports

boom, charge two

Brooklyn College pro-

fessors following a re-

cent study. In the 25

years that the govern-

ment has required

equal opportunity in

school sports, the per-

centage of women coaches of girls’ teams has fallen

from nearly 100 percent to less than 40 percent. The

study suggests that this is one consequence of the law’s

requirement of more equal funding for boys’ and

girls’ sports. As pay for girls’ coaches has increased, the

jobs have become more appealing to male coaches.

Coached by a female?

Reader’s Guide

Key Termsurban renewal, public housing, mass transit

Find Out■ What steps has the federal government taken

since 1980 to support public education?■ Why has federal housing policy been a political

battleground for many years?

Understanding ConceptsFederalism How do the states and the federalgovernment work together to carry out transporta-tion and housing policies?

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During the mid-1960s, President LyndonJohnson made improved education in the UnitedStates a major goal of his Great Society program.In 1965, during the height of public support for Johnson’s ideas, Congress passed the first general aid-to-education law—the Elementaryand Secondary Education Act. This act and lateramendments provided federal aid to most ofthe nation’s school districts.

Aid to Higher Education Until 1862 highereducation was a private undertaking. In that yearCongress passed the Morrill Act, giving a majorboost to higher education in America. This lawgranted the states more than 13 million acres(about 32 million hectares) of public land for theendowment of colleges to teach “agriculture andthe mechanical arts.” States established 69 of theseso-called land-grant colleges under the Morrill Actand a second similar law.

In recent years Congress has provided a num-ber of specific programs to aid higher education.The best known are the various G.I. Bills of Rightsthat provided funds for veterans of World War II,

the Korean War, and the Vietnam War to gain a college education. In addition the Office ofPostsecondary Education makes available manystudent financial assistance programs.

Education Issues The government’s policy ofproviding general federal aid to public schools andcolleges has been controversial. Opponents of suchaid argue that education should be a state and localconcern. They say federal aid leads to federal con-trol of the curriculum and school systems. Thepresident of a major university put it this way:“Federal spending power is used indirectly to con-trol colleges in ways the government could not usedirectly.”

In 1983 the National Commission on Excel-lence in Education, appointed by President RonaldReagan, issued its report. On a series of interna-tional tests, United States students generallyranked below their European and Asian peers. Thecommission called for many reforms. The excel-lence movement that sprang from the report hadmixed results. Barbara Lerner was one of the firstto explain the gap in test scores:


Promoting Learning

▲▲

Students’ NeedsHow have the needsof students changedfrom the 1800s totoday?

Present Students at San Francisco’sThurgood Marshall Academic High Schooluse a computer tocommand robots theyhave designed and programmed.

Past In the 1800s,students learned from McGuffey’s FifthEclectic Reader.

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“Data from good domestic tests . . . show thatin an absolute sense we did not really getworse in the 1980’s as we had done in the1960’s and 70’s, but neither did we get muchbetter. For the most part we stood still. . . .Our foreign competitors, however, did notstand still; they surged ahead. . . .”—Barbara Lerner, 1991

In 1991 President George H.W. Bush unveileda Choice program that allowed students to attendany school—even private and parochial schools—at the state’s expense. It also provided $30 billion tothe states to help them design Choice programsand $200 million to enable disadvantaged childrento participate in them. In 1994 Congress passed theGoals 2000: Educate America Act. The governmentadopted eight educational goals, such as improv-ing graduation rates. The goals reflected PresidentClinton’s preference to develop public schools bysetting benchmarks for performance.

President George W. Bush’s platform in the2000 election centered on education reform. Aftertaking office, he began working on a bill intendedto increase student accountability, reduce bureau-cracy, provide rewards for improving schools andconsequences for failing ones, empower parentsthrough choice programs, and improve teacherquality. His signature education proposal was theNo Child Left Behind Act, signed in 2002. Thislegislation provides federal money to state educa-tional programs across the nation, but only if thestate demonstrates steady improvement. This ismeasured through testing on state-created educa-tional standards.

Housing and Urban ProgramsAdequate housing is an important part ofthe general welfare of any society. The fed-

eral government has developed several programsto ensure adequate housing for all citizens.

Housing Policy The government first becameinvolved in housing policy during the GreatDepression. Millions of Americans were losing theirhomes or farms because they could not meet theirmortgage payments. The government respondedto this catastrophe with a series of federally-funded loan and housing support programs. After

World War II, Congress passed the Housing Act of1949. In this law Congress declared its goal to be “adecent home and a suitable living environment forevery American family.”

Promoting Home Buying and BuildingThe federal government has developed severalprograms to promote building and purchasinghouses. The best known program is the FederalHousing Administration (FHA). The FHA, a partof the Department of Housing and Urban Devel-opment (HUD), guarantees banks and other pri-vate lenders against losses on loans they make tothose who wish to build or buy homes. By acting as an insurer for these mortgages, the FHA has allowed many low- and middle-income familieswho might not have qualified for private loans topurchase their own homes. HUD also offers rentassistance to low-income families.

The majority of the federal housing programsthat HUD administers are targeted on cities. Thefederal government has addressed urban problemswith two types of programs: urban renewal andpublic housing.

Urban Renewal To arrest the decline and assistthe rebuilding of central cities, the federal govern-ment supports urban renewal programs. Citiescan apply for federal aid to clear deterioratingareas and to rebuild. Most renewal projects begin by removing run-down properties. Privatedevelopers may then buy the land at a reducedprice and rebuild according to plans approved by the city and HUD. As part of urban renewal,federal mortgage insurance is available to the private developers.

The goal of urban renewal policies has been torestore slum areas and make cities more attractiveplaces in which to live. Critics charge, however,that urban renewal neglects new lower-incomehousing. Instead, urban renewal has forced lower-income people from their homes to make way formore affluent housing and commercial centers. Asone spokesperson for the disadvantaged said ofurban renewal, “We’re already living nowhere, andnow they’re going to move us out of that.” In addi-tion, critics charge urban renewal has destroyedsome of the social fabric of the city by dispersingresidents of ethnic neighborhoods and uprootinglocal businesses.


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Supporters of urban renewal argue that the pol-icy has represented a useful effort on the part of thenational government to get local governments andprivate investors to work together to save the cities.They also point to the Housing and CommunityDevelopment Act of 1974, which requires cities todemonstrate that they are actually serving the needsof the disadvantaged when redeveloping areas.

Public Housing Programs Since 1937 andespecially after the 1949 Housing Act, the federalgovernment has given aid to local governments toconstruct and operate public housing for low-in-come families. To implement the program, a cityfirst sets up a “public housing authority” to whichthe federal government can make low-interestloans that may cover up to 90 percent of the hous-ing construction costs. The government alsogrants subsidies to these agencies to allow them to

operate by charging very low rents. Income fromthe rents is used to repay the federal loan. About 4million Americans live in public housing, largelyconcentrated in the major cities.

Over the years public housing projects havefaced serious problems and opposition from manygroups. Local authorities have mismanaged somepublic housing projects. Many such projects haveturned into high-rise slums and centers of crime.The situation had grown so grave by 1973 thatPresident Nixon halted federal aid for public hous-ing projects. In doing so, Nixon stated, “All acrossAmerica, the federal government has become thebiggest slumlord in history.”

The government has yet to find a truly effec-tive public housing policy. In 1976 Congress re-sumed federal aid for public housing projects on alimited scale. At the same time HUD has experi-mented with rent subsidies as one alternative topublic housing. Under this plan lower-incomefamilies pay a percentage of the rent—normally 30percent—for private housing, and the governmentpays the rest of the rent directly to the landlord.

In the 1990s Democrats and Republicans coop-erated to improve the nation’s housing policy. In1994 state and local officials were given morecontrol over housing decisions. In 1998 Congressagreed on more reforms intended to lessen the gapbetween the numbers of whites and minorities whoown homes.According to HUD’s 2003 strategic plan,by utilizing its partnership with other governmentagencies, faith-based organizations, and privatesector assistance, HUD aims to place over 5 millionmore minority households in homes by 2010.

Transportation ProgramsIn 1632 the Virginia legislature proclaimed:“Highways shall be layed out in such conve-

nient places . . . as the parishioners of every parishshall agree.” Governments at all levels in the UnitedStates have been concerned about improvingtransportation ever since.

The national government’s first direct entry intothe field of transportation began in 1811 with con-struction of the National Road that ultimately ranfrom Maryland to Illinois. The federal governmentcontinued to contribute, usually through some formof subsidy, to the building of channels, locks, dams,canals, ports, highways, railroads, and airports.


Rebuilding Cities In Houston, Texas, publichousing stands in the shadow of the city. How canurban renewal help lower-income families?

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In 1966 Congress created the Department ofTransportation (DOT) to coordinate nationaltransportation policies and programs. This de-partment brought together more than 30 agenciesdealing individually with transportation policies.These agencies had been scattered throughout thegovernment. Today the DOT operates through 7major agencies that reflect the various forms oftransportation.

Other Agencies Numerous agencies withinthe Department of Transportation provide impor-tant services. The Federal Aviation Administration(FAA) works to ensure safety in aviation. It licens-es pilots and enforces safety rules for air traffic.The Federal Highway Administration (FHWA)oversees the vast network of federal roads. TheFederal Railroad Administration promotes andregulates the nation’s railroad transportation. TheNational Highway Traffic Safety Administration isresponsible for enforcing laws to protect driversand promote highway safety.


Funding National GrowthThe government entered thefield of transportation by creat-ing national roads, such asthis one painted in 1814 byThomas Birch, titled Conesto-ga Wagon on the PennsylvaniaTurnpike. The governmenthoped to pave the way for thedevelopment of the West withthese roads. How do youthink government funding of transportation systemshelped and continues tohelp the nation develop?

Roads West

Today national roads crisscross the nation. Route 66 is symbolic of America’s highways.

Building and Maintaining Highways TheFederal Road Aid Act of 1916 set the pattern for thedevelopment of federal highway programs. Underthis law the federal government provided yearlygrants for road building to the states and requiredeach state to match this aid on a dollar-for-dollarbasis. These grants-in-aid, administered by theFHWA, form the basis of today’s federal highwayprograms.

Under the Federal Aid Highway Act of 1956and subsequent amendments, states receive bil-lions of dollars every year to build and improve theInterstate Highway System that crisscrosses the na-tion. This system, begun in 1956, consists of morethan 45,000 miles of 4-to-8-lane superhighwaysconnecting nearly all of the nation’s major cities.Federal funds cover 90 percent of the cost of theInterstate Highway System. The money for federalhighway grants comes from the Highway TrustFund. This fund is a special account that receivesfederal excise taxes on gasoline, tires, truck parts,and related items.

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While the federal government provides the fi-nancial aid, the states do the work of constructingand improving the interstate highways. Once thework has been completed, the interstate roads be-long to the state or local governments, which havethe responsibility of maintaining them.

Today the Federal Highway Administrationoversees federal highways and their funding. TheFHWA also applies federal safety standards totrucks and buses and does planning and researchon highway construction and maintenance. TheFHWA’s main job, however, is to administer themassive federal-aid highway program that sup-ports the construction and upkeep of about 25percent of the nation’s roads.

National Highway System Since 1995 theFederal Highway Administration has succeeded in completing 161,000 miles of highway in theNational Highway System (NHS) and has movedon to other transportation needs. These includekeeping up with increasing demand on existinghighways, maintaining road and bridge condi-tions, and reducing traffic fatalities and congestion.

Mass Transit The traffic helicopter seldombroadcasts good news for city dwellers. The streetsand highways of large and small cities are cloggeddaily with automobile traffic, and urban planners

warn of future gridlock, where traffic hardlymoves. Still, many people prefer to drive their ownvehicles when traveling in and around cities.

Could the urban transportation problem besolved with better mass transit systems such assubways, commuter railroads, and bus lines? Whenproperly operated, mass transit can transportmore people than individual automobiles and helpto reduce congestion and air pollution. Beginningin the 1960s, the Urban Mass Transit Administra-tion (UMTA) administered federal grant pro-grams aimed at improving such transit systems inurban areas. The federal government continues tohelp cities cope with the growing need for bettermass transit systems as a substitute for the auto-mobile. The government also helps fund improve-ments in present transportation systems.

Efforts are underway to upgrade existing busservice, promote car and van pooling, and think ofways to make use of existing rail systems in andaround cities.

The Transportation Equity Act for the 21stCentury (TEA-21) was enacted in 1998. The lawauthorizes $41 billion over six years to improve thenation’s transit system. TEA-21 also providesmoney to fund the development of high-speed railin some areas of the nation and to continue re-searching the development of magnetic levitation(MAGLEV) trains.

Sect ion 4 Re v iewSect ion 4 Re v iewSect ion 4 AssessmentSect ion 4 Assessment

Federalism The federal government has developed several programs to ensure ade-quate housing for the people living in the United States. Find out about such programsthat are established in your community thatbuild or remodel homes for low-income fami-lies. Find out how the programs operate andwho administers them. Share your findingswith the class.


below to contrast the Democratic and Republi-can views on housing policy.

2. Define urban renewal, public housing, mass transit.

3. Identify Federal Housing Administration, Depart-ment of Housing and Urban Development.

4. Describe three programs the government initiat-ed to aid education in the 1990s.

5. What was the role of the FHA in helping individ-ual families afford housing?

Critical Thinking6. Demonstrating Reasoned Judgment Why do

governments at all levels spend so much moneyto support education?


Democrats Republicans

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Making Comparisons

When making comparisons, you identifythe similarities and differences amongtwo or more ideas, objects, or events. You

might compare two or more things in terms ofsome attribute—for example, the money spentby New York and Texas on education in oneyear. Or you could compare the same entity atdifferent times—for example, the money spentby Illinois on education in 1995 and 2000.

Learning the SkillFollow these steps to make comparisons:

a. Identify or decide what will be compared.b. Determine a common area or areas in which

comparisons can be drawn.c. Look for similarities and differences within

these areas.d. If possible, find information that explains the

similarities and differences.

Practicing the Skill The centerpiece of President George W.

Bush’s education program is the No Child LeftBehind legislation. This sweeping reform hasbeen controversial. Read the passages below. Thenanswer the questions that follow.

Passage A

“I think it’s bad public policy fundamentally.. . . On the surface, it is in a good cause.Obviously, we want public schools to servewell all students, including special-needsstudents, [b]ut the expectation that allstudents, that 100 percent of the kids willmeet the standard is unrealistic.”—Dr. Claire Sheff Kohn, superintendent,

Princeton, N.J. Regional School District

Passage B

“This law has, for the first time ever, amechanism in place to put an accountabilitysystem in place and a test system in placefor every student in America for gradesthree through eight. It’s an opportunity tomake sure our school systems are perform-ing the way they need to and are meetingthe challenges of each individual child.”—William Hansen, former deputy secretary,

U.S. Department of Education

1. What is the topic of these passages?2. How are the passages similar? Different?3. What conclusions can you draw about the

opinions of the writers?

603

Application ActivityApplication Activity

President George W. Bush visits a school.

Application ActivityApplication Activity

The Glencoe SkillbuilderInteractive Workbook, Level 2provides instruction and practicein key social studies skills.

Survey your classmates about an issue in the news. Summarize the opinions andcompare the different results in a paragraph.

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Reviewing Key TermsChoose the letter of the correct term or conceptbelow to complete the sentence.

a. mixed economy f. marketing quotab. public assistance g. securitiesc. social insurance h. oligopolyd. laissez-faire i. mass transite. urban renewal j. acreage allotment

1. The government tries the _____ method toavoid storing overproduced grain.

2. A small number of powerful companies control-ling a market is called an _____.

3. A hands-off government approach to the econ-omy is called _____.

4. Stocks and bonds are forms of _____.5. A _____ is an agreement among farmers to

sell only aportion of an overproduced crop.6. A federal program of _____ provides a certain

minimum standard of living to those who donot earn enough income.

7. Federal _____ programs are designed to pro-vide insurance against such social problemsas old age, illness, and unemployment.

8. A _____ is one in which the government bothsupports and regulates private enterprise.

9. The federal government supports _____ incities to help replace old buildings.

10. Cities build _____ systems to provide a substi-tute for automobiles.

Recalling Facts1. Describe the business environment that led to

the Sherman and Clayton Antitrust Acts.2. What commission was created in 1972 to pro-

tect consumers against hazardous products?3. What three programs does the federal govern-

ment use to prevent low farm prices?4. Why did the government enact the Social Se-

curity Act of 1935?5. What are the four major public assistance pro-

grams of the federal government?6. How is the federal government involved in edu-

cation?

Understanding Concepts1. Civic Participation What debated issues have

prevented the United States from having aclear and consistent energy policy?

2. Federalism Which clause of the U.S. Consti-tution underlies federal regulation of the economy?

Assessment and ActivitiesChapter 21Chapter 21

Self-Check Quiz Visit the United States Government:Democracy in Action Web site at gov.glencoe.com andclick on Chapter 21–Self-Check Quizzes to preparefor the chapter test.

GOVERNMENT

✦1850

1900

1950

✦

✦

✦2000

1890

1906

1914

1934

1935

1947

1965

1970

1972

1996

Sherman Antitrust Act

Food and Drug Act

Clayton Antitrust Act; Federal Trade Commissioncreated

Securities and Exchange Commission created

Wagner Act and National Labor Relations Boardmake it easier for workers to unionize andnegotiate with management; Social Security Act

Taft-Hartley Act attempts to restore balancebetween industrial unions and businessmanagement

Medicare and Medicaid added to the SocialSecurity system

Environmental Protection Agency established

Consumer Product Safety Commission created;Water Pollution Control Act passed

Aid to Families with Dependent Children (AFDC,commonly called “welfare”) replaced byTemporary Assistance to Needy Families (TANF)

Selected Social and Domestic Policy Initiatives

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Critical Thinking1. Identifying Assumptions

What underlying assump-tions about social prob-lems can you identify inArthur B. Laffer’s assertionthat “The solution rests inless—not more—govern-ment” and in Victor Kam-ber’s view that “. . . we setup regulatory agencies inthe first place to protectthe public interest”?

2. Predicting ConsequencesUse a graphic organizerlike the one below to showhow a rapid rise in the el-derly population and slowergrowth for the populationunder 30 could affect theSocial Security system.

Analyzing Primary SourcesRalph Nader, a political activist and recent candi-date for the presidency, advocates to protect con-sumers from big business excesses. In this letterto the editor, Nader calls for greater governmentcontrols of big business. Read the excerpt andthen answer the questions that follow.“The relentless expansion of corporate control over our politi-cal economy has proven nearly immune to daily reporting bythe mainstream media. Corporate crime, fraud and abusehave become like the weather; everyone is talking about thestorm but no one seems able to do anything about it. This islargely because expected accountability mechanisms . . . areinert or complicit. . . .

In 1938, in the midst of the Great Depression, Congresscreated the Temporary National Economic Committee tohold hearings around the country, recommend ways todeal with the concentration of economic power and promote a more just economy. World War II stopped thiscorporate reform momentum. We should not have to waitfor a further deterioration from today's gross inequalities

Interpreting Political Cartoons Activity

of wealth and income to launch a similar commission onthe rampant corporatization of our country. At stake iswhether civic values of our democratic society will prevailover invasive commercial values.”

1. What type of business practices is Nader criti-cizing? What, in his opinion, is big businessharming the most?

2. What further type of check on big businessdoes Nader want?

Participating in Local Government

Find out how your localgovernment protects con-sumers’ rights. Find out whatlegislation protects consumers andhow consumer complaints are han-dled. Also, find out what private community organi-zations work to protect consumers’ rights. Preparean oral report to share with the class.


Chapter 21Chapter 21

1. How does the cartoonist present the difficulties of SocialSecurity reform?

2. How does the cartoonist portray baby boomers? 3. According to the cartoon, who will financially support

retired baby boomers?

If Then

elderly population

grows fasterthan

under 30 population

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Documents

GOVERNMENTmrbextermueller.weebly.com/uploads/5/0/0/8/50085613/chapter_21.pdf · Yosemite Valley is preserved by the government. 574-583 CH21S1-860053 12/3/04 ... that government regulation