Chapter 10: Reluctance Illustrated: Policy

Uncertaintyduring the Clinton Administration

Selected Orienting Events

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Clinton Administration: 1992 – 2000• The Clinton Presidency: The first two years• 1992: Clinton won the election without a mandate

- Three way race, Perot siphoned votes- Tried to institute liberal policies.- Social investments - Health reforms and others- Resurgent Republican minority- Aligned with moderate and conservative Democrats- Americans tired of government gridlock- Made many errors in this period

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Clinton’s Grim Options

• Clinton announces tax increases and spending cuts• Places Hillary in charge of task force to develop

health reform proposal• Family and Medical Leave Act enacted• Signs the Omnibus Reconciliation Bill, which cuts

the deficit, raises taxes, and increases the EICT• Clinton presents ambitious plan to reform health

care• North America Free Trade Agreement enacted• Federal policy on gays in the military is modified

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A Brief Digression: The Budget Process

FIGUR E: An overview of the president’s proposed budget for fiscal year 1994

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Four Facets of the federal budget• Funding of entitlements: Cuts in expenditures on entitlements have a

severe impact on social workers’ clients, who often depend on Medicare, Medicaid, AFDC, SSI, and Food Stamps

• Domestic discretionary spending: This section of the budget accounts for only about 16 percent of the total, funds social programs related to mental health, child welfare, substance abuse, public health, child care, homelessness, AIDS treatment/prevention, and many other areas

• Tax policy: Tax cuts decrease the revenues needed to fund entitlements and domestic discretionary spending.

• Military spending: Military programs compete with domestic programs for discretionary funds

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The major provisions of Clinton’s health reform

• Most employers would be required to fund health care for their employees, with some government subsidies to small employers.

• The federal government would fund the purchase of private health insurance policies for unemployed people or part-time workers.

• The government would establish the basic minimum coverage to be included in all health policies

• Regional health care alliances would be developed to publicize competing health insurance policies

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…contd.

The major provisions of Clinton’s health reform• Private insurance companies would not be allowed• to discontinue coverage for preexisting conditions.• The government would develop controls over the

prices charged by pharmaceutical companies for existing and new drugs.

• The government would provide every American with a health security card to be used when seeking services from health care plans.

• Medicare and Medicaid would be retained, but their enrollees could join competing plans offered by regional health care alliances.

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The Third Year: The Newt Gingrich Era

• 1994: victories of both Houses by conservative Republicans and their “Contract with America”

• Clinton gave in to most of Republican budget demands

• Spending cuts analogous to Reagan only Congress not President

• Clinton successful in slowing down Newt’s agenda

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Budget Confrontation of 1995

• Congress enacts Omnibus Reconciliation Act which seeks to eliminate the entitlement status of AFDC, Medicaid, and Food Stamps

• Clinton vetoes Omnibus Reconciliation Act as well as specific appropriation bills

• Government shuts down• Citizens blame Congress not President

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Lack of support to his health reform plan

• Neither liberals nor conservatives rallied to the plan• Many liberal Democrats favored a single-payer system• Republicans branded the Clinton proposal as unworkable or

as excessively costly• The American health care system polarizes Americans into

insured people and uninsured Americans

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Clinton’s Anticrime Legislation

• Outlined the basic elements of a Democratic anticrime plan in August of 1993

• A huge anticrime bill largely funded expansion of police forces and new prisons

• Enactment of Violence Against Women Act which provided federal penalties and programs to reduce domestic violence

• Easier deportation of illegal aliens convicted of felonies

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Balancing the budget and tax limitation

• A constitutional amendment requiring that Congress submit a balanced budget each year

• A requirement that tax increases could be enacted only if a three-fifths majority of Congress voted for them—a policy that would usually put the

• Burden of balancing the budget on spending cuts rather than tax increases;

• A legislative line-item veto to restore fiscal responsibility.

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Strengthening national defense

• legislation requiring that no U.S. troops be placed under UN command;

• restoration of funding for essential parts of national security

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Tax cuts to strengthen families and to benefit middle-class people

• a $500-per-child tax credit for families with annual incomes up to $200,000;

• repeal of the marriage tax penalty, which causes many married couples to pay higher taxes than are levied on two single people;

• creation of American Dream Savings Accounts to allow individuals to contribute up to $2,000 a year to a tax-free account for retirement income, the

• purchase of a first home, education expenses, or medical costs

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Aid to senior citizens

• An increase in the Social Security earnings limit—which currently forces seniors out of the workforce—from $11,160 to $30,000 over five years

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Welfare reform• Denial of welfare to mothers under age 18;• Denial of higher payments to mothers who give birth to additional

children while on welfare;• A strict two-years-and-out provision for recipients;• More stringent work requirements, to promote individual

responsibility;• A cap on spending for AFDC, SSI, and public housing programs• Consolidation of nutrition programs such as Food• Stamps, the Special Supplemental Nutrition Program for Women,

Infants, and Children (WIC), and the school lunch program into a block grant to states

• Permission for states to opt out of the current AFDC program by converting their share of AFDC payments into fixed annual block grants

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Reform of unfunded mandates and incentives to business

• Termination or reform of unfunded mandates, in which the federal government requires state and local governments to implement specific policies without providing the resources for them to do so

• A cut in the capital gains tax to stimulate investment

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Strengthening the family

• More stringent child support enforcement;• Larger tax incentives for adoption;• Stronger child pornography laws;• Tax credit for people who care for an elderly

parent or grandparent

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Legal reforms to curb litigation

• Loser-pays laws;• Reasonable limits on punitive damage

awards;• Reform of product liability laws

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The Oppression of Vulnerable Populations• Women’s reproductive rights were under attack by

conservatives during the Clinton era• Policies to help persons of color came under increasing

political attack• Anti-immigrant sentiment has often grown more strident

during periods of economic uncertainty. This pattern continued in the 1990s

• A policy controversy during Clinton’s first months in office illustrated continuing discrimination against gays and lesbians

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Reluctance Illustrated

• Clinton sought relatively liberal policies, including social investments, health reform, and many smaller measures

• A combination of forces frustrated Clinton’s attempts at reform

• large numbers of Americans did not want major social initiatives

• Clinton and his advisors made many errors of their own during the first two years; in particular, the health reform proposal that they developed was far too complex to win broad support

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Major Achievements during Clinton’s terms

• Domestic discretionary spending actually declined as a percentage of GDP during his tenure

• Secured some initiatives from 1993 through 1999 in the austere fiscal environment

• Defeated or diminished some Republican cuts in social spending

• Clinton also deserves some credit for ending the nation’s annual budget deficits

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Linking Uncertainty during the 1990s to Contemporary Society

• The presidency of Bill Clinton graphically illustrates the importance of the budget process in federal, state, and local jurisdictions

• Federal and States will face major budget shortfalls in coming decades

• Several policy initiatives of President Clinton demonstrated that government can and should help working persons of moderate means

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Policy Scoreboard• Personal Responsibility and Work Opportunities

Act of 1996• Family and Medical Leave Act of 1993• North American Free Trade Act (NAFTA) of 1993• Numerous budget battles that defeated

conservatives’ attempts to cut social spending• The Balanced Budget Act of 1997 that brought

large cuts in Medicare and Medicaid• Anticrime legislation of 1994• Expansion of the Earned Income Tax Credit

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Policy Scoreboard

• Initiation of charter schools under amendments to the Elementary and Secondary Education Act in 1994 and passage of the School Expansion Act of 1998

• HOPE scholarships for postsecondary education and Lifetime Learning Credit

• Brady bill that established limits on gun ownership and purchases

• Enactment of State Child Health Insurance Program (SCHIP) in 1997

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Policy Scoreboard

• Adoption and Safe Families Act of 1997• Issuance of Defense Directive 1304.26,

establishing “don’t ask, don’t tell” for gay and lesbian members of the military

• AmeriCorps• Omnibus Reconciliation Bill of 1993, which

markedly shifted American budget priorities, along with the Balanced Budget Act of 1997

• Mental Health Parity Act of 1996

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