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Carter's Domestic Policies
Elizabeth von Haunalter
Period 3
Key Terms
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“Prime Rate”
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Fiscal Conservatism

“Zero-based” Budgeting
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PBJI
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“Double Digit” Inflation
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NHI
Outline
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I. Introduction
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II. Fiscal Conservatism
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III. Economic Downfall

IV. Political Divisions
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V. Energy Crisis
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VI. Other Carter Policies
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VII. Summary
Introduction
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Governor in Georgia previously
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Much of his cabinet made up of Georgian politicians
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Elected under premise that he would “Never tell a lie”.
Promoted frugality and was anti-establishment.
Economy already in a downturn when elected.
Watergate Scandal had just occurred. Many citizens felt
bitter towards government
Fiscal Conservatism

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Carter had little congruence to his policies, except
regarding his budget.
He was a fiscal conservative, meaning he did not believe
in big government spending nor deficits.
Consistently favored fiscal conservatism over social or
political justice.
Ex: When agriculture was struggling, Carter chose to keep
a balanced budget at price of farmers. Wanted to put in a
support on products that was even lower than existing
prices.
Fiscal Conservatism

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“Zero-based” Budgeting: every fiscal year, budgets
rebuilt from zero without expectation of funding
increases.
PBJI: Program for Better Jobs and Income.
Basically a welfare reform act. Failed to achieve its goals
and repealed within ten months. Carter could not please
the people without increasing government spending.
Economic Downfall

Unemployment in 1976: 8%. In 1978: 6%. In 1979: 9%
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$34 Million tax reduction for corporations

Focused on prices and wages to help economy

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Inflation near 20% in 1980. Throughout Carter's time in
office, inflation was consistently in double digits. Termed
“Double-digit” inflation
Housing and automobile markets crashed
“Prime Rate”: interest rate of the banks best customersrose to nearly 20% during Carter administration
Political Divisions
•
Carter was anti-establishment. He criticized the IRS and
federal bureaucracy.
•
Carter promised to curb federal spending- yet was part
of the Democratic party who believed in increased
spending to help the economy.
•
Much of Congress was newly elected when Carter
cameto office. That, combined with Carter's professed
dislike of big government and persistent failure to
consult with the Congressmen on important issues,
created a weak relationship between the legislative and
executive branches of government
Political Divisions
•
Carter had a hard time getting his many of his bills
passed.
•
Example: National Health Initiative (NHI) was a
national health care bill. It failed to pass after
disagreements within Congress
•
There were also divisions within the Democratic Party
over welfare (Entitlement vs. New Deal policies). One
reason why the welfare bill was a failure.
•
After receiving advice that he should “rethink his
administration” Carter fired five key cabinet members.
Began to rely even more heavily on his circle of
Energy Crisis
•
There was a severe energy crisis already brewing when
Carter came into office. Shortages and rising oil prices
led to energy riots.
•
Carter believed conservation and alternative energy was
key. Tried to pass bill with gas taxes, incentives for
conservation, etc. but only got a “gas guzzler” tax
passed.
•
Critics saw this as the administration giving in to big oil
and increasing inflation while not reducing dependence
on foreign oil.
Other Policies
•
Carter put $1.6 billion towards cleaning up toxic wastes.
•
Signed bill preserving 100 acres of Alaskan land
•
Pardoned 10,000+ draft evaders- mixed response
•
Rescinded 19 water projects from national budget.
Alienated Congressmen and showed Carter was hapless
with budget cuts
•
Reorganized Social Security to avoid bankruptcy
•
Created separate Department of Energy
Summary
•
At end of term, Carter's approval rating was lower than
that of Nixon's during Watergate Scandal
•
Carter had no overarching vision or definition to his
policies. The effect was that he pleased no one; he
appeared contradictory.
•
Created divisions, even within his own government
•
Carter's term was marked with inflation, unemployment,
and energy crises.
Summary
•
Failed to enact his agenda or achieve his promises.
•
Promised to curb federal spending, but $60 billion
deficit by end of his term
•
Alternative perspectives: Hargove- “non-political
politician”. Carter was not appreciated in his time.
Jones- “trustee president”. Carter was willing to
sacrifice his political image for the good of the people.
•
“Restored faith in the integrity of American politics”,
“failed president” Randall Woods