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  2. 2. Expansion of federal govt As a Republican President it wasassumed that Bush would continue themove towards shrinking the size of thefederal govt and of decentralisation Bush presided over the largest overallincrease in inflation adjusted federalgovt spending since Lyndon Johnson’sGreat Society programme of the mid1960s
  3. 3. Reasons for expansion Impact of 9/11 - push to significantlyincrease homeland security Expansions of Medicare & educationprogrammes. December 2003 Bushsigned Medicare expansion bill tobenefit senior citizens at an estimatedcost of $400 billion The No Child Behind Act 2002 – majorexpansion of federal govt’s role ineducation – new law mandated that the
  4. 4. Other factors 2005 Hurricane Katrina – use of theNational Guard and Secretary ofHomeland Security coordinated federalgovt response ($10.5 billion reliefpackage) Banking crisis – Bush authorisedSecretary of State Henry Paulson totake control of 2 privately ownedcompanies Fannie Mae and FreddieMac – had suffered huge losses incollapse of housing market
  5. 5. Future Obama – more federal support? Agreed toaccept California’s tough car emissions Recognise the important role played by statesas policy laboratories eg Vermont and Maineoffering model attempts at providing universalhealth insurance In the present economic climate federal-statecooperation needed to solve problems, notfederal-state rivalry. However Obama’sstimulus package received a hostile reactionfrom many southern state governors -‘irresponsible’