The term “industrial policy” in the American setting is not so much a discrete policy proposal as an umbrella term for a debate about a whole range of economic policies. The long-standing imbalance between imports and exports, and the evident decline of heavy industry and textiles have led to a searching debate in the United States about both what other countries are doing better, and what government policy should be.

The twin characteristics of the industrial policy issue in America – its union of the practical with the ideological, and its tentative and beginning stages in the policy cycle – provide a distinctive example of how Congress and president interact in formulating public policy. We seek to understand how Congress contributes to policy formation, how it functions, and how its activity is shaped by outside circumstances. We will consider the growing congressional interest in industrial policy over the span of three Congresses, and then examine the three specific cases of congressional and executive branch action which received the most attention (Congressional Budget Office (CBO), 1983; Scott and Lodge, 1985; 484–93).

INDUSTRIAL POLICY AT THE BEGINNING: FORMING THE AGENDA

A large number of bills on industrial policy were introduced in the three Congresses in the 1979–84 period. We include under “industrial policy”, proposals for coordinated government action to address concerns for industrial competitiveness, productivity, and development. Many of the proposals also incorporated related issues such as research and technology, exports and trade, and adjustment assistance for structurally disadvantaged workers.