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Chapter 14
| Question | Answer |
|---|---|
| What was the process for federal spending up until 1921? | The House and Senate approved spending bills, which the president could either sign or veto. |
| What is a federal deficit? | the amount by which the national government's annual expenditures exceed its revenues |
| What is the result of deficit spending by the federal government? | a rising national debt |
| Why did President Nixon and Congress clash over the budget process in the 1970s? | Nixon used his power of impoundment to take control of spending away from Congress. |
| What did the Budget and Impoundment Control Act of 1974 achieve? | It gave the legislative and executive branches shared control over budget making. |
| How long is the federal budget cycle? | 18 months |
| How does the budget cycle begin? | The executive branch prepares a budget proposal. |
| What needs to happen before the president submits a budget proposal to Congress? | Each department and agency must prepare its own budget request. |
| The budget resolution passed by Congress provides | a set of guidelines that reflect Congress's spending priorities. |
| What is the role of the Congressional Budget Office in the budget process? | to compare how the president's budget matches its own estimate of future revenues and expenses |
| What happens if the president and Congress cannot reach an agreement on the budget by the deadline of October 1? | Congress and the president try to agree upon a continuing resolution to keep the government working. |
| What is Tax Freedom Day? | the date when taxpayers have earned enough income to pay their annual tax burden |
| If you were a wealthy taxpayer, which kind of income tax would benefit you the most? | regressive tax |
| The two main categories of mandatory spending are | entitlements and interest on the national debt. |
| What is discretionary spending? | budget items that can be raised or lowered as Congress sees fit |
| One example of an earmark is a set-aside of | 233 million to build a bridge to a sparsely populated island in Alaska. |
| Many state and local governments' budgets differ from that of the federal government because | some are required to approve a balanced budget each year. some limit how much certain taxes can increase from year to year. some require voters to approve tax hikes through referenda. |
| Unlike the federal government, state and local governments spend most of their funds on | services such as education and fire protection. |
| Health and welfare services are funded through the budgets of | the federal, state, and local governments. |
| Which revenue source is collected only by state and local governments and not by the federal government? | property taxes |
| Which level of government receives the revenue associated with the individual income tax form? | federal |
| Which branch controlled the federal budget in 1789-1921? | Legislative branch |
| Which branch controlled the federal budget in 1921-1974? | Executive branch |
| Which branch controlled the federal budget in 1974-present? | Executive branch and legislative branch share power |
| Budget process worked how in 1789-1921? | Originated from the House, requests combined into one bill, house approved bill, then sent to senate for approval, president signs bill or vetos |
| Budget process worked how in 1921-1974? | The executive branch proposed budget plans to congress, then congress vote yes or no to place as a law |
| Budget process worked how in 1974-present? | Budget committees in both the house and senate draft bills to show to the president |
| National debt raised in 1921-1974 why? | Presidents created their own programs and put money into whatever they liked , but neither branch wanted to raise taxes to fund projects |
| Nation debt raised in 1789-1921 why? | The US went to war |
| Individual income tax | tax levied on an individual's or married couple's annual income |
| Social insurance taxes | Taken from paycheck. Used to fund pensions, health insurance for elderly, unemployed, and dis |
| Corporate income taxes | Paid by businesses on their profits each year |
| Excise taxes | Taxes levied on the sale of goods (alcohol) and services |
| Borrowing | When Federal spending exceeds tax revenue the gov. borrows from private sources and foreign countries |
| Progressive tax | Burden falls on wealthy people more (higher income = more tax) |
| Regressive tax | Burden falls on the poor class people (% of income, like excise tax) |
| Mandatory spending | Gov expenses required by law to be allocated in specified ways; can only be altered by special legislation |
| Examples mandatory spending | Interest on national debt and entitlements |
| Discretionary spending | Gov expenses that can be raised or lowered as determined by congress |
| Examples discretionary spending | Department of defense and services provided by federal government |
| State and local budgets can what? | Limit power to spend; can't fill gaps; prohibit tac from certain taxes; voters approve taxes |
| Federal budgets can what? | Borrow money to fill gaps; citizens small role in tax policy; bulk spending old people and national defense |
| Sales tax | Tax on the sales of goods by a customer at time of purchase |
| Pro of sale tax | easy to collect |
| Con of sale tax | Regressive tax effects poor and rich |
| Property tax | Tax levied on the value of real property main tax square for local government |
| Pro of property tax | Cannot be easily hidden from tax collectors |
| con of property tax | May not reflect the owners ability pay |
| Individual income tax | tax on income of state residents |
| Excise tax | Tax levied on certain goods "sin tax" tobacco, alchol |
| Lottery | Large-scale legal gambling used to raise money for a public cause |
| Bonds | Debt issued by a gov to raise funds for a purpose repaid with interest |
| Inheritance and estate taxes | Tax levied on the estate a person leaves after death inherit by estate tax |
| User fees | Fees charged to use public facilities/services permits/licenses |
Created by:
taylorlynn