AP Gov—1/26/2016 Welcome back. S2 check-in Federal Budget: taxing & spending “Ten Trillion and Counting” Homework: 1. Edwards Budget challenge: print the summary page and bring to class on Thursday

The Federal Budget

Key Vocab Deficit: an excess of federal expenditures over federal revenues Expenditures: gov’t spending Revenues: the financial resources of the gov’t National debt: all the money borrowed by the federal gov’t over the years and is still outstanding

Taxing & spending I. Sources of federal revenue A.In the past B.Presently C.Tax revolt II. Where the money is spent A.Nondiscretionary/mandatory B.Discretionary III. Entitlements A.Meet eligibility requirements B.Automatically spent each year without congressional review

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Total Budget:$3.64 trillion Mandatory:$2.1 trillion Discretionary:$1.2 trillion Interest on Debt$247 billion Budget of the U.S. Government, FY2011.

AP Gov—1/27/2016 Federal Budget: The Budgeting Process “Ten Trillion and Counting”—have your video questions out Homework: 1. Edwards 13.2 and Budget challenge: print the summary page and bring to class tomorrow 3. Budget quiz Monday

Warm up questions 1. What is the primary source of revenue for the federal gov’t? 2. Explain mandatory spending versus discretionary spending. What is the main expenditure for each type of spending? 3. What are entitlements?

Taxing & spending IV.The budget process A.Executive branch A.OMB B.Congress A.House Ways & Means B.Senate Finance C.CBO C.Political influences D.Presidential action

Taxing & spending IV. The budget process 1.The President’s budget request - due 1 st Monday in February, for fiscal year starting on October 1st 2.Congressional budget resolution -concurrent resolution, no presidential signature or veto possible, cannot be filibustered in the Senate -due by April 15 th, but this deadline is often not met, and a continuing resolution is passed which continues the last year’s funding levels -very basic document, broad spending categories -spending is then detailed by congressional committee with jurisdiction

Taxing & spending V. Deficit-spending A.Budget deficits vs. national debt B.Budget Programs 1.Balanced budget amendments 2.Paygo PresidentBeginning national debt Carter$653 billion Reagan$930 billion G.H.W. Bush$2.68 trillion Clinton$4.17 trillion G.W. Bush$5.66 trillion Obama$10.70 trillion

AP Gov—1/28/2016 Budget Challenge results Federal Budget: Federal Reserve “Ten Trillion and Counting”—have your video questions out Homework: 1. Finish up Edwards Ch. 13 and pgs Budget quiz Monday

The Federal Reserve Board Created in 1913 Members appointed by the president, confirmed by the Senate; serve a nonrenewable fourteen-year term Somewhat independent of both the president and Congress

Federal Reserve Board Regulates the supply and price of money Sets monetary policy: the effort to shape the economy by controlling the amount of money and bank deposits and the interest rates charged for money Too little money in circulation slows the economy Too much cash/credit in circulation inflates the economy

AP Gov—1/29/2016 TGIF! Quick debate debrief Federal Budget: Economic theories StudentCam Homework: 1. Budget quiz Monday 2. Current Events

Managing the Economy Economic Policy

Types of Economic Policies Fiscal Taxing and spending considerations Budgeting Conducted by Congress and the President Monetary Regulation of money supply Adjusting interest rates to increase/decrease inflation Conducted by “the Fed”

History of Economic Policy Constitution gives Congress power to regulate commerce Industrial Revolution Great Depression

Economic theories A. Keynesian Gov’t spending can help weather the ups and downs Gov’t can spend its way out of the Depression Provide jobs, get $ back in people’s pockets Increase demand Generally favored by Democrats

Economic theories B. Supply-Side Stimulate supply of goods, not their demand When gov’t spends too much/taxes too much/regulates too tightly it curtails economic growth Low taxes motivate individuals Generally favored by Republicans

Do you think either of these approaches is reasonable? If not, what would you envision as another option?

Economic Policy Making Council of Economic Advisers: professional economists sympathetic to the president’s view of economics Office of Management and Budget: prepares estimates of amounts to be spent by federal government agencies; negotiates department budgets Secretary of the Treasury: reflects the point of view of the financial community

History of the National Debt