Ch. 13 Vocabulary Review The Federal Budget

1) A policy allocating burdens (taxes) and benefits (expenditures). Budget

2) Government spending. Major areas of federal spending are social services and national defense. Expenditures

3) The financial resources of the government 3) The financial resources of the government. The individual income tax and Social Security Tax are two major sources of the federal government’s income. Revenues

4) Shares of individual wages and corporate revenues collected by the government. The 16th Amendment explicitly allowed Congress to levy this. Income Tax

5) The Constitutional Amendment adopted in 1913 that explicitly allowed Congress to levy an income tax. 16th Amendment

6) An excess of federal expenditures over revenues. Deficit

National Debt as a Percentage of GDP 7) All of the money borrowed by the federal government over the years and still outstanding. Today the total is $20.5 Trillion. National Debt

8) Revenue losses that result from special exemptions, exclusions, or deductions allowed by federal law. Tax Expenditures

9) A 1935 law intended to provide a minimal level of sustenance to older Americans and thus save them from poverty. Social Security Act

10) A program added to the Social Security System in 1965 that provides health insurance for the elderly, covering hospitalization, doctor’s fees, and other expenses, Medicare

11) A description of the budget process in which the best predictor of this year’s budget is last year’s budget, plus a little more. According to Aaron Wildavsky, “most of the budget is a product of previous decisions.” Incrementalism

Uncontrollable Expenditures 12) Expenditures that are determined by how many eligible beneficiaries there are for a program or previous obligations of the government and that Congress therefore cannot easily control. Uncontrollable Expenditures

13) Policies for which Congress has obligated itself to pay X level of benefits to Y number of recipients. Social Security benefits are an example. Entitlements

House Ways and Means Committee 14) The House of Representatives Committee that, along with the Senate Finance Committee, writes tax codes, subject to the approval of Congress as a whole. House Ways and Means Committee

Senate Finance Committee 15) The Senate Committee that, along with the House Ways and Means Committee, writes tax codes, subject to the approval of Congress as a whole. Senate Finance Committee

Congressional Budget Office 16) Advises Congress on the probable consequences of its decisions, forecasts revenues, and is a counterweight to the Office of Management and Budget. Congressional Budget Office

17) A resolution binding Congress to a total expenditure level, supposedly the bottom line of all federal spending for all programs. Budget Resolution

18) A congressional process through which program authorizations are revised to achieve required savings. It usually includes tax or other revenue adjustments. Reconciliation

19) An act of Congress that establishes, continues, or changes a discretionary government program or an entitlement. It specifies program goals and maximum expenditures for discretionary programs. Authorization Bill

20). An act of Congress that actually funds programs 20) An act of Congress that actually funds programs within limits established by authorization bills. These cover one year. Run by House and Senate Appropriations Committees. Appropriations Bill

Continuing Resolutions 21) When Congress can’t reach agreement and pass appropriations bills, these resolutions allow agencies to spend at the level of the previous year. Continuing Resolutions