© 2001 by Prentice Hall, Inc. American Government Government at Work: The Bureaucracy

Chapter 15, Section 1 The Federal Bureaucracy S E C T I O N 1 The Federal Bureaucracy What is a bureaucracy? What are the major elements of the federal bureaucracy? How are groups within the federal bureaucracy named? What is the difference between a staff agency and a line agency?

Three features distinguish bureaucracies: What Is a Bureaucracy? Chapter 15, Section Hierarchical authority. Bureaucracies are based on a pyramid structure with a chain of command running from top to bottom. 1-Job specialization. Each bureaucrat, or person who works for the organization, has certain defined duties and responsibilities. 1-Formalized rules. The bureaucracy does its work according to a set of established regulations and procedures.

Major Elements of the Federal Bureaucracy (2)The federal bureaucracy is all of the agencies, people, and procedures through which the Federal Government operates. Chapter 15, Section The President is the chief administrator of the Federal Government. In order to enact and enforce policy, Congress and the President have created an administration—the government’s many administrators and agencies. The chief organizational feature of the federal bureaucracy is its division into areas of specialization.

Staff and Line Agencies Staff Agencies Staff agencies serve in a support capacity. They aid the chief executive and other administrators by offering advice and other assistance in the management of the organization. Chapter 15, Section Line Agencies Line agencies perform tasks for which the organization exists. Congress and the President give the line agencies goals to accomplish, and staff agencies help the line agencies accomplish them.

The Executive Office of the President Chapter 15, Section The (3)Executive Office of the President (the EOP) is an umbrella agency of separate agencies. The EOP serves as the President’s right arm, staffed by most of the President’s closest advisors and assistants. The EOP was established by Congress in 1939.

The White House Office and National Security Council Chapter 15, Section The White House Office The White House Office is comprised of the President’s key personal and political staff. Staff positions in the White House Office include chief of staff, assistants to the President, press secretary, the counsel to the President, and the President’s physician. 4-The National Security Council The National Security Council (NSC) acts to advise the President on all domestic, foreign, and military matters that relate to the nation’s security. Members include the Vice President and the secretaries of state and defense.

The 5-West Wing of the White House Chapter 15, Section The President’s closest advisors work in the West Wing of the White House, near the oval office.

Executive Departments The executive departments, often called the (6)- Cabinet departments, are the traditional units of federal administration. Chapter 15, Section Each department is headed by a secretary, except for the Department of Justice, whose work is directed by the attorney general. Each department is made up of a number of subunits, both staff and line. Today, the executive departments vary a great deal in terms of visibility, size, and importance.

The Cabinet Chapter 15, Section The Cabinet is an informal advisory body brought together by the President to serve his needs. By tradition, the heads of the executive departments form the Cabinet. The (7)President appoints the head of each of the executive departments, which are then subject to Senate approval. Cabinet members serve as both head of their respective departments and as advisors to the President.

Why Independent Agencies? Chapter 15, Section The independent agencies are created by Congress and located outside the executive departments. Independent agencies have been formed for numerous reasons, including: 8-being assigned a task or function that does not fit well within the existing departmental structure; 8-protecting the agency’s purposes from the influence of both partisan and pressure politics; 8-being created outside the departmental structure by accident.

The Independent Executive Agencies Examples of independent executive agencies include the General Services Administration, and the EPA, CIA, FDIC, Some independent executive agencies are far from well-known, such as the Citizens’ Stamp Advisory Committee. Chapter 15, Section The independent executive agencies include most of the independent agencies. The most important difference between the independent executive agencies and the 14 executive departments is that they simply 9-do not have Cabinet status.

The Government Corporations Government corporations are also within the executive branch and subject to the President’s direction and control- 10-federally funded for profit organizations Government corporations were established by Congress to carry out certain business-like activities. There are now over 50 government corporations, including the U.S. Postal Service, Amtrak, and the Tennessee Valley Authority. Chapter 15, Section

Development of the Civil Service Chapter 15, Section The use of patronage—the 11-practice of giving government jobs to supporters and friends—was in use throughout most of the nineteenth century. The Pendleton Act, also known as the Civil Service Act of 1883, laid the foundation of the present federal civil service system, and set merit as the basis for hiring in most civil service positions. The civil service is that group of public employees who perform the administrative work of government, excluding the armed forces.

The Civil Service Today Chapter 15, Section The Office of Personnel Management is the central clearinghouse in the federal recruiting, examining, and hiring process. The 12-Merit Systems Protection Board enforces the merit principle in the federal bureaucracy. Congress sets the pay and other job conditions for everyone who works for the Federal Government, except for postal employees.

Chapter 16, Section The Power To Tax 13- Article I, Section 8, Clause 1 of the Constitution grants Congress the power to tax. 13-The Sixteenth Amendment gives Congress the power to levy an income tax. Limits on the Power to Tax The power to tax is also limited through the Constitution. According to the Constitution: 14. Taxes must be used for public purposes only. 14. Federal taxes must be the same in every State. 14. The government may not tax exports.

Current Federal Taxes Chapter 16, Section Individual Income Tax Individual income taxes regularly provide the largest source of federal revenue. The tax is levied on each person’s taxable income. 16-Corporation Income Tax Each corporation must pay a tax on its net income, that is, on the earnings above the costs of doing business. The Income Tax The15-income tax is the largest source of federal revenue today. The tax is also a progressive tax, that is, the higher the income and the ability to pay, the higher the tax rate.

Social Insurance Taxes There are three main types of social insurance taxes levied: 17-OASDI The Old-Age, Survivors, and Disability program is the basic Social Security program. 17-Medicare Medicare is health insurance for the elderly and part of the Social Security program. 17-Unemployment Compensation The unemployment compensation program pays benefits to jobless workers and is also part of the overall Social Security program. Chapter 16, Section

Other Types of Taxes 18-Excise Taxes An excise tax is a tax laid on the manufacture, sale, or consumption of goods and/or the performance of services. Custom Duties A 18-custom duty is a tax laid on goods brought into the U.S. from abroad. Estate and Gift Taxes An 18-estate tax is a levy imposed on the assets (estate) of one who dies. A 18-gift tax is one imposed on the making of a gift by a living person. Chapter 16, Section

Taxing for Nonrevenue Purposes Chapter 16, Section Besides taxing for revenue purposes, the Federal Government sometimes taxes for the purpose of 19- regulating and even discouraging some activity that Congress thinks is harmful or dangerous to the public. The Supreme Court has upheld Congress’s taxing for nonrevenue purposes. However, the Supreme Court can still rule a tax unlawful if it finds that the tax was imposed for improper reasons.

Chapter 16, Section Nontax Revenues and Borrowing 20-Nontax Revenues Nontax revenues come from a variety of sources, including canal tolls; fees for passports, copyrights, and patents; interest earned; and selling philatelic stamps. 20-Borrowing Congress has the power “[t]o borrow Money on the credit of the United States.” (Article I, Section 8, Clause 2). A 21-deficit is the shortfall between income and spending. A 22-surplus is more income than spending. Congress must authorize all federal borrowing.

Chapter 16, Section The Public Debt The 23-public debt is the government’s total outstanding indebtedness. It includes all of the money borrowed and not yet repaid, plus the accrued, or accumulated, interest.

Causes and Effects of the Public Debt Causes: 24-Deficit financing 24-Failure to repay the debt over time 24-Interest accruing on the existing debt Effects: 24-Increased revenue needed to pay off the debt 24-Fears of financial obligations for tomorrow’s taxpayers Chapter 16, Section

Federal Spending Chapter 16, Section Spending by the Federal Government accounts for billions of dollars and has effects on the economy as a whole. Spending Priorities 26-Entitlements are benefits that federal law says must be paid to all those who meet the eligibility requirements. 25- Entitlements are the largest sector of government spending. Interest on the public debt has grown to be the second largest category of federal spending. Outlays for defense spending account for another large section of the federal budget.

123 Go To Section: Creating the Federal Budget Chapter 16, Section

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