1. Political Science, Unit 7

2. TAXING & SPENDING HOW DOES THE GOVERNMENT RAISE MONEY? 1) TAXES a. Progressive Individual Income Tax b. Corporate Income Tax c. Social Insurance Taxes d. Excise Taxes e. Customs Duties f. Estate and Gift Taxes

3. TAXING & SPENDING HOW DOES THE GOVERNMENT RAISE MONEY? 2) BORROWING FOR REVENUE a. Bonds & Securities b. National debt

4. KEY TERMS TO KNOW Taxes Taxable income Dependent Witholding Self-employment Internal Revenue Service April 15

5. THE FEDERAL BUDGET Operates in a FISCAL YEAR, from October 1 of one year to September 30 of the next year STEPS: 1. Executive branch agencies develop requests, send them to the Office of Management and Budget (OMB) - President draws up a budget 2. Budget document submitted to Congress – Congress must approve spending and revenue bills – Congress passes a budget

6. Managing the Economy Government spending: $4.6 billion in 1933 $2 trillion today WHERE THE MONEY GOES: 1. Direct benefit payments 2. National Defense 3. Discretionary spending

7. FISCAL & MONETARY POLICY FISCAL POLICY: government spending and taxation MONETARY POLICY: controlling the supply of money and credit (through the Federal Reserve System) FEDERAL RESERVE: central banking system of the United States (“banker’s bank”)

8. SUMMARY REVENUE (taxes, duties, borrowing) ---  FEDERAL BUDGET ---  EXPENDITURES (social security, welfare, health; defense; discretionary spending)

9. SOCIAL & DOMESTIC POLICY BUSINESS AND LABOR POLICY 1. The federal government promotes and protects business 2. The federal government regulates business 3. The federal government protects consumers

10. SOCIAL & DOMESTIC POLICY AGRICULTURE AND ENVIRONMENTAL POLICY 1. The federal government is involved in American agriculture (Department of Agriculture; various farm laws to support prices, allot acreage, promote conservation) 2. The federal government protects the environment (pollution regulations, other laws)

11. HEALTH & PUBLIC ASSISTANCE SOCIAL INSURANCE PROGRAMS 1. Social Security 2. Medicare / Medicaid 3. Unemployment insurance 4. Aid to Families with Dependent Children 5. Welfare

12. EDUCATION & HOUSING PUBLIC EDUCATION PROGRAMS Federal aid to education Aid to Public Schools HOUSING & URBAN PROGRAMS Federal Housing Administration (FHA) Urban renewal

13. TRANSPORTATION Department of Transportation Federal Aviation Administration Federal Highway Administration

14. FOREIGN POLICY AND DEFENSE FOREIGN POLICY: strategies and goals that guide our nation’s relations with other countries and groups in the world GOALS OF FOREIGN POLICY 1. National Security 2. Free and open trade 3. World peace 4. Aiding democratic governments 5. Humanitarian concern

15. MODERN FOREIGN POLICY AGENDA PERSIAN GULF WAR WAR ON TERRORISM Preemptive strategy Iraq War

16. FOREIGN POLICY IN ACTION MUTUAL DEFENSE ALLIANCES: nations sign agreements to protect one another NORTH ATLANTIC TREATY ORGANIZATION (NATO) – Unites States and western Europe FOREIGN AID – SANCTIONS – MILITARY FORCE