2. Congress at Work Taxing and Spending Bills Chapter 7, Section 2

3. Each year, it costs more than $2 trillion to run the national government. Where does that money come from?

4. Taxes!!!

5. The Constitution “The Congress shall have the power to lay and collect taxes, duties imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States …” Article I, Section 8

6. Most other countries of the world have higher tax rates than the U.S. What can you conclude about the public services in those countries?

7. Revenue Bills Tax Bills Bills to establish new taxes Bills to amend or change existing taxes

8. All revenue bills must start in the House of Representatives. In the House, almost all work on tax laws happens in the Ways and Means Committee.

9. Closed Rule: –Forbids any members of Congress to offer any amendments to a bill from the floor. Rule is meant to make sure that only members from ways and means committee have a direct hand in writing tax bills.

10. When the tax bill goes to the House “floor” for debate, amendments get added that increase the amount of the taxes. When many such amendments and riders (and earmarks) are added, the bill is called a “Christmas Tree Bill.”

11. When a tax bill moves to the Senate, it is referred to the Finance Committee where most of the tax work in the Senate occurs.

12. Appropriations Congress must pass a law to “appropriate” money so that the government can spend it.

13. Authorization Bill: –Sets up a federal program and specifies how much money will be spent on the project. Appropriation Bill: –Provides the money needed to carry out the many laws congress has passed. 2 Procedures in Appropriating Money

14. The Federal Budget The President ( his staff ) prepares a budget and submits it to Congress. The budget is a “request” for Congress to allow the government to actually spend money that has been “appropriated” by Congress.

16. Appropriations Committee House and Senate 13 subcommittees Yearly heads of departments and agencies of programs testify before them. In order to gain money for programs they must request from congress each year.

17. Uncontrollable Expenditures Many spending amounts have been established by previous Congresses. The government is legally committed to spend those amounts of money. About 70% of the Federal budget is uncontrollable.

18. Examples: Social Security payments Interest on the national debt Federal contracts already in force Uncontrollable Expenditures