Test Four

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Superfund

A fund created by Congress in 1980 to clean up hazardous waste sites. Money for the fund comes from taxing chemical products.

Welfare state

A government that undertakes responsibility for the welfare of its citizens through programs in public health and public housing and pensions and unemployment compensation etc.

Credit

An arrangement to receive cash, goods, or services now and pay for them in the future.

Deficit

An excess of federal expenditures over federal revenues.

Poverty line

The poverty threshold is the minimum level of income deemed adequate in a particular country.

Laissez-faire

The principal that government should not meddle in the economy.

Debt

All the money borrowed by the federal government over the years and still outstanding.

Earned Income tax

A "negative income tax" that provides income to very poor individuals in lieu of charging them federal income taxes.

Welfare Reform Act of 1996

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 -A.K.A. "The Welfare Reform Act," represents the federal government's attempt to reform the welfare system by "encouraging" recipients to leave welfare and go to work, and by turning over primary responsibility for administering the welfare system to the states

Secretary of the Interior

The Secretary of the Interior is the head of the U.S. Department of the Interior and is responsible for establishing standards for all programs under Departmental authority and for advising Federal agencies on the preservation of historic properties listed in or eligible for listing in the National Register of Historic Places.

Senate Finance Committee

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

Food Stamp Program

The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp program, provides food-purchasing assistance for low- and no-income people living in the U.S. It is a federal aid program, administered by the U.S. Department of Agriculture, under the Food and Nutrition Service (FNS), though benefits are distributed by each U.S. state's Division of Social Services or Children and Family Services.

Direct tax/indirect tax

-A tax paid directly by the person or organization on whom it is levied -A tax levied on one party but passed on to another for payment.

Ben Benanke/Janet Yellen

-Chairman of the Federal Reserve -Chair of the Board of Governors of the Federal Reserve System

Social Security Act

A 1935 law passed during the Great Depression that was intended to provide a minimal level of sustenance to older Americans and thus save them from poverty.

Clean Air Act

A United States federal law designed to control air pollution on a national level. It requires the Environmental Protection Agency (EPA) to develop and enforce regulations to protect the public from airborne contaminants known to be hazardous to human health.

Nonrenewable resources

A natural resource that cannot be replaced or that can be replaced only over thousands or millions of years.

Globalism

A philosophy which regards the entire world as one giant community that should be unified politically and economically.

Antitrust policy

A policy designed to ensure competition and prevent monopoly, which is the control of a market by one company.

Sequestration

Describes a new fiscal policy procedure under the Budget Control Act of 2011. The automatic reduction of spending triggered if Congress approves spending levels that exceed certain "caps" set out by the acts. Basically, If Congress failed to meet the deficit goals, automatic across-the-board spending cuts were to be ordered by the president (a number of programs, including Social Security and interest on the national debt, were exempt from this process.)

Copyright protection

Designed to ensure that those who create content are financially compensated for their work.

Payroll tax

Second largest source of federal income (1/3 of federal revenues). These taxes are based on the payroll of a business and are deducted from a workers paycheck to fund Social Security and Medicare.

Income tax

Shares of individual wages and corporate revenues collected by the government based on income earned. The Sixteenth Amendment explicitly authorized Congress to levy a tax on income.

Social Security

Social insurance that provides economic assistance to persons faced with unemployment, disability, or old age. It is financed by taxes on employers and employees.

Safety Net

Social welfare services are provided by a community of individuals at the state and local levels. These services are geared toward eliminating poverty in a specific area. These services may include housing re-assignment, job placement, subsidies for household bills, and other cash equivalents for food. Social safety net works in conjunction with a number of other poverty reduction programs with the primary goal of reducing/preventing poverty.

Discretionary spending

Federal spending on programs that are controlled through the regular budget process.

Mandatory spending

Federal spending required by law that continues without the need for annual approvals by Congress.

FDA

Food and Drug Administration, The federal agency formed in 1913 and assigned the task of approving all food products and drugs sold in the United States. All drugs, with the exception of tobacco, must have FDA authorization.

GDP

Gross domestic product, The total value of goods and services produced within the borders of a country during a specific time period, usually one year.

GNP

Gross national product, The total value of goods and services, including income received from abroad, produced by the residents of a country within a specific time period, usually one year.

Faith based groups

Group that provide not only financial support but also spiritual, volunteer and community support

Endangered Species Act

Identifies threatened and endangered species in the US, and puts their protection ahead of economic considerations

New Deal Legislation

Policies set forth during FDR terms. Included the National Labor Relations Act (Wagner Act), Works Progress Administration, National Youth Administration, Social Security Act, and the United States Housing Authority; Relief, Recovery, Reform

Import quota

a limit on the number of products in certain categories that a nation can import

Trade surplus/ deficit

-A favorable balance of trade; occurs when the value of a country's exports exceeds that of its imports -An imbalance in international trade in which the value of imports exceeds the value of exports.

"End welfare as we know it"

Clinton, requires recipients to work and limits benefits to five years

Medicare/Medicaid

-A federal program of health insurance for persons 65 years of age and older -A federal system of health insurance for those requiring financial assistance.

Progressive/ regressive tax

-A tax by which the government takes a greater share of the income of the rich than of the poor--for example, when a rich family pays 50 of its income in taxes, and a poor family pays 5 percent. -A tax in which the burden falls relatively more heavily on low-income groups than on wealthy taxpayers.

Progressive/Regressive tax

-A tax by which the government takes a greater share of the income of the rich than of the poor. In other words, tax rates increase as income increases -A tax in which the burden falls relatively more heavily on low-income groups than on wealthy taxpayers.

Income vs. wealth

-The money that an individual or business receives in exchange for providing a good or service or through investing capital -The measure of the value of all of the assets of worth owned by a person, community, company or country.

Regulation/Deregulation

-The use of governmental authority to control or change some practice in the private sector. Regulations pervade the daily lives of people and institutions -The lifting of restrictions on business, industry, and professional activities for which government rules had been established and that bureaucracies had been created to administer.

16th amendment

1913, Amendment to the United States Constitution that gave Congress the power to tax income. This made the rich pay their fair share to the government as well as allowing the Underwood-Simmons Tariff of 1913 to lower many tariffs.

Reserve requirement

A regulation in which requires a bank to keep a certain percentage of each dollar deposited in the bank in its reserve.

Budget resolution

A resolution binding Congress to a total expenditure level, supposedly the bottom line of all federal spending for all programs. Basically, a decision that states the maximum amount of money the government should spend.

Tariffs

A special tax added to imported goods to raise the price, thereby protecting American businesses and workers from foreign competition.

Balanced Budget

A spending plan in which the government's expenditures are equal to its revenue.

Right to work laws

A state law forbidding requirements that workers must join a union to hold their jobs; they were specifically permitted by the Taft-Hartley Act of 1947

Gini index

A statistical formula that measures the amount of economic inequality within a country. "0" corresponds with perfect equality and "100" represents perfect inequality.

neoliberalism

A strategy for economic development that calls for free markets, balanced budgets, privatization, free trade, and minimal government intervention in the economy

Subsidies

A sum of money granted by the government or a public body to assist an industry or business.

Graduated income tax

A tax on income in which the taxation rates grow progressively higher for those with higher income.

CPI

Consumer Price Index, The key measure of inflation that relates the rise in prices over time. Also, a measure of the overall cost of the goods and services bought by a typical consumer.

AFDC

Aid to Families with Dependent Children, largest federal cash-transfer program, which provides federal funds for children in families that fall below state standards of need. In 1996 Congress abolished AFDC and replaced it with the Temporary Assistance to Needy Families (TANF) block grant.

debt

All the money borrowed by the federal government over the years and still outstanding. Today the federal debt is more than $8 trillion.

AARP

American Association of Retired Persons, The largest senior citizens' nonprofit membership organization in the United States. Provides economic and social services to retired and non-retired persons over 50.

Appropriations bill

An act of Congress that actually funds programs within limits established by authorization bills. Appropriations usually cover one year. e.g. if Congress authorizes expenditures on building highways, Congress must pass another bill to appropriate the funds to bill them.

Authorization bill

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. Specify program goals and set the maximum amount that they may spend.

Social Security Act of 1935

An act to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes.

Surplus

An amount of money remaining after all expenses have been met.

Capitalism

An economic system in which individuals and corporations, not the government, own the principal means of production and seek profits. Pure capitalism means the strict noninterference of the government in business affairs.

Free market

An economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation or fear of monopolies.

supply-side economics

An economic theory, advocated by President Reagan, holding that too much income goes to taxes and too little money is available for purchasing. The solution is to cut taxes and return purchasing power to consumers.

Affordable Care Act

An expansion of Medicaid, most employers must provide health insurance, have insurance or face surtax, prevents rejection based on pre-existing condition. Also referred to as "Obamacare", signed into law in 2010.

Debt ceiling

An explicit, legislated limit on the amount of outstanding national debt.

Unemployment rate

As measured by the Bureau of Labor Statistics, the proportion of the labor force actively seeking work but unable to find jobs.

OMB

Office of Management and Budget, An Executive office that grew out of the Bureau of the Budget, created in 1921, consisting of a handful of political appointees and hundreds of skilled professionals. The OMB performs both managerial and budgetary functions while monitoring federal spending.

Monetary policy

Based on monetarism, monetary policy is the manipulation of the supply of money in private hands by which the government can control the economy. In other words, a form of government regulation in which the nation's money supply and interest rates are controlled.

Transnational corporations

Businesses with vast holdings in many countries-such as Microsoft, Coca-cola, and McDonald's- many of which have annual budgets exceeding that of many foreign governments. In other words, a company that conducts research, operates factories, and sells products in many countries, not just where its headquarters or shareholders are located.

CBO

Congressional Budget Office, A counterweight to the president's Office of Management and Budget (OMB). It advises Congress on the probable consequences of budget decisions and forecasts revenues.

Tax expenditures

Defined by the 1974 Budget Act as "revenue losses attributable to provisions of the federal tax laws which allow a special exemption, exclusion, or deduction." Tax expenditures represent the difference between what the government actually collects in taxes and what it would have collected without special exemptions.

Block Grants

Federal grants given more or less automatically to states or communities to support broad programs in areas such as community development and social services

EPA

Environmental Protection Agency, An agency of the federal government created in 1970 and charged with administering all the government's environmental legislation. It also administers policies dealing with toxic wastes. It is the largest federal independent regulatory agency. It can can impose fines and other penalties on business firms that violate environmental regulations.

Uncontrollable expenditures

Expenditures that are determined not by a fixed amount of money appropriated by Congress but by how many eligible beneficiaries there are for a program or by previous obligations of the government.

Clean Water Act

Federal Law setting a national goal of making all natural surface water fit for fishing and swimming by 1983, banned polluted discharge into surface water and required the metals be removed from waste

World Trade Organization

International organization that regulates international trade. It administers the rules governing trade between its 144 members while helping producers, importers, and exporters conduct their business and ensure that trade flows smoothly.

Renewable resources

Natural resources that can be replaced.

Collective bargaining

Negotiations between representatives of labor unions and management to determine pay and acceptable working conditions.

NAFTA

North American Free Trade Agreement, An economic pact that combined the economies of the United States, Canada, and Mexico into one of the world's largest trading blocs, eliminating the barriers to trade in, and facilitate the cross-border movement of goods and services between the countries.

Entitlements

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

Eminent domain

Power of a government to take private property for public use. However, requires the government to provide just compensation for that property.

Flat tax

Proportional tax on individual income after a specified threshold has been reached.

Executive Orders

Regulations originating from the executive branch. Executive orders are one method presidents can use to control the bureaucracy; more often, though, presidents pass along their wishes through their aides. Basically, a rule or order issued by the president to an executive branch of the government and having the force of law.

Revenue bills

Tax bills (must originate in the House) to raise money for the government.

Social Security Trust Funds

The "bank account" into which Social Security contributions are "deposited" and used to pay out eligible recipients.

House Ways and Means Committee

The House of Representatives committee that, along with the Senate Finance Committee, writes the tax codes, subject to the approval of Congress as a whole.

Free and Reduced Lunch

The National School Lunch Program is a federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. It provides nutritionally balanced, low-cost or free lunches to children each school day.

Commerce clause

The clause in the Constitution (Article I, Section 8, Clause 1) that gives Congress the power to regulate all business activities that cross state lines or affect more than one state or other nations (interstate and international commerce)

Revenues

The financial resources of the federal government. The individual income tax and Social Security tax are two major sources of revenue.

Delegation of regulatory authority

The first issue that is encountered in the study of administrative law concerns the way in which Congress can effectively delegate its legislative power to an Administrative Agency. Article I, Section I, of the U.S. Constitution provides that all legislative power is vested in Congress.

Individual mandate

The individual is required to purchase insurance because insurance companies cannot deny insurance due to preexisting condition

Minimum wage

The legal minimum hourly wage for large employers.

Federal Reserve System

The main instrument for making monetary policy in the United States. It was created by Congress in 1913 to regulate the lending practices of banks and thus the money supply. The seven members of its Board of Governors are appointed to 14-year terms by the president with the consent of the Senate.

Fiscal policy

The policy that describes the impact of the federal budget-taxes, spending, and borrowing-on the economy. It is almost entirely determined by Congress and the president, who are the budget makers. In other words, government policy that attempts to manage the economy by controlling taxing and spending.

Balance of Trade

The ratio of what is paid for imports to what is earned from exports. When more is imported than exported, there is a balance-of-trade deficit. In other words, the difference in value between a nation's exports and imports.

Inflation

The rise in prices for consumer goods. Inflation hurts some but actually benefits others. Groups such as those who live on fixed incomes are particularly hard hit, while people whose salary increases are tied to the consumer price index but whose loan rates may enjoy buying power.

Keynesian economic theory

The theory emphasizing that government spending and deficits can help the economy weather its normal ups and downs. Proponents of this theory advocate using the power of government to stimulate the economy when it is lagging.

Working Poor

The working poor are defined as people who spend 27 weeks or more in a year "in the labor force" either working or looking for work but whose incomes fall below the poverty level.

Privatization

To change from government or public ownership or control to private ownership or control.

Continuing resolutions

When Congress cannot reach agreement and pass appropriations bills, these resolutions allow agencies to spend at the level of the previous year for a specified period. Basically, an emergency budget extension measure that Congress passes when a full budget law has not been completed by the beginning of the new fiscal year (October 1). Avoids government shutdown.


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