The Federal Budget and Social Security
not required by law
discreationary spending programs are
sixteenth amendment (1913)
permitted Congress to ley an income tax
Franklin D. Roosevelt
signed the Social Security Act into law in 1935
36%
social insurance taxes now generate approximately ___ percent of federal tax revenue
policy agenda
the budget reflects the priorities and goals of the president's
$12 trillion
the federal debt now exceeds
$12 trillion
the total federal debit now exceeds
balance budget
when expenditures equal revenues in a fiscal year
Social Security and Medicare
_____ and _____ are the most expensive programs in the federal budget; along with Medicaid, they currently make up 44 percent of all fedreal expenditures
budget
a financial plan for the use of money, personnel, and property
defense
currently accounts for approximately 20 percent of the total federal budget
estate taxes
currently generate 1.2 percent of federal tax revenue
excise taxes
currently generate approximately 2.7 percent of federal tax revenue
corporate income taxes
generated approximately 12 percent of federal tax reveune
office of management and budget
has the primary responsibility for preparing the federal budget
congress; president
have no power to change uncontrollable spending directly
Medicare
in 1965, congress added ____ to the Social Security Program
baby boom generation
includes 76 million people born between 1946 and 1964
fiscal policy
includes raising and lowering taxes and government spending programs
monetary policy
includes regulating the money supply, controlling inflation, and adjusting interest rates
46%
individual income taxes generate approximately ___ percent of federal tax revenue
the president
initiates the budget process by submitting a proposed budget to congress
gift tax
is a levy imposed on a gift from a living person to another
estate tax
is a levy imposed on the assets of someone who dies
federal entitlement
is a program that guarantees a specific level of benefits to persons who meet requirements set by law
excise tax
is a tax on the manufacture, sale, or consumption of a good or service
monetary policy
is controlled by the Federal Reserve Board
Medicare
is designed to assist the elderly with medical costs
regressive tax
is levied at a flat rate without regard to the level of a taxpayer's income or ability to pay; as a result, poor citizens pay a higher percentage of their income compared with wealthier citizens
progressive tax
is proportionate to income; as a taxpayer's income increases, so does the tax rate
fiscal policy
is the controlled by the executive and legislative branches; the president proposes the federal budget and Congress passes it
interest rates
it is important to note that the amount of money spent servicing the debt depends on ____
budget deficits
make it difficult to fund key policy goals fully
corporations
pay a tax that ranges from 15 percent to 35 percent of taxable income
custom duties
prior to the income tax, ____ were the federal government's most important source of income; they currently generate just 1.1 percent of federal tax revenue
44%
social security, medicare, and medicaid are now responsible for approximately ___ percent of all federal expenditure
$1.42 trillion
the 2009 federal budget deficit reached a record ___, or $4,700 for every man, woman, and child in the United States
The Congressional Budget and Impoundment Control Act of 1974
-designed to reform the congressional budgetary process and regain power previously lost to the executive branch -created a fixed budget calendar -established a budget committee in each house of congress -created the Congressional Budget Office (CBO) to advise congress by forecasting revenues and evaluating the probable consequences of budget decisions
House Ways and Means Committee Senate Finance Committee
all tax proposals are referred to the
5 to 9 percent
approximately ____ of all federal expenditures go to paying interest on debt
entitlement programs
are by far the largest portion of uncontrollable spending in the federal budget
federal excise taxes
are currently imposed on the sale of gasoline, tobacco, alcohol, airline tickets, and many other goods and serices
social insurance taxes
are regressive because they are levied at a fixed rate without regard to the level of a taxpayer's income
custom duties or tariffs
are taxes levied on goods brought into the United States from abroad
Social Security System
as a result of improving health care, average life expectancy is incrasing; this will put additional pressure on the
baby boom generation
as the _____ to retire, the number of workers who fund Social Security will decline while the number of people eligible for Social Security benefits will increase
interest payments
budget deficits require huge _____; in 2008 the federal government paid $249 billion just to service the debt
employers and employees
each pay a Social Security tax equal to 6.2 percent of the first $106,800 of earnings
for medicare
employees pay a 1.45 percent tax on their total annual income; employers must match the accounts withheld from their employees' paychecks
60%
entitlement programs now account for over ___ percent of the total federal budget; this limits what the president and congress can do to achieve a balanced budget
incrementalism
federal agencies assume that their annual budgets will increase by small amounts each year; this process of small but regular increases is called _____; because it is built into the budgetary process, it is very difficult to make spending cuts
uncontrollable category
over 60 percent of all federal spending now falls into the
thirteen major appropriations bills
the congress is required to pass _____ by the beginning of the federal government's fiscal year on October 1
$3.6 trillion
the federal budget for 2010 was
interest groups
the fragmented federal system enables ___ to resist tax increases and defend favored programs successfully
the House and Senate Appropriations Committees
the president's budget is sent to _____, which hold hearings on key items
-defense -education -agriculture -highways -research grants -government operations
what are examples of discretionary programs
-social security -medicare -medicaid -food stamps -unemployment insurance -veteran's pensions and benefits
what are the largest entitlement programs
balance deficit
when expenditures exceed revenues in a fiscal year
25; 3.3
when the Social Security program began, there were ___ workers for every 1 beneficiary; today the the ratio is ___ workers for every 1 beneficiary
budget deficits
will place a heavy burden on future generations