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