Crash Course Chapter 14 - The Federal Budget and Social Security

Congress and the president have no power to directly change _____________. Over ___% of federal spending now falls into this category.

uncontrollable spending, 60

taxes levied on goods brought into the US from abroad; prior to the income tax, this was the federal government's most important source of income; currently generate just 1.1% of federal tax revenue

custom duties (tariffs)

What currently accounts for approximately 20% of the total federal budget?

defense

a levy imposed on a gift from a living person to another

gift tax

process of small but regular increases to federal agencies' annual budgets, which make spending cuts very difficult

incrementalism

Congress is required to pass 13 _______________ bills by the beginning of the federal government's fiscal year on October 1.

major appropriations

a type of tax proportionate to income

progressive tax

a tax 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

regressive tax

The social insurance taxes are _________ because they are levied at a fixed rate without regard to the level of a taxpayer's income. These taxes now generate approximately ___% of federal tax revenue.

regressive, 36

The federal budget now exceeds $_________. Approximately 5% to 9% of all federal expenditures go to paying ____________.

12 trillion, interest on the debt

Corporations pay a tax that ranges from ___% to ___% of taxable income. They generate approximately ___% of federal tax revenue.

15, 35, 12

What amendment permitted Congress to levy an income tax?

16

When the Social Security program began there were ___ workers for every 1 beneficiary. Today the ratio is ___ workers to every 1 beneficiary.

25, 3.3

Social Security, Medicare, and Medicaid are now responsible for approximately ____% of all federal expenditures.

44

Individual income taxes generate approximately ___% of federal tax revenue.

46

The Baby Boom generation includes _________ people born between 1946 and 1964. As the Baby Boom generation begins to _____, the number of workers who fund Social Security will begin to _______ while the number of people eligible for Social Security benefits will _________, which will put additional pressure on the Social Security system.

76 million, retire, decrease, increase

___________ will place a heavy burden on future generations and make it difficult to fully fund key policy goals.

Budget deficits

The president initiates the budget process by submitting a proposed budget to ________. The ______________ has the primary responsibility for preparing the federal budget. The budget reflects the priorities and goals of the president's __________. The budget is then sent to both the House and Senate ______________, which hold hearings on key items.

Congress, Office of Management and Budget, policy agenda, Appropriations Committees

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 to advise Congress by forecasting revenues and evaluating the probable consequences of budget decisions.

Congressional Budget and Impoundment Control Act of 1974

All tax proposals are referred to the _______________ and to the ____________.

House Ways and Means Committee, Senate Finance Committee

For ________, employees pay a 1.45% tax on their total annual income. Employers must match the amounts withheld from their employee's paychecks.

Medicare

Employers and employees each pay a ____________ tax equal to 6.2% of the first $106,800 of earnings.

Social Security

signed into law by FDR in 1935; In 1965, Medicare was added to it to assist the elderly with medical costs; most expensive program in the federal budget

Social Security

Entitlement programs now account for over 60% of the total federal budget. This limits what the president and Congress can do to achieve a ______________.

balanced budget

When expenditures equal revenues in a fiscal year

balanced budget

When expenditures exceed revenues in a fiscal year

budget deficit

type of program not required by law; defense, education, agriculture, highways, research grants, and government operations are all examples of this

discretionary spending program

a program that guarantees a specific level of benefits to persons who meet requirements set by law; social security, medicare, medicaid, food stamps, unemployment insurance, and veteran's pensions & benefits are the largest types of these programs; this the largest portion of uncontrollable spending in the federal budget

entitlement programs

a levy imposed on the assets of someone who dies; currently generate 1.2% of federal tax revenue

estate tax

A tax on the manufacture, sale, or consumption of a good or service; currently imposed on the sale of gasoline, tobacco, alcohol, airline tickets, and many other goods and services; generate approximately 2.7% of federal tax revenie

federal excise tax

controlled by the executive and legislative branches; includes raising and lowering taxes and government spending program

fiscal policy

controlled by the Federal Reserve Board; includes regulating the money supply, controlling inflation, and adjusting interest rates

monetary policy