Chapter 13 Flashcards
Income tax
Shares of individual wages and corporate revenues collected by the government. The Sixteenth Amendment explicitly authorized Congress to levy a tax on income.
16th amendment
The constitutional amendment adopted in 1913 that explicitly permitted Congress to levy an income tax.
Revenues
The financial resources of the govern-ment. The individual income tax and Social Security tax are two major sources of the federal goverment’s revenue.
Expenditures
Government spending. Major areas of federal spending are social services and national defense.
Budget
A policy document allocating burdens (taxes) and benefits (expenditures).
Deficit
An excess of federal expenditures over federal revenues.
National debt
All the money borrowed by the federal government over the years and still outstanding. Today the national debt is about $25 trillion.
Tax expenditures
Revenue losses that result from special exemptions, exclusions, or deductions allowed by federal tax law.
Social security act
A 1935 law intended to provide a minimal level of sustenance to older Americans and thus save them from poverty.
Medicare
A program added to the Social Security system in 1965 that provides health insurance for the elderly, covering hospi-talization, doctor fees, and other health expenses.
Incrementalism
A description of the budget process in which the best predictor of this year’s budget is last year’s budget plus a little bit more (an increment). According to Aaron Wildavsky, “Most of the budget is a product of previous decisions.”
Uncontrollable expenditures
Expenditures that are determined by how many eligible beneficiaries there are for a program or by previous obligations of the government and that Congress therefore cannot easily control.
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.
Appropriations bill
An act of Congress that funds programs within limits established by authorization bills. Appropriations usually cover one year.
Continuing resolutions
When Congress cannot reach agreement and pass appropriations bills, these resolutions allow agencies to spend at the level of the previous year.
Budget resolution
A resolution binding Congress to a total expenditure level, supposedly the bottom line of all federal spending for all programs.
Reconciliation
A congressional process through which program authorizations are revised to achieve required savings. It usually also includes tax or other revenue adjustments.
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.
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.
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.
Congressional budget office
Advises Congress on the probable consequences of its decisions, forecasts revenues, and is a counterweight to the president’s office of management and budget
