Chapter 14 Review

Question 0

Progressive Tax

Answer 0

The different abilities to pay example: income tax

Question 1

Flat Tax

Answer 1

Tax where everyone has the same rate/same expenditure example: sales tax

Question 2

Why do some economists believe that we should be concerned about the national debt?

Answer 2

• Government borrowing crowd out private borrowers leads to higher interest rates
• Makes the USA more dependent on foreign investors

Question 3

How interest groups play a part in the budgeting process

Answer 3

Lobby congressional committees or even the president to support the budget that they want

Question 4

How agencies play a part in the budgeting process

Answer 4

Support their budget because they believe that their “mission” is important, sends requests to office management to get on a congressional committee

Question 5

How office of management and the budget (OMB) play a part in the budgeting process

Answer 5

Help the president make decisions about the budget. Who gets what.

Question 6

How the president play a part in the budgeting process

Answer 6

Makes the final decisions about what to propose to Congress

Question 7

How tax committees play a part in the budgeting process

Answer 7

Write the new tax codes to provide financing for the budget

Question 8

How budget committees and the congressional budget office play a part in the budgeting process

Answer 8

Set congressional limits on how much revenue the government can collect

Question 9

How subject-matter committee play a part in the budgeting process

Answer 9

Write new laws that provide agency funding

Question 10

How the appropriations committee and their subcommittees play a part in the budgeting process

Answer 10

Decide who gets what

Question 11

How congress as a whole play a part in the budgeting process

Answer 11

Must approve taxes and appropriations (spending) want to deliver money to their constituents

Question 12

How the government play a part in the budgeting process

Answer 12

Works as Congress’s eyes and ears auditing, monitoring and evaluating what agencies do

Question 13

Incrementalism

Answer 13

The belief that the best predictor of this years budget is last years budget, plus a little bit more (an increment). According to Aaron Widavsky, “most of the budget is a product of previous decisions”

Question 14

Procurements

Answer 14

Process by which the government obtains military equipment

Question 15

Entitlements

Answer 15

Policies for which congress has obligated itself to pay X level of benefits to Y number of recipients (social security is an example)

Question 16

Military-industrial complex

Answer 16

Characterize the close relationship between the military hierarchy and the defense industry that supplies it’s hardware needs

Question 17

Social insurance taxes

Answer 17

Social security (pay role deductions)

Question 18

Sequestration

Answer 18

Automatic across the board spending cuts

Question 19

Tax reduction

Answer 19

Amount that you pay (rate)

Question 20

Tax reform

Answer 20

Changes in method of collecting taxes (IRS code)

Question 21

Differences between tax reduction and tax reform

Answer 21

Tax reduction is what you actually pay and the tax reform is the change that happens in methods of taxes

Question 22

What federal expenditures make up the largest portion of the US budget?

Answer 22

Payments for individuals/entitlements (social security)

Question 23

How do the expenditures of the US government compare to those of other modern government?

Answer 23

US spends less than modern countries

Question 24

When was social security created? By whom? Why? What has been added since 1930’s?

Answer 24

Franklin D Roosevelt, to provide a minimal level of sustenance to older Americans saving them from poverty. 1950 Disability was added, 1965 Medicare was added, 2003 Prescription drugs were added

Question 25

What predictions are being made about social security by the year 2018?

Answer 25

That there will be fewer workers to fund social securities, more retires, extended income from tax collect

Question 26

Why is it so difficult to cut the US budget?

Answer 26

You can’t decide what is not important, incrementalism (they always increase the budget from the year before)