Midterm Flashcards
What is the difference between a confederation and a federation?
The difference between a confederation and a federation is to be found in where power resides. In a confederal system all sovereignty, authority, and responsible basically resides with the states or provinces. Thus, undervalued a confederal system like the Articles of Confederation, the states had practically all sovereignty. In contrast, federal states divide sovereignty or delegate sovereignty between different powers or different levels of government. Thus, the federal system created by the Constitutions delegates some powers exclusively to the federal government (e.g. Immigration and regulating interstate commerce) and some powers exclusively to the state governments (i.e. Whatever powers the Constitution does not reserve for the federal government and does not prohibit the states from exercising.)
What is the difference between a federal and a unitary system?
The difference between a federal system and a unitary system is that under unitary system the national government holds all the power, whereas under a federal system power (or sovereignty) is reserved to both the national government and sub-national governments. Example of Unitary system: UK. Example of federal system: US.
Constitutional arrangements for Federal and State governments
Federal governments have some exclusive powers (coining money, regulating interstate commerce, declaring war. State governments also have some exclusive powers (regulating intrastate commerce, conducting local elections, issuing licenses, education, directly taxing people (until the later amendment of this). There are also concurrent powers which state and federal governments share. These concurrent powers include setting up courts, making and enforcing laws, issuing debt, spending money).
Federal government under Articles of Confederation
Weak. Had no power to tax. No power to draft soldiers or regulate interstate or international commerce. No court system. Any ammendment required unanimous consent
What is the difference between monetary policy and fiscal policy?
Fiscal policy involves the use of taxation and government spending to influence aggregate demand in the economy. Monetary policy involves the use of interest rates, reserve requirements, etc. to influence the money supply in the economy.
The role of the President in Fiscal Policy and Monetary Policy
In Fiscal Policy: the President can informally propose legislation related to taxing and spending. the president can veto legislation with regard to taxing and spending. The president can sign legislation related to taxing and spending (if passed by both houses of Congress) into law. The president executes fiscal policy.
In Monetary policy: The President nominates the members of the Federal Reserve Board, who are confirmed by the Senate. Outside of this and applying political pressure upon the Federal Reserve, the President does not have much of a role in Monetary Policy.
The role of Congress in Fiscal Policy and Monetary Policy
Congress legislates Fiscal Policy. In order to become law, Fiscal Policies must first be introduced in Congress (tax policy must be introduced in the House) and must be passed by Congress.
Congress has relatively little power over monetary policy. That said, it is the power of the Senate to confirm members of the Federal Reserve Board. Likewise, Congress can require members of the Federal Reserve board to testify.
Reason for Government
“Makes the markets”, safeguard private property, rule of law, courts to adjudicate, legal tender w/ stable value, and stabilize the economy
Two types of government services or goods or policies
Direct: gov provides good or service itself (ie nat parks or postal service)
Indirect: government provides good or service or implements policy indirectly through things like grants to incentivize certain behaviors, tax expenditures, regulation,
Definition of Tax expenditures
Tax expenditures are reductions in a taxpayer’s tax liability that are the result of special exemptions and exclusions from taxation deductions, credits, deferrals of tax liability, or preferential tax rates… often aimed at policy goals similar to those of federal spending
What are the 6 types of tax expenditures?
Exclusions. Exemptions. Deductions. Credits. Deferrals. Preferential tax rates.
Exclusion
Excludes income that would otherwise constitute part of a taxpayer’s gross income (e.g. Employees don’t have to pay income taxes on health insurance benefits)
Exemption
Reduces the gross income for taxpayers because of their status or circumstances. E.g. Taxpayers with children who are college-aged college students may reduce their tax liability
Deduction
Reduces gross income due to expenses taxpayers incur. E.g. Deduct mortgage interest off of home or deduct some state and local taxes
Tax credit
Reduces tax liability dollar-for-dollar. Some are refundable. I.e, if you owe $500 in taxes and you have a $499 tax credit. You only have to pay $1 in taxes. Example of tax credit is the Child tax credit.
Preferential tax rate
Reduces tax rates on some forms of income (i.e. Capital gains is taxed at a lower rate than regular income)
Deferral
Delays recognition of income or accelerates some deductions otherwise attributable to future years (ex: defer paying tax on interest of certain US bonds until the bonds are redeemed)
Purpose of taxation
Raise money to fund government and/or to discourage activity
Broadbased taxes
Income tax, property tax, sales tax
Formula for calculating tax liability
Income - exemptions - exclusions - deductions= taxable income - tax credits
Problems with Tax Expenditures
The cost a lot (in terms of foregone revenue). There is relatively little oversight in terms of how effective or ineffective they are.
What kind of tax expenditure is the reduction in liability for income from s/l bonds?
Exclusion. Income from sl bonds is excluded.
Definition of excise taxes
Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline.
Reasons states use excise taxes
- Consumption taxes are economically efficient … avoid economic distortions
- Income tax revenue is very volatile (consumption taxes are less cyclical, states cant borrow like feds)
- Sales taxes let you collect from no residents
- Sales and property taxes let you collect from no residents (makes tax dodging harder)
- Easy to pass
Problems with sin taxes
- Often they don’t actually discourage unhealthy behaviors (as the price of a sinful good increases, consumers often substitute an equally bad good in its place).
- Sin taxes are a bad way to raise revenue (if the goal is to raise revenue then broad based sales taxes are better)
- Primary support for sin taxes comes from those who benefit directly from them
- Sin taxes are regressive
- Sin taxes are not
Sin taxes
Taxes that are designed to reduce specific behaviors thought to be harmful to society
Types of excise taxes
User fees (e.g. Airline taxes or gas. tax) Substitutes tax (e.g. Tax on forest would tax value of land not standing timber) Yield tax (tax on the value of timber when cut down and Recording tax (property sold) Sin taxes
Externality taxes
E.g. Carbon tax… taxes on gas guzzling cars….
Export tax
Tax paid by largely, if not entirely, by non-residents (e.g. Hotel tax)
What makes a “good” tax?
Equity Simplicity Administrative ease Transparency Compliance
Congress under Articles of Confederation
Each state sent one representative
Powers to:
Make peace
Raise an army (at the will of each state)
Collect revenue (at the will of each state)
No direct power to tax
Needed full voluntary compliance of each state
Coin money
Enumerated Powers
The powers of Congress to:
Lay and collect taxes, duties, and customs
Borrow money
Regulate international and interstate commerce
Regulate rules of naturalization (immigration)
Declare war
Raise and support armies
Rules for governing armies
Appropriate money (ie determine how much money the federal government can spend and what it can spend this money on)
What states can’t do under the Constitution?
States cant coin money, make foreign treaties, impose duties
What Congress can’t do under Constitution?
Cant interfere w/ interstate commerce (ie. cant tax NC tobacco but not VA tobacco)
No money shall be draw from the Treasury without an appropriation
Can’t directly tax people (ammended by income tax ammendment)
Can’t violate writ of Habeas Corpus
Can’t pass a Bill of Attained (declaring a person or group guilty of some crime)
Can’t make ex post facto laws
Seperation of Powers in US government
Executive branch has executive power
Legislative branch has power to legislate.
Judicial branch has power to adjudicate
Bicameralism and Presentation
Bill has to pass both houses of congress and be presented to the president who can sign or veto
Examples of Checks and Balances
Bicameralism and Presentation
Congress declares war. President is commander in chief.
President negotiates treaty. Senate ratifies treaty.
Pres. appoints head. Senate approves
Pres. appoints SC judges, Senate approves
Congress passes bills. President can veto bills. Congress can override veto.
SC can adjudicate the constitutionality of federal law (assuming there is standing). Pres. appoints justices. Senate confirms.
House impeach. Senate convicts. Can remove Pres and other officials.
Definition of reserved powers
10th amendment, those powers not delegated to the United States nor prohibited to the states are the powers of the states
Examples of Reserved powers
Education. Regulating intrastate commerce. Who and when voting. Police Licensing Property rights
Definition of Sovereignty
Power that can be exercised and responsibility
Sovereignty of Federal Govt
Fed gov can enact laws derived from the delegate powers of the Constitution (the powers delegated to them by the States)
State sovereignty
States can do what they didn’t give the federal government the power to do
Expansion of Federal Government
Crux of federal power is derived from delegate powers of the constitution. Expansions of power has largely come from the necessary and proper clause (Congress has the power to make all laws which shall be necessary and property for carrying into Excution the delegated powers). At this point, whatever the SC says is ok or says is necessary and proper is Constitutional.
Dual Federalism
Dominant before 1930’s New Deal. Under Dual Federalism, power and sovereignty is very clearly and distinctly divided between the Federal government (which can do what is in the enumerated powers and little else) and State governments (which can do everything other than the enumerated powers). Also known as layer cake federalism.
Cooperative federalism
A concept of federalism, which emerged during the New Deal era, in which national and state governments interact cooperatively and collectively to solve common problems rather than making policies separately. Practically speaking, Cooperative federalism has meant the expansion of the federal government into roles reserved to the states under Dual Federalism. This is evident in federal involvement in major infrastructure, law enforcement (e.g. FBI), safety net programs, etc.
New Federalism
New Federalism is a political philosophy of devolution, or the transfer of certain powers from the federal government back to state governments. In this regard, it is a movement to return many of the federal powers assumed during New Deal and Great Society, back to the states. Rather than repealing these programs altogether, New Federalism generally tries to achieve the ends of the New Deal and the Great Society by providing states with block grants.
Grants
Grants are an expenditure of the federal government (thus, they require Congressional authorization and appropriation). Recognizing the weak fiscal position (relative to the Federal government) that the states find themselves in, the Federal government uses grants (whether categorical or block) incentivize states to abide by federal policy goals or to disincentivize non-compliance with federal policy goals.
Two ways in which Grants are used by fed gov.
Carrots and Stick. Functioning as a metaphorical carrot, grants to states give states money to do something (i.e. If states do x, the federal government will give them y). Functioning as a metaphorical stick, grants punish (in a non-coercive manner) for not doing something (i.e. If states do not do x, the federal government will take away or not give them y).
Limits on ability of Federal Government to use grants
Federal government cannot the “stick” of grants in a manner that is too burdensome on the states. “Stick” cannot be too burdensome or else it coercive and commandeering and, thus, is unconstitutional because it violates state sovereignty. Ex. Of sticks that are too coercive - The ACA’s requirement that states raise levels of Medicaid funding or else all Medicaid funding would be withheld. This was found to be too coercive and be commandeering (i.e. The federal government forcing states to pass certain laws) and thus is unconstitutional because it violates state sovereignty.
Public goods
Public goods are commodities or services provided without profit to citizens by the government. Public goods are financed by taxation and provided by government because they are non-exclusive goods and suffer from free-rider problem.
The paradox of government
The paradox of government is that while there is high public demands and expectations, the government has limited legal, political, and institutional capabilities.
Indirect tools of government
Contracts Grants to subnational government Regulations Tax expenditures Loan programs Taxation
Contracts
Agreement with private parties in exchange for a good/service… government by proxy
Ad-hoc federalism
System of choosing a state-centered or nation-centered view of federalism through partisan politics… E.g. Establishment Republicans believe in states rights except when it comes to x,y, and z things they disagree with while Democrats don’t believe in states rights except when it comes to x,y, and z things they agree with. Politicians and political parties believe in states rights on an issue until they have the power to enshrine their view as national policy.
Progressive tax
A tax whose rate increases as the payer’s income or wealth increases … higher income means higher tax rate
Regressive tax
A tax that disproportionately affects the poor or whose rate, effectively, increases as the taxpayer’s income decreases. Ex. Sin taxes
Horizontal equity
Equals are treated equally… all the people of the same income or wealth or ability to pay are treated the same
Vertical equity
A tax for which people with lower incomes pay lower tax rates and people with higher incomes pay higher tax rates (e.g. A person making 1 million dollars pays a higher tax rate than a person making 50 k dollars)
Excise tax
Taxes levied on the manufacture, sale, or consumption of a single good or service or on a relatively narrow range of goods or services
Why might an excise tax be used?
To raise revenue (its easy to administer and easy to pass)
As a user fee
To achieve redistributive results (e.g. Luxury taxes0
Taxes on things considered harmful or sinful
Allows local government or state government to tax non-residents
Excise taxes and Negative Externalities
Excise taxes can be used to eliminate or reduce negative externaties (e.g. Carbon tax and pollution)
Definition of Federalism
Political system in which national and regional government share powers and are considered independent equals
Definition of Unitary government
Nations in which legal authority or sovereignty is exclusively held by central gov
Definition of Confederal government
Voluntary association of totally sovereign states. Central gov depends upon subcentral govs for its authority.
Concurrent powers
Powers given to federal government, but not denied to the states
Grants-in-aid
Cash appropriations given by the federal government to the states
Categorical grants
Federal grants-in-aid given for specific programs that leave states and localities with little discretion over how to spend the money (strings attached)
General Revenue SHaring Grants
Federal grants-in-aid given with few constraints, leaving states and localities with almost complete discretion over how to spend the money. Few strings attached.
Crosscutting requirements
Strings that apply to all federal grants. e.g. laws against discrimination in violation of the Civil Rights Act.
Crossover requirements
Strings that force the implementation of federal requirements in one area or the states risk losing money in another, similar area. e.g. drinking age and highway funding
Unfunded mandates
Federal laws that direct state action but provide no financial support for that action. e.g. american disabilities act… voting rights act
Block grant
Federal grants in aid given for general policy areas that leave states and localities with wide discretion over how to spend the money within the designated policy area ex: TANF
What is the role of states in federal elections?
The Constitution assigns to the states the authority to determine manner of selecting the presidential elections.
States have total authority over elections except where states violate the 14th ammendments or other constitutional ammendments related to voting.
Definition of Voter Fraud
Voter fraud occurs when individuals cast ballots, knowing they are ineligible to vote, to defraud the election system.
How do Voter Id laws address voter fraud?
Voter ID laws really work against only one kind of voter fraud. That is, Voter ID laws really only work against voter impersonation.
Presidential Powers
The executive power shall be vested in the President
The take care clause… the President shale take care that the laws be faithfully executed
Structure of the Executive Branch
Executive Office of the President
WHO and non-WHO.
Cabinet departments … created and funded by Congress. Heads and other political appointees in the department are appointed by the President and confirmed by the Senate.
Independent executive agency: not a cabinet position. Not regulating anything and not charging for its services… ex NASA or National Archives
Independent Regulatory Agencies (Commissions) - federal agencies created by an act of Congress that are somewhat independent of the executive departments. Though they are considered part of the Exec branch, these agencies supposed to be relatively free of political influence. These agencies regulate some aspect of the economy or are responsible for enforcing these regulations. Ex: Federal Reserve, FCC, SEC.
Difference between WHO and non-WHO EOP
Members of the WHO do not have to be confirmed by the Senate.
Presidential advisors.
Close, loyal advisors to the President who push his agenda
Non-WHO Presidential appointees have to be confirmed by the Senate. Likewise, Congress can creates and can eliminate non-WHO departments in the EOP. Non-WHO members of EPO must testify before Congress and can be impeached and removed by Congress.
Criterion for Judging Executive Order
- Maximum authority - President acts within his constitutional authority and pursuant with the law.
- Gray area- President acts within his constitutional authority but Congress hasn’t either acted or denied such power.
- Minimal authority- president acts within his constitutional authority, but his order is incompatible with what congress has said.
Difference between Exec. Order and Memorandum
Similarities: President needs legal and/or Constitutional power/justification for both executive orders and memoranda.
Difference:
Executive orders have the force of law (they remain in place in perpetuity until a president rescinds them). They can only be issued by the president.
Memorandum do not have the force of law. They can be issued by members of EXecutive branch other than the president.
Legislative and Executive Process
Congress passes identical bills and presents them to the president for his signature or approval. President can either sign it (with or without a signing statement) and it becomes law, he can veto it and send it back to Congress (where they will vote on whether or not to override his veto), or he can do nothing and it will (if congress is in session) become law automatically or (if congress is in recess) dies automatically.
Now that it is law, the president can issue executive orders in regards to how the federal government should carry out the law or memorandum for the same purpose. The president must faithfully execute the law (even if he disagrees with all or some of it). That said, he does have discretion to interpret the law (to the extent that it is open to interpretation) and to prioritize the what the exec branch does if there is not enough money to go around. He cannot impound money.
In addition to the president, the bureaucracy also has the job of interpreting the law, interpreting the presidents interpretation of the law, and writing and enforcing regulations based upon the law.
Steps in the policy making process
- Problem identification
- Formulate a solution
- Adopt policy (who champions policy… stakeholders… policy makers…. buy in)
- Implementation (bureaucracy… policy interpretation)
- Evaluation (how is it working… how is it not working)
10th Amendment
Powers not delegated to federal government nor denied to the states retained by states and people
14th Amendment
equal protection and due process under the law… applies to States
15th Amendment
right to vote shall not be abridged on basis of race or color
16th Amendment
federal income tax… increases power of federal government and the direct power of the federal government over the states and the people
17th Amendment
direct election of Senators… decreases power of the states and the extent to which the US government is representative of the desires of state governments
18th Amendment
prohibition
19th Amendment
women’s suffrage
20th amendment
repeal of prohibition
22nd amendment
presidential term limit… limit on the power of the President in wake of WWII and the FDR presidency
26th amendment
18 yo’s can vote… states still have discretion with regards to allowing younger people to vote. eg. Maryland could let 16 yo vote and Virginia could not let 16 yo vote, but neither could prohibit 18 yo from voting.
Byrd v. Raines
case brought by a handful of Senators who argued that the Line item veto is unconstitutional… court found that the Senator’s did not have standing because the matter was not judicable and they could not show anything beyond speculative harm. Likewise, the Court held that individual members of Congress do not necessarily have standing litigate the constitutionality of laws affecting Congress as a whole.
Three Things Needed for Standing
- Injury … the person or group must show that they have been harmed or will be harmed if the court does not act
- Causation… the person or group must show that the defendant is in some sense responsible for causing this harm
- Addressability… the person or group must show that the injury is one that the court can address, can redress, resolve.
Regulatory Process
- Law is passed that authorizes particular agency to write regs. with regard to some sort of issue.
- Agency that is authorized by law to write regs. drafts regs.
- Drafted regs go to OIRA.
- If OIRA approves, draft regs go in Fed. Register.
- Period of public comment.
- Agency responds to public comments.
- Agency drafts final regs.
- Agency sends final regs to OIRA.
- If OIRA approves, final regs go in Fed. Register.
- Congress has 60 legislative days to pass a joint resolution to overturn the regs.
- If Congress passes resolution and President signs then regs are overturned. If Congress passes resolution and President vetoes then regs remain. If Congress doesn’t pass resolution then regs remain.
- After this 60 legislative day period… the regs are, hypothetically, set in stone.
Congressional budget resolution
concurrent resolution that needs to pass both houses of Congress, but does not require presidential approval. It states how much Congress is supposed to appropriate for each of the broad spending categories and how much money the government is going to collect in revenues
Authorization bills
Authorization bills establish, continue, or modify agencies or programs.
Appropriation bills
Appropriation bills provide funding for agencies or programs that have been authorized.
Administration Procedures Act
Established many of the procedural requirements that govern how the executive branch regulates
Congressional Review Act
Requires agencies to submit report to both houses of Congress and to the GAO. GAO reviews to make sure that the agency followed proper regulatory procedures. Congress has 60 legislative days to pass joint resolution to overturn regs (resolution requires presidential signature. Hypothetically, increased Congressional oversight of regulatory state.
Notice and Comment
period of 30 to 60 day, following the publication of proposed regs in federal register and required by the APA, in which agency receives comments from the the public. After this period, agency must address these comments.
Federal Register
proposed regs and final regs must be published in Federal Register. Increases transparency of regulatory process. No secret rule making.
Midnight regulation
regulations that are finalized in the last “minutes” of a Presidency
Line item veto
unconstitutional… but would have allowed the president to veto certain appropriations within a bill without vetoing the enitre bill.
Jackson’s Ruling with regard to president authority to issue exec orders
- Maximum authority= President acts pursuant to express or implied authority from Congress
- Presidential authority without either Congressional approval or disapproval
- Presidential authority is not pursuant with what Congress has said… incompatible with what Congress has said.
Amount of Money Due on Taxes
Income - exemptions - exclusions - deductions = taxable income - tax credits
Bicameralism and Presentation
bill has to pass both houses with identical language and has to be presented to the president who can sign or veto
Sovereignty
inherent authority, power, and responsibility
Sovereignty by level of govt
Federal gov. - can do whatever the states, in the Constitution, said that they can do
State gov. - can do whatever they didn’t give to the federal gov. and didn’t prohibit themselves from doing
Local gov. - no sovereignty
Exec. Order vs. Memorandum
Similarities: President needs statutory and constitutional authority to do both
Differences: Memorandum does not have force of law and does not automatically cease at the end of the administration that proclaims it
Signing Statement
No legal authority. Presidential rejection of one part of new law as unconstitution. Again, no legal authority.
President and the Military
President is the CommanderinChief under article 2 of the constitution. He is in charge of the US armed forces and state militias. Controls the military and impliments military policy. Check/Balance is that Congress controls military appropriations, political appointments in the military need Senate approval, Congress (hypothetically) declares war.
Why Presidents don’t want to go to war?
Costly
Approval ratings decline if the conflict is long-term(e.g vietnam, iraq, etc)
No focus on domestic agenda
Factor in Decision to go to “fight”
International support (UN, NATO) American Interests at Stake (Afghanistan)
Exec branch Players in Military Decisions
EOP (WHO, NSC, National Security Advisor, other advisors)
Departments/Agencies (DOD, CIA, State Department, Chiefs of Staff)
Executive Budget
Presidential wish list. What the president wants to spend money on. Reflects presidential priorities. Very detailed. Reflects the amount of money President wants both for existing programs and new programs. Tend to be incremental changes are made on the margins (i.e. add-subtract small amounts).
The Biggest Factor when it comes to budgeting
The economy. Major changes in the economy, for either better or worse, can affect the amount of government spending and the amount of government revenue.
Budget Process
- OMB works with Agencies and Departments to make Executve Budget.
- President signs off on budget and sends to Congress.
- Congress passes budget resolution that says how much money is going to be appropriated and how much revenue is projected.
- Programs are authorized
- 12 subcommittes appropriate money, working within the guidelines of the budget resolution. divy up the money between specific agencies and programs.
- Passed by both Houses of Congress.
- Signed by President
President as Chief Diplomat
Represents the US Negotiates Treaties Appoints Ambassadors Head of State and Head of Govt Receives foreign ambassador Commander in chief Chief Intellegence Office
Checks on Presidential Power as Diplomat
Senate Supermajority required to approve treaty.
Ambassadors and political appointees must be approved by Senate
Congress controls appropriations
Congress can hold hearings and subpoena people
Congressional Executive Agreement
Joint resolution that requires only simple majority. Not a treaty, but effectively an alternative to a treaty. Not the same as an executive agreement.
Executive Agreement
an agreement between the Executive Branch and a forgeign gov which has the force of law but is not a treaty. It does not require any congressional approval. can be overturned by the president.
Purpose of Regulations
implement laws… give details to legislation.
Requirements for Regs
based on statutory authority and created following procedures
Problems with Regs
potential that Congress has abdicated responsibility to legislate
potential that Exec. Branch is legislating
Limits democratic control over regulation.
Increases likelihood that regulations will be written (i.e. increases size of government)
