User:Atcovi/AP Government/Budget


 * Budget: https://www.thebalance.com/what-is-the-federal-budget-3306305
 * Deficit: Money that we spent which was borrowed
 * 16th Amendment: Able to pass income taxes (IRS, Pollock v. Farmer's Loan and Trust -- SCOTUS found that the income tax was unconstitutional)
 * Progressive income tax -- you are taxed at a higher rate as you climb the income ladder.
 * We tax the way we do by tax brackets so that raises don't push you to the above bracket.
 * Tax expenditures - https://www.taxpolicycenter.org/briefing-book/what-are-tax-expenditures-and-how-are-they-structured

Who paid taxes?

 * 45% paid no INCOME taxes
 * 1% paid INCOME 35% taxes
 * 10% paid INCOME 68% taxes
 * Bottom 50% paid INCOME 3% taxes [children & retired]

Social Insurance Taxes

 * Social Security
 * Medicare
 * provides 1/3 of federal revenue

How do we get revenue? We usually borrow it from bonds. Treasury Department sells bonds. When you buy a bond, you give the government a loan and you're payed back with interest. A lot of government debt is from bonds or loans (from the Federal Reserve Bank). The national debt is about 20 trillion dollars. 9% of federal spending are interest payments. Spending increases when revenue decreases.

Tax Expenditures

 * Charity
 * Mortgage interest
 * Business equipment
 * Benefit the wealthy

Tax Reductions
US has least tax burden compared to other nations. Reasons why is that other countries have social programs to aid their citizens, thus increasing tax burdens.
 * Popular with voters, limit the government

The Cold War spends half of federal budget, 1/5 of federal budget remains today. Decreased until 9/11. Income security expenditures make up half of the federal budget, this is like Medicare and SS.

- Why are some of the budget is uncontrollable? Uncontrollable: Mandatory spending where we can't control how much mandatory spending there is going to be (Medicare, SS, gov't pensions)


 * Mandatory spending: Money that we're obligated to pay
 * Discretionary spending - spending that we can choose to raise or lower as we see fit.

President's Budget

 * Budget and Accounting Act; prepares budget with help of OMB


 * Due February

Congress's Budget

 * Budget Impoundment and Control Act 1974 - Created a budget process. Created budget committees in both chambers of Congress. Created the CBO.

Steps on Voting Process on How Much of the Budget is going to be spent

 * 1) Agencies/departments give budget requests to the OMB
 * 2) The OMB makes recommendations to the President.
 * 3) The President makes a budget and sends it to Congress.
 * 4) Congressional committees meet and make recommendations for their particular subject areas.
 * 5) Congress votes on a final number for the budget.
 * 6) Then Congress goes through the reconciliation process to reconcile committee requests and agency requests to that number.
 * 7) Congress passes a BUDGET
 * 8) POTUS approves


 * Authorization bills -- These bills authorize agencies and departments to spend money in line with the budget.
 * Appropriations bills - These bills direct the Treasury Department to give agencies and departments money to spend.

Continuing resolution funds the government temporarily at the same levels as the last budget.