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budget

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A policy document allocating burdens (taxes) and benefits (expenditures).

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deficit

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An excess of federal expenditures over federal revenues.

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expenditures

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Federal spending of revenues. Major areas such as spending are social services and the military.

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revenues

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The financial resources of the federal government. The individual income tax and Social Security tax are two major sources of these.

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income tax

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Shares of individual wages and corporate revenues collected by the government. The Sixteenth Amendment explicitly authorized Congress to levy this.

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Sixteenth Amendment

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The constitutional amendment adopted in 1913 that explicitly permitted Congress to levy an income tax.

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federal debt

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All the money borrowed by the federal government over the years and still outstanding. Today it is more than $8 trillion.

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tax expenditures

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Revenue losses that result from special exemptions, exclusions, or deductions on the federal tax law.

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Social Security Act

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A 1935 law passed during the Great Depression that was intended to provide a minimal level of sustenance to older Americans and thus save them from poverty.

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Medicare

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A program added to the Social Security system in 1965 that provides hospitalization insurance for the elderly and permits older Americans to purchase inexpensive coverage for doctor fees and other health expenses.

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incrementalism

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The belief that the best predictor of this year's budget is the last year's budget, plus a little bit more.

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uncontrollable expenditures

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Expenditures that are determined not by a fixed amount of money appropriated by Congress but by how many eligible beneficiaries there are for a program or by previous obligations of the government.

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entitlements

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Policies for which Congress has obligated itself to pay X level of benefits to Y number of recipients that must be eligible for the benefits.

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House Ways and Means Committee

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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.

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Senate Finance Committee

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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.

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Congressional Budget and Impoundment Control Act of 1974

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An act designed to reform the congressional budgetary process. Its supporters hoped that it would also make Congress less dependent on the president's budget and better able to set and meet its own budgetary goals.

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Congressional Budget Office (CBO)

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Advises Congress on the probable consequences of its decisions, forecasts revenues, and is a counterweight to the president's OMB.

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budget resolution

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A resolution binding Congress to a total expenditure level, supposedly the bottom line of all federal spending for all programs.

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reconciliation

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A congressional process though which program authorizations are revised to achieve required savings. It also usually also includes tax or other revenue adjustments.

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authorization bill

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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.

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appropriations bill

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An act of Congress that actually funds programs within limits established by authorization bills. It usually covers one year.

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continuing resolutions

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When Congress cannot reach agreement and pass appropriations bills, these resolutions allow agencies to spend at the level of the previous year.

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capitalism

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an economic system in which individuals and corporations, not the government, own the principal means of production and seek profits

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mixed economy

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an economic system in which the government is deeply involved in economic decisions through its role as regulator, consumer, subsidizer, taxer, employer, and borrower

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multinational corporations

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Businesses with vast holdings in many countries, many of which have annual budgets exceeding that of many foreign governments.

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Securities and Exchange Commission

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an independent federal agency that oversees the exchange of securities to protect investors

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minimum wage

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the lowest wage that an employer is allowed to pay

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labor union

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an organization of employees formed to bargain with the employer

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collective bargaining

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Negotiations between representatives of labor unions and management to determine pay and acceptable working conditions.

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unemployment rate

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As measured by the Bureau of Labor Statistics, the proportion of the labor force actively seeking work but unable to find jobs.

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inflation

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a general and progressive increase in prices

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consumer price index

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The key measure of inflation that relates the rise in prices over time

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laissez-faire

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the principle that government should not meddle in the economy

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monetary policy

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Government policy that attempts to manage the economy by controlling the money supply and thus interest rates

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monetarism

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an economic theory holding that variations in unemployment and the rate of inflation are usually caused by changes in the supply of money

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Federal Reserve System

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The main instrument for making monetary policy in the United States. It was created by Congress in 1913 to regulate the lending practices of banks and thus the money supply.

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fiscal policy

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the policy that describes the impact of the federal budget - taxes, spending, and borrowing - on the economy.

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Keynesian economic theory

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The theory emphasizing that government spending and deficits can help the economy weather its normal ups and downs.

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supply-side economics

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An economic theory, advocated by President Reagan, holding that too much income goes to taxes and too little money is available for purchasing. The solution is to cut taxes and return purchasing power to consumers.

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protectionism

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Economic policy of shielding an economy from imports.

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World Trade Organization

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an international organization based in Geneva that monitors and enforces rules governing global trade

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antitrust policy

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A policy designed to ensure competition and prevent monopoly, which is the control of a market by one company.

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Food and Drug Administration

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The federal agency formed in 1913 and assigned the task of approving all food products and drugs sold in the United States.

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National Labor Relations Act

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A 1935 law, also known as the Wagner Act, that guarantees workers the right of collective bargaining sets down rules to protect unions and organizers, and created the National Labor Relations Board to regulate labor-management relations.

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social welfare policies

answer

Policies that provide benefits, cash or in-kind, to individuals, either through entitlement or means testing.

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entitlement programs

answer

government programs providing benefits to qualified individuals regardless of need.

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means-tested programs

answer

government programs providing benefits only to individuals who qualify based on specific needs.

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income distribution

answer

the way the national income is divided into "shares" ranging from the poor to the rich.

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relative deprivation

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A perception by an individual that he is not doing well economically in comparison to others.

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income

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the amount of money collected between any two points in time.

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wealth

answer

the value of assets owned

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poverty line

answer

the income threshold below which people are considered poor, based on what a family must spend for an "austere" standard of living.

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feminization of poverty

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The increasing concentration of poverty among women, especially unmarried women and their children

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progressive tax

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a tax by which the government takes a greater share of the income of the rich than of the poor- for example, when a rich family pays 50% of its income in taxes and poor family pays 5%.

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proportional tax

answer

A tax by which the government takes the same share of income from everyone, rich and poor alike.

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regressive tax

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A tax in which the burden falls relatively more heavily on low-income groups than on wealthy taxpayers.

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Earned Income Tax Credit

answer

refundable federal income tax credit for low-to-moderate- income working individuals and families, even if they did not earn enough money to be required to file a tax return.

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transfer payments

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Benefits given by the government directly to individuals. They may be either cash transfers, such as Social Security payments and retirement payments to former government employees, or in-kind transfers, such as food stamps and low-interest loans for college education.

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Social Security Act of 1935

answer

Created both the Social Security Program and a national assistance program for poor families, usually called Aid to Families with Dependent Children.

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Personal Responsibility and Work Opportunity Reconciliation Act

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The welfare reform law of 1996, which implemented the Temporary Assistance for Needy Families program.

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Temporary Assistance for Needy Families

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Replacing "Aid to Families with Dependent Children" as the program for public assistance to needy families, requires people on welfare to find work within two years and sets a lifetime maximum of five years.

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Social Security Trust Fund

answer

The "account" into which Social Security employee and employer contributions are "deposited" and used to pay out eligible recipients.

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health maintenance organization (HMO)

answer

Organization contracted by individuals or insurance companies to provide health care for a yearly free. Such network health plans limit the choice of doctors and treatments. About 60 percent of Americans are enrolled in HMOs or similar programs.

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patient's bill of rights

answer

A controversial proposal before Congress that would give patients certain rights against medical providers, particularly HMOs, including the right to sue them

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national health insurance

answer

A compulsory insurance program for all Americans that would have the government finance citizens' medical care. First proposed by President Truman, the plan was soundly opposed by the American Medical Association.

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Medicaid

answer

A public assistance program designed to provide health care for poor Americans. Medicaid is funded by both the states and the national government.

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Environmental Protection Agency (EPA)

answer

An agency of the federal government created in 1970 and charged with administering all the government's environmental legislation. It also administers policies dealing with toxic waste. The EPA is the largest federal independent regulatory agency.

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National Environmental Policy Act (NEPA)

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The law passed in 1969 that is the centerpiece of federal environmental policy in the US. The NEPA established the requirements for environmental impact statements.

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environmental impact statement (EIS)

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A report required by the NEPA that specifies the likely environmental impact of a proposed action. NEPA requires that whenever any agency proposes to undertake a policy that impacts the environment, the agency must file a statement with the EPA.

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Clean Air Act of 1970

answer

The law that charged the Department of Transportation with the responsibility to reduce automobile emissions.

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Water Pollution Control Act of 1972

answer

A law intended to clean up the nation's rivers and lakes. It requires municipal, industrial, and other polluters to use pollution control technology and secure permits from the EPA for discharging waste products into waters.

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Endangered Species Act of 1973

answer

This law requires the federal government to protect actively each of the hundreds of species listed as endangered, regardless of the economic effect on the surrounding towns or region.

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Superfund

answer

A fund created by Congress in 1980 to clean up hazardous waste sites. Money for the fund comes from taxing chemical products.

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foreign policy

answer

A policy that involves choice taking, like domestic policy, but additionally involves choices about relations with the rest of the world. The president is the chief initiator of foreign policy in the United States.

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United Nations

answer

Created in 1945, an organization whose members agree to renounce war and to respect certain human and economic freedoms. The seat of real power in the United Nations is the Security Council.

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North Atlantic Treaty Organization

answer

Created in 1949, an organization whose members include the United States, Canada, most Western European nations, and Turkey, all of whom agreed to combine military forces and to treat a war against one as a war against all.

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European Union

answer

A transnational government composed of most European nations that coordinates monetary, trade, immigration, and labor policies, making its members one economic unit. An example of regional organization.

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Secretary of State

answer

The head of the Department of State and traditionally a key adviser to the president on foreign policy

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Secretary of Defense

answer

The head of the Department of Defense and the president's key adviser on military policy; a key foreign policy actor.

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Joint Chiefs of Staff

answer

The commanding officers of the armed services who advise the president on military policy.

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Central Intelligence Agency

answer

an agency created after World War 2 to coordinate American intelligence activities abroad, conspiracy, and meddling as well.

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isolationism

answer

A foreign policy course followed throughout most of our nation's history, whereby the United States has tried to stay out of other nations' conflicts, particularly European wars. Isolationism was reaffirmed by the Monroe Doctrine.

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containment doctrine

answer

A foreign policy strategy advocated by George Kennan that called for the United States to isolate the Soviet Union, "contain" its advances, and resist its encroachments by peaceful means if possible, but by force if necessary.

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Cold War

answer

War by other than military means usually emphasizing ideological conflict, such as that between the United States and the Soviet Union from the end of World War II to 1990s

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McCarthyism

answer

The fear, prevalent in the 1950s, that international communism was conspiratorial, insidious, bent on world domination, and infiltrating American government and cultural institutions. It was named after Senator Joseph McCarthy and flourished after the Korean War.

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arms race

answer

A tense relationship beginning in the 1950s between the Soviet Union and the United States whereby one side's weaponry became the other side's goad to procure more weaponry, and so on.

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detente

answer

a slow transformation from conflict thinking to cooperative thinking in foreign policy strategy and policymaking. It sought a relaxation of tensions between the superpowers, coupled with firm guarantees of mutual security.

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Strategic Defense Initiative

answer

Renamed "Star Wars" by critics, a plan for defense against the Soviet Union unveiled by President Reagan in 1983. The Strategic Defense Initiative would create a global umbrella in space, using computers to scan the skies and high-tech devices to destroy invading missiles.

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interdependency

answer

Mutual dependency, in which the actions of nations reverberate and affect one another's economic lifelines

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tariff

answer

A special tax added to imported goods to raise the price, thereby protecting American businesses and workers from foreign competition.

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balance of trade

answer

The ratio of what is paid for imports to what is earned from exports. When more is imported than exported, there is a balance-of-trade deficit.

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Organization of Petroleum Exporting Countries

answer

An economic organization consisting primarily of Arab nations that controls the price of oil and the amount of oil its members produce and sell to other nations.

AP Gov’t Unit 5 (Ch. 14, 17-20) – Flashcards

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