Chapter 14 The Congress, The President, and the Budget: – Flashcards

question
A budget deficit occurs when expenditures exceed
answer
revenues
question
Most of today?s federal debt was run up by government borrowing during
answer
the 1980s.
question
Approximately what percentage of the annual federal budget pays interest on the national debt?
answer
9
question
Which of the following is NOT currently one of the major sources of federal revenue?
answer
excise taxes
question
In Pollock v. Farmer?s Loan and Trust Co. (1895), the United States Supreme Court ruled that
answer
the income tax was unconstitutional.
question
The Sixteenth Amendment, ratified in 1913,
answer
explicitly permitted Congress to levy an income tax.
question
A(n) ________ is a policy document allocating taxes and expenditures, or a series of goals with price tags attached.
answer
budget
question
A budget is
answer
a policy document allocating burdens (taxes) and benefits (expenditures).
question
Congress was officially given the power to levy an income tax through the
answer
Sixteenth Amendment.
question
The federal government?s budget is mainly
answer
a policy statement that allocates burdens and benefits by attaching price tags to policy goals.
question
According to Aaron Wildavsky, budgeting is a process most concerned with
answer
translating financial resources into human purposes.
question
Which of the following is NOT the responsibility of the Internal Revenue Service?
answer
establishing the annual tax rates that Americans of different incomes must pay
question
Income taxes
answer
provide the largest source of federal revenue.
question
In order of decreasing amounts, the sources of federal revenue include
answer
individual income tax, social insurance receipts, borrowing and corporate income tax.
question
Corporations today pay
answer
income taxes which account for much less federal revenue than individual income taxes
question
The income tax is generally progressive, meaning that
answer
those with more income pay higher rates of tax on their income.
question
Social Security taxes are
answer
paid for by employees and employers.
question
Social insurance taxes
answer
are earmarked for a specific purpose.
question
The fastest growing source of federal revenue has been
answer
Social Security taxes.
question
The government borrows money principally by
answer
selling bonds.
question
Who can purchase United States government bonds?
answer
) financial institutions B) citizens C) corporations D) mutual funds
question
The federal debt
answer
consists of all the money borrowed over the years by the national government and still outstanding.
question
The federal debt in the United States
answer
has increased due to the budget deficit caused by the difference between revenues and expenditures.
question
Unlike state and local governments, the federal government is borrowing primarily for
answer
its day-to-day expenses.
question
________ are revenue losses attributable to provisions of the federal tax laws which allow a special exemption, exclusion, or deduction.
answer
Tax expenditures
question
Tax expenditures consist of
answer
tax exemptions, deductions, and exclusions.
question
The federal income tax deduction for mortgage interest on an owner-occupied home is an example of a
answer
tax expenditure.
question
An example of a tax expenditure is
answer
a tax deduction for the mortgage interest paid by homeowners.
question
The Office of Management and Budget estimates that the total tax expenditures is more than ________ of the federal government?s total receipts.
answer
30 percent
question
Tax expenditures tend to most benefit
answer
middle- and upper-income people and corporations.
question
Which of the following statements about President Reagan?s 1981 tax cut is FALSE?
answer
Corporate taxes were increased.
question
Which of the following statements about President Reagan?s 1981 tax cut is TRUE?
answer
It provided new tax incentives for personal saving and investment.
question
Which of the following was NOT a provision of President Reagan?s 1985 tax simplification program?
answer
It increased the number of tax expenditures available to businesses.
question
Beginning in 1985, federal income taxes were ________ to the cost of living, so that government no longer got a larger percentage when inflation pushed incomes into higher brackets while the tax rates stayed the same.
answer
indexed
question
President Reagan?s 1981 tax cuts were most beneficial to
answer
high-income families.
question
In 1993, Congress agreed to President Clinton?s proposal to
answer
raise the income tax rate for families in the highest income brackets
question
The United States government?s annual budget is now approximately
answer
$2.75 trillion.
question
Compared to most other countries with developed economies, the national, state, and local governments in the United States tax
answer
less.
question
Compared to other Western nations, America?s total government expenditure as a percentage of the Gross Domestic Product (GDP) is
answer
one of the smallest.
question
Which of the following countries have the smallest total tax revenues as a percentage of their gross domestic product?
answer
United States
question
The federal budget consumes ________ of America?s gross domestic product.
answer
50 percent
question
America?s national, state and local governments spend an amount equal to ________ of the GDP.
answer
20 percent.
question
During the 1950s and early 1960s, over half the federal budget was spent every year on A) agricultural subsidies and programs.
answer
the Department of Defense.
question
From the mid-1960s to the early 1980s, the biggest change in government spending was the
answer
increase in social service expenditures and decline in defense spending.
question
The military industrial complex refers to
answer
the close relationship between defense officials and the corporations that supply their hardware needs.
question
The budget of the Department of Defense
answer
decreased in the 1990s.
question
The purchasing of military hardware is known as
answer
procurement.
question
The biggest expenditure in the federal budget today is
answer
income security programs
question
The Social Security Act, which set up the Social Security system, was passed in
answer
1935
question
The Social Security Act was passed under the administration of President
answer
Franklin D. Roosevelt.
question
In 1965, ________ was added to the Social Security program to provide hospital and physician coverage to the elderly.
answer
Medicare
question
Medicare
answer
provides both hospital and physician coverage to the elderly.
question
The biggest slice of the federal budget pie belongs to
answer
income security expenditures.
question
By 1990, the Social Security system was financed by a payroll tax of
answer
over 15 percent.
question
A major feature of incremental budgeting is that it
answer
provides small increases in the current budget over the previous year?s budget.
question
An example of incremental budgeting is
answer
giving an agency a little more than it had last year
question
Which of the following is not a feature of incremental budgeting?
answer
Agencies must justify their entire budget request.
question
________ refers to the concept that in the spending appropriations process, the best predictor of this year?s budget is last year?s budget plus a little bit more.
answer
Incrementalism
question
The most prevalent model of budgetary decision making in practice is
answer
incrementalism.
question
Which of the following is NOT associated with incremental budgeting?
answer
An agency or program must prove it still merits its very existence every year.
question
Budget items mandated by law or by a previous obligation are known as
answer
uncontrollable expenditures
question
Social Security payments are an example of a(n)
answer
entitlement.
question
An ?uncontrollable? expenditure in the federal budget is defined as
answer
an expenditure that is required by current law or a previous government obligation to people automatically eligible for some benefit.
question
Social Security programs, interest on the national debt, and military pensions are examples of
answer
uncontrollable expenditures.
question
The biggest uncontrollable expenditure in the federal budget is
answer
the Social Security system.
question
An estimated ________ of the federal budget is considered uncontrollable, unless Congress changes a law or existing benefit levels.
answer
two-thirds
question
The ultimate power to determine how much the government will tax and spend, and what it will spend taxes for, lies with
answer
Congress.
question
In the House of Representatives, it is the ________ Committee that writes tax codes, subject to the approval of Congress as a whole.
answer
Ways and Means
question
Agencies invariably pad their budget requests because
answer
they want the almost inevitable budget cuts to be bearable
question
In the Senate, the ________ Committee is responsible for writing tax codes, subject to the approval of Congress as a whole.
answer
Finance
question
The budget cycle begins in the executive branch ________ months before the fiscal year begins
answer
19
question
The Director of the Office of Management and Budget
answer
is a presidential appointee requiring approval of the Senate.
question
The ________ is responsible for supervising preparation of the federal budget and advising the president on budgetary matters.
answer
Office of Management and Budget
question
Until Congress passed the Budget and Accounting Act of 1921,
answer
agencies of the executive branch sent their budget requests to the secretary of the treasury, who forwarded them on to Congress, with the president playing little or no role in the entire process.
question
Before the president submits her budget to Congress, the Office of Management and Budget (OMB) coordinates the requests of
answer
executive agencies.
question
The heads of executive agencies send their budget requests to the
answer
Office of Management and Budget
question
Agencies? behavior and budgets are audited, monitored, and evaluated for Congress by the
answer
General Accounting Office.
question
The Office of Management and Budget parcels out money to government agencies and is accountable to
answer
the president.
question
Which of the following statements about the Office of Management and Budget (OMB) is FALSE?
answer
The OMB is one of the few government agencies created by the Constitution.
question
Once the Office of Management and Budget has prepared the federal budget,
answer
the president makes revisions and submits it to Congress.
question
According to the Constitution, all federal appropriations must be authorized by
answer
Congress.
question
The Congressional Budget and Impoundment Control Act of 1974 set up all of the following EXCEPT
answer
the Office of Management and Budget.
question
The Congressional Budget and Impoundment Act of 1974 requires that
answer
Congress agree on a budget according to a fixed schedule, with target figures for the total budget size
question
The congressional equivalent of the Office of Management and Budget is the
answer
Congressional Budget Office.
question
One of the important purposes of the Congressional Budget Act of 1974 is to
answer
force Congress to consider the budget as a whole rather than in terms of individual appropriations.
question
The main purpose of the Congressional Budget Office is to
answer
advise Congress on the consequences of its budget decisions.
question
To set a limit on total government spending, both houses of Congress are required to pass a(n) ________ every April, binding Congress to a total expenditure level, or bottom line, of all federal spending for all programs.
answer
budget resolution
question
A budget resolution
answer
sets limits on expenditures based on revenue projections.
question
Congress attempts to bind itself to a total expenditure level that should form the bottom line of all federal spending for all programs by passing
answer
a budget resolution.
question
Budget ________ revises program authorizations to achieve required savings
answer
reconciliation
question
A budget reconciliation
answer
revises program authorizations to achieve required savings.
question
An ________ bill is an act of Congress that establishes a discretionary government program or an entitlement, or that continues or changes such programs.
answer
authorization
question
To actually fund a program, Congress must pass an ________ bill.
answer
appropriations
question
Which of the following would be a specific example of an appropriations bill?
answer
a bill funding the Department of the Interior for the fiscal year
question
Failing to meet its own budget timetable, Congress has frequently resorted to ________, which are laws that allow agencies to spend at the previous year?s level.
answer
continuing resolutions
question
An authorization bill
answer
establishes, continues, or changes a discretionary program or an entitlement.
question
In order to actually fund programs established by authorization bills, Congress must pass
answer
an appropriations bill.
question
The Balanced Budget and Emergency Deficit Control Act called for the president to order ________, if Congress failed to meet specific deficit-reduction goals.
answer
sequestrations
question
The Gramm-Rudman-Hollings Act
answer
mandated maximum allowable deficit levels for each year until 1993, when the budget was to be balanced.
question
In 1990, Congress split discretionary spending into three categories. Which of the following was NOT one of the three categories?
answer
debt service
question
Near the end of 1990, Congress approved a major change in the making of budget policy that shifted the focus from cutting spending to
answer
controlling increases in spending.
question
By 2002, the budget deficit had increased again due to
answer
the first Iraq war.
question
Some economists argue that less affluent voters will always use their votes to support public policies that
answer
redistribute benefits from the rich to the poor.
question
________ are not unwilling victims of big government and its big taxes in a democracy, they are at least its co-conspirators.
answer
Citizens
question
Research has found that the public sector expands principally
answer
in response to changes in economic and social conditions that affect the public?s preferences for government activity.
question
Economists Allen Meltzer and Scott Richard argue that the cost of government grows because
answer
people in a democracy use the government to secure benefits.
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question
A budget deficit occurs when expenditures exceed
answer
revenues
question
Most of today?s federal debt was run up by government borrowing during
answer
the 1980s.
question
Approximately what percentage of the annual federal budget pays interest on the national debt?
answer
9
question
Which of the following is NOT currently one of the major sources of federal revenue?
answer
excise taxes
question
In Pollock v. Farmer?s Loan and Trust Co. (1895), the United States Supreme Court ruled that
answer
the income tax was unconstitutional.
question
The Sixteenth Amendment, ratified in 1913,
answer
explicitly permitted Congress to levy an income tax.
question
A(n) ________ is a policy document allocating taxes and expenditures, or a series of goals with price tags attached.
answer
budget
question
A budget is
answer
a policy document allocating burdens (taxes) and benefits (expenditures).
question
Congress was officially given the power to levy an income tax through the
answer
Sixteenth Amendment.
question
The federal government?s budget is mainly
answer
a policy statement that allocates burdens and benefits by attaching price tags to policy goals.
question
According to Aaron Wildavsky, budgeting is a process most concerned with
answer
translating financial resources into human purposes.
question
Which of the following is NOT the responsibility of the Internal Revenue Service?
answer
establishing the annual tax rates that Americans of different incomes must pay
question
Income taxes
answer
provide the largest source of federal revenue.
question
In order of decreasing amounts, the sources of federal revenue include
answer
individual income tax, social insurance receipts, borrowing and corporate income tax.
question
Corporations today pay
answer
income taxes which account for much less federal revenue than individual income taxes
question
The income tax is generally progressive, meaning that
answer
those with more income pay higher rates of tax on their income.
question
Social Security taxes are
answer
paid for by employees and employers.
question
Social insurance taxes
answer
are earmarked for a specific purpose.
question
The fastest growing source of federal revenue has been
answer
Social Security taxes.
question
The government borrows money principally by
answer
selling bonds.
question
Who can purchase United States government bonds?
answer
) financial institutions B) citizens C) corporations D) mutual funds
question
The federal debt
answer
consists of all the money borrowed over the years by the national government and still outstanding.
question
The federal debt in the United States
answer
has increased due to the budget deficit caused by the difference between revenues and expenditures.
question
Unlike state and local governments, the federal government is borrowing primarily for
answer
its day-to-day expenses.
question
________ are revenue losses attributable to provisions of the federal tax laws which allow a special exemption, exclusion, or deduction.
answer
Tax expenditures
question
Tax expenditures consist of
answer
tax exemptions, deductions, and exclusions.
question
The federal income tax deduction for mortgage interest on an owner-occupied home is an example of a
answer
tax expenditure.
question
An example of a tax expenditure is
answer
a tax deduction for the mortgage interest paid by homeowners.
question
The Office of Management and Budget estimates that the total tax expenditures is more than ________ of the federal government?s total receipts.
answer
30 percent
question
Tax expenditures tend to most benefit
answer
middle- and upper-income people and corporations.
question
Which of the following statements about President Reagan?s 1981 tax cut is FALSE?
answer
Corporate taxes were increased.
question
Which of the following statements about President Reagan?s 1981 tax cut is TRUE?
answer
It provided new tax incentives for personal saving and investment.
question
Which of the following was NOT a provision of President Reagan?s 1985 tax simplification program?
answer
It increased the number of tax expenditures available to businesses.
question
Beginning in 1985, federal income taxes were ________ to the cost of living, so that government no longer got a larger percentage when inflation pushed incomes into higher brackets while the tax rates stayed the same.
answer
indexed
question
President Reagan?s 1981 tax cuts were most beneficial to
answer
high-income families.
question
In 1993, Congress agreed to President Clinton?s proposal to
answer
raise the income tax rate for families in the highest income brackets
question
The United States government?s annual budget is now approximately
answer
$2.75 trillion.
question
Compared to most other countries with developed economies, the national, state, and local governments in the United States tax
answer
less.
question
Compared to other Western nations, America?s total government expenditure as a percentage of the Gross Domestic Product (GDP) is
answer
one of the smallest.
question
Which of the following countries have the smallest total tax revenues as a percentage of their gross domestic product?
answer
United States
question
The federal budget consumes ________ of America?s gross domestic product.
answer
50 percent
question
America?s national, state and local governments spend an amount equal to ________ of the GDP.
answer
20 percent.
question
During the 1950s and early 1960s, over half the federal budget was spent every year on A) agricultural subsidies and programs.
answer
the Department of Defense.
question
From the mid-1960s to the early 1980s, the biggest change in government spending was the
answer
increase in social service expenditures and decline in defense spending.
question
The military industrial complex refers to
answer
the close relationship between defense officials and the corporations that supply their hardware needs.
question
The budget of the Department of Defense
answer
decreased in the 1990s.
question
The purchasing of military hardware is known as
answer
procurement.
question
The biggest expenditure in the federal budget today is
answer
income security programs
question
The Social Security Act, which set up the Social Security system, was passed in
answer
1935
question
The Social Security Act was passed under the administration of President
answer
Franklin D. Roosevelt.
question
In 1965, ________ was added to the Social Security program to provide hospital and physician coverage to the elderly.
answer
Medicare
question
Medicare
answer
provides both hospital and physician coverage to the elderly.
question
The biggest slice of the federal budget pie belongs to
answer
income security expenditures.
question
By 1990, the Social Security system was financed by a payroll tax of
answer
over 15 percent.
question
A major feature of incremental budgeting is that it
answer
provides small increases in the current budget over the previous year?s budget.
question
An example of incremental budgeting is
answer
giving an agency a little more than it had last year
question
Which of the following is not a feature of incremental budgeting?
answer
Agencies must justify their entire budget request.
question
________ refers to the concept that in the spending appropriations process, the best predictor of this year?s budget is last year?s budget plus a little bit more.
answer
Incrementalism
question
The most prevalent model of budgetary decision making in practice is
answer
incrementalism.
question
Which of the following is NOT associated with incremental budgeting?
answer
An agency or program must prove it still merits its very existence every year.
question
Budget items mandated by law or by a previous obligation are known as
answer
uncontrollable expenditures
question
Social Security payments are an example of a(n)
answer
entitlement.
question
An ?uncontrollable? expenditure in the federal budget is defined as
answer
an expenditure that is required by current law or a previous government obligation to people automatically eligible for some benefit.
question
Social Security programs, interest on the national debt, and military pensions are examples of
answer
uncontrollable expenditures.
question
The biggest uncontrollable expenditure in the federal budget is
answer
the Social Security system.
question
An estimated ________ of the federal budget is considered uncontrollable, unless Congress changes a law or existing benefit levels.
answer
two-thirds
question
The ultimate power to determine how much the government will tax and spend, and what it will spend taxes for, lies with
answer
Congress.
question
In the House of Representatives, it is the ________ Committee that writes tax codes, subject to the approval of Congress as a whole.
answer
Ways and Means
question
Agencies invariably pad their budget requests because
answer
they want the almost inevitable budget cuts to be bearable
question
In the Senate, the ________ Committee is responsible for writing tax codes, subject to the approval of Congress as a whole.
answer
Finance
question
The budget cycle begins in the executive branch ________ months before the fiscal year begins
answer
19
question
The Director of the Office of Management and Budget
answer
is a presidential appointee requiring approval of the Senate.
question
The ________ is responsible for supervising preparation of the federal budget and advising the president on budgetary matters.
answer
Office of Management and Budget
question
Until Congress passed the Budget and Accounting Act of 1921,
answer
agencies of the executive branch sent their budget requests to the secretary of the treasury, who forwarded them on to Congress, with the president playing little or no role in the entire process.
question
Before the president submits her budget to Congress, the Office of Management and Budget (OMB) coordinates the requests of
answer
executive agencies.
question
The heads of executive agencies send their budget requests to the
answer
Office of Management and Budget
question
Agencies? behavior and budgets are audited, monitored, and evaluated for Congress by the
answer
General Accounting Office.
question
The Office of Management and Budget parcels out money to government agencies and is accountable to
answer
the president.
question
Which of the following statements about the Office of Management and Budget (OMB) is FALSE?
answer
The OMB is one of the few government agencies created by the Constitution.
question
Once the Office of Management and Budget has prepared the federal budget,
answer
the president makes revisions and submits it to Congress.
question
According to the Constitution, all federal appropriations must be authorized by
answer
Congress.
question
The Congressional Budget and Impoundment Control Act of 1974 set up all of the following EXCEPT
answer
the Office of Management and Budget.
question
The Congressional Budget and Impoundment Act of 1974 requires that
answer
Congress agree on a budget according to a fixed schedule, with target figures for the total budget size
question
The congressional equivalent of the Office of Management and Budget is the
answer
Congressional Budget Office.
question
One of the important purposes of the Congressional Budget Act of 1974 is to
answer
force Congress to consider the budget as a whole rather than in terms of individual appropriations.
question
The main purpose of the Congressional Budget Office is to
answer
advise Congress on the consequences of its budget decisions.
question
To set a limit on total government spending, both houses of Congress are required to pass a(n) ________ every April, binding Congress to a total expenditure level, or bottom line, of all federal spending for all programs.
answer
budget resolution
question
A budget resolution
answer
sets limits on expenditures based on revenue projections.
question
Congress attempts to bind itself to a total expenditure level that should form the bottom line of all federal spending for all programs by passing
answer
a budget resolution.
question
Budget ________ revises program authorizations to achieve required savings
answer
reconciliation
question
A budget reconciliation
answer
revises program authorizations to achieve required savings.
question
An ________ bill is an act of Congress that establishes a discretionary government program or an entitlement, or that continues or changes such programs.
answer
authorization
question
To actually fund a program, Congress must pass an ________ bill.
answer
appropriations
question
Which of the following would be a specific example of an appropriations bill?
answer
a bill funding the Department of the Interior for the fiscal year
question
Failing to meet its own budget timetable, Congress has frequently resorted to ________, which are laws that allow agencies to spend at the previous year?s level.
answer
continuing resolutions
question
An authorization bill
answer
establishes, continues, or changes a discretionary program or an entitlement.
question
In order to actually fund programs established by authorization bills, Congress must pass
answer
an appropriations bill.
question
The Balanced Budget and Emergency Deficit Control Act called for the president to order ________, if Congress failed to meet specific deficit-reduction goals.
answer
sequestrations
question
The Gramm-Rudman-Hollings Act
answer
mandated maximum allowable deficit levels for each year until 1993, when the budget was to be balanced.
question
In 1990, Congress split discretionary spending into three categories. Which of the following was NOT one of the three categories?
answer
debt service
question
Near the end of 1990, Congress approved a major change in the making of budget policy that shifted the focus from cutting spending to
answer
controlling increases in spending.
question
By 2002, the budget deficit had increased again due to
answer
the first Iraq war.
question
Some economists argue that less affluent voters will always use their votes to support public policies that
answer
redistribute benefits from the rich to the poor.
question
________ are not unwilling victims of big government and its big taxes in a democracy, they are at least its co-conspirators.
answer
Citizens
question
Research has found that the public sector expands principally
answer
in response to changes in economic and social conditions that affect the public?s preferences for government activity.
question
Economists Allen Meltzer and Scott Richard argue that the cost of government grows because
answer
people in a democracy use the government to secure benefits.
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