Ch 4: Federal Budget Structures

Question 1

Categories of federal spending

Answer 1

Social security & unemployment: 30%
Medicare and health: 27%
Military: 16%
Education: 3%
Interest on debt: 6%

Question 2

Percentage of federal revenue that comes from personal income taxes

Answer 2

49%

Question 3

Percentage of revenue that comes from corporate income taxes

Answer 3

6.6%

Question 4

Means tested income security programs

Answer 4

food stamps
SSI
TANF
Earned income tax credit
WIC
Child care assistance
Refugee assistance
LIHEAP

Question 5

Non-means tested income security program

Answer 5

Unemployment

Question 6

T or F, the federal budget is in a deficit most years

Answer 6

True–only five years with no deficit since 1968

Question 7

The “power of the purse” belongs to

Answer 7

Congress

Question 8

Article 1, Section 9 of the Constitution

Answer 8

“No Money shall be drawn from the Treasury but in Consequence of Appropriations made by Law; and a regular Statement and Account of Receipts and Expenditures of all public Money.”

Question 9

Federal funds cannot be spent until

Answer 9

Congress passes and the president signs an appropriation

Question 10

T or F, until late 1800s, agencies submitted budgets directly to congress

Answer 10

True, president was not involved and there was no national budget. WWII deficits began to change the conversation about budgeting

Question 11

Budget and Accountability act of 1921

Answer 11

Established:
OMB, originally called Bureau of Budget
GAO
Disallowed agency submission of appropriation requests directly to congress

Question 12

Congressional Budget and Impoundment Control Act of 1974

Answer 12

Established Congressional Budget Office
Established house and senate budget committees:
Authorization
Appropriation (with 12 subcommittees)
Budget (to develop congressional budget)
Financing (taxes, Social Security, Medicare, etc)

Senate: Finance Committee
House: Ways and Means Committee

Question 13

Balanced Budget and Emergency Deficit Control Act of 1985

Answer 13

Established deficit targets
If targets were not met, a sequestration process reduced spending by formula
Replaced by Budget and Enforcement Act in 1990

Question 14

Budget and Enforcement Act of 1990

Answer 14

Created mandatory and discretionary spending categories

Mandatory-payments determined by eligibility rules and entitlement authority

Discretionary spending-determined by appropriation bills

Placed dollar limits on mandatory spending and enacted PAYGO requirements

Question 15

Statutory Pay as you Go Act of 2010

Answer 15

Can’t approve new taxes, fees or mandatory spending if doing so increases the projected deficit

Revenue cuts must be offset by spending cuts
Spending increases requires revenue increases

OMB determines if it’s been violated. If so, President issues required sequestration

Question 16

Budget Control Act of 2011

Answer 16

Set discretionary spending caps through FY 2021
Created a joint committee on deficit reduction Sequestration will occur if caps not met

Question 17

Federal agencies start preparing budgets

Answer 17

about 18 months before FY begins (April)

Question 18

OMB compares budget requests to

Answer 18

Presidential program objectives
Expenditure caps set by President
Dept of Treasury revenue forecasts
Economic estimates

Question 19

President submits budget to Congress on

Answer 19

First Monday in February

Question 20

Four committee paths in the congressional fiscal process

Answer 20

Authorizations
Appropriations
Budget
Financing

Question 21

The Congressional Budget and Impoundment Control Act, 1974 was passed in response to

Answer 21

Nixon’s abuse of impoundment authority. He refused to release funds.

Impoundments became subject to congressional review

Question 22

Types of budget authority

Answer 22

Appropriations
Back door spending-contracting, borrowing
Continuing resolution
Supplemental appropriation

Question 23

Mandatory and net interest spending is _____% of the budget

Answer 23

69.9%

Question 24

Discretionary spending is _____% of the budget

Answer 24

30.1%

Of this, 54% of it is national defense spending