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| Federal budget | A policy document that states how much the government plans to collect in revenue (primarily taxes) and spend (expenditures) in one fiscal year.. |
| Deficit | An excess of federal expenditures over federal revenues. |
| expenditures | Federal spending of revenues. The two major areas of spending are social welfare services and the military. |
| revenues | The financial resources of the federal government. The individual income tax and Social Security tax are two major sources of these. |
| income tax | Shares of individual wages and corporate revenues collected by the government. The Sixteenth Amendment explicitly authorized Congress to levy this. |
| Sixteenth Amendment | The constitutional amendment adopted in 1913 that explicitly permitted Congress to levy an income tax. |
| federal debt | All the money borrowed by the federal government over the years and still outstanding. Today it is more than $16 trillion. |
| tax expenditures | Revenue losses that result from special exemptions, exclusions, or deductions on the federal tax law. |
| Social Security Act | 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. |
| Medicare | 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. |
| incrementalism | The belief that the best predictor of this year's budget is the last year's budget, plus a little bit more. |
| uncontrollable expenditures | 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. |
| entitlements | 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. |
| House Ways and Means Committee | 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. |
| Senate Finance Committee | 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. |
| Congressional Budget and Impoundment Control Act of 1974 | 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. |
| Congressional Budget Office (CBO) | Advises Congress on the probable consequences of its decisions, forecasts revenues, and is a counterweight to the president's OMB. |
| budget resolution | A resolution binding Congress to a total expenditure level, supposedly the bottom line of all federal spending for all programs. |
| reconciliation | A congressional process though which program authorizations are revised to achieve required savings. It also usually also includes tax or other revenue adjustments. |
| authorization bill | 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. |
| appropriations bill | An act of Congress that actually funds programs within limits established by authorization bills. It usually covers one year. |
| continuing resolutions | When Congress cannot reach agreement and pass appropriations bills, these resolutions allow agencies to spend at the level of the previous year. |
| fiscal policy | This is controlled primarily by Congress. This involves deciding on revenue sources (taxes) and deciding how to spend the nation's money. |
| monetary policy | This is controlled by the bureaucratic independent regulatory agency known as the Federal Reserve. They control the supply of money in circulation in the US as well as the interest rates charged to borrow money. |
| surplus | An excess. When talking about budget, this means that revenues exceeded expenditures. |
| GDP | The total amount (in $$) of goods and services produced in the US in one year. The current Gross Domestic Product is around $16 trillion. |
| Department of the Treasury | The cabinet department responsible for printing currency (even though the Fed Reserve tells dictates how much to print) |
| corporate income tax | The third largest source of government revenue. These are the taxes charged to businesses based on the profits they earn. |
| baby boomers | The generation born in the decade and a half after WWII. This generation was larger than the generations before or after. They are currently in or approaching retirement which is posing problems for the Social Security and Medicare programs. |
| loopholes | a tax break or benefit that allows someone to write off expenses or get out of paying certain taxes (ex: Ross Perot story from your book) |
| Tax Reform Act of 1986 | During Reagan's presidency, Congress reduced the number of tax brackets and eliminated or reduced many tax deductions. |
| IRS | The bureaucratic independent regulatory agency that is responsible for collecting taxes from individuals and businesses. |
| omnibus bill | A "Christmas Tree Bill" of different, unrelated pieces of legislation slapped together in one document and passed or rejected together. |
| bonds | a piece of paper the government sells to an individual in exchange for the paying the individual back with interest at a set future date. This is a way for the government to borrow money from people and helped finance WWII spending. |
| OMB | makes budget proposals for bureaucratic agencies and submits them to the president who then makes suggestions for Congress to include in the budget document |
| uncontrollable expenditures | mandatory expenses such as Social Security and Medicare. |
| military industrial complex | Today, the Department of Defense gets 1/5 of government budget, representing the second large expenditure. |
| deficit spending | Spending the country into deficit, knowingly exceeding revenues with expenditures. The federal government has been borrowing primarily for its day-to-day expenses, running deficits almost every year of our nation's history. |
