AP Gov—1/26/2016
 Welcome back. S2 check-in
 Federal Budget: taxing & spending
 “Ten Trillion and Counting”
 Homework:
1. Edwards 13.1
2. Budget challenge: print the summary
page and bring to class on Thursday
The Federal Budget
Key Vocab
 Deficit: an excess of federal expenditures over federal revenues
 Expenditures: gov’t spending
 Revenues: the financial resources of the gov’t
 National debt: all the money borrowed by the federal gov’t over the
years and is still outstanding
Taxing & spending
I.
Sources of federal revenue
A.
B.
C.
II.
Where the money is spent
A.
B.
III.
In the past
Presently
Tax revolt
Nondiscretionary/mandatory
Discretionary
Entitlements
A.
B.
Meet eligibility requirements
Automatically spent each year without congressional review
Copyright © Houghton Mifflin
Company. All rights reserved.
18 | 5
Total Budget:
$3.64 trillion
Mandatory:
$2.1 trillion
Discretionary:
$1.2 trillion
Interest on Debt
$247 billion
Budget of the U.S. Government,
FY2011.
AP Gov—1/27/2016
 Federal Budget: The Budgeting Process
 “Ten Trillion and Counting”—have your video
questions out
 Homework:
1. Edwards 13.2 and 13.3
2. Budget challenge: print the summary
page and bring to class tomorrow
3. Budget quiz Monday
Warm up questions
1. What is the primary source of revenue for the federal gov’t?
2. Explain mandatory spending versus discretionary spending. What
is the main expenditure for each type of spending?
3. What are entitlements?
Taxing & spending
IV. The budget process
A.
A.
B.
A.
B.
C.
C.
D.
Executive branch
OMB
Congress
House Ways & Means
Senate Finance
CBO
Political influences
Presidential action
Taxing & spending
IV.
The budget process
1. The President’s budget request
- due 1st Monday in February, for fiscal year starting on October 1st
2. Congressional budget resolution
- concurrent resolution, no presidential signature or veto possible, cannot be
filibustered in the Senate
- due by April 15th, but this deadline is often not met, and a continuing resolution
is passed which continues the last year’s funding levels
- very basic document, broad spending categories
- spending is then detailed by congressional committee with jurisdiction
Taxing & spending
V.
Deficit-spending
A. Budget deficits vs. national
debt
B. Budget Programs
1.
2.
Balanced budget amendments
Paygo
President
Beginning national
debt
Carter
$653 billion
Reagan
$930 billion
G.H.W. Bush
$2.68 trillion
Clinton
$4.17 trillion
G.W. Bush
$5.66 trillion
Obama
$10.70 trillion
AP Gov—1/28/2016
 Budget Challenge results
 Federal Budget: Federal Reserve
 “Ten Trillion and Counting”—have your
video questions out
 Homework:
1. Finish up Edwards Ch. 13 and
pgs. 553-557
2. Budget quiz Monday
The Federal Reserve Board
 Created in 1913
 Members appointed by the president, confirmed by the Senate; serve
a nonrenewable fourteen-year term
 Somewhat independent of both the president and Congress
Federal Reserve Board
 Regulates the supply and price of money
 Sets monetary policy: the effort to shape the economy by
controlling the amount of money and bank deposits and the
interest rates charged for money
• Too little money in circulation slows the economy
• Too much cash/credit in circulation inflates the economy
AP Gov—1/29/2016
 TGIF!
 Quick debate debrief
 Federal Budget: Economic theories
 StudentCam
 Homework:
1. Budget quiz Monday
2. Current Events
Managing the Economy
Economic Policy
Types of Economic Policies
Fiscal
Monetary
 Taxing and spending considerations
 Regulation of money supply
 Budgeting
 Adjusting interest rates to
 Conducted by Congress and the
increase/decrease inflation
 Conducted by “the Fed”
President
History of Economic Policy
 Constitution gives Congress power to regulate commerce
 Industrial Revolution
 Great Depression
Economic theories
A.
Keynesian

Gov’t spending can help weather the ups and downs
Gov’t can spend its way out of the Depression
Provide jobs, get $ back in people’s pockets
Increase demand
Generally favored by Democrats




Economic theories
B. Supply-Side
 Stimulate supply of goods, not their
demand
 When gov’t spends too much/taxes too
much/regulates too tightly it curtails
economic growth
 Low taxes motivate individuals
 Generally favored by Republicans
 Do you think either of these approaches is reasonable? If not, what
would you envision as another option?
Economic Policy Making
 Council of Economic Advisers: professional economists
sympathetic to the president’s view of economics
 Office of Management and Budget: prepares estimates of amounts
to be spent by federal government agencies; negotiates department
budgets
 Secretary of the Treasury: reflects the point of view of the financial
community
History of the National Debt