The Federal Budget, Chapter 25.1
Essential Idea #1:
1. The first Monday of every February, the president proposes a _____________ to
Congress that outlines how the government should _________ its money.
2. Congress then passes a budget __________________, which totals the revenues
and spending, and sets targets for how much money will be __________ in
different categories.
3. There are two types of spending: ________________ and __________________.
a. ________________________
i. This type of spending does ______ need annual approval. The
government will pay this no matter what.
1. Examples:
b. ___________________________
i. This type of government spending must be approved
_______________.
1. Examples:
4. Before the government can actually spend this money, the Congress must first
pass ______________________________.
a. _________________________ approve spending for a particular activity.
Essential Idea #2:
1. The federal budget contains two parts: ________________ and
_________________.
Revenues
2. Nearly _______ of the government’s revenue comes from the ______________,
which is paid by _________________. Each year, every worker files a
________________, which calculates how much of their ___________ they must
pay in taxes. Tax returns are due by _______________ of each year.
3. The second largest source of revenue is called __________________, which is used
to pay for ___________________ and _________________.
a. ______________________ pays people who are _____________ or
_______________.
b. ______________________ pays for the __________________ costs of
the elderly.
c. ____________________ pays the health costs of people with _____
incomes.
4. A tax on specific goods like gasoline, tobacco, or telephone services is called an
________________.
5. A tax on money inherited is called an _________________.
6. Taxes can be classified according to the effect they have on the people taxed.
a. ____________________
i. With a progressive tax, the percentage of tax ______________ as
income _____________.
ii. Example:
b. _______________________
i. With a regressive tax, the percentage of tax _______________ as
income _____________. Regressive taxes hurt people with _____
incomes.
ii. Example:
c. ______________________
i. With a proportional tax, the percentage of tax
__________________ no matter the income.
Expenditures
7. What does the government spend all of this money on?
a. The government spends most of its money on ___________________,
which accounts for ___________ of the federal expenditures.
b. Will the money spend on social security increase or decrease in the future?
Why?
c. The second largest category is _____________________, which accounts
for ____________ of the federal expenditures.
i. Defense spending ____________ during times of __________.
d. A portion of the federal budget goes toward paying _____________ on the
______________. How big is the national debt right now?
Managing the Economy
8. The government used to only have ___________ expenditures that could be
written on _______ page. Today, the budget takes __________ pages to write.
9. When the government spends ________ money than it collects, it has a
__________.
10. When the government spends ________ money than it collects, it has a
_________.
11. Government want a ________________________, where spending and collecting
are _____________.
12. To help stabilize the economy, the government provides ____________________,
such as ______________________, and making income tax a
______________________.