Zahra Ahmed
AP Government and Politics
Ms. Ebner
Period 6
Bureaucracy and Budget Notes
(Textbook Chapter 14: The Congress, the President and the Budget)
Key vocabulary
Budget- a policy document allocating burdens (taxes) and benefits (expenditures)
Deficit- an excess of federal expenditures over federal revenue
Expenditures- federal spending of revenues. Major source of such
spending are social 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
revenue
I. Sources of Federal Revenue
a. Income Tax- income tax is shares of individual wages and
corporate revenues collected by the government. The 16th amendment
(adopted in 1915) explicitly authorized congress to levy a tax on income.
The Internal Revenue Service was established to collect it.
b. Social Insurance taxes- Social Security taxes come from both
employers and employees. Money is deducted from employees’ paychecks
and matched by their employers. The
money is earmarked for the Social
Security Trust Fund.
c. Borrowing- When the
federal government wants to borrow
money, the Treasury Department
sells bonds, guaranteeing to pay
interest to the bondholder. Unlike
state and local governments and
private businesses, the federal
government does not have a capital
budget, a budget for expenditures on
items that will serve for the long
term, such as equipment, roads, and
buildings. The federal debt is all the
money borrowed by the federal government over the years and still outstanding.
d. Taxes and public policy- A tax loophole is presumably a tax break or tax benefit that gives
exemptions, deductions, and special cases. Tax loopholes cost the treasury relatively little. Tax
expenditures are defined as “revenue losses attributable to provisions of the federal tax laws that allow a
special exemption, exclusion, or deduction.” On the whole, tax expenditures directly benefit middle- and
upper-income taxpayers and corporations. Tax reductions are rare. The Tax Reform Act of 1986
eliminated or reduced the value of many tax deductions, removed several million low-income individuals
from the tax rolls, and reduced the number of tax brackets.
II. Federal Expenditures
a. A generation ago the most expensive part of the federal budget was its military budget. In the
1950s and early 1960s, spending for past, present, and future wars amounted to more than half the federal
budget. A generation ago the most expensive part of the federal budget was its military budget. In the
1950s and early 1960s, spending for past, present, and future wars amounted to more than half the federal
budget.
b. Social Security Act (1935) intended to provide a
minimal level of sustenance to older Americans, saving them
from poverty. In the 1950s, disability insurance became a part
of Social Security and Medicare was added in 1965. Money is
taken from the working members of the population and spent
on the retired members. The number of older Americans has
increased and people tend to stay on the rolls longer as life
expectancies increase.
c. Incrementalism means simply that the best
predictor of this year’s budget is last year’s budget plus a little
bit more (an increment). Many are uncontrollable
expenditures because Congress has in effect obligated itself to
pay X level of benefits to Y number of recipients. These
policies are called entitlements.
III. The Budget Process
a. The president’s budget: The Budget and Accounting
Act of 1921 required presidents to propose an executive budget
to Congress and created the Bureau of the Budget (later called
the Office of Management and Budget) to help them. It takes
almost a year to prepare a presidential budget.
b. Congress: The Congressional Budget and Impoundment Control Act of 1974 reformed the
congressional budgetary process. It created a fixed budget calendar, a budget committee in each house,
and a Congressional Budget Office. The process of set limits on expenditures on the basis of revenue
projections is called setting a budget resolution. Budget reconciliation is a process by which program
authorizations are revised to achieve required savings. An authorization bill is an act of Congress that
establishes a discretionary government program or an entitlement, or that continues or changes such
programs. An appropriations bill must be passed to fund programs established by authorization bills.
Continuing resolutions are laws that allow agencies to spend at the previous year’s level
(Textbook Chapter 15: The Federal Bureaucracy)
I. The Basics
a. The patronage system (hiring and promotion based on knowing the right people). The Pendleton
Civil Service Act (1883) created the federal Civil Service. All civil service systems are based on the
merit principle (using entrance exams and promotion ratings to reward qualified individuals) to create a
nonpartisan government service. The Hatch Act prohibits civil service employees from active
participation in partisan politics while on duty. The Office of Personnel Management is in charge of
hiring for most agencies of the federal government. Each job is assigned a GS (General Schedule) rating
with salaries keyed to rating and experience.
II. Parts of the Bureaucracy
a. The Cabinet Departments: A secretary chosen by the
president and approved by the Senate heads each of the
fourteen cabinet departments
b. The Regulatory Agencies: Each independent
regulatory agency has responsibility for some sector of the
economy—making and enforcing rules designed to protect the
public interest.
c. The Government Corporations: Government corporations provide a service that could be
handled by the private sector and typically charge for their services. Examples include the Tennessee
Valley Authority, U.S. Postal Service, and Amtrak.
d. The Independent Executive Agencies: Independent executive agencies are essentially all the
rest of the government, appointed by the president and serve at his will.
III. Implementation
a. What makes them fail: First, it is impossible to implement a policy with faulty program design
that is defective in its basic theoretical conception. Second, policies often lack clarity since Congress is
fond of stating a broad policy goal and leaving implementation up to the bureaucracies. Not only are goals
unclear, they may also be contradictory. Third, bureaucracies often lack resources and authority to carry
out the tasks they have been assigned to do. Fourth, administrative routine may get in the way of effective
implementation. Fifth, Administrators’ dispositions may also be a barrier to implementation Sixth,
fragmentation and the diffusion of responsibility make the coordination of policies time-consuming and
difficult. Sometimes those who are supposed to comply with a law receive contradictory signals from
different agencies
b. The Voting Rights Act of 1965- successful case of implementation because its goal was clear
(to register large numbers of African-American voters); its implementation was straightforward (sending
out people to register them); and the authority of the implementers was clear (they had the support of the
attorney general and even U.S. marshals) and
concentrated in the Justice Department, which was
disposed to implementing the law vigorously.
IV. Bureaucrats as regulators
a. All regulation contains three elements, first,
a grant of power and set of directions from Congress;
second a set of rules and guidelines by the regulated
agency often developed in consultation with the
people or industries being regulated; and third some
means of enforcing compliance with congressional
goals and agency regulations.
b. deregulation is that the number and
complexity of regulatory policies have made
regulation too complex and burdensome. Opponents
of the regulatory system argue that it raises prices,
hurts America’s competitive position abroad, and
does not always work well. Both conservatives and
liberals have pushed for deregulation. Others argue that many regulations have proved beneficial to
Americans.
V. Bureaucracies and the government
a. Bureaucracies and the president: Presidents try to impose their policy preferences on agencies by 1)
appointing the right people to head the agency; 2) issuing executive orders; 3) tinkering with an agency’s
budget; and 4) reorganizing an agency. Congress can take measures to oversee the bureaucracy, such as,
1) influencing the appointment of agency heads; 2) tinkering with an agency’s budget; 3) holding
hearings; and 4) rewriting the legislation or making it more detailed.
b. Bureaucracies and congress: Presidents and Congress find it difficult to control bureaucracies because
agencies have strong ties to interest groups and congressional committees and subcommittees. These
close ties are often called iron triangles or subgovernments. Iron triangles can influence policies, often
resulting in contradictory policies.
Useful Sources
Textbook Outlines:
http://wps.ablongman.com/long_edwards_government_11/10/2809/719264.cw/index.html
Flash cards/games on the Budget and the Bureaucracy:
http://quizlet.com/3903392/bureaucracy-and-budget-test-ap-gov-flash-cards/
Multiple Choice Questions
1.
Which of the following institutions is responsible for compiling the president’s budget
proposal?
a.
Department of Treasury
b.
Congressional Budget Office
c.
Senate Appropriations Committee
d.
Office of Management and Budget
e.
Council of Economic Advisors
2.
Which of the following are accurate statements about the federal debt?
I. The rising cost of public education has contributed significantly to the federal debt.
II. The debt allows the government to displace the cost of current policies onto the shoulders of
future generation.
III. President Reagan’s major tax cuts in the 1980’s caused the national debt to grow to an
unprecedented sized
IV. The government will erase the national debt as soon as it succeeds in balancing the fisical
budget
a.
II only
b.
IV only
c.
I and II only
d.
II and III only
e.
I, III, and IV only
3.
What is the main function of the federal bureaucracy?
a.
To develop and enforce procedures for implementing policy
b. To make policy recommendations
c.
To create new policies
d. To review policies
e.
To research policy initiatives
4.
Federal agencies perform their regulatory task of enforcing industry standards by
a.
Setting budgets for private industries
b.
Issuing executive orders to factories
c.
Hiring civil servants to head industry offices
d.
Requiring industries to report directly to the president
e.
Sending agency officials to inspect facilities
5.
All the following are steps in the budgetary process EXCEPT
a. The congressional budget office works closely with the president to finalize the budget that
he will propose to congress
b. The house ways and means committee and the senate finance committee work together
to write the tax codes
c.
The OMB reviews and assesses the budget proposals submitted by each agency
d.
Congress passes a budget resolution to set a cap on expenditures for the fiscal year
e.
The appropriations committee decides how to divide federal resources among the
departments and agencies
6.
The federal government borrows money from citizens through
a.
Income taxes
b.
Bonds
c.
Social Security
d.
Authorization bills
e.
Entitlement programs
7.
Which of the following is an uncontrollable expenditure?
a.
National security
b.
Public education
c.
Entitlement programs
d.
Highway systems
e.
Energy research
8.
Which of the following accurately describes the size of the federal bureaucracy?
a.
The U.S. Postal Service is the largest department of the bureaucracy
b. The federal bureaucracy grew at a rapid rate due to the expansion of national defense
during the cold war
c.
The federal bureaucracy experienced no significant change in size throughout the
second half of the 20th century
d.
Washington D.C., houses the largest group of federal bureaucrats
9.
Policy implementation is sometimes a matter of trial and error and may not succeed for any
of the following reasons EXCEPT
a.
Administrators may make poor judgments
b.
Bureaus often are short staffed or lack resources
c.
Miscommunication among departments that share responsibility for a program
d.
Failure to establish standard operating procedures
e.
Legislation may not clearly convey congress’s policy goals
10. Most federal bureaucrats are hired in which of the following ways?
a.
They are awarded positions by the political party in power
b. They taken examination to prove their qualifications
c.
they are appointed to a position by the president
d.
they work in the legislative branch and then move to the bureaucracy
e.
they pay a fee to apply for a position
Answers
1.
(D) The office of Budget and Management was established to coordinate the budget
proposals of all government agencies into the president’s final proposal. It has significant
budgetary power, but it’s checked by Congress’s approval of the president’s nominee for director.
2.
(D) Ronald Reagan instituted enormous tax cuts while dramatically increasing defense
spending at the same time. During his eight years as president, the national debt tripled. It
continued to grow but has recently leveled off at more than 5 trillion.
3. (A) As the federal bureaucracy makes up the bulk of the executive branch, its job is to execute
the laws passed by congress. It establishes the budget, personnel, and other resources necessary to
translate policy goals into practice. Then it is responsible for regulating and enforcing these
programs.
4. (E) Federal agencies often send experts to investigate plants, factories and other industry
facilities. For example, the food and drug administration has government officials inspect and
report on activities at meatpacking plants. They may also test products and inspect working
conditions to ensure that all standards of quality and safety regulations are being met.
5. (A) The president works closely with the office of management and budget, an executive
office, to formulate his budget proposal. The congressional Budget Office works with
congressional committees to review and amend the president’s proposal.
6. (B) Bonds function like loans-people buy them from the government and the government must
pay them back with interest. Bonds are usually a good source of income for the federal
government.
7. (C) Entitlement programs are a form of mandatory spending because everyone entitled to the
benefits of the program must be paid. Congress cannot control these expenditures unless it
changes eligibility requirements of the program, which it is unlikely to do unless such measures
are absolutely necessary.
8. (C) Despite the common misconception, the federal bureaucracy actually has not grown. In
fact, the American population has grown and the social responsibilities of the government have
increases without the size of the federal bureaucracy changing much. State and local
bureaucracies have grown. Answer A is a trick because the U.S. Postal Service is not a
department but an agency.
9. (D) All agencies have some form of standard operating procedures. These provide uniformity
and help streamline the agency’s activities. Implementation might falter, however, in unusual
cases f or which the standard operating procedures don’t apply.
10. (B) Civil service is based on the merit system. Applicants must take an exam, only qualified
individuals are hired. Most bureaucrats’ positions are filled this way, though the president does
appoint some people to high level positions.
Free response Question
Iron triangles, or subgovernments, often form around a specific policy area to shape and administer
relevant policies. Select ONE of the following policy areas.
Agriculture
The environment
Product safety
Oil
For the policy are you selected, describe how an iron triangle might form. Who would the political
participants be and what are their roles and responsibilities to each other?
Explanation
Iron triangles often form among an interest group, a federal agency, and a legislative committee or
subcommittee in order to shape policies in a particular policy area. One example of an iron triangle that
deals with environmental issues might include an interest group such as Greenpeace, the Environmental
Protection Agency, and the Senate Environment and Public Works Committee or one of its
subcommittees.
For example, suppose hundreds of residents near a few different power plants have developed
chronic asthma from the plats emissions. They may take their case to the EPA and see assistance fom
Greenpeace, which has the resources to draw attention to their cause. Greenpeace brings the issue into the
political arena by demanding tighter federal regulation of plant emissions. It issues many reports to the
EPA showing the link between the chemicals emitted by the plants and the illnesses of the residents. The
EPA may also become involved if citizens register their complaints directly with the agency. As a result
of these claims, the EPA may send inspectors to test the air quality in the neighborhoods around the plant.
The EPA, with the help of Greenpeace, has gathered enough information to prompt the need for new
regulations. However, suppose federal law prohibits EPA from making certain industry changes to power
plants. The EPA and Greenpeace the must enlist the help of a sympathetic committee, such as the Senate
Environment and Public Works Committee.
The interest group now lobbies the committee, providing information about the effects of plant
emissions and pledges support for committee members in the next congressional election. The EPA also
appeals to the committee and can argue that it has already done its best to shoulder the complaints of the
public, thereby shielding committee members from angry voters. The committee, in order to appease the
voters and Greenpeace, may revise the law to allow further regulation by the EPA. Or it may increase the
budget of the EPA so that the agency can develop some kind of solution.
Interest groups have succeeded in influencing policy, the agency, with the help of Greenpeace’s
resources, has done its job, and the members of the committee can stay out of the fray. They work
together and solidify their relationships as issues arise.
This essay identifies the participants in an environmental iron triangle and describes how the iron
triangle forms during various steps of the policy process. The student successfully applies a theoretical
concept a real world situation in order to demonstrate knowledge of iron triangles and the way they
operate in policies.