Chapter 14 The Congress The President And The Budget

Chapter 14 – The Congress, the President, and the Budget * Introduction
The battle of the budget is at the center of American politics. Two questions are central to public policy: Who bears the burdens of paying for government? Who receives the benefits? The public budget is a policy document allocating burdens (taxes) and benefits (expenditures). A budget deficit occurs when expenditures exceed revenues in a fiscal year. Americans want the government to balance the budget, maintain or increase the level of government spending on most policies, and keep taxes low. * Sources of Federal Revenue * Income Tax * Individuals are required to pay the government a portion of the money they earn; this portion is an income tax.
In the 1950s and early 1960s, spending for past, present, and future wars amounted to more than half the federal budget. From the mid-1960s to the early 1980s, defense expenditures crept downward in real dollars while social welfare expenditures more than doubled. * In the 1990s defense expenditures have decreased in response to the lessening tensions in Europe. The defense budget now only constitutes about one-sixth of all federal expenditures. Payrolls, pensions, research, development, and procurement are the major parts of the defense budget. * The Rise of the Social Service State * The biggest slice of the budget pie belongs to income security expenditures. The 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. Social Security is less an insurance program than a kind of intergenerational contract. Essentially, money is taken from the working members of the population and spent on the retired
One explanation for this growth is that politicians spend money to “buy” votes. Some scholars have argued that government grows in a democracy because of the equality of suffrage. In the political arena power is more equally distributed. Parties must appeal to a majority of the voters. Many politicians willingly cooperate with the desire of the working-class voters to expand their benefits. * Furthermore, corporations support a big government that offers them contracts, subsidies, and other benefits. Therefore, low-income and wealthy voters alike have voted for parties and politicians who promised them benefits. Government also grows by responding to groups and their demands. * However, some politicians compete for votes by promising not to spend money. One of the most common criticisms of government is the failure to balance the budget. Public officials are often criticized for lacking the will to deal with the problem, yet it was not lack of resolve that prevented a solution to enormous budget deficits, it was a lack of consensus on policy. * The Budget and the Scope of