Federal Budget: Mandatory, Discretionary Spending & Deficits (2.2 Part 4)

What is a deficit?

The amount by which government expenditures exceed revenues.

What is mandatory spending?

Government spending required by law.

What are entitlement programs?

Federal programs guaranteed to all who meet requirements.

What is discretionary spending?

Portions of the budget which Congress has to authorize how money can be spent and how much.

Who is responsible for preparing the federal budget since 1921?

The President.

Who passes the budget each year?

Congress.

What is the largest amount of discretionary spending targeted for?

Defense / military.

List three areas that receive discretionary funds.

Defense/military, education, science and technology.

True or false: Government revenue routinely equals government expenditures on a year by year basis.

False.

What do Republicans suggest as a method for balancing the budget?

Cut spending.

What do Democrats suggest as a method for balancing the budget?

Increase taxes.

Why are both methods for balancing the budget difficult to implement?

Increasing taxes is politically unpopular, while cutting spending would affect essential areas.

What are two reasons for the increase of mandatory spending as a percentage of the overall federal budget?

Baby boomers are retiring and increased life expectancy.

Which portion of the budget has been cut the most between 1970 and 2023 (projected)?

Discretionary spending (Defense spending).

Identify the three most expensive entitlement programs.

Medicare, Medicaid, and Social Security.

What is the difference between discretionary spending and mandatory spending?

Mandatory spending is required by law, while discretionary spending is authorized annually by Congress.