AP Gov Review Policymaking

Process of the Federal Budget

The process of the Federal Budget involves the President submitting a proposed budget to Congress in February, assisted by the Office of Management and Budget (OMB). Congress must authorize all appropriations, which detail the allocation of funds for various government programs and services.

What is the role of the OMB in the budget?

Responsible to POTUS, suspensible for preparing the federal budget proposal, ensuring it aligns with the President's policies and priorities.

Revenue of the Budget

Total income generated by the federal government, primarily through taxes, fees, and other sources, which is used to fund government programs and services.

Budget Surplus

Tax Revenue > Spending

Govn’t is making more money than its spending

Budget Deficit

Govn’t Spending > Tax Revenue

Govn’t is spending more money than it’s making

National Debt

Total amount of money that a country's government has borrowed to cover budget deficits and is required to pay back. It accumulates when the government's spending exceeds its revenue over time.

Progressive Tax

The higher income individuals pay a higher % in taxes

Ex: Income taxes

Regressive Tax

Lower income individuals pay higher % in taxes

Ex: sales taxes

Proportional Tax

Everyone pays the same % of their income in taxes

Incrementalism

The best predictor of this years budget is last years budget + more because of the “uncontrollable” spending on amenities

House Ways and Means Committee and Senate Finance Committee

Write the tax codes

Starts in the House Ways and Means Committee and then moves to the Senate Finance Committee

Appropriations Committee

Decides how to spend the tax code

Growth of the National Govn’t

• Defense

  • Used to be the biggest expense, now it has a smaller % of the budget

• Interest

  • Increasing as a % of spending because of the increase in debt

• Payment for Individuals

  • Largest part of the budget

  • Increases each year because of demographics

    • People live longer bc of new medicine and tech

    • Baby boomers are retiring

    • Decrease in birth rate

Uncontrollable Expenditures

Revolt from policies that make certain groups automatically eligible for government benefits or services, resulting in expenditures that are difficult to control or limit.

Congressional Budget and Impoundment Act of 1974

Passed in response to Nixon impounding (not spending) funds

Established:

• Fixed budget calendar

• Budget committee in each house

• CBO to advise Congress

• Budget considered as a whole and prevent future impoundments.

Authorization Bill

Act of Congress that establishes a discretionary program or an agency and sets the amount of funding available for that program.

Appropiration Bill

Must pass to actually fund programs and can’t exceed amount authorized to spend

Continuing Resolution

If appropriation bill aren’t passed, Congress passed these to allow the govn’t to continue operating at previous funding levels until new appropriations are enacted.

Omnibus Budget Bills

Keep govn’t from shutting down

Worries of the Economic Policy

1. Unemployment

2. Inflation

Unemployment

#of people out of work, but are LOOKING for work

Inflation

Measured with CPI and refers to the general increase in prices and fall in the purchasing value of money.

Monetary Policy

Done by federal reserve banks to control money and interest rates

Structure of “Fed”

Independent group of economic experts that implements monetary policy and regulates financial institutions (12 banks regulate the commercial banks)

Fiscal Policy

The use of the government's revenue collection and spending to influence the economy.

Keynesian Economics

An economic theory that advocates for government intervention to stabilize the economy during recessions, emphasizing the importance of total spending in the economy.

FDR used it when implementing the New Deal programs to combat the Great Depression.

Supply Side Economics

Reagan Economics

Anti-Keynesian

Trickle Down Economics- Tax cuts for businesses will trickle down wealth to consumers and stimulate economic growth.

Taft Hartley Act 1947

A federal law that restricts the activities and power of labor unions, including prohibiting secondary boycotts and allowing states to pass "right-to-work" laws.

Right-To-Work

Laws that prohibit mandatory union membership as a condition of employment, allowing workers the choice to join or not join a union.

Entitlement Programs

If someone qualifies (age, need, etc.) they are entitled to get benefits such as Social Security, Medicare, and Medicaid, which provide financial assistance and services to individuals in need.

Means Tested

Provide benefits that select people with specific need must qualify for based on income or other criteria, ensuring assistance goes to those who require it the most.

Income Distribution in America

Unequal

Top 20% own must wealth

Increase in poverty

Transfer Payments

Through progressive taxes, $ is redistributed

What are the biggest entitlements?

Social Security, Medicare, and Medicaid.

AFDC 1935

Assistance for Families with Dependent Children

Helps widows

TANF 1996

Temporary Assistance for Needy Families

Replaced AFDC, providing financial aid and support services to low-income families.

Was devolutioned to the states, emphasizing work requirements and time limits on assistance.

Lyndon B. Johnson on War on Poverty

Created the Great Society programs aimed at eliminating poverty and racial injustice, including Medicare and Medicaid.

Reagan and Welfare

Diminished social programs like food assistance and financial aid through budget cuts and policy changes, promoting welfare reform and individual responsibility.

Trust Fund

Social Security $$ went into a trust fund to provide retirement income and benefits to eligible citizens.

Problems with Social Sercurity

1. Ratio of workers to retire is decreasing

   1. In 1935, it was 40-1, now its 3-1, predicted to be 2-1

2. People are living longer’

3. Baby Boomers are retiring and healthcare is $$

Solutions to the Problems of Social Security

Cut Benefits

Increase retirement age

Increase taxes

Obama Care

• Affordable health care

• Allowed children to stay on parent’s insurance until age 27

• Forced insurance companies to take people with pre-existing conditions

• Made insurance mandatory for every person

What Clinton did to Healthcare

He tried a healthcare reform

Failed

What Bush did to Healthcare

Increased spending on medicare without increasing taxes, so there was an increase in deficits

EPA 1970

Environmental Protection Agency

Created to administer environmental legislation

Clean Air Act 1970

Tried to decrease automoblie pollution

Paris Accord 2004

An international treaty aimed at combating climate change and limiting global warming

Obama entered the US in the agreement in 2016

Trump removed the US in 2017

Biden reentered the US in 2021

Trump removed the US in 2025

Water Pollution Control Act 1972

Legislation aimed at reducing water pollution by regulating the discharge of pollutants into US waters and setting water quality standards.

Toxic Waste Superfund 1980

Created a program to clean up hazardous waste sites and hold responsible parties accountable for their contamination.

Companies had to pay a tax whenever they used chemicals for a clean up

Yucca Flats, Nevada

Where nuclear waste was almost stored

Different Type of Energy Sources

Oil = Electricity

Coal = Dirty Air Pollution

Nuclear = Controversial and Dangerous

Sierra Club

Oldest Pro-Environmental Interest Group in the United States, dedicated to protecting natural resources and promoting sustainable practices.

3 Tools Needed for National Security

Military, Economic, Diplomatic

NATO (North Atlantic Treaty Organization)

Combine military forces from US, Canada, and most of Europe to ensure collective defense and security among member nations.

EU (European Union)

A political and economic union of 27 European countries aimed at fostering integration, trade, and collaboration among member states.

Free Trade Area

POTUS as a Policy Maker

Commander in Chief

Makes Treaties

Diplomats as Policy Makers

Secretary of State

Key advisors in foreign policy

Secretary of Defense as Policy Makers

President’s main civilian advisor on military matters, overseeing the Department of Defense and coordinating military strategy and operations.

Part of the National Security Establishment

Joint Chief of Staff as a Policy Maker

Commanding officers of each of the services/branches who advise the President and Secretary of Defense on military operations and strategic plans.

Part of the National Security Establishment

NSC (National Secrurity Council)

A group that advises the President on national security and foreign policy issues, comprising key cabinet members and security advisors.

CIA (Central intelligence Agency)

A civilian foreign intelligence service tasked with gathering, processing, and analyzing national security information from around the world.

War on Terror

A global military campaign led by the United States aimed at combating terrorism and extremist groups, especially following the September 11 attacks in 2001.

FECA (Federal Election Campaign Act)

• Passed after Watergate exposed illegal contributions

• Created the Federal Election Commission (FEC)

• Provided for partial funding of POTUS elections (matching funds) to qualify a party, they must have 5%

• Required to fully disclose campaign finance activities and contributions to ensure transparency in the electoral process.

• Limited individuals from funding their down campaign

Buckley v. Valeo 1976

• Challenged FECA

• SCOTUS stated individuals should be able to fund their own campaigns bc its guaranteed in 1st Amendment

• RESULT

  • Milionaries ran and funded their own campaign

  • Rich used soft $$ to fund party building activities not related to the campaign

  • Rich and Interest Groups used “Independent Expenditures” to launch media attacks not coordinated with a party

McCain Feingold 2002

Bipartisan Campaign Finance

1. Ban soft

2. Increasing individual contributions to $2000 (Hard )

3. Limited Independent expenditures

   1. No issuing ads 30 days before a primary election

   2. No issuing ads 60 days before general election

4. RESULTS

   1. Wealthy individuals used what previously was soft $$ and created 527 groups

527 Groups

Political organizations that can raise unlimited funds for advocacy and issue promotion, often circumventing campaign finance restrictions.

McConnell v. FEC 2002

Upheld the constitutionality of most of McCain Feingold

Soft $$ could be banned

****Citizens United v. FEC 2010****

• Overruled parts of McConnell and McCain Feingold

• Stated that the limit of independent expenditures violated the 1st Amendment

  • “Speech is important to democracy”

  • $ = speech

• ****Results of Citizens United v. FEC 2010****

• Explosion of Super PACs; 501 organizations don’t disclose $$ for 6 months

• Can’t coordinate with campaigns

• Biggest campaigns are run by people closest to a campaign

  • 2012 Romney’s son ran his campaign

  • 2008 Obama’s former camera man led his campaign