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Chapter 14: The Congress, the President, and the Budget: the Politics of Taxing and Spending

Multiple Choice

This activity contains 19 questions.

A generation ago, the most expensive part of the federal budget was its

	social services.
	military budget.
	operating costs.
	interest payments.

A major feature of incremental budgeting is that it

	greatly inflates government spending each year.
	reevaluates the budgetary base on which past budgets were built.
	reduces current budgets by small amounts over successive years.
	provides small increases in the current budget over the previous year's budget.

A policy document allocating burdens and benefits is called a(n)

	bill.
	public budget.
	executive order.
	appropriation.

A solution to the budget problems has been difficult to achieve because of the lack of

	will by public officials.
	power among relevant interest groups.
	desire by the public.
	consensus on policy.

An example of a tax expenditure is

	direct government support of a charity.
	a lower tax rate for lower-income families.
	a tax deduction for the mortgage interest paid by homeowners.
	the Social Security system.

In 1993, Congress agreed to President Clinton's proposal to

	raise the income tax rate for families with incomes over $140,000.
	reduce the income tax rate for middle-income families.
	change the tax code.
	increase the tax rates for lower income families.

No government policy affects as many Americans as

	foreign policy.
	defense policy.
	social welfare policy.
	tax policy.

Social insurance taxes

	go into the government's general money fund.
	are paid only by employers.
	are earmarked for a specific purpose.
	have grown very little in recent years.

The ability of businessmen to deduct the cost of a "three-martini lunch" was an example of a

	tax reduction.
	social welfare tax.
	tax loophole.
	tax reform.

The biggest slice of the budget pie belongs to

	income security expenditures.
	national defense.
	health expenditures.
	education aid.

The biggest uncontrollable expenditure in the federal budget is

	the Social Security system.
	interest on the national debt.
	veterans aid.
	government retirement benefits.

The largest social policy of the federal government is in the area of

	education.
	health.
	Social Security.
	job training.

The majority of government expenditures are determined by

	how much Congress appropriates to an agency.
	whether the president requests a budgetary increase for an agency.
	how many eligible beneficiaries there are for some particular program.
	agency requests.

The most prevalent model of budgetary decision-making in practice is

	uncontrollable budgeting.
	incrementalism.
	allowance budgeting.
	rational party bargaining.

The only way to "control" uncontrollable expenditures is

	for Congress to pass a constitutional amendment.
	for the president to disband an agency.
	for Congress to change a law or existing benefit levels.
	when the original purpose of the policy is no longer relevant.

The purpose of budget reconciliation is to

	critique and analyze the president's proposed budget.
	establish a discretionary government program or entitlement.
	adjudicate disputes over the budget.
	revise program authorizations to achieve required savings.

The purpose of Gramm-Rudman-Hollings was to

	decrease the spiraling defense budget.
	stabilize deficit spending at a manageable level.
	introduce a constitutional amendment to balance the budget.
	mandate maximum allowable deficit levels until the budget was balanced in 1993.

When President Reagan first revealed his massive tax simplification plan in 1985

	it was met with overwhelming popular support.
	a pitched battle began between tax reformers and interest groups determined to hold onto their tax benefits.
	the Chairman of the House Ways and Means Committee launched a campaign against tax reform.
	Republicans in the House of Representatives united in overwhelming support of the plan.

When the government wants to borrow money the

	gross national product (GNP) decreases.
	federal income tax increases.
	Treasury Department sells more bonds.
	level of federal expenditures declines.

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