Chapter 15: Government at Work: The Bureaucracy

What is a Bureaucracy A bureaucracy is a large administrative structure that handles everyday business of an organization. Pg. 426- Examples of a bureaucracy

Three features of a Bureaucracy Hierarchal authority- Chain of command from the top down. Job specialization- Each person who works for the organization has certain duties and defined responsibilities. Formalized rules- Rules are set out in written form and so can be known by all who are involved.

Political Cartoon- pg. 427

The Federal Bureaucracy The federal bureaucracy is all of the agencies, people, and procedures through which the Federal government operates. The Constitution makes the President the chief administrator of the Federal Government. Article II, Section 3 declares that “he shall take Care that the Laws be faithfully executed.”

Federal Government- Organization The chief organizational feature of the federal bureaucracy is its division into areas of specialization. The executive branch is composed of three broad groups of agencies. The Executive Office of the President The 15 Cabinet departments- pg. 429 A large number of independent agencies

Section 2: The Executive Office of the President Every officer, every employee, and every agency in the executive branch of the Federal government is legally subordinate to the President. They all exist to help the President. The Executive Office of the President is, in fact, an umbrella agency, a complex organization of several separate agencies staffed by some 1,800 advisors and assistants.

The White House Most of the President’s key personal and political aides work there. The two wings on either side of the White House hold the offices of most of the President’s staff. The White House chief of staff to the President directs all of the operations of the EOP and is among the most influential presidential aides.

National Security Council Most of the President’s major steps in foreign affairs are taken in close consultation with the National Security Council. It meets at the President’s call, often on short notice, to advise him in all domestic, foreign, and military matters that relate to the nation’s security.

National Security Council Pg. 432- Composition

Office of Management and Budget The OBM’s major task is the preparation of the federal budget, which the President must submit to Congress every year. The federal budget is a very detailed estimate of expenditures and federal income. A fiscal year is the 12 month period used by government for record keeping, budgeting, and other financial management purposes. Government Fiscal Year- 10/1- 9/30

Office of Management and Budget Pg. 433- The budget Pg. 433- How is the President’s budget created?

Office of National Drug Control

Council of Economic Advisors

Section 3: Cabinet Departments Much of the work of the Federal Government is done by the 15 Cabinet departments. The First Congress created three of these departments in 1789: the Department of State, Treasury, and War. As the size and workload of the Federal Government grew, Congress added new departments.

Chief Officers and Staff Each department is headed by a secretary, except for the Department of Justice, whose work is directed by the attorney general. Each department head is the primary link between presidential policy and his or her department.

Subunits Each department is made up of a number of subunits. Each of these subunits, or agencies is usually further divided into smaller working units. Pg. 436- Criminal Division of the DOJ

The Executive Departments Pg. 436 Read- The Executive Departments today. Leadership

Choosing Cabinet Members The President appoints the head of each of the 15 executive departments. Each of these appointments is subject to confirmation by the Senate.

What Factors Influence the President’s Cabinet Choices

The Cabinet’s Role Cabinet members have two major responsibilities. Individually, each is the administrative head of one of the executive departments Collectively, they are advisors to the President.

Section 4: Independent Agencies Until the 1880’s nearly all that the Federal Government did was done through its Cabinet departments. Since then, Congress has created a large number of additional agencies.

NASA The National Aeronautics and Space Administration was created by Congress in 1958 to hand space programs. NASA’s work ranges from basic scientific research to ongoing explorations of outer space. NASA

History of Civil Service Pendleton Act Video

Independent Regulatory Commissions There are twelve independent regulatory commissions today, each created to regulate and monitor important aspects of the nation’s economy. Pg. 447

Chapter 16: Financing Government

Section 1: Taxes and Other Revenue A government’s fiscal policy consists of the various means it uses to raise and spend money and thereby influence the nation’s economy. Pg. 456- Simplest terms

The Power to Tax Congress exercises the taxing power in order to raise money needed to operate the Federal Government. Licensing- pg. 457. Thoughts on licensing?

Constitutional Limitations on Taxing The power to tax is not unlimited. Congress is given the power to tax in order to “pay the Debts and provide for the common Defense and general Welfare of the United States.” Export taxes are prohibited. Direct taxes must be equally apportioned among the states. All indirect taxes levied by the federal government must be set at the same rate in all parts of the country.

Income Tax A flexible and progressive tax because the higher one’s income, the higher the tax rate. 2013 Fiscal Year- $1.2 trillion. April 15- Everyone who earned a taxable income in the preceding calendar year must file a tax return.

Corporation Income Tax Each corporation must pay a tax on its net income- that is, on all of its earnings above the cost of doing business. Nonprofit organizations such as churches and charitable foundations are not subject to the corporation income tax.

Social Insurance Tax The Federal Government collects huge sums to finance three major social welfare programs. The Old Age, Survivors, and Disability Insurance Program. Medicare- Healthcare for the elderly. Unemployment compensation- Benefits paid to jobless workers. Pg. 460

Excise Taxes A tax laid on the manufacture, sale, or consumption of goods and/or the performance of services. Examples- Gasoline, oil, tires, tobacco, alcohol, firearms, airline tickets. Sometimes referred to as “luxury taxes” because they are imposed on goods not usually considered necessities.

Estate and Gift Taxes An estate tax is a levy imposed on the assets of someone who dies. A gift tax is one imposed on a gift from living person to another. Pg. 461-462

Custom Duties Taxes laid on goods brought into the United States from abroad. Congress decides which imports will be taxed and at what rate. Examples- 462 U.S. Customs and Border Patrol

Section 2: Borrowing and the Public Debt The Constitution gives Congress the power to borrow money on the credit of the United States. The power to borrow money was seen as a way for the government to: Meet the costs of crisis situations. (wars) Pay for large- scale projects that could not be financed out of current income.

Borrowing In nearly every year of the last 80 years, the government has run up a deficit and borrowed to make up the difference. 2013- $1.1 trillion added to the existing deficit

The Depression and Deficit Spending Great Depression Video FDR

Keynesian Economics President Roosevelt launched the New Deal- a series of government spending and jobs programs designed to stimulate the economy and put Americans back to work. John Maynard Keynes (British Economist)- Government should influence the economy by large increases in public spending in times of high unemployment.

Economics Comparison Demand-Side Economics Supply- Side Economics If government must borrow to support increased spending, the high employment that results will soon produce high tax revenues Lower taxes, not greater spending provide the best route to a stronger economy.

The Public Debt Read- pg. 466 Public Debt

Section 3: Spending and the Budget Chart- Pg. 467 Health and Human Services- $848 billion. Medicare, Medicaid, and other programs. Entitlements- Benefits that federal law says must be paid to all those who meet the eligibility requirements. The government guarantees assistance for all those who qualify for those benefits

Examples

Controllable Spending Most items in the Federal Government are controllable. That is, Congress and the President can decide each year just how much will be spent on the many things that the federal government does. Examples- National parks, highway projects, aid to education, civil service pay, and so on.

Uncontrollable Spending Social Security benefits, food stamps, and most other entitlements are also largely uncontrollable. Once Congress has set the standards of eligibility for those programs, it really has no control over just how many people will meet those standards.

The Federal Budget Congress-and only Congress- has the power to provide the enormous sums that the government consumes each year. Despite the fact that Congress holds the power of the purse, the President initiates the process by which the Federal government spends money. The President proposes the budget to Congress Pg. 469- Remember….

The President and the Budget Each federal agency prepares detailed estimates of its spending needs for that twelve month period. Each agency then submits its spending plans to the President’s Office of Management and Budget. The OBM reviews all of the many agency proposals, often in budget hearings at which agency officials must defend their dollar requests.

Congress and the Budget The President’s budget proposal is referred to the Budget Committee in each chamber. There in both the House and Senate committees those money requests are studied and dissected with the help of the Congressional Budget Office.

Congress and the Budget Pg. 470- Process Videos

Section 4: Fiscal and Monetary Policy Gross Domestic Product- The total value of all final goods and services produced in the country each year. GDP The Federal Government seeks to achieve three main goals in the economic realm: full employment, price stability, and economic growth. Unemployment data= Major indicator of the nation’s economic health.

Inflation vs. Deflation A general increase in prices throughout the economy. A general decrease in prices. Harmful effects- pg. 474

Recession A growing economy is one in which the GDP constantly increases. That growth helps produce a higher standard of living. When there is an absence of growth and the economy shrinks, a recession occurs. Lee Hirsch Video****

Fiscal and Monetary Policies The various means the government uses to raise and spend money. A process through which the government can influence the nation’s economy through changes in the money supply and availability of credit.