1. 10 trillion and counting https://www.youtube.com/watch?v=pfZyffw7U6E
Solve the deficit
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2. How does the US Gov’t Determine Spending?
How much is 3.45 trillion dollars in billions?
What branch of gov’t begins the process of budgeting?
What role does Congress play in budgeting?
How would you divide $ trillion dollars b/w the 12 subject areas?
Budget Subject Area
Amount of $
Reason

4. The Federal Budget
Unit 7.5

5. I. Budget and Spending
Executive Branch - President submits a new budget every year
Office of Management and Budget (OMB)
Huge political statement about priorities of gov’t

6. B. Legislative Branch
Congress receives a proposed budget from the executive branch
B/w March – October
Each branch of Congress must pass bills for discretionary spending
Appropriations –bills that assign spending money on a specific program, project or government department
12 subject areas
EX: Defense, Agriculture, Transportation & Housing and Urban Development

7. C. Fiscal Policy
Fiscal Policy –use of gov’t revenue collection and expenditures to influence the economy
Discretionary -spending optional spending that is approved thru an appropriations bill
12 departments/committees are subject to this funding

8. 3. Mandatory spending -spending required by existing law
a. Currently 60% of US budget
Social Security
Medicare/Medicaid
Other entitlements

9. D. Budget breakdown
entitlement programs (social security, Medicare, welfare): ~50% of budget
defense- 21%, interest on debt 9%
deficit (spending more than the revenue collected)
total debt: $10.8 trillion, >$200 billion in interest

11. II. Gov’t interventions
Entitlement programs
Medicaid, Food Stamps, WIC, FDC payments, federal jobs programs & training
Gov’t subsidized loans for college education
Federal Reserve
lowering interest rates so that companies can expand businesses & hire more workers
Taxation
Progressive tax rate & Income tax credit

12. Unemployment and Poverty
Cyclical Employment- unemployment rises during economic downturns and falls when economy improves
Full Employment- unemployment rate 4-6%
Underemployment- people working at a job in which they are overqualified or part-time

13. Close
Give a situation in which someone is underemployed.
What is fiscal policy? Why do you think both the executive and legislative branches participate in shaping it?