Monday March 10, 2014Monday March 10, 2014 OBJ: SWBAT determine whether the OBJ: SWBAT determine whether the

Beauraucracy is to big be examining Beauraucracy is to big be examining multiple viewpoints.multiple viewpoints.

Drill: Get your homework out. Take 5 Drill: Get your homework out. Take 5 minutes to go over vocab with a partnerminutes to go over vocab with a partner

Homework: Read article, summarize and Homework: Read article, summarize and answer question at the bottom.answer question at the bottom.

Office of Management Office of Management and Budgetand Budget

HistoryHistory

Established in 1921Established in 1921 Made part of the Made part of the

Department of the Department of the TreasuryTreasury

Established by the Established by the Budget and Budget and Accounting Act Accounting Act

Officially called the Officially called the OMB in 1970OMB in 1970

• Director is Director is Sylvia Sylvia Mathews BurwellMathews Burwell

• Senate approval Senate approval needed to become needed to become the leaderthe leader

Responsibilities Responsibilities

Assist president in: Assist president in:

- overseeing the preparation of the - overseeing the preparation of the federal budgetfederal budget

- formulating spending plans- formulating spending plans

- setting funding priorities- setting funding priorities Helps improve administrative management Helps improve administrative management Ensures legislation is consistent with the Ensures legislation is consistent with the

budget budget

After 9/11, President George W. Bush merged 17 federal agencies toAfter 9/11, President George W. Bush merged 17 federal agencies to form the Department of Homeland Security and charged it with creatingform the Department of Homeland Security and charged it with creating a usable and efficient early-warning system to prevent future attacks.a usable and efficient early-warning system to prevent future attacks. • • This system includes the use of Suspicious Activity Reports (SARs),This system includes the use of Suspicious Activity Reports (SARs), which detail behavior potentially connected to criminal or terroristwhich detail behavior potentially connected to criminal or terrorist activity, and the development of fusion centers, which serve asactivity, and the development of fusion centers, which serve as clearinghouses for the massive amount of data generated by SARs.clearinghouses for the massive amount of data generated by SARs. • • Supporters of this system assert that it has made America a saferSupporters of this system assert that it has made America a safer nation, while critics say that the use of SARs and attendant technologynation, while critics say that the use of SARs and attendant technology (such as surveillance cameras on police cruisers to identify license(such as surveillance cameras on police cruisers to identify license plates) has grown increasingly invasive of Americans' privacy.plates) has grown increasingly invasive of Americans' privacy. • • There has been massive growth in the private and public securityThere has been massive growth in the private and public security apparatus of the United States, so large, unwieldy and secret that noapparatus of the United States, so large, unwieldy and secret that no one has a complete picture of how much it costs or everything that itone has a complete picture of how much it costs or everything that it does.does.

One of the most important documents produced One of the most important documents produced each year by the President and Congress is the each year by the President and Congress is the federal budget. Through a lengthy process, federal budget. Through a lengthy process, government leaders determine how much money government leaders determine how much money they expect the government to receive during each they expect the government to receive during each of the next several years, where it will come from, of the next several years, where it will come from, and how much to spend to reach their goals in and how much to spend to reach their goals in areas such as national defense, foreign affairs, areas such as national defense, foreign affairs, social insurance for the elderly, health insurance social insurance for the elderly, health insurance for the elderly and poor, law enforcement, for the elderly and poor, law enforcement, education, transportation, science and technology. education, transportation, science and technology.

  

YYou will be participating in a simulation in which you will be ou will be participating in a simulation in which you will be making decisions similar to those made every year by the making decisions similar to those made every year by the government to determine next year’s federal budget.government to determine next year’s federal budget.

   The President and Congress decide how much spending they will The President and Congress decide how much spending they will

finance through taxes, and debate how to use the budget to help finance through taxes, and debate how to use the budget to help the economy grow or to redistribute income. More recently, they the economy grow or to redistribute income. More recently, they have been debating how large a deficit the government needs to have been debating how large a deficit the government needs to run in order to stimulate our distressed economy. In this overview, run in order to stimulate our distressed economy. In this overview, we will discuss these decisions in some detail--that is, how the we will discuss these decisions in some detail--that is, how the government raises revenues and where it spends money.government raises revenues and where it spends money.

  

What What IsIs the Budget? the Budget?    The federal budget is:The federal budget is:    a plan for how the government spends a plan for how the government spends

taxpayers’money. taxpayers’money.    What activities are funded? How much should we What activities are funded? How much should we

spend for defense, national parks, the FBI, Medicare, spend for defense, national parks, the FBI, Medicare, and meat and fish inspection?and meat and fish inspection?

   a plan for how the government pays for its activities. a plan for how the government pays for its activities.   

HHow much revenue does it raise through different kinds of ow much revenue does it raise through different kinds of taxes--income taxes, excise taxes (taxes applied to various taxes--income taxes, excise taxes (taxes applied to various products, including alcohol, tobacco, transportation fuels products, including alcohol, tobacco, transportation fuels and telephone services), and social insurance payroll and telephone services), and social insurance payroll taxes?taxes?

   a plan for government borrowing or the repayment of a plan for government borrowing or the repayment of

borrowed funds. borrowed funds.    If revenues are greater than spending, the government If revenues are greater than spending, the government

runs a surplus. If expenses are greater than revenues (as runs a surplus. If expenses are greater than revenues (as is currently the case), the government runs a deficit.is currently the case), the government runs a deficit.

  

something that affects the nation's economy. something that affects the nation's economy.    Some types of spending--such as improvements in education and support for science and technology—Some types of spending--such as improvements in education and support for science and technology—

increase productivity and raise incomes in the future.increase productivity and raise incomes in the future.    Taxes, on the other hand, reduce incomes, leaving people with less money to spend.Taxes, on the other hand, reduce incomes, leaving people with less money to spend.    something that is affected by the nation's economy. something that is affected by the nation's economy.    When the economy is doing poorly, people are earning less and unemployment is high. In this atmosphere, When the economy is doing poorly, people are earning less and unemployment is high. In this atmosphere,

revenues decrease and the deficit grows.revenues decrease and the deficit grows.    an historical record. an historical record.    The budget reports on how the government has spent money in the past, and how that spending was The budget reports on how the government has spent money in the past, and how that spending was

financed.financed.    The 2011 budget document embodies the President's budget proposal to Congress for fiscal year 2011, The 2011 budget document embodies the President's budget proposal to Congress for fiscal year 2011,

which begins on October 1, 2010. It reflects the President's priorities and proposes his initiative to meet our which begins on October 1, 2010. It reflects the President's priorities and proposes his initiative to meet our national and international needs.national and international needs.

   The federal budget, of course, is not the only budget that affects the economy or the American people. The The federal budget, of course, is not the only budget that affects the economy or the American people. The

budgets of state and local governments have an impact as well. State and local governments are budgets of state and local governments have an impact as well. State and local governments are independent of the federal government, and they have their own sources of revenue (taxes and borrowing). independent of the federal government, and they have their own sources of revenue (taxes and borrowing).

Bibliography Bibliography

http://www.whitehouse.gov/omb/