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20 Cards in this Set
- Front
- Back
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MANDATE OF SPENDING OUTSIDE THE REGULAR APPROPRIATIONS PROCESS FOR A GIVEN PURPOSE BY STATUTORY OR CONSTITUTIONAL LOCAL CHARTER LAW |
SAN FRANCISCO CHILDREN'S AMENDED TO THE CITY'S CHARTER: 1. 1991 AMENDMENT 2. CREATED A CHILDREN'S FUND FROM 3% OF LOCAL PROPERTY TAX REVENUES PER YEAR 3. FOR CHILDREN/YOUTH/FAMILY SERVICES 4. MONIES REQUIRE TO SUPPLEMENT EXISTING FUNDING |
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ENTITLEMENT EXAMPLES: MEDICAID, MEDICARE, SOCIAL SECURITY |
DEFINITION: ESTABLISHING IN SUBSTANTIVE LAW (SEPARATE FROM ANNUAL APPROPRIATIONS PROCESS) AN OPEN-ENDED OBLIGATION TO PROVIDE CERTAIN BENEFITS TO ANY PERSON OR ENTITY MEETING THE ELIGIBILITY REQUIREMENTS. |
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TRUST FUNDS |
1. DISTINCT ACCOUNTING ENTITY THAT BY SUBSTANTIVE LAW (OUTSIDE OF THE REGULAR APPROPRIATIONS PROCESS) HAS SPECIFIC RECEIPTS DESIGNATED FOR A PARTICULAR EXPENDITURE PURPOSE; 2. USUALLY RELATED TO THE SOURCE OF THE RECEIPTS; 3. $ DEPOSITED IN A TRUST FUND IS IN PRINCIPLE TO BE USED ONLY FOR PURPOSES SPECIFIED 4. IDEA IS TO SEMI-INSULATE SPENDING IN A GIVEN AREA FROM HAVING TO COMPETE WITH OTHER SPENDING PROGRAMS IN REG. APP. PROCESS |
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FEDERAL HIGHWAY TRUST FUND |
1. DISTINCT FROM FEDERAL GENERAL FUND; 2. HEAVILY SUPPORTED BY THE FEDERAL GASOLINE TAX; AND 3. PRIMARY PURPOSE OF FUND IS TO SUPPORT MAJOR HIGHWAY CONSTRUCTION. |
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FEDERAL PROGRAMS THAT ARE ENTITLEMENTS & TRUST FUNDS? |
1. SOCIAL SECURITY 2. MEDICARE |
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IS MEDICAID OPERATED FROM A TRUST FUND? |
Medicaid is NOT operated from a trust fund. |
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MANDATORY VS. DISCRETIONARY SPENDING |
SEE CHART IN STUDY QUESTIONS ANSWERS FOR MODULE 7 |
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MANDATORY
EXAMPLES: MEDICARE, MEDICAID, SOCIAL SECURITY & DEBT INTEREST |
RELATIVELY MORE AUTOMATIC
OUTSIDE OF REGULAR PROCESS I.E. ENTITLEMENTS & DEBT INTEREST
FINANCE COMMITTEES I.E. HOUSE WAYS & MEANS / SENATE FINANCE
ABOUT 60% OF FEDERAL SPENDING |
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DISCRETIONARY
EXAMPLES: DEPT. OF DEFENSE OPERATIONS, IRS OPERATIONS & COMMUNITY DEVELOPMENT BLOCK GRANTS |
RELATIVELY LESS AUTOMATIC
PART OF THE REGULAR PROCESS (FLOWS FROM THE 12 APPROPRIATION BILLS DERIVED FROM PRESIDENT'S ANNUAL BUDGET PROPOSAL)
APPROPRIATIONS COMMITTEES I.E. HOUSE & SENATE
ABOUT 40% OF FEDERAL SPENDING |
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AUTOMATIC SPENDING?
MIKESELL PG. 126 |
MANDATORY SPENDING FLOWS FROM FORMULAS & ELIGIBILITY CRITERIA AND NOT THROUGH ANNUAL APPROPRIATIONS
THERE IS NO APPROPRIATIONS CHECKPOINT SINCE PAYMENT IS DETERMINED BY LAWS/RULES
MANDATORY ALSO INCLUDES OFFSETTING RECEIPTS COLLECTED FROM OTHER GOVT. ACCOUNTS OR FROM THE PUBLIC IN BUSINESS |
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WHAT SPENDING GETS CUT FIRST? |
DISCRETIONARY SPENDING GETS CUT FIRST AND DEEPER THAN MANDATORY. |
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HOW IS SOCIAL SECURITY PRIMARILY FUNDED? |
ANNUALLY THE FUND RECEIVES PAYROLL TAX REVENUES (pg. 129 in Mikesell - from employees, employers and net annual earnings of self-employed) |
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WHAT IS CURRENTLY DONE WITH EXCESS SOCIAL SECURITY RESERVES?
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FEDERAL LAW HAS REQUIRED THAT EXCESS RESERVES BE INVESTED IN SPECIAL U.S. GOVERNMENT BONDS ISSUED TO SOCIAL SECURITY
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WHAT FISCAL PRESSURE IS PLACED ON FEDERAL GOVERNMENT WHEN EXCESS RESERVES ARE NEEDED? |
1. RESERVES ARE NOT READILY CONVERTED TO CASH. 2. TO PAY OF BONDS AS THEY ARE REDEEMED, THE GOVERNMENT MUST RAISE TAXES, BORROW MORE, OR CUT OTHER FEDERAL SPENDING TO REPAY THE DEBT BEING LIQUIDATED. 3. ESSENTIALLY THE RESERVES ARE REALLY NOTHING MORE THAN IOUs. |
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WHAT DEMOGRAPHIC FORCE HAS CREATED THE POTENTIAL PROBLEM OF THE SOCIAL SECURITY TRUST FUND NOT TAKING AS MUCH AS IS BEING TAKEN OUT PER YEAR? (P.130) |
IN 1960, THERE WERE 5 WORKERS FOR EACH SOCIAL SECURITY RECIPIENT WHILE BY 2030, THERE ARE ONLY ABOUT 2 WORKERS PER RECIPIENT EXPECTED. THE IMMEDIATE TRANSFER FROM WORKER TO RECIPIENT CANNOT BE SUPPORTED ANYMORE. (people living longer, baby-boomers retiring, & labor force growth slowing are other demographic forces in place now) |
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KEEP IN MIND |
BY 2036, THE SOCIAL SECURITY FUND (WITH NO PROGRAM CHANGES) WILL HAVE NOT EXCESS RESERVES/ASSETS. THEREAFTER THE FUND "WOULD BE SUPPORTED ONLY BY ANNUAL PAYMENTS INTO THE FUND, AND THOSE WOULD ALLOW PAYMENT OF ABOUT 3/4 OF PROMISED BENEFITS UNTIL 2085. |
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WHAT ARE SOME OPTIONS TO RESTORE FISCAL STABILITY TO THE SOCIAL SECURITY TRUST FUND? |
1. HARD POLICY CHANGES 2. SOCIAL SECURITY TAX RATES INCREASED 3. SOCIAL SECURITY INCOME CAP (currently $117,000) INCREASED OR ELIMINATED 4. WHEN PEOPLE CAN RETIRE MAY BE INCREASED TO RECEIVE FULL BENEFITS 5. PERIODIC COST OF LIVING BENEFITS SCALED BACK 6. ALLOW SOME INVESTMENT OF RESERVES IN POTENTIALLY HIGHER YIELD STOCKS AND CORPORATE BONDS (SEE ALSO MIKESELL P. 132 FOR MORE) |
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FEDERAL BUDGET PROCESS |
PRESIDENT: VETO POWER BUT NO LINE-ITEM VETO POWER
ANNUAL BUDGETS
NO BALANCED BUDGET REQUIREMENT
NO DISTINCT OPERATING & CAPITAL BUDGETS
DOESN'T OPERATE UNDER DILLON'S RULE |
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STATE BUDGET PROCESS |
GOVERNOR: VETO AND LINE-ITEM VETO POWER
60% STATES = ANNUAL BUDGET 40% STATES = BIENNIAL BUDGET
HAS A BALANCED BUDGET REQUIREMENT
MOST HAVE DISTINCT OPERATING & CAPITAL BUDGETS
DOESN'T OPERATE UNDER DILLON'S RULE |
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LOCAL BUDGET PROCESS |
NO VETO OR LINE-ITEM VETO POWER
ANNUAL BUDGETS
HAS A BALANCED BUDGET REQUIREMENT
MOST HAVE DISTINCT OPERATING & CAPITAL BUDGETS
OPERATE UNDER DILLON'S RULE (only have powers specifically given to them by the States) |
