Govt needs $$$$ to function This $$$ comes from TAXES People pay taxes Businesses pay taxes Who’s in charge of controlling taxes? CONGRESS!! Which article of the Constitution gives Congress this power?
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States
Tax bills must start in the House of Reps Most important tax work happens in the Ways and Means Committee CLOSED RULE- before 1973 Only members of Ways and Means committee could write, amend, or contribute to tax bills. In 1973, House members of other committees revolted and demanded that they be allowed to get involved in constructing tax bills
Alltax bills must start in the House, but Senate can propose amendments Senate tries to change tax bills often Finance Committee deals with tax bills in the Senate Ways and Means Committee (House) and Finance Committee (Senate) = POWERFUL!
Look at Chart on page 190. 1. Which countries collect more than 50% of their GDP from taxes? 2. What do these countries have in common? 3. Where does the U.S. fall on this chart?
Approval of government spending Congress must approve before govt. departments/agencies can spend any money Two step process 1. authorization bill- how much money max may be given to a certain program 2. appropriation bill- actually gives the money to the program- may be less than requested based on budget constraints
In both the House and the Senate Heads of agencies and departments must testify before the appropriations committees explaining why they need the money they have requested Heavilyinfluenced by lobbyists trying to convince committee members to give more money to certain agencies
Congress cannot control spending on certain programs Social Security Interest on national debt Social programs (called entitlements) TheU.S. govt is legally obligated to pay for these programs
4. What is Appropriation? 5. What are the two steps in the appropriation process? 6. List some examples of uncontrollable expenditures that Congress cannot control. 7. What are the most powerful committees in the House and Senate that deal with govt. money issues? 8. In which house must all tax bills begin?