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Bureaucracy and Budget
Study Guide
Bureaucracy Key Terms
Administrative discretion: authority of administrative actors to select among various responses to a
given problem, especially when rules do not fit or more than one rule applies.
Bureaucracy: implementers of policy.
Civil service: promotes hiring on the basis of merit and establishes a nonpartisan government service.
Command-and-control policy: regulatory strategy where government sets a requirement and then
enforces individual and corporate actions to be consistent with meeting the requirement.
Deregulation: the withdrawal of the use of governmental authority to control or change some practice in
the private sector.
Executive orders: regulations originating in the executive branch.
Governmental corporations: provide services that could be handled by the private sector but that
generally charge cheaper rates than a private sector producer.
GS (General Service) rating: assigned to each job in federal agencies, this rating helps to determine the
salary associated with the position.
Hatch Act: passed in 1940, prohibits government workers from active participation in partisan politics.
Incentive system: regulatory strategy that rewards individuals or corporations for desired types of
behavior, usually through the tax code.
Independent executive agencies: executive agencies that are not cabinet departments, not regulatory
commissions, and not government corporations.
Independent regulatory commission: has responsibility for a sector of the economy to protect the public
interest.
Iron triangles: refers to the strong ties among government agencies, interest groups, and congressional
committees and subcommittees.
Merit principle: using entrance exams and promotion ratings for hiring workers.
Office of Personnel Management (OPM): responsible for hiring for most agencies.
Patronage: a hiring and promotion system based on knowing the right people.
Pendleton Civil Service Act: passed in 1883, it created the federal Civil Service.
Policy implementation: the stage of policymaking between the establishment of a policy and the results
of the policy for individuals.
Regulation: the use of governmental authority to control or change some practice in the private sector.
Senior Executive Service: the very top level of the bureaucracy.
Standard operating procedures: detailed rules written to cover as many particular situations as officials
can anticipate in order to help bureaucrats implement policies uniformly.
Street-level bureaucrats: bureaucrats who are in constant contact with the public.
Budget Key Terms
Budget: a policy document that allocates burdens (taxes) and benefits (expenditures).
Deficit: occurs when government spends more money than it receives in taxes in the fiscal year.
Entitlements: expenditures for which the total amount spent is not by congressional appropriation, but
rather by rules of eligibility established by Congress.
Expenditures: money spent by the government in any one year.
Federal debt: all of the money borrowed by the government over the year that is still outstanding.
Income tax: the portion of money individuals are required to pay to the government from the money they
earned.
Incrementalism: the best predictor of this year’s budget is last year’s budget plus a little bit more.
Medicare: in 1965, this program was added to Social Security to provide hospital and physician coverage
to the elderly.
Revenues: money received by the government in any given year.
Sixteenth Amendment: passed in 1913, permits Congress to levy an income tax.
Social Security Act: passed to provide a minimal level of sustenance to older Americans.
Tax expenditures: revenue losses due to special exemptions, exclusions, and deductions.
Uncontrollable expenditures: result from policies that make some group automatically eligible for
benefits.
Growth in Government Employees
Organization of the Executive Branch
Organization of the Department of Interior
Iron Triangles
Federal Revenues
Federal Expenditures
Multiple-Choice Questions
1. An advantage that bureaucrats in federal government have over the president in the policymaking
process is that bureaucrats
a. Control the budgetary process
b. Have an independence from the president that is guaranteed by the Constitution
c. Find it easier to gather public support than does the president
d. Usually have a continuity of service in the executive branch that the president lacks
e. Usually have better access to the media than does the president
2. Cabinet-level agencies are responsible to
a. Congress
b. The president
c. The courts
d. The White House staff
e. The executive office of the president
3. Many contemporary politicians have come to see bureaucracies as agencies
a. That aim to make realistic recommendations that may result in lower budgets than the
year before
b. Whose main objective is to seek profits
c. Whose major goal is to cut back on their powers
d. Who strive to maximize their budgets and powers
e. Who work more closely with the judiciary
4. All the following are characteristics of the independent regulatory agency EXCEPT:
a. It has a responsibility for some sector of the government.
b. It makes rules designed to protect the public interest.
c. It enforces rules designed to protect the public interest.
d. Its powers are so great that it is often called the “fourth branch of government.”
e. It is exempt from court rulings.
5. Bureaucratic policy implementation includes all the following elements EXCEPT
a. The ability to abolish a nonfunctioning department in another agency
b. The ability to create new operating procedures within its own agency
c. The ability to assign new responsibilities within its own agency
d. The ability to translate policy goals into operational rules for its own personnel
e. The ability to coordinate its own resources and personnel to achieve intended goals
6. When a president tries to control a bureaucratic agency, all the following methods are available to
him EXCEPT
a. Appointing the right people to head the agency
b. Reducing the agency’s budget
c. Issuing executive orders
d. Recommending a reduction of the agency’s following year’s budget
e. Using his office to influence agency direction
7. Which of the following results from an iron triangle relationship?
a. Each policy being made independently from the others
b. Policies being made that are contradictory from others
c. A lack of an integrated, coherent approach to broad policy problems
d. A cooperative relationship among a special interest group, a bureaucratic agency, and
Congress
e. A hostile relationship among the bureaucratic agencies making policy
8. The largest source of federal revenue is the
a. Capital gains tax
b. Social Security tax
c. Property tax
d. Income tax
e. Sales tax
9. Federal spending for which of the following is determined by laws that lie outside the regular
budgetary process?
a. Military procurement
b. Regulatory agency funding
c. Government-subsidized housing programs
d. Educational assistance programs such as student loans
e. Entitlement programs such as Social Security
10. Fiscal policies refer to the government’s power to
a. Regulate specific industries
b. Tax and spend
c. Reapportion congressional seats
d. Control the supply of money
e. Enforce treaties
Free-Response Question
The federal bureaucracy as part of the executive branch exercises substantial independence in
implementing governmental policies and programs. Most workers in the federal bureaucracy are civil
service employees who are organized under a merit system.
(a) Describe one key characteristic of the merit system.
(b) For each of the following, describe one factor that contributes to bureaucratic independence.
• The structure of the federal bureaucracy
• The complexity of public policy problems
(c) For each of the following, explain one Constitutional provision that it can use to check the
bureaucracy.
• Congress
• The courts
• Interest groups
Answers and Explanations
1. D
Using process of elimination, you can come up with the answer to this question. Congress
controls the budgetary process of bureaucratic agencies. Even though some bureaucratic agencies
have an independence from the president (mostly the independent regulatory agencies), this
independence stems from laws passed by Congress. Choice C is incorrect because bureaucrats
usually distance themselves from the public and do not usually have close contact with the media.
Because many bureaucrats are appointed for longer terms of service than the president or have
civil service appointments, they have a continuity of service.
2. B
Because the president appoints cabinet heads, you can argue that these agencies are responsible to
the person actually making the appointments. Therefore, the agency is ultimately responsible to
the president. Congress does have some control through the budgetary process and using
congressional oversight.
3. D
Because bureaucracies have developed the reputation of wanting to create so-called empires of
power, many politicians have become skeptical. In fact, there have been calls to abolish the
Departments of Education and Energy. Therefore, choice D represents what many legislators see
as a drawback of the modern bureaucracy.
4. E
Choices A, B, C, and D are all characteristics of an independent regulatory agency. Think of
examples of these agencies such as the Food and Drug Administration or Environmental
Protection Agency, and you will be able to make the connections. Court rulings can negate
regulations from these agencies.
5. A
The point of this question is that bureaucratic policies are carried out within the department.
Choices B, C, D, and E reflect that issue. Choice A goes beyond the parameter suggesting that
policy implementation includes the abolition of a nonfunctioning department in another agency.
That is not within the authority of a bureaucracy.
6. B
The budgets of bureaucratic agencies are determined by legislative action only. The president can
appoint chairs of agencies, can issue an executive order that may negate and agency directive, can
recommend a reduction or increase in the budgets of the agencies, and can try to use a bully
pulpit to influence the direction of an agency.
7. D
Thinking of a specific example like the military-industrial complex during the Vietnam War gives
you the answer to this question. By definition, an iron triangle relationship exists when a
bureaucratic agency, special interest group, and legislative arm work hand in hand to develop
policies.
8. D
According to the 2002 fiscal year estimates, 49% of the federal revenue comes from individual
income taxes, 35% from social insurance taxes, 10% from corporation income taxes, 3% from
excise taxes, and 4% from other sources. Therefore, choice D is the correct answer.
9. E
Uncontrollable expenditures are expenditures that are determined not by a fixed amount of money
appropriated by Congress but by how many eligible beneficiaries there are for a program or by
previous obligations of the government. Such policies are called entitlements, and the biggest of
these is the Social Security system. Therefore, choice E is the correct answer.
10. B
Fiscal policy is defined as the policy that describes the impact of the federal budget – taxes,
spending, and borrowing – on the economy. Therefore, choice B is the correct answer.
Free-Response Question
6 points
Part (a): 1 point
One point is earned for a description of a characteristic of the merit system. Answers may include:


Hiring or promotion based on merit/experience/qualifications
Hiring based on testing
Part (b): 2 points
One point is earned for each of two descriptions of factors contributing to bureaucratic independence.
Answers may include:

Structure of the bureaucracy
o Large
o Specialized units/expertise
o Tenure protections/hard to fire
o Based on merit
o Independent agencies/independent regulatory commissions

Complexity of public policy problems
o Specialized units/expertise
o Delegated authority — because Congress and the president cannot handle everything,
they delegate authority to the bureaucracy
o Discretionary authority — because legislation lacks details, the bureaucracy can fill
in the gaps
Part (c): 3 points
One point is earned for each of three explanations of a constitutional provision that can check the
bureaucracy. Answers may include:

Congress
o Appropriations — can reward or punish agency
o Legislation — can pass legislation affecting the bureaucracy
o Rejection of presidential appointments to the bureaucracy
o Impeachment of executive officials

Courts
o Court rulings that limit bureaucratic practices
o Judicial review — can declare bureaucratic actions unconstitutional
o Injunctions against federal agencies

Interest groups
o Use of the First Amendment
 Lobbying
 Protests
 Media usage
 Speech
o Litigation
A score of zero (0) is assigned to an answer that is attempted but earns no points.
A score of dash (—) is assigned to an answer that is blank or off task.