Terms You May Have Heard:
Balanced budget: A balanced budget requires the government’s income to be equal to the amount it spends. The US Constitution does not require that Congress pass a balanced budget, and it often does not. For nearly 70 years, the US budget has not been balanced.
Budget deficit: A budget deficit occurs when a government spends more money than it brings in. Budget deficits require the government to raise needed funds by borrowing, therefore adding to the national debt.
Entitlement program: The federal government officially defines an entitlement as a “statutory mandate or requirement of the United States to incur a financial obligation unless that obligation is explicitly conditioned on the appropriation in subsequent legislation of sufficient funds for that purpose.”
Alternatively speaking, entitlement programs are those that guarantee benefits to any individual as long as they meet the eligibility criteria, regardless of need.
Typical entitlement programs include Social Security retirement and disability insurance, veterans’ pensions and health care, Medicare, Medicaid, unemployment insurance, Temporary Assistance to Needy Families, food stamps, Supplemental Security Income, the earned income tax credit, and the Affordable Care Act’s health insurance subsidies.
Gross domestic product (GDP): The GDP is a measure of national income that consists of the total value of all goods and services produced in a country.
The New Deal: In the 1930s, President Franklin D. Roosevelt enacted financial reforms and regulations as well as a series of public works projects and other social programs. These reforms, known as “the New Deal,” were intended to provide relief and recovery from the Great Depression. Since the New Deal, government spending on federal entitlement programs has steadily increased and in recent years has reached unpreceded levels.