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Item 1. Purpose and Function of Our Government General

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Item 1. Purpose and Function of Our Government General PART I Item 1 Timeliness of data Information included in each section of this report is generally based on the most current information from government sources for the majority of the data in the particular section. Part II of this report generally includes information through September 30, 2017, which marks the end of the latest fiscal year for which aggregated state and local income statement data is available. More recent federal data is available, but to provide a consolidated picture of our Government as a whole, we generally limit the financial data we present to the latest period for which both state and local and federal data is available. We acknowledge that this information is not timely. We do, however, believe that there is value in looking at a longer time series of data, as we have presented in this report and on our website, and that the longer-term trends noted in our analyses likely did not change materially between fiscal years 2017 and 2019. We will continue to search for more current data and explore ways that we might aggregate it ourselves to provide more timely information. In general, Parts I and III of this report include more recent data, with dates depending on availability of the majority of the respective data. Item 1. Purpose and Function of Our Government General Who we are The United States of America (US) is a federal republic composed of 50 states, a federal district of Washington, D.C., five major and various minor insular areas, as well as over 90,000 local governments, including counties, municipalities, townships, school districts, and special district governments. At 3.8 million square miles and with 325 million people, the US is the world’s third-largest country by total area and the third most populous. Our vision and mission As documented in the US Constitution, the people of the US, through our Government, seek to form a more perfect union by establishing justice, ensuring domestic tranquility, providing for the common defense, promoting the general welfare, and securing the blessings of liberty to ourselves and our posterity. Our strategy To achieve the mission of the people, our Government raises money, spends money, and exercises its authority. Through these actions, it enables, incentivizes, and forces certain behaviors (e.g. saving for retirement through Social Security and Medicare, attending minimum years of school, getting vaccinated) in an effort to maintain or improve various key metrics related to American life. Raising and spending money Our Government raises money through taxes and non-tax sources, including businesses it runs. This money is used to pay government expenditures and to transfer money to individuals and others. At the federal level, when the money raised is not sufficient to cover the money spent (most years), the US Department of the Treasury may borrow money to finance the difference. States may borrow funds for projects but may not borrow to fund annual deficits, except Vermont, where its constitution does not preclude it from doing so. 2 PART I Item 1 Exercising authority Our Government exercises its authority directly by regulating, legislating, and issuing executive orders and court orders. It also grants authority to, and rescinds it from, government agencies and state and local governments. See more at Government operations below. Government structure The US is a constitutional republic and representative democracy. Our Government is regulated by a system of checks and balances defined by the US Constitution, which serves as the country’s supreme legal document. In the US, citizens are usually subject to three levels of government: federal, state, and local. The original text of the Constitution establishes the structure and responsibilities of the federal government and its relationship with the individual states. The Constitution has been amended 27 times, including the first 10 amendments, the Bill of Rights, which forms the central basis of Americans’ individual rights. Federal government structure The Constitution divides the federal government into three branches to ensure a central government in which no individual or group gains too much control: ▪ Legislative – Makes laws (Congress) ▪ Executive – Carries out laws (President, Vice President, Cabinet) ▪ Judicial – Evaluates laws (Supreme Court and other courts) Each branch of government can change acts of the other branches as follows: ▪ The president can veto legislative bills passed by Congress before they become law (subject to Congressional override). ▪ Congress confirms or rejects the president’s appointments and can remove the president from office in exceptional circumstances. ▪ The justices of the Supreme Court, who can overturn unconstitutional laws, are appointed by the president and confirmed by the Senate. Legislative The legislative branch enacts legislation, confirms or rejects presidential appointments, and has the authority to declare war. This branch comprises Congress (the Senate and House of Representatives) and several agencies that provide support services to Congress. Executive The executive branch carries out and enforces laws. It includes the president, vice president, the Cabinet, 15 executive departments, independent agencies, and other boards, commissions, and committees. Judicial The judicial branch interprets the meaning of laws, applies laws to individual cases, and decides if laws violate the Constitution. The judicial branch comprises the Supreme Court and other federal courts. 3 PART I Item 1 THE UNITED STATES GOVERNMENT THE CONSTITUTION LEGISLATIVE BRANCH EXECUTIVE BRANCH JUDICIAL BRANCH THE CONGRESS THE PRESIDENT THE SUPREME COURT OF SENATE | HOUSE THE VICE PRESIDENT THE UNITED STATES 100 Senators EXECUTIVE OFFICE OF THE PRESIDENT 9 Justices 435 Representatives 15 Cabinet Members United States Courts of Appeals Architect of the Capitol White House Office United States District Courts United States Botanic Garden Office of the Vice President Territorial Courts Government Accountability Office Council of Economic Advisers United States Court of International Trade Government Printing Office Council on Environmental Quality United States Court of Federal Claims Library of Congress National Security Council Administrative Office of Congressional Budget Office Office of Administration the United States Courts US Capitol Police Office of Management and Budget Federal Judicial Center Office of National Drug Control Policy United States Sentencing Commission Office of Policy Development Office of Science and Technology Policy Office of the US Trade Representative SIGNIFICANT REPORTING ENTITIES (15) DEPARTMENT OF DEPARTMENT OF DEPARTMENT OF DEFENSE DEPARTMENT OF EDUCATION DEPARTMENT OF ENERGY AGRICULTURE COMMERCE DEPARTMENT OF HOUSING AND DEPARTMENT OF HEALTH DEPARTMENT OF DEPARTMENT OF THE URBAN DEPARTMENT OF JUSTICE AND HUMAN SERVICES HOMELAND SECURITY INTERIOR DEVELOPMENT DEPARTMENT OF THE DEPARTMENT OF VETERANS DEPARTMENT OF LABOR DEPARTMENT OF STATE DEPARTMENT OF TRANSPORTATION TREASURY AFFAIRS OTHER SIGNIFICANT REPORTING ENTITIES Environmental Protection Agency US Nuclear Regulatory Commission National Credit Union Administration General Services Administration Defense Security Cooperation Agency Overseas Private Investment Corporation National Aeronautics and Space Administration Export-Import Bank of the United States Pension Benefit Guaranty Corporation National Science Foundation Farm Credit System Insurance Corporation Railroad Retirement Board Office of Personnel Management Federal Communications Commission Securities and Exchange Commission Small Business Administration Federal Deposit Insurance Corporation Smithsonian Institution Social Security Administration General Fund of the US Government Tennessee Valley Authority US Agency for International Development Millennium Challenge Corporation US Postal Service IN CONSERVATORSHIP Fannie Mae Freddie Mac SIGNIFICANT RELATED ENTITIES The Federal Reserve The Farm Credit System Federal Home Loan Banks For a discussion of each of the federal government departments and offices, please see The United States Government Manual at https://www.govinfo.gov/app/collection/GOVMAN. State government structure1 Under the Tenth Amendment to the US Constitution, all powers not granted to the federal government are reserved to the states and the people. All state governments are modeled after the federal government and consist of three branches: executive, legislative, and judicial. The US Constitution mandates that states uphold a “republican form” of government, although the three-branch structure is not required. 4 PART I Item 1 Legislative All 50 states have legislatures made up of elected representatives, who consider matters brought forth by the governor or introduced by its members to create legislation that becomes law. The legislature also approves a state’s budget and initiates tax legislation and articles of impeachment. The latter is part of a system of checks and balances among the three branches of government that mirrors the federal system and prevents any branch from abusing its power. Every state except one has a bicameral legislature made up of two chambers: a smaller upper house and a larger lower house. Together the two chambers make state laws and fulfill other governing responsibilities. The smaller upper chamber is always called the Senate, and its members generally serve longer terms, usually four years. The larger lower chamber is most often called the House of Representatives, but some states
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