What does the "power of the purse" refer to?

The "power of the purse" refers to the authority over governmental spending. This concept is crucial as it highlights the role of legislative bodies, particularly in the context of checks and balances within a government. Through this power, legislators have the ability to decide how public funds are raised and allocated, which is foundational to overseeing the executive branch's financial actions. This control ensures that the government remains accountable to the citizens it serves, as the approval of budgets and expenditures typically requires legislative approval.

In contrast, while taxing states is related to fiscal responsibilities, it does not encompass the full scope of financial authority implied by the "power of the purse." Control of foreign investments and the right to enforce treaties involve other aspects of governmental authority and do not specifically pertain to financial management and spending powers. Therefore, the distinction of the "power of the purse" primarily lies in its impact on fiscal policy and government accountability through spending decisions.