This website uses cookies to ensure you have the best experience. Learn more

The Federal Budget Essay

3063 words - 12 pages

The Federal Budget

The federal budget is known as the infamous monetary tank from which money is distributed to various programs. Why does the federal budget plan cause such uproar of approval or disapproval when it is proposed by the President every February? The money utilized every fiscal year, which runs from October 1st of each year until the end of September of the following year, belongs to the people. The money is raised through income taxes, excise taxes (taxes on goods) and social insurance payroll taxes. Presently, the public is worried about how they will receive a fair share of money appropriations in such a slow economy. The federal deficit has returned, which means that the government’s spending exceeds its raised revenues. The federal budget is an exercise in making choices, and these choices will inevitably make a dramatic impact on individuals living in the U.S.

Historical View

The present federal budget can be characterized by one word: deficit spending. It has been a way of life for the federal government since World War II. The last times that federal budget expenses were brought into balance with revenues were in 2000, 1998, 1969, and 1960. Prior to 1940, the federal budget was balanced, except in years of war and economic recession.

There are many theories to the causes of persistent federal budget deficits during the last forty years. Many experts believe the cause of the current deficit originates in policy mistakes of the 1980s, such as the reduction in taxes and increase in defense spending. Others believe that the American public is demanding more in government benefits than it is willing to pay for in taxes. However, the complex budget process may explain the persistent budget deficits.

The current budget process has a decentralized budget process. No one decides on the total amount the federal government will spend. Instead, legislative bills that determine the total amount of spending are divided up among fifteen separate committees in the Senate and seventeen committees in the House of Representatives. The Appropriations Committee has jurisdiction over non-entitlement programs (spending varies year to year based upon spending authorized by Congress), which covers one-third of total federal spending. The remaining two-thirds is made up of entitlement programs (spending authorized by permanent laws), which are handled by other standing committees. The agricultural committees have authority over farm price supports, food stamps, and other rural programs. The tax-writing committees in the House and Senate are responsible for Social Security and Medicare. The House Energy and Commerce Committee has jurisdiction over Medicaid.

The decentralization of spending authority creates deficit financing. By spreading the spending responsibility among so many committees, Congress has created a commons problems. Numerous...

Find Another Essay On The Federal Budget

Federal Budget Deficit Essay

738 words - 3 pages trade (“Atkins”). The federal deficit has become a big issue and Americans must try everything to reduce the debt. We must come up with a plan that will strive for a balanced budget. One way the government can reduce the deficit is by spending less. Americans are known for spending. Whether it is on necessities or just simple wants, money is thrown out. Most of the time, we spend more money than what we really have. When you spend more than ones

Federal Land Up for Budget Grabs

1574 words - 6 pages The purpose for Laura Meckler to write “The Deficit Fight: Federal Land Up for Budget Grabs” is bring attention to the government selling properties. Laura Meckler also wrote the article for the reason that she want to inform the public on the sale of these properties and how it could help the federal budget. The article “The Deficit Fight: Federal Land Up for Budget Grabs” by Laura Meckler is about the government selling “under-utilized

Economics - Federal Budget - Randwick Boys High School/ Economics - Research Paper

1090 words - 5 pages What is the federal budget? The federal budget is the Australian government’s annual economic statement containing details of what it expects to collect in revenue and allocate in expenditure. Budget Outcome The budget outcome gives an indication of the overall impact of fiscal policy on the state of the economy. The federal budget outcome is a deficit and is expected to be $29.4 billion, meaning there is more injections than leakages. In

Federal budget essay

810 words - 3 pages AT WHAT COST?The 8th liberal budget was delivered to Australia on the 12th of May 2003, by treasurer Peter Costello with a much debatable response from the public. Various factors have effected Costello's probable last shot at shaping Australia's future, however how different is it really in comparison to the other 7 budgets produced by Australia's highest taxing government?Some of the major projections for Australia would be the boosted $15

Budget Comparison

990 words - 4 pages Americans are not unfamiliar with the concept of a budget, in fact, most follow a budget on an everyday basis, however, the topic of a public budget can be overwhelming to many them. Although many Americans might have a small concept of how the federal budget works, very few are familiar with their local budget process, and even less familiar to their adopted annual city budget. Every local budget is as unique as the cities who developed them

Budget Process

757 words - 4 pages When considering the nature of the federal budget, indeed one can trace the foundations of budgeting back to biblical principles. Inside the community of faith, the bible has often been considered the cornerstone and reference point for authoritative declarations. Thus, when applying a biblical perspective to the nature and context of the federal budget, one must begin with the nature of property and stewardship within biblical context. As

The Events of the Grievance Process

2262 words - 10 pages Municipal Budget (1907) and the National Municipal League’s model 1916 city charter (Swanson, 2012, pg. 528). Executive budget and standard budget cycles and formats gained considerable use in local government and also appeared in the federal government with the passage of the 1921 Budgeting and Accounting Act (Swanson, 2012, pg. 528). One of the reasons these events are important is because it underscores the budget control remains at the heart

What is the Budgetary Process?

1329 words - 6 pages What are some questions that come to mind when you think of the budgetary process? Some may ask questions like what exactly does the budgetary process mean and how does it work? How has the budget process been handled in recent years and has it changed? How do we contribute to the budgetary process and does it benefit or affect us the people? The budget is an important document and process in state government and the decisions made can either

jnjj

680 words - 3 pages and appropriations. With the help of the Office of Management and Budget, the president has to set a federal budget that has to be eventually approved by Congress. With the budget, the president can either set a budget of high or low federal spending (Pika and Maltese 2012). By setting a high budget, one higher than the revenue they bring in, it can cause a budget deficit. By setting a low budget, one lower than the revenue the national

Macroeconomics forecasting

1294 words - 5 pages forecasts prepared by the following financial institutions.* Congressional Budget Office (CBO)* Office of the Management and Budget (OMB)* Research Department - Federal Reserve Bank of PhiladelphiaThe following individual forecasts are compared:* Nominal GDP* Real GDP (Percentage Change)* GDP Price Index (Percentage Change)* Consumer Price Index (Percentage Change)* Unemployment Rate (Percent)* Three Month Treasury Bill Rate (Percent)* Ten Year Treasury

National Debt

2559 words - 10 pages spending and decreased taxes under the Reagan administration. Since the beginning of the 1990's the deficit has decreased slightly but it is still over $100 billion (Building Blocks 21). Clearly something must be done to decrease the budget deficit and slow the growing debt. There is a difference between the national debt and the budget deficit. The national debt is the total amount of money owed by the government; the federal budget deficit is the

Similar Essays

The Evolution Of The Federal Budget Process

1111 words - 4 pages Federal spending is necessary for the economy and is essential to the accomplishment of national goals and advancement. This is why a budget is needed, however, there is no actual process mentioned in the Constitution that explains how Congress should do this. The Constitution states: No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of Receipts and Expenditures of

Politics Of The Federal Government Budget

1134 words - 5 pages The Sequester: When and Why In March of 2013 action was taken in order to pressure policymakers in to a budget compromise and reduce spending deficits in the United States. Across the board spending cuts, known as sequestration, is meant only to catalyze compromise and not to act as a solution itself. The sequester is set to stay enacted until budget goals have been met, continuously cutting funding to federal agencies with each passing

The Unorthodox Lawmaking Of The 2011 Federal Budget

1671 words - 7 pages and the Tea Party Movement  most commonly used was that federal spending in the United States was creating out of control national debt. Many right winged politicians won their political offices by promising their constituents that they would reduce the budget of the federal government by reducing the budget of many federally funded organization and agencies. This political pledge by many Republican candidates combine with the Republican party

Analysis Of The Likely Impacts Of The 2003 04 Australian Federal Budget On Australia's Economic Growth, Unemployment And Inflation

1240 words - 5 pages taxes (Gans, J. et al, 2000; 721). This paper will focus on the government's fiscal policy, namely the 2003-04 Commonwealth Budget, and its effects on Australia's growth, unemployment and inflation.On May 13th, federal treasurer Peter Costello announced the 2003-04 federal budget, which included policies which came as a surprise to many economists and market analysts. As Saul Eslake, chief economist at ANZ stated;It contained at least two surprises