United States federal budget
The United States federal budget outlines how the government allocates its financial resources for the upcoming fiscal year, which runs from October 1 to September 30. It incorporates both government revenue, derived mainly from taxes and other sources, and expenditures, detailing how funds will be spent across various programs. The budget includes mandatory spending on entitlements, such as Social Security and Medicare, which are required by law and typically account for over half of all federal spending. Discretionary spending, which encompasses funding for areas like defense and government agencies, can be adjusted each year and requires Congressional approval.
The budget process begins with the president's recommendation, followed by resolutions passed by both the Senate and the House of Representatives. Each house works through committees to decide the allocations for specific programs, which can lead to differences in budget versions. Once a budget is agreed upon, it must be signed by the president, who has the power to veto. Failure to finalize a budget can lead to government shutdowns, prompting Congress to enact short-term measures known as continuing resolutions to maintain funding. The entire budgeting process is complex, often influenced by the political landscape, and can be subject to delays and procedural hurdles.
United States federal budget
The United States federal budget specifies how the federal government will spend its money. The federal budget manages receipts—which include government income gained through taxes, fines, duties, and other programs—and debts the government owes. The federal budget contains all government spending for the coming fiscal year, which begins each year on October 1 and ends the following September 30. Both the Senate and the House of Representatives must agree upon the budget. Once agreement has been reached, the budget must be signed into law by the president. Creating the federal budget is a complex process, and it is not always accomplished.
Overview
The federal budget includes entitlements and discretionary spending. Entitlements include money the government is obligated to spend. Entitlements are not usually under the budget's control. These include programs such as Social Security and Medicare. Entitlements can be altered only through legislation passed by Congress. As of 2014, entitlements accounted for more than half of the federal budget.
Discretionary spending is revised with each new budget. It includes things such as military spending and funding for most government organizations. The discretionary spending process begins when a committee receives budget authorization, which is specific authorization that allows the government to incur debts. Next, the authorized committees pass appropriations, which are specific decisions about how government money will be spent. The passed appropriations cause obligations, or debts the government has to pay at some point in the future. Finally, the United States Treasury issues outlays, which are payments in the form of cash or checks, to fulfill its obligations. Entitlements skip most of this process and are automatically approved for spending.
Passing the Budget
Passing the federal budget is a complicated process. It begins when the president issues his budget recommendation to Congress. This recommendation is not legally binding; it is simply the president's detailed account of how he thinks the available funds should be spent. The president's Office of Budget Management officially prepares this recommendation for him.
Soon afterward, each house of Congress passes its own congressional budget resolution, also known as a 302a allocation. The 302a sets the total amount the government can spend. The president does not need to sign these bills, and the Senate is not allowed to use any stalling tactics to prevent votes on these bills. These steps in the process are supposed to be completed by April 15 each year, but this rarely happens. A deeming resolution, a less specific version of the 302a that allows the budget process to move forward, is passed instead.
After each house adopts its own version of the 302a, the appropriations committee in each house takes control of the budget. Each appropriations committee is then divided into twelve subcommittees. Each subcommittee is assigned the task of determining how much funding specific organizations and agencies should receive. For example, one subcommittee may be responsible for deciding the funding for the National Park Service while another may determine funding for Veterans Affairs. The subcommittees' bills are called 302b allocations. After all the subcommittees agree on their 302b allocations, the full appropriations committee votes to accept or reject each one.
Once all the appropriations committees and subcommittees have finished voting, each house of Congress will have agreed upon a different version of one 302a appropriations bill and twelve 302b appropriations bills detailing exactly how discretionary spending should be distributed in the budget. Often, especially when different political parties control the House and Senate, the two houses produce very different versions of the bills.
Next, the House and Senate attempt to work out differences between their agreed-upon budgets. Because the budgets sometimes differ by billions of dollars, this normally takes a long time. To speed up the process, politicians often bundle several appropriations bills together, so that opposing politicians will be less likely to vote against them.
After Congress approves one 302a allocation bill and twelve 302b allocation bills by majority vote in both the Senate and the House, the thirteen bills are presented to the president. Like any other legislation, the president can sign the bills into law or veto them. Any vetoed bill must be amended, approved again, and presented to the president for approval a second time. If the president signs the amended version of the bill, that version becomes law. If the president refuses, the process repeats. Additionally, Congress can override the president's veto by voting on the same bill again. However, this vote requires a two-thirds majority in both the Senate and the House to pass.
When the president signs the finished budget, it receives one final check to make sure that it does not spend more money than the law allows. If it does, mandatory cuts called sequestrations are automatically made to all discretionary spending. After this, the budget officially becomes law.
Congress is supposed to complete this process once a year. However, Congress does not always manage to agree on a budget. In fact, it failed to create a federal budget for 1999, 2003, 2005, 2007, and 2011 through 2014. In these circumstances, the government would normally stop discretionary spending, which prevents many government organizations from functioning. To prevent this, Congress usually passes several bills called continuing resolutions. Continuing resolutions are short-term bills that temporarily allow the government to continue spending the same way it did the previous year. The continuing resolutions are renewed until a new budget is passed.
Bibliography
"A Brief Guide to the Federal Budget and Appropriations Process." Acenet.edu. American Council on Education, Leadership and Advocacy. Web. 3 Dec. 2014. http://www.acenet.edu/news-room/Pages/A-Brief-Guide-to-the-Federal-Budget-and-Appropriations-Process.aspx
"Policy Basics: Introduction to the Federal Budget Process." cbpp.org. Center on Budget and Policy Priorities. Web. 3 Dec. 2014. http://www.cbpp.org/cms/?fa=view&id=155
"The Federal Budget: A Primer." Truthandpolitics.org. Truth and Politics. Web. 3 Dec. 2014. http://www.cbpp.org/cms/?fa=view&id=155