* The Government spends most of your money on a few major programs. In 2001:
|Social Security|| ||23%|
|National Debt|| ||10%|
* The Government collects most of its revenues for a few main sources:
|Individual Income Taxes|| ||48%|
|Social Security Receipts|| ||34%|
|Corporate Income Taxes|| ||10%|
* Because all of the revenues do not cover the costs of all spending,the Government borrows money to finance this deficit. The total it has borrowed over the years, but not repaid, is the national debt. Budget History Facts:
- In its first 150 years, the Government sometimes generated budget deficits (for instance, to finance a war) but later ran surpluses and repaid much of the debt that had accumulated.
- In 2001, the federal budget surplus was $184 billion. Budget deficits had grown more frequent in the last half-century, and they soared during the 1980s. At the end of fiscal year 1977 the deficit was $706 billion. By the end of fiscal year 1997 it was $5.38 trillion -- almost 8 times as much as it had been 20 years earlier.
- In its first three years, the Government spent a total of about $4 million. By 1800, total annual spending amounted to less than $11 million. Almost two centuries later the total has climbed to $521 billion.
- Federal spending climbed during the 1930s from $4 billion in 1931 to over $8 billion in 1936. WWII increased that number to over $91 billion by 1944.
Types of Spending:
Discretionary - 35% of all Federal Spending
This is the money the President and Congress must decide to spend each year. It includes money for such programs as the FBI and the Coast Guard, housing and education, space exploration and highway construction, and defense and foreign aid.
Mandatory - 65% of all Federal Spending
This is the money that the Federal Government appends automatically - unless the President and Congress change the laws that govern it. It includes entitlements- such as Social Security, Medicare, and Food Stamps - through which individuals receive benefits because they meet some criteria of eligibility (e.g. age, income). It also includes interest on the national debt, which the Government pays to individuals and institutions that buy saving bonds and other US securities. Despite its name, however, mandatory spending is not fixed in stone. The President and Congress can change the laws that govern entitlements or taxes, but they must take explicit action to do so.
The Budget Process:
- The President's Budget is sent to Congress in early February. This proposal is his/her plan for the next fiscal year, beginning October 1. This plan, however, only becomes official after Congress passes, andthe President signs spending bills and legislation creating new taxes and entitlements.
- After receiving the President's budget, Congress examines itin detail. Scores of committees and subcommittees hold hearings on proposals under their jurisdiction. The House and Senate Armed Services Committees, for instance, would hold hearings on the President's defense plan. If the President's plan contains proposals that affect Federal revenues, the House Ways and Means and Senate Finance committees would hold hearings. The President, the Budget Director, the Cabinet, and others work with Congress as it accepts some proposals, rejects others, and changes still others.
- Each year Congress must pass and the President must sign, 13 appropriation billsthat include all of the discretionary spending. The President and Congress do not have to enact new laws governing entitlements or taxes. If they do not, the Government will pay the benefits for Social Security and other programs and collect the taxes required by laws in place.
|No later than the 1st Monday in February||President transmits the budget, including a sequester preview report.|
|Six weeks later||Congressional committees report budget estimates to Budget Committee.|
|April 15th||Action to be completed on congressional budget resolution.|
|May 15th||House consideration of annual appropriations bills may begin.|
|June 15th||Action to be completed on reconciliation.|
|June 30th||Action on appropriations to be completed by House.|
|July 15th||President transmits Mid-Session Review of the budget.|
|August 20th||OMB updates the sequester preview.|
|October 1st||Fiscal year begins.|
|15 days after the end of a session of Congress||OMB issues final sequester report, and the President issues a sequester order, if necessary.|
Appropriation - A legislative grant of money to finance a government program.
Congressional Budget Office - Provides expert technical and computer services to Congress; analyzes the budget proposal of the office of management and budget; determines the economic consequences of legislation.
Entitlements - A law that requires the paying of monetary benefits to some person or persons who meet the eligibility requirements established by the law; a binding obligation of the government (i.e. Social Security).
General Accounting Office (GAO) - Checks to see that government spending is proper and reasonable; headed by the Comptroller General who is appointed by the President, with the Senate's approval, for a 15 year term.
Office of Budget and Management - An advisory body that prepares the national budget and reviews agency requests for congressional appropriations. The OMB prepares the national budget, supervises and controls the administration of the budget, and helps the President propose legislation dealing with the budget. In addition, theOMB assists in the preparation of proposed executive orders and keeps the President informed of all overall activities of the government. The Director of the OMB is appointed by the President with Senate approval.
Reconciliation - A concurrent resolution, passed by both houses of Congress, that reconciles the specific amounts to be spend in the coming fiscal year with the overall budget ceiling.
2001 Budget Information Source:
2002 Budget Information Source:
2003 Budget Information Source:
Prior Budget Information