c.ph.s., dosent
Moiseyeva F.A.
Donetsk national
university of economics and trade
named after Mikhail
Tugan-Baranovsky
The
Federal budget, as all budgets, sets forth priorities and levels of spending,
ways of financing the spending, and a plan for managing the funds. In purely
financial terms, the Federal budget that comes out each year includes a record
of actual receipts and spending for the fiscal year that was just completed.
Preparation
of the President's budget to Congress is only one step in the congressional
budget process, but it is the step that most directly involves Executive Branch
agencies. The Congress, however, does not have to adopt the President's budget
and supporting legislative proposals. Congress has a process that leads to, and
results in the implementation of, its own policies [2].
The
centerpiece of the Budget Act is the requirement that Congress each year
develop a "budget resolution" setting aggregate limits on spending
and targets for federal revenue.
On
or before the first Monday in February, the President submits to Congress a
detailed budget request for the coming federal fiscal year, which begins on
October 1. This budget request, developed by the President's Office of
Management and Budget (OMB), plays three important roles. First, it tells
Congress what the President recommends for overall federal fiscal policy, as
established by three main components: (1) how much money the federal government
should spend on public purposes; (2) how much it should take in as tax
revenues; and (3) how much of a deficit (or surplus) the federal government
should run, which is simply the difference between (1) and (2). In most years,
federal spending exceeds tax revenues and the resulting deficit is financed
through borrowing. Second, the budget request lays out the President's relative
priorities for federal programs – how much he believes should be spent on
defense, agriculture, education, health, and so on. The budget typically
sketches out fiscal policy and budget priorities not only for the coming year
but for the next five years or more. The third role that the President's budget
plays is to signal to Congress what spending and tax policy changes the
President recommends. The President does not need to propose legislative
changes for those parts of the budget that are governed by permanent law if he
feels none are necessary.
The
President does have to ask for one type of spending each year: funding for
"discretionary" or "appropriated" programs, which fall
under the jurisdiction of the House and Senate Appropriations Committees.
Discretionary programs must have their funding renewed each year in order to
continue operating.
The
President's budget can include changes to "mandatory" or
"entitlement" programs, such as Social Security, Medicare, Medicaid,
and certain other programs (including but not limited to food stamps, federal
civilian and military retirement benefits, veterans' disability benefits, and
unemployment insurance) that are not controlled by annual appropriations [1].
Congress develops a budget resolution – its own plan for
the appropriate levels of spending and taxes. It includes targets for total
spending, total revenues, and the deficit. This budget resolution always covers
the budget year and a number of future years. It is a concurrent resolution,
agreed to by both Houses of Congress but, since it is designed solely to guide
the Congress in its detailed deliberations on the budget, it is not signed into
law by the President. Also, since it is a statement of what the Congress would like and not a law that must be carried
out, it is generally a highly political statement [2].
After
receiving the President's budget request, Congress generally holds hearings to
question Administration officials about their requests and then develops its
own budget resolution. This work is done by the House and Senate Budget
Committees, whose primary function is to draft and enforce the budget
resolution.
Unlike the
President's budget, which is very detailed, the congressional budget resolution
is a very simple document. It consists of a set of numbers stating how much
Congress is supposed to spend in each of 19 broad spending categories (known as
budget "functions") and how much total revenue the government will
collect, for each of the next five or more years.
From
time to time, Congress makes use of a special procedure outlined in the
Congressional Budget Act known as "reconciliation". This procedure
was originally designed as a deficit-reduction tool, to force committees to
produce spending cuts or tax increases called for in the budget resolution.
However, it was used to enact tax cuts several times during the George W. Bush
Administration, thereby increasing projected deficits. This practice has since
been barred, by House and Senate rules adopted in 2007 at the same time as the
PAYGO rule.
In short, the annual federal budget process begins with a
detailed proposal from the President in February; Congress next develops a
blueprint called a budget resolution that sets limits on how much each
committee can spend (or reduce revenues) over the course of the year; and the
terms of the budget resolution are then enforced against individual
appropriations, entitlement bills, and tax bills on the House and Senate
floors. In addition, Congress sometimes uses a special procedure called
"reconciliation" to facilitate the passage of deficit reduction
legislation or other major entitlement or tax legislation. Finally, a companion
PAYGO rule helps ensure that tax cuts and entitlement increases are paid for and
do not add to the deficit.
Literature:
1. Policy Basics:
Introduction to the Federal Budget Process // [Электронный ресурс]. – 2011. – 46 кБ – URL: http://www.cbpp.org/cms/?fa=view&id=155
2. Budget Process in the U.S.
Department of Education // [Электронный ресурс]. – 2011. – 70 кБ – URL:
http://www2.ed.gov/about/overview/budget/process.html