Macgruder's American Gov't: Chapter 16 Section 3: Spending and the Budget
List 3 examples of entitlement programs
1. OASDI 2. Medicare 3. Unemployment Insurance *Other majors ones include Medicaid, Food Stamps, and Veterans' pension
Describe the basic steps involved in creating the federal budget.
1. Presenting the Budget *On the first Monday in February, the President proposes a budget outlining the administration's policy and funding priorities and estimating spending, income, and borrowing for the coming fiscal year. *President submits budget request to Congress 2. Creating a Budget Resolution *Using the President's budget as a guide, the House and Senate work individually and the together to determine the size of the budget, estimate revenue, and set discretionary spending levels. *House and Senate Budget Committees conduct hearings on a Budget Resolution *House and Senate debate and vote on their respective committee's Budget Resolution *Conference committee works to blend both chambers' resolutions into one final resolution *Each house votes on final version of the Budget Resolution 3. Setting Appropriations *Guided by the Budget Resolution, the House and Senate work individually and then in conference to divide monies among federal agencies. Appropriations measure set out the budgets of the federal agencies in detail and provide the legal authority to spend their funds. *House and Senate Appropriations Committees each develop 13 separate massive spending bills. *Conference committee settles on one bill for each of the 13 appropriations measures. *Each house votes on final version of each appropriations bill 4. Approving the Final Budget *As each appropriations bill is approved by Congress, it is presented to the President to veto or sign into law. *President signs or vetoes the appropriations bills. If a bill is not approved by October 1st, Congress must pass a continuing resolution for unfunded agencies to ensure their continued operation.
Entitlement
A benefit that federal law says must be paid to all those who meet the eligibility requirements, e.g., Medicare, food stamps, and veterans' pension
Continuing Resolution
A measure that allows agencies to continue working based on the previous year's appropriations
Controllable Spending
An amount decided upon by Congress and the President to determine how much will be spent each year on many individual government expenditures, including environment protection programs, aid to education, etc.
Why is controllable spending sometimes referred to as "discretionary spending?"
Economists often use the term "discretionary spending" to describe spending on those budget items [national parks, highway projects, aid to education, civil service pay, defense sending] about which Congress and the President can make choices.
What are entitlement programs?
Government benefits that certain qualified individuals are entitled to by law, regardless of need
Uncontrollable Spending
Spending that Congress and the President have no power to change directly
Explain how the President and Congress work together to create the federal budget.
The process of building a budget is a lengthy one. In fact, it begins at least 18 months before the start of the fiscal year for which the budget is intended. First, each federal agency prepares detailed estimates of its spending needs for that 12 month period. Each agency then submits its spending plans to the President's budget-making agency, the Office of Management and Budget (OMB). The OMB reviews all of the many agency proposals, often in budget hearings at which agency officials must defend their dollar requests. Following the OMB's review, revised and usually lowered spending plans for all of the agencies in the executive branch are fitted into the President's overall program. They become a part of the budget document- a part of the political statement- the President sends to Capitol Hill.
What is the purpose of a continuing resolution?
They end the debate over the budget and prevent shut down. They extend the current budget for another whole year.
