The Federal Budget

Process and Amounts.

The federal budget process is defined by the Constitution, congressional statutes, and the executive policy agenda. It follows the general lawmaking process, and thus the budget is really a comprehensive law dictating how much the government will spend on defense, highways, national parks, and the hundreds of other services it provides the U.S. taxpayer. The process is, of course, more complicated than Congress passing it and the president signing it. Every governmental entity (Dept. of Defense, FBI, Nat. Parks) desires something in this bill–the funds to operate at their best levels. Recall, each congressional committee chair has his or her pet projects, and 435 Congress members want to send money back to their districts. And the interest groups pressure members to steer money toward their interests. A lot of hands are reaching for and into that federal purse.

The president, after a bottom-up request for funds from the agencies and departments, as they have large budgets themselves, puts together the budget proposal. He does so with his Office of Management and Budget , his Secretary of the Treasury, economic advisers, and others. Once the overall asking and allotment is finished at the White House, the proposal is sent to Capitol Hill. A manager in an organization is often the better person to recommend estimated spending, much like the president often is here. The representative body, Congress in this case, holds the ultimate power of the purse. City mayors run the city, but the council members usually must approve the spending.

Where does the money go? About two-thirds of the cash the federal government spends annually goes toward entitlements, programs and payments that citizens, states, other entities are entitled to. For example, Medicare and Social Security payments. For decades, citizens pay into these programs and the government must follow through on its promise of social security checks and medicare funding.

Examine the federal government web page for the budget from USA.GOV. and answer the questions below.



1. What department spends the most money in an annual Budget? Find a smaller agency and compare the totals.

2. Why do you think these are the highs and lows of government spending?

3. Name and explain 2 steps in the federal budget-making process.