The Budget Process

The budget process begins the first month in February, when the President submits his proposal to Congress. The budget process is used to create the United States federal budget. The President’s proposed budget includes extensive supporting documentation to make the case for White House spending and saving priorities. The federal budget is divided into two categories mandatory and discretionary. There are five steps in the Federal Budget process. The first step beginning with the President submits a budget request to congress. Second the House and Senate pass budget resolutions, the third step the budget resolution, the fourth step the House and Senate vote on appropriations bill and reconcile differences.  Lastly the fifth step is the President signs each appropriation bill and the budget becomes law.

Briefly explaining the process, each February for the coming fiscal year which begins October 1, the President sends a budget request which is just a proposal. Congress will then review the request and passes its own appropriation bill. Once the President signs the bills the country will have a budget for the new fiscal year. Congress then begins a process that can take months of reviewing the request after the President’s budget request has released. When the president’s budget request has been submitted and lawmakers have closely reviewed it, the House Committee on the Budget and Senate committee on the budget each will write a budget resolution. The appropriations committee in both the House and Senate will split into smaller Appropriations subcommittees. They will review the president’s budget request pertaining to the federal agencies under their specific jurisdictions.

Once the subcommittees have reviewed the president’s request, it conducts hearing and poses questions to leaders of its associated federal agencies about the agencies requested budget. With all this information, the chair of each subcommittee will write a first draft of the subcommittee’s appropriations bill. Once it has passed the full committee reviews it and then sends it to the full House or Senate for consideration. The full house and senate will have a debate, then vote on appropriations bill from the twelve subcommittees. Once the House and Senate have expressed their versions of each appropriations bill a conference committee will resolve the differences the House and Senate have. After the conference committee has reconciled the differences the House and Senate will vote again.

Once the House and Senate have passed, each appropriations bill goes to the President. Often, however, the process takes longer and rarely is the work finished on all twelve bills by October 1. Some of the problems the federal budget currently has are the President and Congress hardly agrees on the budgetary blueprint. With this occurring the chances of Congress and the President negotiating on a timely matter are slim. This process is supposed to provide determination on the nations annual spending and revenue priorities instead turns into a debate and prevents cooperation. The federal budget is supposed to provide an opportunity for congress and the president to cut back ad decide how much the federal government should tax and spend the following year. In reality, only one-third of spending that is classified under discretionary is subject to the appropriations each year. All the other programs are left without oversight and grow uncontrollably each year.

Furthermore, the mandatory programs that are “beyond consideration” represent the largest long-term threat to the nation’s fiscal health. Not to mention the budget process is created with a bias toward higher spending and taxes. Democracies make decisions that have substantial effect on what is decided. These multi-year constraints fail to settle the question of whether the budget process should be used to limit spending or slow the growth of the budget deficit, no matter the government size. The confusion this causes creates odd situations whereby even policies that have the intentions of achieving both goals of reducing spending and budget have not been allowed. Lastly the budget process is complex. The current budget process is even too complex for journalists, voters, and even policymakers to understand. This leads to budgetary decisions often dominated by those of its intricacies, and bend the complex rules in their favor. The National Debt has continued to increase an average of $2.28 billion per day since September 30, 2012.

According to Knock Knoller from CBS News, The Debt raised $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office. Since the amount left over in the 1990’s, the federal budget has been deficit since fiscal year 2001. This adds to the already existing stock of outstanding federal debt. With everything considered, the relationship between the growth rate and the federal debt and overall rate of economic growth is critical to economic stability. As long as the output continues to grow rapidly the ratio of debt to gross domestic product will rise. The presidents proposed discretionary spending for fiscal year 2014 is as follows, 6% education, 6% government, 6% veterans benefits, 5% housing and community, 5% health, 3% international affairs, 3% energy and environment, 3% science, 3% transportation, 2% labor, 1% food and agricultural, and 57% military. Non-discretionary spending in fiscal year 2013 was as follows, 22% social security payments, 21% Medicare/Medicaid/SCHIP payments, 6% interest on the national debt, 15% other mandatory payments. Sequester is a general cut in government spending.

The term budget sequestration is referred to automatic spending cuts in particular categories and federal outlays. The $1.2 trillion in budget cuts would be spread over the next ten years and are equally divided between domestic spending programs and military budget. During the remainder of the 2013 fiscal year, $85 billion worth of cuts are set to go into effect. The budget cuts would end in 2021. Who is to blame for it? It all depends there’s the republican take and the democratic take. The republicans feel they do not have a big choice; it is between no spending cuts or deep spending cuts. They feel no one will offer what they consider serious spending cuts. In my opinion both parties are to blame. They both decided on budget cuts in order to get out of “the red”. I do not agree with raising taxes because it will affect the working class just as much as losing their jobs. The Republicans feel Obama’s method will not solve the problem and I agree, like the article mentions Republicans feel he is just “moving the goal posts”. Ultimately budget cuts are going to occur. The politicians need to really look at where and how the money is being spent and must be applied evenly to every program, project, and activity.