In every country, the federal government requires funds to be spent in a particular year. The expenditure is implemented in the form of various projects that the government undertakes to be beneficial to its citizens. A federal budget is the funds that are available for the government to spend (expenditure) in a particular year. Moreover, each sector of the government is awarded a small portion of the federal budget to continue ongoing projects or even start the new ones. In addition, several stages are followed to create the budget attributing different roles to the president and the legislative body. Thus, this essay discusses the federal budget including the problems associated with the budget creation process as well as explains the reasons why the expenditure of the government continues to grow at a high rate in the USA.
Several steps are involved in the creation of a budget in the USA which typically runs from October the first to September the 30th the next year. This process incudes the office of the president and the U.S. Congress. First of all, the budget creation starts when the President submits a budget proposal to the Congress between the first Monday of January and that of February. Additionally, this budget is formulated by a branch of the Office of the President, the Office of Management, and Budget. In March, the Congress performs an analysis of the president’s budget proposal through the Congress Budget Office (CBO). It, then, writes a report which the budget committees use to consider the president’s budget proposal, and by April 1 each committee presents a resolution of the budget to its house. Further, the Senate and the House regard the budgets and are expected to be passed by April 15 with the possible amendments. After this, selected Senators and Representatives combine both reports to introduce a conference report. However, for the conference report to be binding, approval must be received by the Senate and Congress. Once passed by both bodies, it is signed by the president and becomes a law. The roles of the president are, therefore, to create a budget proposal and sign the final budget as law. On the other hand, the Congress analyzes the budget proposal and notes the expected amendments combining then both their amendments and the Senate’s ones to get a conference report which is passed as a bill.
As a result of the federal budget process, various problems arise which are either political or economic. Concerning the politically related problems, the major difficulty is the complication of passing the budget. The federal government can go for years without developing a budget that is fully fledged because the president and both houses of Congress have a difficult time agreeing on the same budget. As a result, the amendments are proposed in these two houses resulting in a final budget which is different from the one intended by federal government. Moreover, it also leads to the development of stopgap measures each year allowing the running of the federal government but preventing it from creating a long-term budget plan. As for the case of an economically related problem, the primary obstacle is that the budget process is vulnerable to the demands raised by special interests. In the U.S., the government has huge budget deficits. During the budget process, the various government programs bring pressure on it. The legislators, therefore, succumb to the interests of these projects and give them what they want. Consequently, the government spending is not reduced and taxes are raised to ensure that the country’s finances are stable.
The federal debt of the U.S. has been on a constant hike in the last few years because of an increase in the government spending. The government continually initiates new programs and expands the existing ones for the benefits of its citizens. To finance these projects, the government borrows funds from financial institutions or from the other countries, which leads to the growth of the federal debt. Furthermore, the spending of the government is classified into two major categories: discretionary and non-discretionary (mandatory) spending. According to Dr. Austin (2012), discretionary spending in comparison with mandatory spending has fallen. Discretionary spending is a government expenditure set by the Senate and House appropriation committees which lasts for one year. On the other hand, non-discretionary (mandatory) spending refers to the government’s expenditure passed by both houses but is not limited to a timeframe of one year. Most entitlement programs such as social security and healthcare are included in this category. In addition, another reason of the rise in the federal debt lies in the mismanagement of the programs initiated by the government. The managers of these projects mismanage the funds allocated to them by the federal government resulting in more money being allocated for the same projects.
Several issues in the U.S. are considered to be a threat to the national deficit of the country since they increase the overall spending of the government. The national deficit and debt of the U.S. are in excess and urgent measures must be taken (Furgang&Furgang, 2012). First, the citizens of the U.S. have unsustainable living standards. According to Johnson, credits cards are being used by the citizens meaning that they spend more than they make. The same case applies to the government since the expenditures by the government are higher than the revenue gained from the citizens, which leads to the massive borrowing, a situation known as the national deficit. The government is also introducing new entitlement programs and expanding the already existing programs. In fact, these are beneficial programs initiated and funded by the government to the citizens as their right (Rogers- Dillon, 2004). Moreover, the entitlement programs that the government spends on the most include social security, the Medicaid program, and the Medicare program. Most employees that retire are entitled to social security and the healthcare programs.
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