Federal budget of the United States

Federal budget of the United States
Country	United States
Budget year	2024 (fiscal)
Submitted by	Joe Biden
Submitted to	118th United States Congress
Total revenue	$4.9 trillion (est.)
Total expenditures	$6.9 trillion (est.)
Deficit	$1.9 trillion (est.)
Debt	~$34.6 trillion (gross)
Website	[https://www.whitehouse.gov/omb/budget/ Office of Management and Budget]

Federal budget of the United States. The federal budget is the financial plan of the U.S. Government detailing anticipated revenues and authorized expenditures for a fiscal year. It is a primary instrument of national economic policy, reflecting the legislative priorities of the President of the United States and the United States Congress. The process is governed by statutes including the Congressional Budget and Impoundment Control Act of 1974 and is centrally managed by the Office of Management and Budget and the Congressional Budget Office.

Overview

The budget outlines the government's fiscal policy, allocating resources to federal agencies and programs. It directly influences the national economy, impacting areas from Social Security benefits to funding for the Department of Defense. The scope of the budget has expanded significantly since the early 20th century, particularly following key events like the New Deal and World War II. Modern budgets address complex challenges, funding entities from the National Institutes of Health to the Federal Bureau of Investigation.

Budget process

The budget process begins with the President's submission of a proposed budget to Congress, prepared by the Office of Management and Budget in consultation with agencies like the Department of the Treasury. Congress then reviews this proposal through its budget committees, including the House Budget Committee and the Senate Budget Committee. Following the passage of a budget resolution, appropriations committees in both the House and Senate draft the twelve annual appropriations bills. Key legislation shaping this process includes the Budget and Accounting Act of 1921 and the Gramm–Rudman–Hollings Balanced Budget Act.

Major expenditure categories

Federal spending is typically divided into mandatory and discretionary outlays. Mandatory spending, which is required by permanent law, constitutes the largest portion and includes major entitlement programs like Social Security, Medicare, and Medicaid. Discretionary spending is set annually by Congress and funds national defense, operated by the Department of Defense and agencies like the Department of Veterans Affairs, as well as non-defense programs such as those run by the Department of Education and the National Aeronautics and Space Administration. Other significant costs include interest payments on the public debt held by entities like the Federal Reserve.

Revenue sources

The federal government collects revenue from several primary sources. The individual income tax is the single largest source, administered by the Internal Revenue Service. Payroll taxes fund specific trust funds for Social Security and Medicare. Revenue is also generated from the corporate income tax, excise taxes on goods like gasoline, and other sources such as estate taxes and customs duties collected by U.S. Customs and Border Protection. Tax policy is heavily influenced by legislation like the Tax Cuts and Jobs Act of 2017.

Deficit and debt

A budget deficit occurs when annual expenditures exceed revenues, while a surplus occurs when revenues are greater. Persistent deficits add to the gross public debt, which is the total accumulation of past borrowing. The debt is held by the public, including foreign governments like Japan and China, and by government accounts like the Social Security Trust Fund. Management of the debt is a responsibility of the Treasury Department, and concerns over its growth have prompted legislative actions such as the debt ceiling debates and proposals from commissions like the Simpson–Bowles Commission.

Historical trends

The size and composition of the budget have evolved dramatically. Prior to the Great Depression, the federal budget was relatively small, with major spending limited to areas like the Navy Department. The New Deal programs under President Franklin D. Roosevelt marked a significant expansion in domestic spending. Defense spending surged during World War II and the Cold War, funding agencies like the Central Intelligence Agency and projects such as the Strategic Defense Initiative. More recent trends include major tax cuts under President Ronald Reagan and President George W. Bush, the expansion of Medicare under President Lyndon B. Johnson, and large stimulus packages like the American Recovery and Reinvestment Act of 2009 and the CARES Act in response to the COVID-19 pandemic.

Category:Federal budget of the United States Category:Government finances in the United States