United States federal budget

United States federal budget
Country	United States
Budget year	Fiscal Year 2025 (Oct 2024 – Sep 2025)
Submitted by	President Joe Biden
Submitted to	118th United States Congress
Total revenue	$5.0 trillion (est.)
Total expenditures	$6.9 trillion (est.)
Deficit	$1.9 trillion (est.)
Debt	~$35 trillion (gross, est.)
Website	[https://www.whitehouse.gov/omb/budget/ Office of Management and Budget]

United States federal budget is the financial plan for the Federal government of the United States, outlining projected revenues and authorized expenditures for a fiscal year. It is a primary instrument of national economic policy, reflecting the priorities of the President of the United States and United States Congress. The budget's scale and composition have profound impacts on the domestic economy, national defense, and global financial markets.

Overview

The budget is prepared annually for a fiscal year running from October 1 to September 30, as mandated by the Congressional Budget and Impoundment Control Act of 1974. It encompasses all federal activities, from funding the United States Department of Defense to administering Social Security (United States). Key guiding documents include the President's budget request, congressional budget resolutions, and the resulting appropriations bills. The process involves complex interactions between the Executive Office of the President, specifically the Office of Management and Budget, and various committees in the United States House of Representatives and United States Senate.

Budget process

The formal cycle begins when the White House submits a detailed budget proposal to Congress, typically in early February. This proposal is developed by the Office of Management and Budget in consultation with federal agencies like the United States Department of the Treasury. Congress then drafts a budget resolution to set overall spending and revenue targets. The House and Senate Appropriations Committees allocate specific funds through twelve annual appropriations bills, which must be passed by both chambers and signed by the President. Key legislation shaping the process includes the Balanced Budget Act of 1997 and the Budget Control Act of 2011.

Major expenditure categories

Federal spending is divided into mandatory and discretionary outlays. Mandatory spending, governed by permanent laws, includes major entitlement programs such as Social Security (United States), Medicare (United States), Medicaid, and interest on the public debt. Discretionary spending is set annually by Congress and funds national defense through the United States Department of Defense, as well as domestic agencies like the United States Department of Health and Human Services and the United States Department of Veterans Affairs. Other significant costs include federal employee retirement programs administered by the Office of Personnel Management and income security programs.

Revenue sources

The primary source of federal income is individual income taxes, administered by the Internal Revenue Service. Corporate income taxes, payroll taxes for Social Security (United States) and Medicare (United States)], and various excise taxes constitute other major streams. Additional revenue comes from estate and gift taxes, customs duties, and earnings from the Federal Reserve System. Revenue levels are influenced by economic conditions, tax laws set by Congress, and rulings from the United States Tax Court.

Deficit and debt

A budget deficit occurs when annual expenditures exceed revenues, while a surplus is the opposite. Persistent deficits add to the gross National debt of the United States, which is the total accumulation of past borrowing. Debt is held by the public, including foreign governments like Japan and China, and by federal accounts such as the Social Security Trust Fund. Management of the debt is conducted by the Treasury Department and is subject to a statutory limit set by Congress, often leading to debates over the United States debt-ceiling crisis.

Historical trends

Major shifts in budget composition have followed national events and policy changes. The New Deal programs under President Franklin D. Roosevelt significantly expanded federal domestic spending. The World War II mobilization led to massive increases in defense expenditures. The Great Society initiatives under President Lyndon B. Johnson created new mandatory spending on healthcare. More recent defining periods include the Reaganomics tax cuts, the budget surpluses of the late 1990s under President Bill Clinton, and the responses to the Great Recession and COVID-19 pandemic in the United States, which saw major legislation like the American Recovery and Reinvestment Act of 2009 and the CARES Act.

Category:Government finances of the United States Category:United States federal budgets