budget of the United States government

budget of the United States government
Country	United States
Budget year	Fiscal Year 2025 (proposed)
Submitted by	Joe Biden
Submitted to	118th United States Congress
Total revenue	$5.0 trillion (est.)
Total expenditures	$7.3 trillion (est.)
Deficit	$2.3 trillion (est.)
Debt	~$35 trillion (gross)
Website	[https://www.whitehouse.gov/omb/budget/ Office of Management and Budget]

budget of the United States government is the financial plan for the federal government, detailing its anticipated revenues and proposed expenditures for a fiscal year. It is a central document of American politics, reflecting the policy priorities of the President of the United States and the United States Congress. The process of its creation and enactment involves complex interactions between the Executive Office of the President, the United States House of Representatives, and the United States Senate.

Overview

The federal budget authorizes the collection of revenue, primarily through taxation, and the obligation of funds for all government activities. The fiscal year runs from October 1 to September 30. Key actors in the budget's formulation include the Office of Management and Budget (OMB), which assists the President, and the Congressional Budget Office (CBO), which provides independent analysis for Congress. The ultimate legal authority for spending lies with the appropriations bills passed by Congress and signed by the President, though mandatory spending on programs like Social Security operates under permanent law.

Budget process

The modern budget process is largely governed by the Congressional Budget and Impoundment Control Act of 1974. It begins with the President's submission of a budget request to Congress, typically in February. This proposal is then reviewed by the House Committee on the Budget and the Senate Committee on the Budget, which draft a concurrent budget resolution setting overall spending and revenue targets. Following this, the House Committee on Appropriations and Senate Committee on Appropriations draft the twelve annual appropriations bills that fund discretionary programs. Key legislation influencing 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 (or direct) and discretionary categories. Mandatory spending, which is not controlled by the annual appropriations process, includes major entitlement programs such as Social Security, Medicare, and Medicaid. Discretionary spending, which is set annually by Congress, funds national defense through the Pentagon, veterans' benefits, and the operations of cabinet departments like the United States Department of Education and the United States Department of Homeland Security. Interest payments on the national debt are another significant and growing expenditure.

Revenue sources

The primary source of government revenue is the Internal Revenue Code, which authorizes the collection of individual income taxes, corporate taxes, and payroll taxes that fund Social Security and Medicare. Other significant sources include excise taxes on items like gasoline and tobacco, estate taxes, and customs duties. The Internal Revenue Service (IRS) is the agency responsible for tax collection. Revenue levels are significantly influenced by economic conditions and changes in tax law, such as those enacted in the Tax Cuts and Jobs Act of 2017.

Deficit and debt

A budget deficit occurs when annual expenditures exceed revenues. Persistent deficits add to the gross national 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 the responsibility of the United States Department of the Treasury, and concerns over its size have prompted legislative efforts like the Gramm–Rudman–Hollings Balanced Budget Act. The Federal Reserve also plays a role through its monetary policy operations.

Historical trends

The size and composition of the federal budget have changed dramatically throughout history. Major wars, including the American Civil War, World War I, and World War II, caused massive spikes in spending and debt. The expansion of the social safety net during the Great Depression under President Franklin D. Roosevelt and the Great Society programs under President Lyndon B. Johnson established large mandatory spending programs. Recent decades have seen significant tax reforms under presidents like Ronald Reagan and George W. Bush, and major spending initiatives such as the American Recovery and Reinvestment Act of 2009 and the CARES Act in response to the COVID-19 pandemic.

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