Budget of the United States Government

Budget of the United States Government
Congressional Budget Office · Public domain · source
Name	United States Federal Budget
Caption	Seal of the United States Department of the Treasury
Date issued	Annual
Jurisdiction	United States
Minister	United States Secretary of the Treasury

Budget of the United States Government is the annual financial plan for federal receipts and expenditures prepared by the President of the United States and enacted by the United States Congress. It allocates funding across federal departments such as the Department of Defense, Department of Health and Human Services, and Department of Education and affects programs like Social Security, Medicare, and Medicaid. The budget intersects with institutions including the Office of Management and Budget, Congressional Budget Office, and the United States Department of the Treasury and is shaped by laws such as the Budget and Accounting Act of 1921, the Balanced Budget and Emergency Deficit Control Act of 1985, and the Budget Control Act of 2011.

Overview

The federal budget outlines estimated tax revenues collected by the Internal Revenue Service and outlays across categories like defense, healthcare, and social insurance administered by agencies including the Department of Defense, Department of Veterans Affairs, Department of Homeland Security, and Department of Agriculture. Key actors include the President of the United States, the Speaker of the House, the Senate Majority Leader, the United States Congress, the Office of Management and Budget, the Congressional Budget Office, and the United States Government Accountability Office. Major statutory frameworks that structure annual decisions include the Congressional Budget Act of 1974 and appropriations processes grounded in the United States Constitution.

Budget Process and Timeline

The annual cycle begins with proposals from the President of the United States via the Office of Management and Budget and proceeds through hearings in committees such as the United States House Committee on the Budget and the United States Senate Committee on the Budget. Budget resolutions passed by the United States Congress set topline figures, followed by 12 appropriations bills enacted by the United States House of Representatives and United States Senate; failure can trigger a shutdown or continuing resolutions negotiated by leaders like the Speaker and the Senate Majority Leader. Disputes have involved presidents from Franklin D. Roosevelt, Harry S. Truman, Dwight D. Eisenhower, John F. Kennedy, Lyndon B. Johnson, Richard Nixon, Ronald Reagan, Bill Clinton, George W. Bush, Barack Obama, Donald Trump, and Joe Biden.

Revenues and Sources of Funding

Primary revenue sources are individual income taxes collected by the Internal Revenue Service, payroll taxes funding Social Security and Medicare, corporate income taxes paid by entities regulated by the Securities and Exchange Commission, and tariffs administered at ports by U.S. Customs and Border Protection. Other receipts include excise taxes, interest on federal assets managed by the United States Department of the Treasury, and fees for services tied to agencies like the United States Patent and Trademark Office and Federal Aviation Administration. Major tax legislation affecting revenue has been enacted through laws such as the Revenue Act of 1924, the Tax Reform Act of 1986, the Economic Growth and Tax Relief Reconciliation Act of 2001, and the Tax Cuts and Jobs Act of 2017.

Mandatory and Discretionary Spending

Mandatory spending comprises entitlements established under statutes like Social Security Act provisions and Medicare eligibility rules, administered by the Social Security Administration and Centers for Medicare & Medicaid Services. Discretionary spending is allocated annually by Congress across departments including the Department of Defense, Department of Education, Department of Energy, and NASA. Entitlement programs such as Supplemental Nutrition Assistance Program involve the USDA, while discretionary appropriations fund agencies like the Federal Bureau of Investigation and Environmental Protection Agency.

Deficits, Surpluses, and National Debt

Budget deficits occur when outlays exceed receipts, historically seen during periods like the Great Depression, World War II, the Global Financial Crisis of 2007–2008, and the COVID-19 pandemic. Surpluses occurred in the late 1990s under administrations such as Bill Clinton with economic conditions influenced by entities like the Federal Reserve and events including the Dot-com bubble. The national debt is held by investors including the Federal Reserve, foreign holders such as Japan and China, trust funds like the Social Security Trust Fund, and private institutions regulated by the Office of Thrift Supervision successors. Debt dynamics are overseen via statutory limit debates involving the United States Treasury and political negotiations led by figures such as the Secretary of the Treasury and congressional leaders.

Budget Enforcement and Fiscal Policy Tools

Congress uses enforcement mechanisms like budget resolutions, reconciliation under the Congressional Budget Act of 1974, and sequestration powers from the Balanced Budget and Emergency Deficit Control Act of 1985 to constrain spending and deficit trajectories. Fiscal policy tools include tax changes, spending adjustments, and countercyclical measures coordinated with the Federal Reserve System during recessions declared by presidents or influenced by events like the 1973 oil crisis and the 2008 financial crisis. Independent institutions such as the Government Accountability Office and Congressional Budget Office provide scoring and analysis; courts including the United States Supreme Court have adjudicated disputes over statutory interpretation.

Historical Trends and Major Budgetary Reforms

Major reforms and trends include the establishment of the Office of Management and Budget and the Budget and Accounting Act of 1921, postwar budget expansion tied to World War II and the Cold War, tax reforms under Franklin D. Roosevelt, Ronald Reagan, and Bill Clinton, creation of Medicare and Medicaid under Lyndon B. Johnson with the Social Security Act Amendments of 1965, deficit control efforts like the Gramm–Rudman–Hollings Balanced Budget Act, and the Budget Control Act of 2011 addressing debt-ceiling standoffs involving administrations like Barack Obama and lawmakers such as Mitch McConnell and Nancy Pelosi. Contemporary debates involve proposals from policymakers and think tanks like the Brookings Institution, Heritage Foundation, Cato Institute, and Committee for a Responsible Federal Budget on entitlement reform, corporate taxation, and discretionary spending priorities.

Category:United States federal budget