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    The Federal Budget

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    The document discusses the federal budget process and differing views between Democrats and Republicans. It notes that Democrats generally favor using government programs to invest in infrastructure and address social issues, while Republicans prefer a smaller government role and lower taxes. The budget process involves the President developing a budget proposal which is then considered by Congress through authorization and appropriations bills. Key areas of government spending are defense, non-defense discretionary, mandatory programs like Social Security and Medicare, and interest on the national debt. The growing national debt and challenges funding mandatory programs are areas of concern.

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    The Federal Budget

    Uploaded by

    api-426413696
    70 views15 pages
    The document discusses the federal budget process and differing views between Democrats and Republicans. It notes that Democrats generally favor using government programs to invest in infrastructure and address social issues, while Republicans prefer a smaller government role and lower taxes. The budget process involves the President developing a budget proposal which is then considered by Congress through authorization and appropriations bills. Key areas of government spending are defense, non-defense discretionary, mandatory programs like Social Security and Medicare, and interest on the national debt. The growing national debt and challenges funding mandatory programs are areas of concern.

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    The document discusses the federal budget process and differing views between Democrats and Republicans. It notes that Democrats generally favor using government programs to invest in infrastructure and address social issues, while Republicans prefer a smaller government role and lower taxes. The budget process involves the President developing a budget proposal which is then considered by Congress through authorization and appropriations bills. Key areas of government spending are defense, non-defense discretionary, mandatory programs like Social Security and Medicare, and interest on the national debt. The growing national debt and challenges funding mandatory programs are areas of concern.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    70 views15 pages

    The Federal Budget

    Uploaded by

    api-426413696
    The document discusses the federal budget process and differing views between Democrats and Republicans. It notes that Democrats generally favor using government programs to invest in infrastructure and address social issues, while Republicans prefer a smaller government role and lower taxes. The budget process involves the President developing a budget proposal which is then considered by Congress through authorization and appropriations bills. Key areas of government spending are defense, non-defense discretionary, mandatory programs like Social Security and Medicare, and interest on the national debt. The growing national debt and challenges funding mandatory programs are areas of concern.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 15

    Current Events: Topic 1

    The Federal Budget


    Where do Tax Dollars Go?

    • Introduction
    – Between the two parties the national debt has become a
    controversial discussion which has brought unprecedented
    attention from the public eye.. The budget battle will always
    continue.
    – In return the federal government has to determine which ways
    are the most appropriate to spend tax payer dollars.
    The Democratic Stance

    • “Bigger” or “Expanding” the Government?


    – Democrats tend to favor using government
    programs to invest in infrastructure and
    address economic and social problems
    • Infrastructure: Highways, Communication, Water,
    Electric, etc.
    • Social Problems: Economic Inequality, Welfare,
    some Individual Rights.
    • Sometimes, this requires higher taxes… usually on
    the wealthiest individuals and corporations
    The Republican Stance
    • “Smaller” or “Contained” Government?
    – Republicans generally prefer a smaller government
    role and lower taxes
    • They believe wealth created at the top of the
    economic chain will “trickle down” and that the
    private sector is better suited to address most
    issues.
    • This can be seen as controversial as the classes
    below the wealthy believe this wealth does not
    “trickle down”.
    • The current Republican leadership is deeply
    opposed to any new or increased taxes
    A Balanced Budget?

    • Can it Work?
    – Some economists argue that a balanced
    budget is the only way to ensure the United
    States' future economic stability
    • Balanced Budget: where a government is able to
    bring in money while keeping their expenses below
    what is made.
    – Most Americans agree that the ballooning US
    debt (currently about $21 trillion) is a huge
    concern
    The Process

    • Where do Priorities Lie?


    – Setting Precedent
    – The President and Congress collaborate year to year to develop a
    proposed federal budget.
    • Portrays the top priorities for the upcoming year, and gives a
    suggestion(s) as to how it will be achieved.
    – Example… if border security is a priority, more government funds will be spent on
    building fences and policing the border
    Cooperation/Conflict of Interests
    • Working together (and sometimes against each
    other), the president and Congress decide how
    much will be spent on defense, health care,
    education, “safety net” programs like
    unemployment, etc., etc.
    – Democratic President and Republican Congress, or vice
    versa can cause tension.
    – Same party affiliations can make the process of either
    party move more effectively.
    • It also has to be taken into account how much total
    revenue will be brought in by the tax payers.
    – Lawmakers determine this by rough estimations as
    nothing is absolute.
    Development of a Budget

    • The President Develops a Budget


    – The Office of Management and Budget is responsible for drawing
    up the president’s budget for the coming fiscal year (Oct – Sep)
    • A fiscal year is the time/period where taxing and accounting purposes
    are considered.
    • The president sends the administration’s budget to Congress no later
    than the first Monday in February
    Congress Takes the Reigns
    • Congress grants approval for all governmental programs
    by passing an authorization bill
    – States the program’s goals, Congress’s rules and
    regulations, and the agency’s spending limits
    • Lawmakers then approve an appropriations bill to give the
    agency money
    – This dual system creates a fiscal “check” by having
    programs discussed on their merits and then on their
    costs
    Congress take the Reign Cont.
    – Congress is also responsible for raising money through the
    collection of taxes or borrowing
    • The House and Senate are supposed to approve a joint budget
    resolution by April of each year
    • Problematic as Congress can sometimes not agree leading to
    government shutdowns.
    – Public faith in government officials has gone down over the years as a result.
    The Basics of the Budget

    • The Whole Enchilada


    – Government spending is divided into four main
    categories
    • Defense
    • Non-Defense Discretionary
    • Mandatory
    • Interest on National Debt
    – Revenues come from taxes (45%), payroll
    Social Security deductions (34%), corporate
    taxes (14%), and other sources
    Why these Four Categories?
    – Every year defense spending is the largest
    – N-D Discretionary pays for budgetary programs like education,
    highways, flu vaccines, etc.
    – Mandatory covers Social Security, Medicare, & Medicaid
    – Interest on National Debt must be paid to keep our credit rating
    high and keep interest rates down
    • Otherwise other countries won’t want to invest in the US Dollar as the
    most trusted currency.
    Mandatory Spending in Trouble?

    • Entitlement Spending
    – Social Security, Medicare, & Medicaid are all in
    trouble
    • Estimates predict that they will run out of money in
    coming years
    – Due to the Baby Boomer generation aging, and not
    enough Millennials/Generation X babies being able to
    support them.
    • These programs are popular and the public is
    demanding that they continue… so the government
    must find new ways to properly fund them
    A Government Beyond its Means

    • Budget Deficits
    – Deficits occur when the government spends more than it takes in
    • To make up any difference, the Treasury must borrow money…
    increasing the national debt
    A Government Beyond its Means

    • The National Debt


    – Currently more than $21 trillion (roughly $64,000 per citizen)
    • Total sum of money borrowed by the government from citizens
    • Lending institutions, foreign banks
    • Government’s own holdings like the Social Security Trust Fund
    – Economists predict that growing debt could dampen long-term investment
    and lead to an economic depression

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