Constitution
Lesson 3
Spending & The Budget
- U.S.
U S spends over $1
$1.7
7 trillion
trillion.
- if you laid $1 bills end to end – 140 million miles
to the sun and ½ way back.
A Federal Spending
A.
1. Social Security spends more than any other agency.
a) most goes to “elderly” & “survivors”
b) entitlements – paid to those who meet the requirements.
1) ex. Medicare, food stamps, veteran pensions, etc.
2. Interest on the National Debt is # 2.
2
2
3. Defense Spending - $287 billion in 1998.
a) does not include what other depts. spend on defense.
1) Dept.
D t off E
Energy – Nuclear
N l Weapon
W
Research
R
h
4. Controllable Spending
a)) most items are controllable – Congress
g
& Pres. decide
how much to spend.
1) ex: farm subsidies, military equipment, education, etc.
5. Uncontrollable Spending
a) Interest on National Debt
1) when we borrow money, we must back the correct amt.
b)) Social Security,
y food stamps,
p entitlements
1) no control over the # of people who qualify.
2) Congress can redefine eligibility or spend less, but
that is politically difficult.
difficult
c) Office of Management & Budget
1) estimates that uncontrollable equals 80% of budget
B. Federal Budget
1. Only Congress can provide money for spending.
2 Pres
2.
Pres. submits a budget at the beginning of each session
session.
a) Pres.’s plan for the govt.
g Process
3. Budget
a) joint effort between the Pres. & Congress
b) Pres. submits it, Congress reacts – usually approve most of it.
4. President & the Budget
a) starts building it 18 months ahead of time.
time
b) each agency turns in a estimate of spending.
c) goes to Office of Management & Budget (OMB)
1) OMB reviews the proposals
2. usually lower the amt. & create a proposal.
5 Congress & the Budget
5.
a) the budget is sent to “budget” committee
b)) CBO – Cong.
g Budget
g Office provides
p
both houses
with financial data and analysis.
c) sent to House & Senate appropriations committees
1) hold
h ld hearings
h i
2) report findings to the floor of each house
d) Propose a resolution of budget before both Houses.
e)) mustt pass both
b th houses
h
by
b May
M 15
1) sets target goals for spending.
f) Another resolution must be passed by Sept. 15.
1) Sets the final limits for all Fed. agencies.
g) Pres. must sign it into law.
h) If not done by Oct. 1 … – (beginning of fiscal year)
1) agencies might have to shut down.
2) Pres. can sign a continuing resolution – agencies
can continue on last year’s budget.