THE BUDGET

Fiscal Policy•Fiscal Policy is the impact of

the federal budget on the economy--for example- taxes, spending and borrowing--so in talking about the budget process, we are talking about making

fiscal policy

MAJOR PLAYERS

•Executive Branch–The President–The Office of Management & Budget

• The Legislative BranchHouse & Senate

AppropriationsCommittees

House & Senate Budget Committees

House Ways & Means Committee

Senate Finance CommitteeCongressional Budget Office

The Process

The President is supposed to prepare the budget and present it to Congress by the first Monday in February.

The Office of Management &

Budget• The President will give the OMB

his guidelines for the budget. • The OMB will also take requests

from the different executive agencies and departments.

• The OMB uses all of this info to prepare the budget.

Congress• The Budget Committees in the House &

Senate receive the budget & study it.• Each committee makes a

recommendation to their chamber by early May and this recommendation becomes the – Budget Resolution

The Budget Resolution is a goal--NOT binding!!

• During the summer, each chamber passes 13 appropriations bills.

• Appropriations bills fund programs. To create a program, an authorization bill must be passed.

•After the House and Senate agree on the appropriations bills and pass them, the President signs them (and we all faint!:)

•Once Congress passes a budget, each chamber usually has to pass a budget reconcilliation resolution

•A budget reconciliation resolution resolves the differences between what the House or Senate meant to spend --budget resolution--and what they actually spent!!

The Fiscal Year• The fiscal year for the national

gov’t is from Oct. 1-Sept. 30.

• IF Congress & the President can’t get the budget completed on time, Congress can pass a continuing resolution. This will continue to fund the gov’t at last year’s level.

•If Congress doesn’t pass a continuing resolution or the President doesn’t sign it, the national gov’t shuts down until a budget or a continuing resolution can be passed!

ENTITLEMENTS

• Benefits provided by government programs to individuals or organizations based on eligibility criteria as defined by law—ex.-social security, Medicare

2011 Budget

THE END