1. The Federal Budget Process
AP Government
Economic Policy Unit

2. Terms Budget- List of expenditures
Revenue- Income, majority from income taxes
Expenditures- Federal spending
Deficit- When expenditures exceed revenue

3. Tax and Finance Committees
House Ways and Means Committee- The House of Representatives committee that, along with the Senate Finance Committee, writes the tax codes, subject to approval of Congress as a whole
Senate Finance Committee- Senate committee that, along with the House Ways and Means Committee, writes the tax codes, subject to approval of Congress as a whole

4. Entitlements
Federal programs that guarantee a specific level of benefits to persons who meet requirements set by law
Person is “entitled” to benefits if they meet the criteria set by the federal government
Spending on entitlements is mandated by the Federal law

5. Examples -Social Security -Medicare -Medicaid -V.A. Programs
-Unemployment Programs
-Food Stamps
-Retirement Plans for Federal Employees

6. Entitlements Positives Negatives
Provides needed benefits to American citizens
Government cannot delay or avoid payment in the budget
No Congressional discretion on money allotted
2/3 of budget
Less money for discretionary spending

7. Proposed at the State of the Union Message in January
The Budget Process
Proposed at the State of the Union Message in January

8. Office of Management and Budget (OMB)
OMB sends instructions to agencies
Agencies send requests to OMB
OMB revises the budget

9. Congressional Budget Office (CBO)
President submits budget to Congress by the first week in February
CBO looks over and sends report to both chambers of Congress

10. Appropriations Committee
The appropriations committee holds hearings and sets budget targets
Reconciliation bills are made if budget does not meet targets

11. Finalizing the Budget
By October 1st, all appropriations bills should be passed
If they are not passed, Congress has to pass a continuing resolution where agencies run on last year’s budget