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Ch 11 budgeting - Chapter 11 Budgeting Congressional Budget...

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Chapter 11: Budgeting Chapter 11: Budgeting
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Congressional Budget Act Congressional Budget Act of 1974: Gave Congress more time to work on the budget by pushing the start of the fiscal year forward from July 1 to October 1 Created new committees in each house and created a new process
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Economic Terms Fiscal year: any given budget year Prior to 1977, FY July 1 ---June 30. Beginning with 1977, FY October 1 -- September 30. Surplus: more revenues than expenditures in any given budget year; slows economic growth by draining money from the economy Deficit: expenditures exceeding revenues within a fiscal year; pumps money into the economy and promotes economic growth
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Federal deficit
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Defining Budgeting Budget decisions shape government programs. Budgeting: fundamental social decisions about the use of scarce resources. Key: determining how and how to decide budget decisions for what?
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Economic Role of the Budget Federal budget shapes national economy Fiscal policy: government taxation and spending Since the 1930s, economists and government recognize that fiscal policy affects the economy. A strong inclination toward more deficits Monetary policy: the Federal Reserve’s management of the money supply
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Political Role of the Budget Budget embodies fundamental political choices: Values: which programs get funded and which do not Institutions: relative sway of the executive and legislative branches
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Top-Down Budget Making Top-down budget approach: each government’s executive sets broad targets for overall spending and revenues.
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  • Spring '11
  • SU
  • United States Congress, Federal government of the United States, Congressional Budget Office, United States budget process

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