A the budget process just as individuals may have

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Unformatted text preview: vidual income taxes as a percentage of GDP in 2005; (3) Projected spending on Medicare in 2008. A The Budget Process Just as individuals may have budgets in which they specify how they will spend their incomes—such as $300 a month for food and $100 a month for clothes—the federal government has a budget, too. In the federal budget, the federal government specifies how it will spend the money it has. It may decide to spend $250 billion on national defense, $100 billion on health care, and so on. It Begins with the President Preparing a budget and passing it into law is a long process. It begins with the president of the United States, who, with others in the executive branch of government, prepares the budget. The president’s budget recommends to Congress how much should be spent for such things as national defense and income security programs. The president must submit the budget to Congress on or before the first Monday in February of each year. Disagreements and Compromises Once the president’s budget is in the hands of Congress, it is scrutinized by the members of the many congressional committees and subcommittees. The Congressional Budget Office advises the members of the committees and subcommittees on technical details of the president’s budget. 380 Chapter 14 Taxing and Spending Members of Congress may disagree with the president about how money should be spent. For example, the president may want to spend more money for health care than do many members of Congress. Disagreements may also arise over how much tax revenue is likely to be raised over the next few months. Perhaps the president estimated that the federal government will take in $2,100 billion in tax revenues, but Congress estimated tax revenues to be $1,900 billion. Both the executive and legislative branches must estimate tax revenues, because no one knows for sure how the economy will perform. For example, if the economy is sluggish and many millions of people are out of work, less income is earned, and thus income taxes will be down. Many details of the president’s budget may be changed to reflect compromises between the president and Congress. Public Opinion Counts Where are the American people in the budget process? Do they have a role to play? Once the president submits a budget to Congress, the people get a chance to hear about it. Usually numerous newspaper stories and newscasts cover the president’s proposals. The American people can write to or call their congresspersons and express their preferences on the president’s budget. Also during this time, special-interest groups may lobby members of Congress and express their preferences on the president’s budget. The Budget Becomes Law Congress is obligated to pass a budget by the beginning of the fiscal, not the calendar, year. (A calendar year begins on January 1 and runs through December 31; a fiscal year can begin on the first day of another month and run for the next 12 months. The fiscal year under which the federal government operates begins on October 1 and runs through September 30....
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This document was uploaded on 01/16/2014.

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