United States federal budget

2023-federal-budget-breakdown

Federal Budget Deficit or Surplus over time as of 2023

US Federal Debt Held By Public as of Feb. 2023

2023 US Federal Budget Infographic

Total Revenues and Outlays as Percent GDP 2023

CBO 2023 Current Law Baseline

United States federal budget refers to the annual financial plan used by the United States government to allocate its resources. The budget outlines the government's expenditures and revenues for a fiscal year, which runs from October 1 to September 30. The process of creating the federal budget involves multiple steps and requires the collaboration of the President of the United States, Congress, and various federal agencies.

Budget Process

The budget process begins with the President submitting a budget request to Congress. This request is formulated with the assistance of the Office of Management and Budget (OMB), which compiles and analyzes the budget proposals from various federal agencies. The President's budget proposal outlines the administration's fiscal policy and priorities for the upcoming fiscal year, including proposed spending levels for federal programs and projections of federal revenues.

After receiving the President's budget, Congress reviews and modifies the proposal. The House of Representatives and the Senate each work on their versions of the budget resolution, which sets the overall spending limits but does not specify funding for individual programs. The budget resolution must be agreed upon by both chambers of Congress.

Following the budget resolution, the appropriations process begins. This involves the creation of twelve appropriations bills, each managed by a specific appropriations subcommittee in both the House and the Senate. These bills allocate funding to various federal agencies and programs. Congress must pass and the President must sign these appropriations bills by October 1 to avoid a government shutdown.

Key Components

The United States federal budget is primarily composed of mandatory spending, discretionary spending, and interest on debt.

• Mandatory Spending: This includes expenditures that are required by law, such as Social Security, Medicare, and Medicaid. Mandatory spending is determined by eligibility rules rather than annual appropriations.

• Discretionary Spending: This category includes government spending that is negotiated annually through the appropriations process. It covers a wide range of programs, including defense, education, and transportation.

• Interest on Debt: This represents the cost of borrowing to finance the government's deficit spending. Interest payments are made on the national debt, which accumulates when the government spends more than it collects in revenues.

Fiscal Challenges

The United States federal budget faces several long-term fiscal challenges, including rising healthcare costs, an aging population, and the sustainability of entitlement programs. These challenges are compounded by the need to manage the national debt and ensure that federal spending does not outpace revenues by a significant margin.

Recent Trends

In recent years, the federal budget has been characterized by significant deficits, with government spending exceeding revenues. These deficits have contributed to an increasing national debt. Efforts to address the fiscal imbalance have focused on both reducing spending and increasing revenues, though achieving a consensus on the best approach has been challenging.

Conclusion

The United States federal budget is a complex and critical component of the nation's economic policy. It reflects the government's priorities and has a significant impact on the economy. The budget process requires careful planning and negotiation to balance the needs of various stakeholders while promoting fiscal responsibility and sustainability.