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The Federal Budget

The Federal Budget: Politics, Policy, Process

Allen Schick
Copyright Date: 2007
Edition: 3
Pages: 345
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  • Book Info
    The Federal Budget
    Book Description:

    The federal budget impacts American policies both at home and abroad, and recent concern over the exploding budgetary deficit has experts calling our nation's policies "unsustainable" and "system-dooming." As the deficit continues to grow, will America be fully able to fund its priorities, such as an effective military and looking after its aging population? In this third edition of his classic book The Federal Budget, Allen Schick examines how surpluses projected during the final years of the Clinton presidency turned into oversized deficits under George W. Bush. In his detailed analysis of the politics and practices surrounding the federal budget, Schick addresses issues such as the collapse of the congressional budgetary process and the threat posed by the termination of discretionary spending caps. This edition updates and expands his assessment of the long-term budgetary outlook, and it concludes with a look at how the nation's deficit will affect America now and in the future. "A clear explanation of the federal budget... [Allen Schick] has captured the politics of federal budgeting from the original lofty goals to the stark realities of today." -Pete V. Domenici, U.S. Senate

    eISBN: 978-0-8157-7732-8
    Subjects: Finance, Business

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-x)
  3. Preface
    (pp. xi-xiv)
  4. 1 Conflict and Resolution in Federal Budgeting
    (pp. 1-7)

    This book is about the politics and processes of federal budgeting and the policies that emerge from them. No discussion of budgeting can be complete unless it takes all three aspects into account. Many governmental activities combine process and politics, but budgeting differs because certain basic tasks must be completed each year. No matter how difficult the choices or how uncertain the outlook, the president must submit a budget and Congress must make appropriations. If the president or Congress decides that the time is not right to change tax policy or to act on a particular legislative proposal, either can...

  5. 2 The Evolution of Federal Budgeting From Surplus to Deficit to Surplus
    (pp. 8-38)

    The process and politics of budgeting revolve around two main institutions of government power: the presidency and Congress. The evolution of federal budgeting has been a long contest between these two political branches for control of the purse. Their weapons have been the rules and procedures of budgeting; each has sought to impose its policies and priorities on the other by leveraging public resources to dictate how big the government should be and how the money should be spent. For more than two hundred years these institutions have vied for political power, sometimes cooperating and sometimes confronting one another. Sometimes...

  6. 3 The Budget’s Shifting Boundaries
    (pp. 39-51)

    An essential step in using or interpreting any budget is to understand what the numbers mean. In federal budgeting, not every dollar taken in is counted as a receipt, nor is every dollar paid out counted as an outlay. To say that the government collects or spends about $3 trillion a year means that these are the official totals reported according to the budget rules currently in effect. But several types of numbers coexist in the federal budget. The next chapter explains the political arithmetic and rules of budgeting. This chapter explains the technical numbers, which are based on accounting...

  7. 4 The Political Rules and Arithmetic of Budgeting
    (pp. 52-83)

    Every budget is a compilation of numbers on the revenues, financial resources, obligations, outlays, borrowing, and deficit or surplus of the government. The federal budget has millions of these numbers, computed and reported on the basis of rules and practices that have accumulated over the years. The rules do not always conform to the way businesses or other governments account for their finances. Some are derived from laws, such as the Congressional Budget Act of 1974 (CBA) and the Budget Enforcement Act of 1990 (BEA); many are not recognized in law or in accounting principles but nevertheless determine how financial...

  8. 5 The President’s Budget
    (pp. 84-117)

    The Constitution does not require the president to prepare a budget recommending the revenues and expenditures of the government. Nevertheless, the budget has become one of the president’s recurring obligations as well as one of his most important policy tools to set legislative and program objectives while charting the nation’s fiscal course. Early in each legislative session, normally the first Monday in February, the president submits an annual budget to Congress. The executive budget estimates spending, revenues, and other financial amounts for the next five or more fiscal years, contains policy and legislative recommendations consistent with those estimates, presents data...

  9. 6 The Congressional Budget Process
    (pp. 118-161)

    Shortly after the president submits his budget, Congress begins work on a budget resolution that expresses its own policies and priorities. This resolution sets forth budget totals for each of the next 10 (or fewer) years and allocates spending among 20 functional categories. The resolution may also contain reconciliation instructions to change existing revenue or direct spending laws, as well as other provisions relating to the budget. In developing its budget resolution, Congress often deviates from the president’s recommendations, but when the Budget Enforcement Act (BEA) was effective, it had to adhere to discretionary spending limits and pay-as-you-go (PAYGO) requirements....

  10. 7 Revenue Legislation
    (pp. 162-190)

    Almost all of the revenues collected each year derive from permanent law, not from current legislative decisions. Congress has the option of doing nothing and allowing existing law to continue or of revising the tax code to change either the volume of revenues or the incidence of taxation. In some years, the president’s budget and Congress’s budget resolution do not propose significant changes in tax policy; these documents merely estimate the receipts that will be generated from existing tax laws. In other years, one or both branches seek to change the amount collected or the distribution of the tax burden,...

  11. 8 Authorizing Legislation
    (pp. 191-213)

    Congress has two distinct processes for establishing and funding federal programs and agencies. One leads to the enactment ofauthorizing legislation, which establishes the legal basis for the operation of federal agencies and programs. The other culminates in theappropriation of money, which enables agencies to incur obligations and expenditures. These steps are usually taken in separate measures, but sometimes they are combined in direct spending legislation. The distinct actions are prescribed by House and Senate rules, which bar unauthorized appropriations and the insertion of legislation into appropriation bills. Although the rules are sometimes waived or disregarded and allow for...

  12. 9 The Appropriations Process
    (pp. 214-274)

    An appropriations act is a law passed by Congress that enables agencies to incur obligations and the Treasury to make payments for designated purposes. Congress’s power to appropriate derives from the Constitution, which provides that “no money shall be drawn from the Treasury but in consequence of appropriations made by law.” An agency may not spend more than the amount appropriated to it, and it must use available funds only for the purposes, and according to the terms, that Congress sets. Over time, appropriations have also come to be regarded as mandates requiring that agencies carry out prescribed activities by...

  13. 10 Managing Federal Expenditures
    (pp. 275-303)

    Appropriations are supposed to be made by the time the fiscal year begins. But even when they are delayed, the start of a fiscal year compels agencies to shift to the next stage of budgeting, which involves managing federal expenditures by spending available funds to carry out authorized activities and by accounting for their actions.

    The fiscal year starts on October 1, approximately 18 months after most federal agencies begin preparing their budgets and eight months after the president submits his budget to Congress. Key conditions affecting the budget are likely to change during these long intervals. The cost of...

  14. 11 Budgeting for the Long Term
    (pp. 304-320)

    This book has demonstrated that federal budgeting operates with many rules, procedures, and constraints. It is not the case that anything goes in budgeting, that spenders and tax cutters get whatever they want regardless of the budget’s condition, and that vote-seeking politicians have no means of rebuffing powerful demands. Budgeting is a regulated process, with checkpoints and controls at various stages of presidential and congressional action. But budgeting also is a political process that is highly sensitive to the preferences of voters and interest groups and to the strong inclination of elected leaders to satisfy constituents. Thus budgeting is a...

  15. Federal Budget–Related Internet Sites
    (pp. 321-322)
  16. Glossary
    (pp. 323-334)
  17. Index
    (pp. 335-346)
  18. Back Matter
    (pp. 347-347)