Category Archives: Federal Budget

Budget 101

On Tuesday, Congress returns from their August “District Work Period” — a/k/a Summer Vacation.    Normally, September in Congress is about appropriations bills, but this year September is going to be even more hectic due to the U.S. nearing its debt ceiling and other budget issues.  To explain this year’s mess, a little budget 101.

Like the typical household budget, the government’s budget consists of revenue/income and expenditures/spending.  However, the government’s revenue consists mostly of taxes.  While a handful of taxes have sunset provisions (i.e. they expire at a certain point in time unless Congress passes a new law extending them), most taxes are permanent (i.e. it takes a new law to change the tax).  But how much revenue is raised by a given tax in a given year depends upon multiple circumstances (how many people with large estates die, how the economy is doing, how much of certain goods are imported).  So for budgeting purposes, revenue is always an estimate.

Similar, on the expenditure side, there are “mandatory” expenses (think the equivalent of mortgage and car payments) and “discretionary” expenditure (think groceries, you have to spend something but you can decide whether to go store brands or name brands depending upon how your finances are).   On the mandatory side, for the government are interest payments and what is commonly called entitlements.  Entitlements have gotten a bad name from conservative spinmeisters, but the term is a legal term reflecting that, if somebody meets the legal criteria for a particular program, they have a legally enforceable right to receive the payments from that program whether that program is Social Security, unemployment compensation, or Medicaid.  The discretionary side on the hand is most federal agencies.  Representing about 25-33% of total spending, Congress has to annually appropriate the money for these agencies (ranging from the military to the national endowment for the arts). Continue Reading...

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Deciphering the Federal Budget

Tonight 45 will speak about the budget plan his folks leaked out yesterday.  He’ll likely speak about other things, also, but that budget is all over the news and he’ll capitalize on that.  However, it’s rare that Congress actually passes a budget (the last time was in 2015, and that was the first time in six years) and rarer still that the presidential framework made it through the process.

So, let’s take a look at what was proposed, where it falls apart, and then what the process actually involves. Go get a cup of coffee, you’re going to need it.

First, the good news. Appropriations come from Congress, not from the Executive branch.  Per the Origination clause in the Constitution, all appropriations bills must start in the House, although the Senate may concur and/or offer amendments. In real life, normally this leads to negotiations between the Chambers prior to anything being enacted. Thus, nothing is happening quickly. That means there is time to lobby your reps for things that matter to you. Continue Reading...

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