Chapter 12 Notes by Natalie McElrath

Uncontrollable Spending Categories

nmcelrath1999 — 2017-11-08 20:48:07 UTC

Federal outlays are determined by laws. For example, entitlement programs, such as Medicaid, Social Security and Medicare establish themselves with annual appropriation reflecting the amount required to cover entitled beneficiaries
Congress has little to no say in annual appropriation unless to change benefits or eligibility criteria

Overly Detailed Budget

The federal budget consists of thousands of accounts and subaccounts.
The budget is a way of making political payoffs by allowing elected officials to reward friends and punish enemies in great precision
Detailed budgeting is time consuming and reduces flexibility of discretionary fiscal policy. It is also subject to political abuse

Natalie Mcelrath

adaira_martinez — 2017-11-09 20:29:54 UTC

•The president’s budget proposal is shaped a year before the budget is submitted to Congress
•Each agency in Congress prepares a budget request
•By late January/February the president submits The Budget of the United States, which is a stack of books that discuss the spending and revenue proposals for the coming fiscal year
•The president’s budget consist more than detailed suggestions for congressional consideration
•While this is taking place, the president’s Council of Economic Advisers sends Congress the Economic Report of the President (a view on the president’s take of the economy)

Adair Martinez

cynmarieperez — 2017-11-11 17:13:01 UTC

The federal budget is a detailed proposal of outlays and revenues for a particular period of time. Federal outlays are composed of transfer payments and government purchases.
Since the 1960s, the federal government has shifted its focus from national defense to income redistribution.
52 percent of the federal budget redistributes income: 38 percent Social Security and Medicare programs and 14 percent welfare spending.
7 percent of the federal budget services the federal debt interest payments.
15 percent goes to the national defense.
The remaining 25 percent pays for everything else in the federal budget such as environmental protection, federal prisons and federal education aid.
In 2016, U.S. federal outlays totaled about $4 trillion.

Cynthia Perez

martinezy549 — 2017-11-12 01:32:49 UTC

· Two-year (biennial) budget would really help Congress ease down the work of creating a budget that then might not pass.

· The executive branch worries about three main budgets which are looking over an already approved budget, defending proposed budgets, and preparing the next budget for Congress to see.

· Even though it would help, Congressmen need to foresee more than they do now and is less reliable than a changing yearly budget.

· A second option is to just to focus on the main costs but the problem is that then they must characterize everything from least to most important.

Yolanda Martinez

Continuing Resolutions Instead of Budget Decisions

karlatamez_ — 2017-11-12 22:26:10 UTC

• Most often, Congress ignores deadlines and leads for budgets to run on continuing resolutions
• Continuing resolutions allow agencies to spend at the previous years' rates when their new budgets have not yet been approved
• Successful programs cannot expand in the presence of poorly conceived programs, as was the case in the U.S. Senate's failure to pass 3 years' worth of budgets in 2009, a problem which led to huge budget deficits

Lengthy Budget Processes
• The planning of discretionary fiscal measures to reduce economic fluctuations, over the course of many years, has proven to be a nearly impossible task
• In many occasions, it had been noted that by the time that the President and Congress have agreed on fiscal remedies, the economy has already recovered on its own

Karla Tamez

a_salinas219 — 2017-11-13 04:30:26 UTC

The budget committees in the House and in the Senate set a budget resolution that begins on October 1st.

Angel

a_salinas219 — 2017-11-13 04:35:23 UTC

When the outlays exceed revenues, the budget is in deficit. On the other hand, when revenues exceed outlays, the budget is in surplus. A surplus can promote economic growth by reducing federal debt and boost savings.

Angel Salinas