1. Good afternoon, ladies and gentlemen. Thank you all for coming. For those of you who do not already
know me, my name is Dvoretskih Anastasia. And today I plan to give you a short talk about the Main Stages of
the Federal Budgetmaking Process in the US. I’m sure this will be of great interest to everyone here. I've
divided my presentation into two main sections. Firstly I’ll talk about what the budget is. Then, I’m going to
make a walk-through(=step-by-step) overview of budget-making process.
I shall only take about 5 minutes of your time. If you don’t mind I’ll deal with questions at the end of my
talk.
Now, let’s move on to the first part of my presentation, which is about budget in general.
The Federal budget, as all budgets, sets forth priorities and levels of spending, ways of financing the
spending, and a plan for managing the funds. In purely financial terms, the Federal budget that comes out each
year includes
a record of actual receipts and spending for the fiscal year that was just completed (in the FY 2008
President's Budget, this would be FY 2006);
an estimate of current-year receipts and spending (FY 2007);
and estimates of receipts and spending for the upcoming fiscal year and 9 years beyond (FYs 2008 and
2009-2017).
However, since formulating a budget involves choosing among alternatives, a budget is also a very
significant statement of policy; it means that goals and priorities are reflected each year in the budget and
supporting legislation that is formulated by the Administration and presented to the public and to Congress.
So, that’s the general picture for what the Federal budget is. And now, let’s turn to the Main Stages of the
Federal Budgetmaking Process in the US.
All process of US Federal Budget-making can be divided into three main stages:
(1) budget formulation,
(2) budget presentation and the congressional process,
(3) budget execution.
(1) The Federal budget process is initiated in the Executive Branch with budget formulation.
In may the agencies begin to make their plans, set their priorities, and develop their budget requests, which
are submitted to Office of Management and Budget, usually in early September.
OMB examiners will hold hearings to obtain a better understanding of agencies’ requestst. By late
November or December, OMB examiners have made their recommendations to the Director of OMB, and
decisions on budget levels are made.
Once final decisions are reached, the Department begins preparation of materials to be included in the
printed President's budget and special analyses that explain and justify the budget.
According to the law the President must transmit the budget to the Congress after the first Monday in
January but not later than the first Monday in February. The President is also required by law to submit to the
Congress on or before July 15 a supplementary budget summary, which provides updated data on which the
February budget can be evaluated.
(2) Budget presentation begins when the President's budget is transmitted to the Congress. The Secretary
holds a press conference and makes available a briefing document to the press and the public that provides
summary and background information on the new budget.
The next step in the process is congressional appropriations hearings, during which the Secretary and
other officials explain and justify the Department's budget proposals.
Than, Congress develops a budget resolution—its own plan for the appropriate levels of spending and
taxes. It includes targets for total spending, total revenues, and the deficit. This budget resolution always covers
the budget year and a number of future years.
There are two types of spending treated in the budget resolution: mandatory and discretionary. For
discretionary programs, Congress and the President must act each year to provide spending authority. For
mandatory programs, they may act to change the spending that current laws require.
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2. After passing a budget resolution Congress sets forth its own guidelines for spending and revenues that it
plans to follow when passing appropriations laws, tax laws and authorizations. It is the appropriations laws and
the laws establishing entitlement programs that provide the legal authority for the Federal Government and its
agencies to obligate and spend funds.
(3) After the Congress and the President enact legislation to create budget authority each year, the
Government is responsible for executing it. through:
▪ agency program managers and budget officials;
▪ the Office of Management and Budget;
▪ congressional committees; and
▪ the General Accounting Office, an auditing arm of Congress.
This oversight is designed to
(1) ensure that agencies comply with legal limits on spending, and that they use budget authority only for
the purposes intended;
(2) see that programs are operating consistently with legal requirements and existing policy; and
(3) ensure that programs are well managed and achieving the intended results.
That completes my overview of Federal Budgetmaking Process in the US.
And in conclusion I’d like to say, that the federal budget, and the budgetary process, is a social contract
between a people and its government. Despite its complexity, it is a document that shows our societal
preferences (for example, guns versus butter) and demonstrates that we do not live in a consensus political
economy—interest group and class politics are alive and well.
That’s all I have to say for now. Thank you for your attention. You are welcome to ask questions.
Sources:
White house website, the page of Office of Management and Budget
US Department of Education website
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