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How the Budge System Works

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Rachel Freeman

on 21 October 2013

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Transcript of How the Budge System Works

How the Budget System Works
President Creates the Proposal
The first steps to actually creating the budget rests with the President and his Office of Management and Budget (OMB). This offices reports directly and only to the president to help him understand and make informed and "good" decisions about the budget. This office exists due to the overwhelming amount of money under his control and the vast complexities of the overall budget. The president and the OMB can go back and forth many or only a few times as they tailor the budget to fit the president's wishes with the OMB doing much of the legwork.
Congress!
Overview
Nearly everyone involved in American politics, the country, or, arguably, the world is invested in how the United States government spends its money. Through the budget money is distributed to many different organizations and many different policies are funded. Without the budget the government cannot run itself or the country (as seen in recent government shut downs). Ther budget is important in how it turely does affect many people, and certainly every American, personally.
Side Note:
This presentation details how the government decides to spend its revenue from taxes (or more than its revenue if the government approves creating a deficit and add to the national debt) on discretionary spending (still about 1/5 of the GDP). Meaning nonessential or nonautomatic funding. While automatic funding cannot be officially given out without a budget being approved such matters are not discussed as detailed in this prezi.
Spring/Summer
Fall/Winter
By Fall the agencies submit the formal budget estimates for the fiscal year, OMB holds hearings and creates more budget recommendations for the president. The president again reviews the recommendatioins and decides of the overall budget policy. Again this is communicated to the agencies. In the winter the agenies revise estimates to conform with final decisions. OMB prepares another recommendation, president again reviews and changes for the final time and by law he must present the final budget proposal by the first Monday in February to Congress.
Beginning Efforts:
Interest groups begin lobbying long before the offical before the offical process of creating the budget begins. Lobbyists try to convince key budget officals (such as members of the OMB) to value their cause in hopes the officals will later grant them money. Similarly, agencies will also send requests to the OMB before the office is offically doing business. Some agencies and interest groups work together to achieve common goals.
Formed in the 1970's when President Nixion reorganized the old Bureau of the Budget and renamed it; the OMB helps prepare the federal budget the president sends out. The director is a presental appointee and is approved by the senate (showing how important the position is). The OMB begins the entire budgetary process in the spring by presenting the present with an analysis of the economic situation, from there it gives guidelines to agencies/interest groups and reviews their requests and projection of budgetary needs. Based on those projections and the president's personal agenda the OMB makes recommendations to the president of final policy, programs and budget levels.
In the summer the OMB convey's the decisions made to agencies and advices them on how to prepare their budgets.
The players in Congress
How the System has been Reformed
An Ideal World
What if they can't agree?
Continuing Resolution
What if they REALLY can't agree?
Shutdown
What this all Means
By: Rachel Freeman and Godson Iheanacho, 2nd period
Every member of congress has some voice in how the budget is but mostly those with spots on key committees. Notable to point out the House has somewhat more power than the senate because budget bills must orginate there.
The Congressional Budget Office advices Congress on its budget plans and it a foil to the president's CBO.

Also the CBO is the congressional equivalent to the OMB, which is responsible to the president.

The tax committees in Congress, The House Ways and Means Committee and the Senate Finance Committee, write tax codes, subject to the approval of Congress

The subject-matter committees write new laws that require new expenditures

The approbations committees decide who gets what

The General Accounting Office works as Congress's eyes and ears, auditing, monitoring, and evaluating what agencies are doing with their budgets

The president makes the final decisions on what to propose to Congress

The Congressional Budget Act and Impoundment Control Act of 1974 was implemented to reform the budgetary process.

A fixed budget calendar was created, giving each step in the process a completion date.
A budget committee was placed in each house.
A Congressional Budget Office advises Congress on the potential consequences of the budget decisions, forecasts revenues, and is a counterweight to the presidents OMB.
If the government can't decide on a budget, then a continuing resolution (CR) can be passed. A continuing resolution is when agencies are allowed to spend at the level of previous years.
If the government can't agree on a budget AND they can't pass a continuing resolution before the end of the fiscal year, then the government shuts down and all federal institutions are closed until the government opens up again whenever they decide on a budget or clean CR.
If the government were to shut down, then the government would have a few weeks to act before the treasury runs out of money, because if they do, then they would no longer be able to repay their debts. :(
Source: http://nationalpriorities.org/media/uploads/federal_budget_101/Figure4.3color.jpg
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