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USG Budget Process

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Chantale Wong

on 17 October 2016

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Transcript of USG Budget Process

Chantale Wong
@chantalew
chantale@chantalewong.com

UNITED STATES GOVERNMENT:
MAKEUP OF THE FEDERAL WORKFORCE:
FEDERAL SPENDING SHARES:
SURPLUSES AND DEFICITS:
2017 Federal Budget:
Totals $4.147 Trillion
FEDERAL SPENDING
as percent of GDP
FEDERAL WORKFORCE:
SOCIAL INSURANCE DEFICIT PROBLEM:
FEDERAL BUDGET PROCESS:
PHASE 1 - Budget Preparation -- FORMULATION
Agencies and OMB--Results in President’s budget
PHASE 2 - Budget Approval -- CONGRESSIONAL
Congress and agencies--results in Budget Resolution, Appropriations
PHASE 3 - Budget Execution -- EXECUTION
Agencies constrained by OMB through Apportionments
PHASE 4 - Audit and Evaluation -- AUDIT
Agencies and auditors (GAO, I.G.s, etc.)
FEDERAL BUDGET:
The Budget is the MOST IMPORTANT thing in the Federal government
Government MUST have MONEY to function
Federal budgeting is enormously complex
Entails dozens of sub-processes
Countless rules and procedures
Tens of thousands of staff workers
Millions of work hours each year
Requires active participation of the President and Congress
Takes over two and a half years for the entire process
Accounts for approx 20 - 22% of the GDP
Discussion
What is it?
A set of rules and institutions for making tax and spending decisions.

Result of several different laws:
Budget and Accounting Act of 1921
Congressional Budget and Impoundment Control Act of 1974
Balance Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Balanced Budget Act)
Budget Enforcement Act of 1990
Budget Control Act of 2011 (BCA)

Develop Budget Guidance based on annual planning
Analyze budget submissions from sub-components
Manage Agency decision process
Produce budget submission to OMB
APRIL - SEPTEMBER:
SEPTEMBER - FEBRUARY:
Submission to OMB
OMB budget hearings
Q&As from EOP
A 72 hour passback/appeal process (day after Thanksgiving)
Conclude settlement with OMB
Input into President's Budget database and documents
Produce Congressional Justification
BUDGET OF THE UNITED STATES GOVERNMENT
PAS - Presidential Appointment, Senate confirmation - 1,217
PA - Presidential Appointment, no Senate confirmation - 364
NA - Executive positions filled by non-career appointments - 680
SC - Schedule C Excepted Appointments - 1, 392
Total - 3,821
President $400K, in 2001, [1st change in 30 years; 1969, $100K to $200K]
Vice President $231K
Congressional Leaders Speaker, $224K; Majority/Minority Ldr, $193
Members of Congress $174K
Executive Schedule $146K to 200K
Senior Executive Service $120K to 181K
General Schedule $18K to 131K [w/ Locality Pay, $20K to $156K]

2017 Deficit ($503 billion)
2016 Deficit ($616 billion)
2015 Deficit ($583 billion)
2014 Deficit ($485 billion)
2013 Deficit ($679 billion)
2012 Deficit ($1.33 trillion)
Entitlements/Mandatory
Social Security . . . . . . . . . . . . . . . . . . . . . .$ 1,327
Medicare/Medicaid Entitlements,
Welfare, Veteran’s, Benefits. . . . .1,191
NET Interest on Public Debt . . . . . . . . . . . .266

Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543

Other Gov't Agencies . . . . . . . . . . . . . . . . . . . . . . . 820


Total Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,147

How is $4.147 Trillion Distributed?
FY 1960 Spending - $92.2 Billion
FY 2016 Spending - $3,951 Billion
Formulation
Congressional
Execution
FEDERAL BUDGET OVERVIEW:
Discretionary
"on budget"
DOD
Domestic
Foreign

Non-Discretionary
Mandatory
"off budget"
interest
Social Security
VA Benefits
Medicare
Medicaid

Audit/Evaluate
PURPOSE OF THE FEDERAL BUDGET:
The President’s request to Congress for:
Appropriations
Actions on existing or new programs
Changes in Tax legislation
An Economic document reflecting the Taxing, Spending and Revenue policies
Proposes an allocation of resources between the private and public sectors
A detailed report to the people
PRESIDENT'S BUDGET:
State of the Union - kick off
Accomplishments
Proposals (appropriated programs, taxes, mandatory programs and interest)
State of the economy
President's Budget Submission to Congress (4 volumes)
the Budget Overview
Appendix (chart of accounts and legislative language
Analytical Perspectives
Historical Tables
House/Senate Budget Comm develops a "budget resolution"
Set out in broad categories taxes and spending - 302(a)
Suballocations are provided to the 12 appropriations subcommittees - 302(b)
FEBRUARY - APRIL:
APRIL - SEPTEMBER:
Hearings are held for Agencies to defend their requests
Each of the 12 subcommittees "mark- up" their bill according to their 302(b)
House Ways & Means/Senate Finance and other authorizing committees enact changes to mandatory spending and revenue levels in the limits set by Budget Committees
APPROPRIATIONS:
Congress must pass 12 appropriations bill by both House and Senate and signed by President by midnight September 30
If Congress does not complete action on an appropriations bill before start of Fiscal Year Oct 1, it must pass and the President must sign a continuing resolution (CR).
If no CR is passed, the government will shut down due to lack of budget authority to operate
SPENDING DEFINITION:
Budget Authority - how much money Congress allows a federal agency to commit to spend
Outlays - how much money actually flows out of the federal Treasury in a given year
HISTORY OF GOVERNMENT SHUTDOWNS:
Interprete authorization/appropriation laws
Provide control numbers for Execution
Develop apportionments/reapportionments (SF 132)
Monthly/Quarterly monitoring of obligations/costs/disbursements
Respond to OMB/Congressional Budget data requests
Quarterly Outlay reports
Mid-session analysis and reporting
AUDIT & EVALUATION:
Annual audit of Agency Financial Statement - Nov 15
Ongoing Programmatic performance audits by IG
GAO audits of Agency programs
Congressional requests of program audits
Ongoing monitoring of program performance and evaluations
Agency Phase
OMB Phase
WHAT IS THE FEDERAL BUDGET PROCESS?:
STATUTORY DEFICIT-CONTROL MECHANISMS:
PAYGO - Pay As You Go
Any legislative change to taxes or mandatory spending must be off set or paid for by other changes to taxes or mandatory spending
Discretionary funding caps
BCA 2011 imposed limits or caps on discretionary appropriations for defense and non-defense programs through 2021
BCA sequestration
Imposed because of failure to propose legislative plan to reduce deficits by $1.2 Trillion over 10 years.

CBO and OMB SCORING:
Baseline Estimation
calculation of the effects of existing
Discretionary funding caps
BCA 2011 imposed limits or caps on discretionary appropriations for defense and non-defense programs through 2021
BCA sequestration
Imposed because of failure to propose legislative plan to reduce deficits by $1.2 Trillion over 10 years.
FEDERAL BUDGET DECISION FRAMEWORK:
Discretionary Caps
Pay As You Go
(Neutral)
Revenue/Mandatory Spending
Pay As You Go
(Neutral)
Surplus/
Deficit
OBJECTIVE
Protect Tax and Revenue Baseline
Originally in place 1991-2002
Re-instated 2010
SEQUESTRATION:
BCA required additional sequestration each year through 2021 in discretionary and select mandatory programs, split evenly between defense and non-defense
For 2014, when Congress failed to enact broad deficit reduction plan, OMB imposed sequestration to meet the caps set in the BCA
In 2013, Congress modified the BCA sequestion requirement in the American Taxpayer Relief Act of 2012
BCA 2013 (Murray-Ryan) reduced sequester cuts in 2014 and 2015
BCA 2015 raised the discretionary spending caps in 2016 and 2017
FY2000 +$290B
FY2009 -$1,413B
FY2015 -$399B
FY2017 - $504B
Full transcript