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Budget
In 2000 the overall budget for the United States for fiscal year 2001 (extending from October 1, 2000, to September 30, 2001) totaled $2.019 trillion in projected revenues and $1.835 trillion in projected outlays, resulting in a projected surplus of $184 billion. By contrast, in 2007 the figures projected for fiscal year 2008 are a total of $2.720 trillion in revenues with outlays of $2.818 trillion and a resulting deficit of $98 billion, according to the Congressional Budget Office. Although the Constitution does not mention a national budget (from a French word for a small leather bag or wallet), it clearly establishes procedures for raising revenue and spending and accounting for public funds, all of which reflect a conscious system of checks and balances.
“All Bills for raising Revenue,” begins Article I, section 7, “shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills….” According to section 8, Congress has the power, among other things, “[t]o lay and collect Taxes, Duties, Imposts and Excises, [and] to pay the Debts….” Section 9 provides in part: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” The federal budget process has evolved from these provisions and others, including the powers granted to Congress, also enumerated in Article I, section 8, to “borrow Money on the Credit of the United States” (see Debt) and to “coin Money, [and] regulate the value thereof…” (see Currency).
A Four-Step Process
The budget process has basically four steps, although each step involves many detailed procedures.
(1) The president submits to Congress, usually shortly after the first of each calendar year, a proposed budget for the next fiscal year, which begins on October 1. In it he presents the Treasury Department’s estimates of the expected revenues and the executive branch’s estimates of future spending, combining all the estimates of all national government obligations (activities that will require payment at some time in the future), including those for Congress and the federal courts.
(2) The two houses of Congress—the House of Representatives and the Senate—analyze the president’s proposed budget and invariably make changes. Sometimes Congress drafts its own budget proposal, which presents the congressional leadership’s version of revenues and expenditures. Negotiations among the members of each house, between the houses, and between Congress and the president lead to a final budget bill, with all the details approved. As with any other law (see Legislation), it is then enacted by Congress and signed by the president.
(3) The third step is the execution phase. The administration, under the president’s supervision, collects the revenues or borrows funds and spends the money in accordance with the budget law for the current fiscal year.
(4) Last comes the accounting phase. Although accounting is in fact a continuous process, an annual accounting for the past fiscal year, based on the figures available at the time, is presented along with the new budget submitted to Congress by the president.
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