U.S. GOVERNMENT | A resilient balance of institutions
06 February 2008
Bush Submits U.S. Budget for Fiscal Year 2009
Annual recommendation lets president promote his funding priorities
Washington -- Each year in early February, the U.S. president sends to Congress The Budget of the United States Government. A 1921 federal law, the Budget and Accounting Act, mandates the president prepare and submit such a document “no earlier than the first Monday in January, and no later than the first Monday in February.”
On February 4, President Bush made budget history in two ways:
• He submitted the funding proposal in an electronic format; and
• He put forward a federal spending plan that topped $3 trillion.
Bush said his budget “achieves some important objectives. One, it understands our top priority is to defend our country, so we fund our military, as well as fund the homeland security. Secondly, the budget keeps our economy growing."
The $3.1 trillion spending request for fiscal 2009 is designed to address the nation’s economic challenges, ensure sustained prosperity and security and help balance the budget by 2012, according the White House. It would freeze funding for most domestic programs and seeks to slow the growth of so-called entitlement programs like Social Security, Medicare and Medicaid -- which provide payments to which all U.S. citizens who meet eligibility criteria are entitled.
Although the $3 trillion proposed by the president is an enormous sum of money, total annual spending by the U.S. federal government in recent years has hovered around 16 percent of the nation’s gross domestic product (GDP). Total government spending, including state and local governments, accounts for about 28 percent of GDP in the United States, a level that is one of the lowest among industrialized nations. In many countries in Western Europe, government spending accounts for half of the GDP.
U.S. government spending provides for the public good -- services needed by society that benefit all, but which the private sector has little or no incentive to provide. Such services include things like a national defense, public safety, education and the management of natural resources. Government activities also include issuing currency, collecting taxes, borrowing money and maintaining economic order.
The U.S. budget is a valuable financial tool, but it is also a powerful way for the president to communicate to Congress and to the citizens the priorities of his administration.
This process is mirrored at the state level, as governors present budget proposals that highlight their priorities to state legislatures for consideration. In state governments, the entire funding process sometimes is concluded within weeks. At the federal level, the process stretches out over many months.
FIRST STEP IN A LONG PROCESS
The submission of the president’s budget is the starting point for setting federal spending priorities for the fiscal year that begins October 1. Because the Constitution reserves the authority to raise and spend money for the federal government to Congress -- the power of the purse -- the president’s budget is simply a recommendation. The actual spending, or appropriations, will be hammered out over several months in a series of actions in Congress and negotiations between Congress and the White House.
The president’s budget process was established in 1921 to increase coordination within the federal government and restrain spending. Previously, individual government agencies had petitioned Congress for funds directly. The shift to a consolidated funding request increased the president’s influence over the budget.
The White House prepares the annual budget after consultation with all federal government entities, soliciting information from the various departments and independent agencies to create a funding request that will support government functions effectively and help implement the president’s policies, both domestic and international.
The Office of Management and Budget, an agency within the executive branch, is in charge of compiling and analyzing budget data for the White House. It generates the actual budget document (traditionally issued as a multivolume set of large, softcover books) and serves as an advocate for the president’s spending policies.
Following the president’s submission, Congress gets to work on drafting a dozen separate appropriation bills to fund various categories of spending, such as agriculture, defense or natural resources. These bills include provisions to fund federal government activities and also allocate money to run programs at the state and local level. Appropriation bills can spark fierce debates between Democrats and Republicans, and between senators and representatives. The spending measures promoted by a member of Congress generally are based on regional, demographic or economic factors in his or her home state.
Additional information on the president’s proposed budget for fiscal year 2009 is available on the White House Web site.
