The Federal

Budget

Dominic Heilman
How does the government decide how to
spend taxpayers’ money?

The Office of Management and Budget and the president work

together to propose a fiscal policy and federal budget. They use these
to determine how much revenue they accrue, where to spend it and
what to tax people. Spending that is required by these policies is
known as mandatory spending, whereas optional spending
determined by the policy is discretionary spending. Spending money
we don’t have, or borrowed money, is deficit spending. Taxes that pay
for this spending are determined by Monetary policy.
 What political factors play a role in how
the federal budget is created?

The president is responsible for proposing what he wants to spend

money on to those creating the budget, which greatly influences how
the budget comes out.
 What is the process of actually passing
the budget?

Departments and agencies submit proposals to the white house. The

president gives his budget proposal to congress. Congress drafts a
budget resolution and a conference committee resolves differences
between the plans to finalize them before the vote. House & Senate
appropriations committees divide the discretionary spending into
subcommittees.
 Individual Taxes

Individual income taxes have

been increased for those in the
upper class so that taxation has
increased our federal budget
while only affecting those with
money to spare. The money
coming from these taxations will
help pay off the national debt.
 Payroll Taxes

Some payroll taxes have been

reduced in order to reduce the
overall taxation on the common
employee.
 Corporate Income Tax

Corporate Income Tax is

increased to supplement the
Federal Budget during the fiscal
year.
 Other Revenues

Estate & gift taxes are reduced so

as to avoid taxing things that
aren’t a form of income, and
alcohol/tobacco taxes are
increased because of their status
as a luxury item/addictive
substance.
 Healthcare

Health care spending remains

unchanged because abrupt
changes to affordable healthcare
and insurance will not affect the
year’s deficit.
 Social Security

Social security spending remains

unchanged because of the
beneficiary’s inability to adjust
their finances.
 Defense

General defense spending has

been decreased because America
is under no immediate threat
from neighboring countries, and
R&D spending has increased to
encourage the development of
new technologies.
 Interest

Interest on debt is determined

early on and cannot be
independently adjusted.
 Economic Security

Food assistance is reduced due to

waste, and housing assistance is
increased to help low income
people find homes.
 General Government

Border security is increased to

help combat the overwhelming
flow of illegal immigrants into the
country, which is estimated to be
half a million people each year.
 Veteran’s Benefits & Services

Money has been put into

Veterans support services and
financial security to help combat
the homeless veteran problem in
the US.
 Infrastructure & Development

Money is put into NASA to help

supplement new developments in
space travel and technology.
 Education

Spending for K-12 education has

been increased in order to make
public schools for kids like myself
better.
 Natural Resources

Spending for energy has been

increased in order to speed up the
process of using renewable
energy sources in America.
 International Affairs

International affairs spending has

been reduced because other
countries are not our
responsibility.
Budget Overview