The Federal Budget Process

1. The Federal Budget Process AP Government Economic Policy Unit

2. Entitlements • Federal programs that guarantee a specific level of benefits to persons who meet requirements set by law • Person is “entitled” to benefits if they meet the criteria set by the federal government • Spending on entitlements is mandated by the Federal law

3. Examples -Social Security -Medicare -Medicaid -V.A. Programs -Unemployment Programs -Food Stamps -Retirement Plans for Federal Employees

4. Entitlements Positives Negatives No Congressional discretion on money allotted 2/3 of budget Less money for discretionary spending • Provides needed benefits to American citizens • Government cannot delay or avoid payment in the budget

5. The Budget Process Proposed at the State of the Union Message in January

6. Office of Management and Budget(OMB) • OMB sends instructions to agencies • Agencies send requests to OMB • OMB revises the budget

7. Congressional Budget Office(CBO) • President submits budget to Congress by the first week in February • CBO looks over and sends report to both chambers of Congress

8. Appropriations Committee • The appropriations committee holds hearings and sets budget targets • Reconciliation bills are made of budget does not meet targets

9. Finalizing the Budget • By October 1st, all appropriations bills should be passed • If they are not passed, Congress has to pass a continuing resolution where agencies run on last year’s budget