Federal Budget

Topics: Medicare, President of the United States, Social Security Pages: 5 (1402 words) Published: May 12, 2014
POL201
ESSAY 2
Dumas Maugile

The federal budget of the United States is the legislation dictating how much money the federal government is entitled to spend in one fiscal year. It is proposed by the president get but must be reviewed and then passed by congress to pass it and put it into law, then sending back to the President for his signature. There are numerous rules and regulations that congress must follow when making decisions to do with the budget; essentially congress will set spending limits which will be passed down to various subcommittees who will then apportion money to all the different federal programs that are to be covered by the budget.

The federal budget is split into two main categories, known as mandatory and discretionary spending. Mandatory spending is essentially composed of ‘long term’ programs, or ones that require funding as dictated by law that is not changed by annual appropriations acts. Mandatory (or direct) spending is composed of many of the larger ‘entitlement’ programs in the United States such as Social Security, Medicare and Medicaid. Mandatory spending typically accounts for around 60% of the federal budget and does include smaller expenses such as certain federal salaries. Discretionary spending on the other hand, requires a new bill every year and is composed of hundreds of various programs for which an appropriations committee must set budget limits for on an annual basis. Certain discretionary spending programs however can have a multi-year appropriations and is usually associated with military spending, which accounts for around 57% of all discretionary spending, other costs in the discretionary spending category of the budget includes education, foreign aid, environmental concerns and veterans affairs.

Both mandatory and Discretionary spending are the cause of much debate in relation to its effect on the federal budget crises, with advocates on both sides of the political spectrum having their own ideas as to which type of spending should be cut and where too much money is being spent. The biggest issue critics seem to have with mandatory spending is the fact that, because it is mostly composed of entitlements (money that has to be paid out no matter what) there is technically no short term limit on the amount spent and this makes it hard to create a functional budget due to the fact the programs’ costs are constantly changing. The only way congress can cut mandatory spending is by either enacting laws that will cut the number of people eligible for these entitlements in future years or simply cutting the amount of benefits that people will receive from these programs. Proponents of higher mandatory spending however argue back that it is necessary to keep these programs well-funded as they are designed to aid citizens when in need, which is in their opinion, the role of the government in the first place. Discretionary spending on the other hand, seems to bear the brunt of funding cuts – particularly in the relatively small (13% of the federal budget) area of non-military discretionary spending. This is typically because lawmakers and politicians tend to try and avoid proposing cuts to the military budget and to mandatory spending programs that aid the population in order to maintain popularity amongst their constituents.

The big political debates on mandatory spending tend to lay with Social Security and Medicare; the two of which account for around 37% of the federal budget. The biggest issue seen with these two programs is that they are costing the country more than it can afford – essentially the taxes used to fund these programs do not meet the amount of money promised to the individuals who have paid these taxes their entire lives to receive benefits upon retirement. As more and more people retire, more money is to be paid out to these individuals, at a rate that the program was not designed to account for. Critics of these programs advocate raising...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Federal Debt and Deficit: the Solutions Essay
  • Essay on Federal Budget Deficit
  • the operating budget assignment 1 Essay
  • Australian Federal Budget 2013 Essay
  • Essay on The Budgetary System of Bangladesh & Remedies to Overcome Budget Deficit
  • Budget Essay
  • Essay on Flexible Budgets
  • Production Budget Essay

Become a StudyMode Member

Sign Up - It's Free