What is the Federal Budget?

A budget is a plan for expenses that seeks to keep them within the limitations of revenue inflows so that a business or organization does not operate at a deficit.

The Federal Budget is much larger and more complicated that most budgets, but it works similarly. Because the use of funds is such an important issue on such a large scale, there are several steps needed to create and enact a budget.

A Federal Budget is created every year. It originates with a proposed budget from the President. The two houses of Congress go through significant deliberation in committees and on the floor, working on the Appropriations Bills. They then reconcile their budgets between the two houses and send it to the President for approval.

Budgets attempt to use the expected revenues for a period to their maximum efficiency, while avoiding a negative cash flow.

In 2015, the government directed the use of about $3.8 Trillion dollars. You may have heard that the government does not always manage to get the budget balanced, and this is correct. In fact, the last time the budget operated at a surplus instead of a deficit was during the Clinton administration, with a Republican Congress.

The national debt is already so large that a few surplus years doesn’t change much, so it’s almost like legislators have just decided not to bother.

For 2017, the government has elected to spend about $500 billion more than it will take in.

What is the Size of our National Debt?
What is Cash Budget?