President Obama’s first Presidential Budget Proposal is in the hands of Congress and the fight over the Fiscal Year 2010 federal budget is under way. Focused on creating and saving jobs while stimulating the economy and curbing the recession, Obama’s budget requests the expenditure of $3.55 trillion, with massive outlays in the job-rich areas of energy research and development, education and health care.
The Congressional Budget Office (CBO) has estimated that, if approved as is, spending in Obama’s 2010 budget would result in a total federal deficit of almost $1.7 trillion, or about 11.9 percent of the nation’s gross domestic product (GDP). Those staggering figures alone tell us one thing: the 2010 federal budget process probably will not go as scheduled. Instead, we can once again expect Congress to pass a number of “continuing resolutions” this fall in order keep the money flowing and prevent the ills of a government shutdown.
The Federal Budget in a Perfect World
Let’s pretend that, even with the spending changes Congress is certain to enact, President Obama’s budget sails through federal budget process exactly as it should. Here is the way the annual federal budget process is supposed to go:
The President’s Budget Proposal Goes to Congress
The President’s Budget Proposal informs Congress of the White House’s vision for the three basic elements of U.S. fiscal policy: (1) how much money the government should spend on public needs and programs; (2) how much money the government should take in through taxes and other sources of revenue; and (3) how large a deficit or surplus will result -- simply the difference between money spent and money taken in.
Congress Begins its Work on the Budget
Congress has until April 15 to debate, amend, and take action on the President’s Budget Proposal. The result will be the Congressional Budget Resolution. Let the partisan battles begin.
Congress Creates the Annual Spending Bills
In this critical phase of the budget process, the total “money pie” is cut into slices to fund the operations of the Cabinet-level agencies, the legislative branch, the District of Columbia, foreign operations and miscellaneous military functions.
Congress and the President Approve the Spending Bills
Once the president has signed all of the spending bills, the budget is considered completed, the new fiscal year rolls around, and the spending begins.
In summary, an outline of the federal budget process with critical dates.
Also See: President Obama’s FY 2010 Budget Proposal from the OMB
