The Federal Budget Process
AP Government
Economic Policy Unit
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
Examples
-Social Security
-Medicare
-Medicaid
-V.A. Programs
-Unemployment
Programs
-Food Stamps
-Retirement Plans
for Federal
Employees
Entitlements
Positives
• Provides needed benefits to
American citizens
• Government cannot delay
or avoid payment in the
budget
Negatives
• No Congressional discretion
on money allotted
• 2/3 of budget
• Less money for
discretionary spending
The Budget Process
Proposed at the State of the Union
Message in January
Office of Management and Budget
(OMB)
• OMB sends instructions to agencies
• Agencies send requests to OMB
• OMB revises the budget
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
Appropriations Committee
• The appropriations
committee holds
hearings and sets
budget targets
• Reconciliation bills are
made of budget does
not meet targets
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