The Budget: Congress
and the President
Incrementalism
 Incrementalism: Budget predictor of this years budget by
looking at what an agency received last year plus a little
more.
 Usually receive at least their previous budget
 Debates usually occur over the increment (increase)
 The budget for most industries increases.
 Why is it difficult to control this?
Uncontrollable
expenditures!
 Uncontrollable expenditure: an expenditure determined
by how many individuals are eligible for program
benefits:
 Ex: Social Security
 Entitlements: Policies Congress has obligated itself to
pay a certain amount of benefits to recipients.
 Farm subsidies.
 Congress could limit, but would face opposition.
Politicking Budgets
 Agencies attempt to link their institutions benefits to a
Congressman’s to gain favor.
 Pgs 420-421 list of all the big players in this process.
 Agencies: Push for higher budgets. Send request to OMB
 Office of Management and Budget(OMB): make
decisions about how to distribute the budget
 President: Makes the final decision on what to propose.
 Budget Committees and Congressional Budget
Office(CBO): Set the rules of the budget process in
Congress.
House Ways and Means
 Set the tax codes for the Congress alongside the Senate
Finance Committee
 The government runs on taxes
 As a result, no taxes, no government.
 The House Ways and Means Com. And Senate Finance
Com give the gov’t what it needs to run
 Essential function to the United States.
The Presidential Budget
 OMB created in order to help the President craft a
budget.
 President by law, submits budget for the year by the first
Monday of February.
 Spring: Budget policy developed
 Summer: Budget decisions conveyed to agencies
 Fall: Estimates reviewed
 Winter: President’s budget determined and submitted.
Congress and the Budget:
 Congressional Budget and Impoundment Control Act
(1974)
 A fixed budget calendar: timetable for budgets
 A budget committee in each house: recommend target
features for the budget by April 1 each year.
 Agreement needed by April 15
 Congressional Budget Office: advises Congress on
consequences of budget decisions.
Budget Resolution
 Budget Res: binds Congress to a total expenditure level.
1. Reconciliation: program authorizations are revised to
meet required savings.
2. Authorization bill: Specifies a programs goals and
maximum expenditure for discretionary programs.
1.
Sets eligibility standards from a program
3. Appropriations bill: An act that funds a program for a
period of usually a year.
FRQ
 1.) Since the 1970s, the national debt has grown from $1
trillion to over $9 trillion. Two factors that have
contributed to this growth are incrementalism and
“uncontrollable” expenditures. (5 points)
a) Define incrementalism and “uncontrollable”
expenditures.
b) Explain how each contribute to the increasing national
debt of the past 40 years.
c) Describe one other factor that has contributed to the
growing national debt of the past 40 years
 _____9.) The federal government receives most of its revenues
from


A.) excise taxes.

B.) social income taxes.

C.) personal income taxes.

D.) public bonds.

E.) sales taxes.
 _____7.) An appropriations bill

 A.) allocates funding for particular programs.
 B.) revises spending proposals in order to achieve required savings.
 C.) allows agencies to spend at the level of the previous year.
 D.) establishes, continues, or changes a discretionary government
program or an entitlement.
 E.) establishes new taxes, or sources of borrowed revenue, to pay for
programs.