5 Questions About the U.S. Budget You Were Too Afraid To Ask
September 30 is the deadline for Congress to agree on a new federal budget. Shortly thereafter, they must also decide on whether to increase the nation's debt limit or risk default for the first time in the nation's history. Both partisan and inter-party debates seem to be holding up passage of this year's budget. Although the ordinary citizen can't significantly influence the debate before the deadline, there are still five things to you should be paying close attention to during this process.
1. What will this bill fund?
The president must submit his annual budget to Congress, who is then tasked with formulating and passing a budget resolution detailing how revenues will be collected and spent. The budget funds both short-term and long-term goals, with funding that is not already mandated by law being labeled as discretionary and must be re-approved annually. The president's Fiscal Year (FY) budget proposal includes descriptions of his economic strategy, which guides his proposed use of federal funds.
2. What is the government's role in society?
Debate over the government's role in society seems to be intensifying in recent years. Those more to the right advocate for less government intervention, and those on the left believe in the need for a strong central government. The inability to simultaneously satisfy these two opposing viewpoints is increasingly making it more difficult for Congress to fulfill its duties. The recently deceased Nobel Prize-winning economist Ronald Coase was often touted by conservatives for his supposed support of government non-intervention, however, careful analysis of his work suggests he was willing to recommend the type of pragmatic decision making that is becoming increasingly rare in Congress.
3. How effective are these expenditures?
The president's budget included over $3.7 billion in proposed spending. These expenditures are structured around the his socioeconomic initiatives. The Office of Management and Budget measures the quality of programs that these funds are spent on. Performance.gov is a website displaying performance data as mandated by the 2010 Government Performance and Results Modernization Act.
4. What is a sequester?
Sequestration was established by the Budget Control Act of 2011 to control federal spending. This bill mandated $1 trillion in across-the-board budget cuts if a plan for $4 billion in deficit reduction isn't agreed upon. The FY 2013 sequester began on March 1 and includes over $85 billion in cuts. The total effects of this year's sequester are still being studied.
5. What steps are being taken to address long-term debt?
Despite recent debate over discretionary spending, long-term obligations, such as Medicare and Social Security, comprise an overwhelming majority of future obligations. Entitlement reform remains a politically risky proposition for many politicians, as the country creeps closer to not being able to fund these federally legislated entitlements. Ideological grandstanding and avoiding entitlement reform will not get us any closer to preventing this disaster from happening.