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Chris Droussiotis September 2011

Lecture Series #4. Budget Planning, Implementation and Monitoring Last Step : Budget Implementation and Monitoring – Government Approach. Chris Droussiotis September 2011. Table of Contents. Distinguish Mandatory Spending Vs Discretionary

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Chris Droussiotis September 2011

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  1. Lecture Series #4 Budget Planning, Implementation and MonitoringLast Step: Budget Implementation and Monitoring – Government Approach Chris Droussiotis September 2011

  2. Table of Contents • Distinguish Mandatory Spending Vs Discretionary • Discipline on Discretionary – The IRR/Payback approach • Implement and Revaluate – Set up Performance Ratios • Moody’s Rating Approach These slides could be obtain via the Instructor’s Web page at www.celeritymoment.com

  3. Spending Drives Revenues Can the U.S. outgrow the problem?

  4. Spending Drives Revenues

  5. Spending Drives Revenues

  6. Revenue Discretion

  7. The 2011 U.S Budget – Case Study - Lessons Learned • 2011 Budget of the United States federal government • Submitted February 1, 2010 by Barack Obama to the Congress • Congress PassedPublic Law 112-10 • Total revenue $2.17 trillion (estimated) • Total expenditures $3.82 trillion (estimated) • Deficit$1.65 trillion (estimated)

  8. The 2011 U.S Budget – Case Study - Lessons Learned • President Barack Obama proposed his 2011 budget during February 2010. • He has indicated that jobs, health care, clean energy, education, and infrastructure will be priorities.

  9. The 2011 U.S Budget – Case Study - Lessons Learned • It was widely anticipated that a government shutdown on April 8, 2011 was possible if a budget resolution or a seventh continuing resolution was not passed by the expiration of the sixth continuing resolution on April 8, 2011, which would have caused the furlough of 800,000 out of 2 million civilian federal employees. • However, a deal was reached with just hours remaining before the deadline, averting the shutdown. • The deal included $38.5 billion in cuts from what had been budgeted for 2010, in addition to another $10 billion in cuts that had been imposed in some of the continuing resolution. • However, the April 13 Congressional Budget Office estimate showed that, compared with then-current spending rates, the spending bill would cut federal outlays from non-war accounts by just $352 million through Sept. 30. About $8 billion in immediate cuts to domestic programs and foreign aid were offset by nearly equal increases in defense spending

  10. The 2011 U.S Budget – Case Study - Lessons Learned

  11. The 2011 U.S Budget – Case Study - Lessons Learned

  12. The Moody’s Rating Approach • Moody’s general obligation bond ratings are forward-looking assessments of an entity’s relative credit strength, and reflect our analysis of four rating factors – Economic Condition and Outlook, Financial Position and Performance, Debt Profile, and Management – as measured against a combination of qualitative and quantitative criteria. • The rating outcome reflects a weighting of these assessments according to the following weighting system: • Economic Strength 40% • Financial Strength 30% • Management and Governance 20% • Debt Profile 10%

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