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POLS 1301-165 2/25/04

POLS 1301-165 2/25/04. The Federal Budget and Process. Notes. Take Chapter 16 Quiz. What is a Budget?. A sum of money allocated for a particular purpose. Set of decisions concerning the allocation of resources to meet goals of the public.

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POLS 1301-165 2/25/04

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  1. POLS 1301-165 2/25/04 The Federal Budget and Process

  2. Notes • Take Chapter 16 Quiz

  3. What is a Budget? • A sum of money allocated for a particular purpose. • Set of decisions concerning the allocation of resources to meet goals of the public. • Schedule of projected revenues, expenditures, and capital outlays.

  4. Revenues by Source 2002

  5. Comparing National Tax Burdens

  6. 2002 Expenditures by Type

  7. Budget Concepts • Balanced Budget – Revenues and Expenditures are equal. • Budget Deficit – Expenses exceed revenues forcing the government to issue debt. • Budget Surplus – Revenues exceed expenditures, allowing government to pay-down debt. • Pork Barrel Spending - Legislation that appropriates gov’t money for local projects of questionable value that may ingratiate a legislator with his or her constituents.

  8. Budget Surplus and Deficit

  9. Growth in National Debt

  10. Social Security Deficits

  11. Budget Agencies • OMB - Office of Management and Budget • Created by Nixon, was previously the treasury department • CBO – Congresssional Budget Office • Was created in 1974 by the Congressional Budget and Impoundment Control Act to give congress same level of detail as President

  12. Budget Process • OMB and President create initial budget to be submitted to the Congress • House of Representatives considers budget and makes adjustments • Senate then considers budget • Final details are worked out in joint committee

  13. Budget Calendar

  14. Monetary Policy • Monetary Policy Link • Inflation - An increase in the general price level of goods and services; alternatively, a decrease in purchasing power of the dollar. • Recession - A downturn in economic activity, broadly defined by many economists as at least two consecutive quarters of decline in a nation's gross domestic product (GDP) • CPI – Consumer Price Index - a measure of the average change in prices over time in a market basket of goods and services.

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