THE FEDERAL BUDGET PROCESS Research Paper Example | Topics and Well Written Essays - 4000 words

THE FEDERAL BUDGET PROCESS - Research Paper Example BODY 1. The History of the Federal Budget process A. Changes made to the process Prior to 1921 Changes made to the process entail how the federal budget process was prior to the three laws, which govern it today. To begin with, preceding the 1921 budget and Accounting Act, the federal budget process was at the discretion of the Congress. The Congress made decisions on how much it was willing to impose as tax, expenditures to be incurred, and if there was need to borrow funds. This bill was taking for presidential accent each year. The enacted federal budget process could then be transferred to the Executive branch that was bestowed with the responsibility of its execution (Fischer, 1975). Budgetary, fiscal, and economic evolutionary changes necessitated the need for a more coordinated federal budget process. This saw the birth of the Federal Reserve System in 1913 that was aimed at coordinating monetary policies, controlling money supply, and centralizing the regulation of the bankin g system (Anderson, Davis & Gullo, 2003). Budget and Accounting Act 1921 The Act necessitated the need for the President to tender a particular consolidated budget each year for consideration by the Congress in bid to developing a synchronized federal budget process. This Act also brought into implementation the Bureau of the Budget that was aimed at making the presidents’ means of generating a tender more efficient. Consequently, this Act brought to existence the General Accounting Office the aided in accountability checks of the Congress. In addition, this Act provided regulations that inhibited agencies from proposing for supplementary appropriations (Anderson, Davis & Gullo,... The paper tells that the federal budget process has four main functions: responsible for the development of the macro fiscal policy attained through the determination of the proportion of the federal surplus or deficit. Secondly, the federal budget process plays a role in setting priorities across the competing programs and projects requiring the allocation of the limited resources. Thirdly, the federal budget process plays a role in promoting the accountability of agencies responsible for the implementation of fiscal goals contained in the budget. Finally, the federal budget process has a function in promoting consideration of the impacts made by decisions accrued today as pertains to the budget, and economies of the prospect. Federal budget process has evolved with time to accommodate the challenging economic situations. On relevance is the social security benefit, which has attributed to the increase in government deficit. This is since the federal government ends up incurring mor e expenses financing the elderly and compensating retired workers who are not bringing any income to the nation. The Congress has come up with alternatives to the social security benefit like the Individualized Retirement Account and Universal Pensions. Deficits in the federal budget process can be corrected by cutting on the expenditure and increasing the GDP every fiscal year. The federal budget process in bid to cushion itself has also implemented the budget cuts where there is less money in circulation affecting the individual expenditure.