The Federal Budget

What three roles does the President’s budget request serve?

The President’s budget request serves the following roles:

  1. It has the president’s recommendations for the overall federal fiscal policies which are developed through the three components. They include the money to be spent by the federal government on public purposes, the tax revenue and the amount that the federal government should run (Schick, 2000).
  2. It presents president’s relative priorities on the federal programs. The budget stipulates the fiscal policy and budget priorities for the current year and for the incoming five years (Brite, 1966).
  3. It serves to signal the Congress about the spending and tax policy changes that the president proposes.

What is the first step generally taken by Congress when the president’s budget request is received?

They hold a hearing and look into the requests by the administrative officials and develop their own budget resolution.

What are the differences between “budget authority” and “outlays”?

The budget authority is an amount of money that the Congress allows the federal agency to use during a fiscal year. It represents the limit of spending. The outlays are the actual amount that the federal agency uses (Schick, 2000). The amounts spent may exceed the set limit or it may be below the limit.

What is “authorizing legislation” and what effect does it have on the budget?

The authorizing legislation provides a framework over which rules of federal programs can be changed and it also governs the way money should be appropriated. It makes sure that the budget is implemented properly (Brite, 1966).

Both the House and Senate each have a rule requiring that all entitlement increases and tax cuts be fully offset. In the Senate, if this requirement is not met, a senator can raise a “point of order” against the bill. What does this imply? In the House, if a member raises a “point of order”, what happens?

            A point of order is raised when a member of the committee of the House or Senate wants to block the legislation (Brite, 1966). In the senate, a point of order is raised when the legislations budget increases and exceeds the committee’s allocation, or when the taxes are cut below the required level in the budget resolution.

What is the governor’s involvement at the beginning of the budget process in Arizona? And what is the governor’s involvement at the end?

At the beginning of the budget process in Arizona, the governor through his office receives the spending plans from department heads. Together with the staffers he reviews and revises the spending plans (Koehler, 1956).  At the end of the budget process the governor is involved in implementation of the budget.

After reading the report, does it appear that the governor or the legislature in Arizona has the most power in directing state spending? Offer examples to support your response.

Yes, the governor or the legislature in Arizona has most power in directing state spending. This is because in the financial year 2009 the legislature and the governor cut $ 1.1 billion from the fiscal budget of that year. The governor also determines the budget for a certain fiscal year from the budget plans from the heads of the departments and makes allocations according to his priorities. The budget report is then submitted to the legislator who reviews it (Beeman, 1971).

How is revenue forecasting in Arizona an example of political bargaining?

The revenue forecasting in Arizona is an example of political bargaining. This is because the legislators signed ‘Taxpayer Protection Pledge’ where they had promised their voters that they would not raise taxes. When the need to raise taxes came in 2010, they were unwilling to do that or go to their voters and tell them so.

How has political feasibility guided revenue options in Arizona (versus revenue sources being based on analysis including issues such as collectability, equity, and stability)? Who seems to have more power in determining revenue sources -- the Governor, the Legislature, or citizens? Offer examples for your response.

The political feasibility has affected the revenue options in Arizona. The politicians have been locked in a situation that they promised their voters that they would protect them from the tax increase. This makes them fail to pass some important legislation that seeks to increase revenue.

The governor has more powers in determining the revenue sources (Beeman, 1971). This is because in a budget proposal released by governor Brewer in January 2010, she provided various ways in which revenue would be sourced in that fiscal year. They include fund transfer, restriction of cash assistance and reduction of Medicaid in Arizona.

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