What is the main goal in creating a federal budget?
It is not an easy question. The response to that query depends on what you think should be the priorities of our country. Should we focus on military spending and national security, or should we invest more money into education and health care? Is it important to lower taxes for everyone or make sure those who need it most get help with social services like food stamps and welfare programs? There are many different ways to look at this issue.
“The primary goal in creating a federal budget should be to do what the people want. If we ask all of them and decide that we need more money for schools, then our government should make sure there is enough money for school. It will help us as a country move forward and prosper.”
Why is the budget process so difficult?
One reason it’s so difficult is that we frequently lack the tools and techniques to help us through the budget process.
I will give you a little idea of what I am talking about here:
Let’s say your car breaks down, and you need $500 bucks to get it fixed. If you don’t have that type of money in savings, then you’re going to have to come up with how you’ll find that money somewhere else. That means restricting expenses or coming up with additional income – maybe even both! So as an example, let’s say you decide that for the next two months, every time you go by Starbucks, stop in for a cup o’ Joe instead of making it at home. Now, this might not look like much amount, but in two months, that’s $10 a day and $60 bucks in savings!
Now let’s say you and your spouse go out to eat every Friday night. This isn’t an extravagant activity; it’s just part of the normal routine. If you cut this out for the next 2 months, that’s an additional $100 bucks in your pocket! This is what I’m talking about when I say restricting expenses or finding supplemental income! These things can be difficult because they require planning – either planning to reduce the costs or planning to make more money.
- However, there are several tools available to help with this process. Here are some examples…
- If you want to find savings by reducing your budget without changing your lifestyle, you can use the “Zero Based Budget – ZBB” method, which requires you to justify every budgeted item.
- If, on the other hand, you are avid to find additional income without reducing your budget, you could try finding an extra job or taking on some freelance work, or even starting up a small business on the side!
- There are many ways to increase revenue, but one of my favorites is selling stuff. An article came out recently that listed ten things that have increased in value over the years. I’ve included it here for reference. It doesn’t cost anything to look online or at garage sales and see what kind of deals may be available. You might be wondering how much value certain items hold!
Now I know that not everyone will be looking for additional income, and some people want to stick with a strict budget no matter what happens. That’s why I also wanted to include another technique that can help you get through the budget process.
- “Cost Segregation” is a method developed by Donald Trump in the early 90s. It takes advantage of depreciation rules to defer taxes! All this means is that you can use certain deductions earlier than expected while also lowering your tax liability at the same time.
- One great example of using cost segregation would be replacing an old HVAC system with a new one. The money spent on labor and materials may be deductible immediately, which reduces the amount of taxable income from your company.
These two tools (the Zero Based Budget and Cost Segregation ) can help make the budget process easier for even those on a tight budget! Sometimes we don’t realize how much money we can save simply by changing our way of thinking.
So, you have – 2 great “tools” that will hopefully help you get through the awful, dreaded budget process!
Who creates the federal budget?
The President of the United States initially submits the federal budget proposal to Congress for approval. The Budget and Accounting Act of 1921 needs that this proposal is presented in a special document known as the Budget Message. After receiving the President’s proposal (the “budget”), Congress traditionally uses it as the starting point for its budget resolutions. The House and Senate budget committees then work out their differences in drafting their separate versions of the solution, which are then sent to each body for an up-and-down vote without amendment. At this stage, the final concurrent resolution is non-binding; it serves only as an expression of policy or priorities. However, both chambers must adopt a final version by April 15 to reconcile it later that year. That last version is a binding law, which the President must then either sign or veto with a “pocket veto.”
- The federal budget is used to set and enforce the fiscal policy.
- The federal budget helps the government meet its obligations every year
- The federal budget is created by Congress and the President, who must work together to reach an agreement on all aspects of it
- According to Article I Section 9 of the Constitution, there are two main goals for creating a federal budget – “to raise revenue” and “to regulate expenditures.”
- To create a balanced budget with enough money coming in from taxes while also staying within limits set by Congress, tax revenues need to be at least as high as expenses each year
- If tax revenues are higher than expenses one year, then that surplus can be used in future years when they’re lower so that things stay balanced over time
- Cost Segregation – “a method developed by Donald Trump in the early 90s.”
- Zero Based Budgeting – “can help make the budget process easier for even those on a tight budget.”
- “These two tools can help make the budget process easier for even those on a tight budget.”
- The federal budget is primarily known as the President’s proposal, which Congress then works to approve or change before sending it back to the President for approval or veto.
- The main goal of creating the federal budget is to ensure that the government has enough tax revenue each year to meet all its debt obligations successfully.
- Creating a balanced budget is the first step towards meeting all fiscal responsibilities under the Constitution.
- The primary goal of creating a federal budget is to raise money for government projects by charging taxes on citizens and other businesses.
- The federal budget is created by Congress, which works with the President to set a budget for all of their promises and projects together.
The goal in creating a federal budget should always be to do what the people want. If we ask all of them and decide that we need more money for schools, then our government should make sure there is enough money for school. This will help us as a country move forward and prosper.