What Is Government Budget

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What is Government Budgeting? A government budget, sometimes called a fiscal budget, is a monthly document prepared by the federal government and/or another political entity presenting its planned tax revenues for the upcoming fiscal year and/or its projected budget for the upcoming fiscal year. Government budgets are required to be submitted to the US Congress (either the House or the Senate), either separately or as a part of the Omnibus Budget Reconciliation Act (OBRA). The purpose of a budget is to inform the American public about the projected spending and income for the upcoming fiscal year, as well as providing budgetary advice for the public. A government budget can also serve as a guide for how government agencies will manage the funds they already have in order to ensure that the public gets value for their money.

As mentioned, a government budget can serve as a guide for how government agencies will manage their existing resources during the upcoming fiscal year. The general circulation budget is not circulated to the public. It is available only to agencies and committees charged with the responsibility of managing the budget. The Budget Control and Transparency Act (PCATA) empowers Members of Congress and other Members of the public to obtain a copy of the annual government budget.

Why is public access to budget information important? As a matter of fact, budgeting itself is an exercise of free market capitalism. Budgeting is a process of selecting which economic activities are important to society at large, those that can be implemented by private actors, and those that must be left to the public sector. In other words, budgeting is about information: about what is government spending, what are our needs and what are our wants. It is about understanding the choices that we have and the limitations of government, and it is about understanding how free-market capitalism can provide the public with the information it seeks.

Government budgeting is a delicate balance. It is important that agencies develop forecasts of their future revenues and expenses so that the annual budget can be adjusted. However, it is equally important that agencies inform the public about their forecasts so that citizens can work out ways to balance the budget. Without that information, the budget will inevitably be manipulated in order to “drive the country into debt”.

One reason why it is so important for citizens to understand what is government budgeting? The inability of elected officials and members of the citizenry to adequately grasp the workings of budgeting leaves them vulnerable to politically inspired pressures. In other words, they may be hamstrung by an inability to accurately make judgments about the efficiency and appropriateness of the programs being funded. A budget that is riddled with uncertainty is like a ship without a rudder, sailing blindly in the dark.

Why do we need a government that regulates its budget in such detail? As noted above, budgeting is an integral part of the workings of government. Without an accurate forecast of how funds are being spent, an accurate assessment of the national debt and the national budget would be impossible. Without a well-crafted and guided budget, the wheels of government will simply turn in circles, leaving the governed helplessly floating in the wind.

Another reason why we need to be careful about what is government budgeting? Without a properly administered budget, the legitimacy of government would be at risk. When the public is aware that the budgeted amount for next year’s programs is way lower than the actual amount spent that year, there is likely to be widespread protests, criticism and, eventually, rebellion. Without stable government, fundamental principles, such as those of freedom of choice and of budgetary accountability become meaningless.

How do we ensure that the budgeted amount for the upcoming year is indeed the actual expenditure that will be made? The very first step is to develop a truly periodic budget, instead of the old and tired “top-down” budget formulation which relies on an omnibus spending program. Such an approach leaves much to chance: either the budget will be too tight and people will start paying more; or, if the budget is too loose, people will pay less but will cut back on essential services. It is best to have periodic national budgeting, with detailed monthly forecasts. Such a system of budgeting ensures that, whatever happens, the government remains accountable and the budget itself can never go overboard.