What is it? How do we fix it? The U.S. Federal Budget What is it? How do we fix it?

President, Congress & the Budget Where should we invest tax dollars? President, Congress & the Budget Which programs should be expanded? Should there be a tax cut? Is it okay to continue to run a large deficit? Which programs should be cut?

What Is the Budget? A plan for how the government spends taxpayers’ money. A plan for how the government pays for its activities. A plan for government borrowing or the repayment of borrowed funds. Something that affects the nation’s economy. Something that is affected by the nation’s economy.

Budget Crisis Collecting less tax revenues Economic Downturn Spending for Job Growth

Where Does the Money Come From? Individual Income Taxes Payroll Taxes Corporate Taxes Miscellaneous – excise taxes, customs duties, etc. Estate and Gift Taxes Basically, 85% comes from employment, so high unemployment = low revenue

Discretionary – 39% of Budget Federal Spending Mandatory – 61% of Budget Discretionary – 39% of Budget Spending required by law Examples: Spending decided upon yearly by President & Congress Examples: Social Security – 20% Medicare – 13% Defense – 19.7% (2010) Education – 19% w/others

Discretionary Spending Defense – 19.7% Other – 19.1% National Defense Education Transportation Health International Affairs Natural Resources & Environment Energy + 7 Other Areas

Deficit Spending – Good or Bad? Positive Negative Invests in the country’s future. Spend needlessly on high interest