1. Creating a Budget Chapter 14

2. Budget Process

3. Deficit v. Surplus Deficit occurs when expenditures exceed revenues in a year – $1.3 trillion in 2010 Surplus occurs when revenues exceed revenues in a year

4. Federal Revenues

5. Federal Expenditures

8. Trends in National Defense Spending

9. Trends in Social Service Spending

10. Uncontrollable Expenditures Uncontrollable Spending Spending that the president and Congress are unwilling to cut, includes interest on national debt and entitlement programs, such as Social Security and Medicare Entitlement Programs Government programs that provide guaranteed/required benefits to those who meet eligibility requirements Ex.) Social Security – costs $700 billion per year Paid for through payroll taxes of current workers

11. Uncontrollable Expenditures v. Discretionary Spending Uncontrollable expenditures – spending that is required – About 61% of the budget Discretionary spending – fluctuates each year depending on changing priorities of Congress + President – Incrementalism – best predictor of this year’s budget is last year’s budget plus a little more

12. Federal Debt All of the money borrowed over the years that has not been paid Currently about $13.7 trillion

13. Federal Debt

14. US Debt Clock http://www.usdebtclock.org/