1. Budget- a plan for managing and spending money. A budget has two parts revenues and expenditures. A budget has two parts revenues and expenditures. Revenue is the amount the government brings in and expenditures is what it spends on each item. Revenue is the amount the government brings in and expenditures is what it spends on each item.

2. Because governments have limited revenues choices must be made. A billion $$’s on space exploration will mean less money for programs that feed the Hungry. A billion $$’s on space exploration will mean less money for programs that feed the Hungry.

3. Budgets are done annually which is once each year. The calendar year runs January 1 st to December 31 st. Governments have a fiscal year which runs from October 1 st to September 30 each year. The calendar year runs January 1 st to December 31 st. Governments have a fiscal year which runs from October 1 st to September 30 each year.

4. The federal government spends an immense amount of money in fact it is over a Trillion $$$”s.

5. Preparing the budget takes the work of 100’s of people over several months. The budget work is first done by the (OMB) or Office of Management and Budget is a division of the executive branch. The budget work is first done by the (OMB) or Office of Management and Budget is a division of the executive branch.

7. The head of the office of management and Budget Has their workers determine how much each branch of the government, agency or department will need in the coming year. Has their workers determine how much each branch of the government, agency or department will need in the coming year. They then how much money the government can expect to take in. They then how much money the government can expect to take in.

8. Director of the Office of Management and Budget. Peter Orszag Peter Orszag

9. Based on recommendations from the President and his advisors a 1 st draft of the budget is worked out. The completed 1 st draft of the budget is often more than a 1,000 pages long. The completed 1 st draft of the budget is often more than a 1,000 pages long.

10. Once the President has approved the OMB’s budget it is sent to the Congress for approval. The President usually marks the occasions with a televised speech. Explaining and defending his budget. The President usually marks the occasions with a televised speech. Explaining and defending his budget.

11. It then goes to Congress and they almost never accept the budget as it is

12. Many members of Congress have different priorities from those of the President. So after weeks or months of debate, the budget usually emerges with major changes. So after weeks or months of debate, the budget usually emerges with major changes.

13. By the time both houses of Congress pass the budget it contains many compromises.

14. Read state budget and Expenditures 477-478 Deficit-an excess of government expenses over revenues. Deficit-an excess of government expenses over revenues. The government spends more money then they take in. The government spends more money then they take in.

15. The Federal government has had a deficit every year since 1970.

16. National Debt Is the total amount the government owes on money it has borrowed. Is the total amount the government owes on money it has borrowed.

17. Total Budget Deficits

18. In 1996 the United States paid $345 Billion $$$ in interest rates on money it has borrowed. Only a limited amount of money is available to borrow if the federal government borrows most of it that leaves very little for individual citizens. Only a limited amount of money is available to borrow if the federal government borrows most of it that leaves very little for individual citizens.

19. Balanced Budget. Is a budget in which expenditures do not exceed revenues-in other words a budget with no deficit. Is a budget in which expenditures do not exceed revenues-in other words a budget with no deficit. Chart federal deficit 480 Chart federal deficit 480 Read 480-481 Read 480-481