The federal budget is a yearly financial plan showing how the U.S. government plans to collect revenue and spend money for the next fiscal year, covering everything from defense to Social Security.
What is true about the federal budget quizlet?
The president develops the federal budget and presents it to Congress for approval; this process begins with the Office of Management and Budget (OMB) drafting the budget proposal.
Congress then reviews, modifies, and ultimately approves the budget through its appropriations committees. This system keeps the executive branch in charge of proposing spending plans while giving the legislative branch the final say on funding. The budget is submitted by the first Monday in February each year for the upcoming fiscal year. For example, the FY 2026 budget was submitted on February 3, 2025, and finalized in December 2025 after months of negotiations.White House OMB
What describes the federal budget?
The federal budget is the government’s estimate of revenue and spending for each fiscal year, itemizing planned expenditures and expected income.
Think of it like a massive personal budget, just on a national scale. It covers everything from infrastructure to education. Key parts include mandatory spending (like Social Security) and discretionary spending (such as defense). The fiscal year runs from October 1 to September 30. In 2026, total federal outlays are projected at $6.8 trillion, with $4.1 trillion coming from revenue and the rest borrowed.CBO Budget Projections
What is a government budget quizlet?
A government budget is a plan for both raising and spending funds, balancing income (revenue) and outlays (spending).
It includes revenue sources (e.g., taxes) and spending priorities (e.g., healthcare, education). Transfer payments—funds redistributed to individuals or groups—are also part of the budget. This plan is typically updated annually. For instance, the U.S. federal budget includes over $1.4 trillion in transfer payments like Social Security and SNAP benefits.Urban Institute on Transfer Payments
What is the federal budget ap gov?
In AP Government, the federal budget refers to expenditures determined by eligibility rules set by Congress, rather than annual discretionary spending.
These are part of mandatory spending, which includes programs like Social Security and Medicare. Discretionary spending, in contrast, is set each year through appropriations bills. The budget reflects policy priorities and resource allocation across federal agencies. For example, mandatory spending accounted for 64% of the FY 2026 budget, while discretionary spending made up the remaining 36%.CBO Budget Projections
Has the 2020 federal budget passed?
The U.S. federal budget for fiscal year 2020 was enacted and covered October 1, 2019, to September 30, 2020.
It was approved through two consolidated spending bills: the Consolidated Appropriations Act, 2020 (H.R. 1158) and the Further Consolidated Appropriations Act, 2020 (H.R. 1865), both passed in December 2019. These bills funded most government operations for the year. The total FY 2020 budget was $4.79 trillion, with a deficit of $984 billion.CBO FY 2020 Budget Review
What are two main categories of the federal budget?
The federal budget is divided mainly into revenue (income) and expenditure (spending) categories.
Revenue comes primarily from taxes, while expenditures include mandatory programs (like Social Security) and discretionary spending (like defense). These categories help policymakers assess fiscal balance and priorities. The budget’s structure reflects both economic and political decisions. For example, in FY 2026, federal revenue is projected at $4.1 trillion, while spending is $6.8 trillion.CBO Budget Projections
Who prepares the federal budget every year to Congress quizlet?
The president and the Office of Management and Budget (OMB) prepare the federal budget and submit it to Congress.
Agencies propose budgets, OMB reviews and compiles them, and the president finalizes and submits the proposal. Congress then analyzes it, often with help from the Congressional Budget Office (CBO), before passing appropriations bills. This process kicks off each February. For FY 2026, the budget was submitted on February 3, 2025, and finalized in December 2025.White House OMB
What increases when the federal government has a deficit quizlet?
When the federal government runs a deficit, the national debt increases.
A deficit occurs when spending exceeds revenue in a given year. Each year’s deficit adds to the total national debt, which now exceeds $34 trillion as of 2026. The debt accumulates from deficits over time. For example, the FY 2026 deficit is projected at $1.5 trillion, adding to the national debt.CBO Budget Projections
What increases when the federal government has a deficit?
When the federal government runs a deficit, the national debt increases; deficits are annual shortfalls, while the debt is the cumulative total.
For example, a $1 trillion deficit in 2026 adds to the national debt. When the government runs a surplus, the debt can decrease. The debt includes money owed to investors, foreign governments, and federal trust funds. As of 2026, the national debt stands at $34.5 trillion, with interest payments alone costing $1.2 trillion annually.CBO Budget Projections
Why do Social Security and Medicare pose problems for the federal government budget?
Social Security and Medicare face long-term sustainability challenges due to a declining worker-to-retiree ratio, rising life expectancy, and increasing retiree numbers.
As of 2026, fewer workers support more retirees, straining pay-as-you-go funding. Life expectancy has risen to about 79 years, increasing payouts. Without reforms, these programs could consume a growing share of the federal budget, crowding out other priorities. For example, Social Security and Medicare are projected to account for 40% of federal spending by 2035.Social Security Trustees Report
What is mandatory spending in government?
Mandatory spending includes entitlement programs and other payments governed by statutory criteria, not annual appropriations.
Examples include Social Security, Medicare, Medicaid, and interest on the national debt. These programs automatically fund eligible recipients based on legal requirements. Mandatory spending now accounts for about two-thirds of federal outlays. In FY 2026, mandatory spending is projected at $4.3 trillion, or 64% of total outlays.CBO Budget Projections
What is a federal government budget deficit?
A federal budget deficit occurs when federal spending exceeds revenue in a given year, signaling a shortfall in funding.
The deficit for fiscal year 2026 is projected at over $1.5 trillion. Deficits increase the national debt, as the government borrows to cover the gap. Persistent deficits can lead to higher interest costs and reduced fiscal flexibility. For example, the FY 2026 deficit is projected to add $1.5 trillion to the national debt, bringing the total to $34.5 trillion.CBO Budget Projections
Which is the first step in creating a federal budget?
The first step in creating a federal budget is for Congress to pass a budget resolution, which sets overall spending and revenue levels.
Each chamber (House and Senate) drafts its own resolution. The budget resolution guides appropriations committees and provides a framework for spending bills. This step typically occurs by April each year. For FY 2026, the budget resolution was passed in April 2025, setting spending limits for the year.CBO Guide to the Budget Process
Who creates the federal budget?
The president creates and submits the federal budget to Congress each year by the first Monday in February.
The budget includes revenue estimates and spending proposals for all federal agencies. Congress then reviews and modifies it through the appropriations process. The budget reflects the administration’s policy priorities and economic projections. For FY 2026, the budget was submitted on February 3, 2025, and finalized in December 2025.White House OMB
What branch is Congress?
Congress is the legislative branch of the U.S. government, consisting of the House of Representatives and the Senate.
As of 2026, Congress remains a bicameral body with 435 voting House members and 100 Senators. It holds authority to make laws, declare war, regulate interstate commerce, and control taxing and spending. The Constitution vests legislative power exclusively in Congress. For example, Congress approved the FY 2026 budget in December 2025 after months of debate.U.S. National Archives
