United States - Public finance

Under the Budget and Accounting Act of 1921, the president is responsible for preparing the federal government budget. In fact, the budget is prepared by the Office of Management and Budget (established in 1970), based on requests from the heads of all federal departments and agencies and advice from the Board of Governors of the Federal Reserve System, the Council of Economic Advisers, and the Treasury Department. The president submits a budget message to Congress in January. Under the Congressional Budget Act of 1974, the Congress establishes, by concurrent resolution, targets for overall expenditures and broad functional categories, as well as targets for revenues, the budget deficit, and the public debt. The Congressional Budget Office monitors the actions of Congress on individual appropriations bills with reference to those targets. The president exercises fiscal control over executive agencies, which issue periodic reports subject to presidential perusal. Congress exercises control through the comptroller general, head of the General Accounting Office, who sees to it that all funds have been spent and accounted for according to legislative intent. The fiscal year runs from 1 October to 30 September.

The public debt, subject to a statutory debt limit, rose from $43 billion in 1939/40 to more than $3.3 trillion in 1993. In fiscal year 1991/92, the federal deficit reached $290 million, a record high. Pressured by Congressional Republicans, President Clinton introduced a taxing and spending plan to reduce the rate of growth of the federal deficit when he began his term in 1993. The Clinton Administration calculated the package of tax increases and spending would cut the deficit by $500 billion over a four year period; in fiscal year 1997/98, the budget experienced an estimated surplus of $69 billion. However, the tax cuts and extensive military spending of President George W. Bush in the first term of the new millenium erased the surplus and pushed the economy toward a record $455 billion deficit projected for the 2003 fiscal year ($475 billion projected for 2004). The total public debt as of 15 August 2003 was $6,770,542,657,467.

The table below gives estimated federal government receipts and expenditures in millions of dollars for 2003 as reported by the US Office of Management and Budget. In the table, the term off-budget refers to receipts and outlays that are excluded from budget totals and are not subject to Congressional budget control mechanisms, such as oversight and review. Social Security is the federally-owned entity that receives the highest level of off-budget protection.

		% OF % OF
		TOTAL	GDP
RECEIPTS BY SOURCE
Individual Income Taxes	1,092,290	48.4
Corporation Income Taxes (1)	227,293	10.1
Social Insurance and Retirement Receipts
Total	766,045 33.9
(On-Budget)	205,233
(Off-Budget)	560,812
Excise Taxes	76,254	3.4
Other 96,358		4.3
Total Receipts
Total	2,258,240 100.0
(On-Budget)	1,697,428
(Off-Budget)	560,812
OUTLAYS BY SUPERFUNCTION AND FUNCTION
National defense	322,071	16.0	2.8
Human resources	1,364,518	67.7	11.9
Education, training, employment,
and social services	81,304
Health	224,390
Medicare	242,114
Income security	285,933
Social security	477,137
(On-budget)	14,479
(Off-budget)	462,658
Veterans benefits and services	53,640
Physical resources	101,038	5.0	0.9
Energy	-112
Natural resources and environment	27,670
Commerce and housing credit	4,704
(On-budget)	5,206
(Off-budget)	-502
Transportation	57,476
Community and regional development	11,300
Net interest	175,244	8.7	1.5
(On-budget)	260,665
(Off-budget)	-85,421

		% OF % OF
		TOTAL	GDP
OUTLAYS BY SUPERFUNCTION AND FUNCTION ( CONTINUED )
Other functions	113,734	5.6	1.0
International affairs	21,289
General science, space and technology	21,377
Agriculture	15,037
Administration of justice	35,382
General government	16,708
Allowances	3,941
Undistributed offsetting receipts	-60,379	-3.0	-0.5
(On-budget)	-51,218
(Off-budget)	-9,161
Total, Federal outlays	2,016,226	100.0	17.6
(On-budget)	1,648,652	81.8	14.4
(Off-budget)	367,574	18.2	3.2
(1) Includes trust fund receipts for the hazardous substance superfund.