POLSCI 318 Lecture Notes - Lecture 16: National Debt Of The United States, Accrued Interest, Internal Audit
4 May 2018
School
Department
Course
Professor
Congress and the President
10.28.16 Lecture Notes – the Federal Budget
x Money from income taxes, corporate taxes, excise taxes, etc.
x THREE TYPES OF GOVERNMENT SPENDING: 1. Mandatory, 2. discretionary, and 3. interest on the
federal debt (national priorities dot com with budget visualizations)
x Federal budget and appropriations only discretionary fluctuates by year in accordance with how
Congress has designed their appropriations – determined by our current legislators, whereas
mandatory spending is pre-determined by our legislative statutes
o Discretionary spending is more dependent on the needs of the nation at the time
o Disretioar spedig iludes the ilitar, eduatio, goeret, health, eteras’ eefits,
housing and community, science, energy and environment, transportation (new transportation
that do not have underlying pre-determined statutes), food and agriculture
o Military spending makes up the bulk of discretionary spending
x Mandatory spending – the type of spending outside of appropriations – Social Security, food stamps,
healthcare
o Mandatory because the Congress and the President is mandated to spend on these issues that
have been decided before their term
o Mandatory spending can fluctuate per year based on how many people are claiming those
benefits (pre-determined levels of eligibility)
o For mandatory spending, Congress can only change it through the legislation proper – change
the underlying structure of the stature
o Entitlement programs – third rails – politiias do’t at to hage them because there are
massive constituencies that have developed around Social Security and Medicaid, etc.; lobbying
groups have also built around it
o Social Security, unemployment and labor (bulk), Medicare and health
x Interest on federal debt – accrued interest that we try to pay off annually
x 12 appropriations bills (subcommittees) – create a budget for discretionary spending
o Federal agencies submit their budgets for review
o Presidet suits Presidet’s udget
▪ The fiscal year starts October 1
▪ Prior to October 1 (the Feb before) the President submits his version of the budget
▪ Arhiteture for spedig for all the eeutie ageies
▪ Before he submits this budget, he goes and interacts with each of the agencies
(conducts an internal audit)
▪ President has massive informational advantage over Congress – intimately aware of
current spending because he has access to all these executive agency heads is aware
of how his spending decisions can translate into policy outcomes (talks with all the
agency heads)
▪ Develops strategy in presenting the budget to Congress so that Congress is favorable to
the budget
▪ Also has first mover advantage – in the negotiating space, President maps out the initial
structure of the budget and Congress has to respond to his version of the budget –
eaig that a oproise ill e i the Presidet’s faor usuall
▪ Budget is also another opportunity for President to show the American people what his
priorities are (functions as a signaling device, akin to a SoTU)
o Congress passes concurrent budget resolutions
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