A government budget outlines expected revenues and expenditures for the next fiscal year, with the process varying between governments. In the US, the federal budget is introduced by the House of Representatives and must be approved by both houses of Congress before going to the President. Regional and local governments also use budgeting. Emergencies may require changes to an existing budget. A government budget can operate with a deficit, unlike a household budget.
A government budget is a document that records and anticipates all government revenues and expenditures for the next fiscal year. A government budget lists all sources of revenue expected for next year. He then lists all of his expected expenditures based on next year’s revenue projections, giving considerable insight into how the funds are allocated for each budget item. The process of passing a public budget varies from one government entity to the next. Almost all existing governments, regardless of their size or structure, operate on some form of a budget process.
In the United States, the Constitution requires that the federal budget be introduced by the House of Representatives. It is led by the Budget Committee. All 435 Representatives have a say in adding or subtracting budget items, but the majority of the federal budget is directed by the Speaker of the House, the House Majority Leader, and the Chairman of the Budget Committee. Once created, the budget must go through committee review. Then it must be approved by a vote of Parliament in the House. From there, the Senate must approve the budget and reconcile any discrepancies at the conference with the Assembly. Once passed by both houses of Congress, it heads to the President’s desk for signing or vetoing.
National governments aren’t the only ones using the budget process to project revenue and expenditure. Regional and local governments in countries around the world also use some form of budgeting. In countries with parliamentary systems, the ruling party usually drafts the budget. It must be voted on and ratified by the entire parliament. Countries with autocratic governments typically require no formal budget vote, yet still operate with one.
While a government budget is a document that breaks down projected revenues for projected government spending projects and other expenditures, emergencies can arise over the course of a fiscal year. War, disasters, new initiatives created by legislation – all of these may require changes to an existing budget or require additional funding resolutions to secure public money.
Some argue that a government budget should function no differently than a household budget. The problem with this analogy, however, is that governments are able to operate with a budget deficit while a household generally cannot. A government budget can and often does require the government to spend more money than it requires.
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