Like any other system, the Us economic policies are also influenced by various factors like:
- Government Laws
- Global Economic conditions
- People’s choice
The economic policies of the U.S. are believed to be one of the most carefully scrutinized and drafted policies in the world, among which the U.S. Federal Budget tops the list. Every year this policy news is created very carefully, which also gives insights into the relationship between the President at the Executive and the Congress at the Legislature since America follows a federal government.
The policies are based on the Congressional Budget Act of 1974 the defines and outline the rules and regulations the government must follow to pass tax and spend policies. The Act demands to establish a budget every year to pay the federal government’s money carefully and in the right places. This budget also covers the cost of legislation passed and all the events and amendments the Congress proposes for the following year.
- The President is the person who initiates the budget, which includes the Federal budget as well.
- The carefully scrutinized and drafted budget is announced on the most Monday of every February, for the following financial year, and for the U.S. it begins every October 1st.
- Three central policies are taken care of in the announced budget.
- While announcing the budget, the President mentions the amount allocated for each department like defense, medical, innovation and research and many more. This also includes the wages of the laborers.
- Depending on who is responsible, sometimes the outline of economic policies will be drafted for the following five years (until his/her term of office), to give a brief idea of how his/her government should work.
- Lastly, the President talks about any changes that should be expected in the following economic year. Generally, there are no changes made, because the implementation of the tax in continued for all the years, with minimal changes made, based on the citizen’s requirements.
Also called Discretionary spending, do not fall under the umbrella of federal funds. However, they need to be renewed every year to meet economic emergencies or a particular request from the President. One of the significant sectors of Discretionary spending is from the defense. Most programs remain uncalled for and unutilized. Some other sectors like health, transportation also falls under Discretionary spending.
As soon as Congress receives budget from the President, they draft a resolution, which is sent for a majority vote at the committee, by April 15th. Once the decision gets a majority, the bill is passed in both the houses. The choice is a summarized version of the President’s and will cover critical topics of funding to 19 significant departments. The resolution includes details like funding and spending on and by each department, respectively. According to the Congressional Budget Act of 1974, the decision must contain at least a detailed study of 5 years of information and the necessary action to be taken.