Government budgeting process and implementation

Government Budget Process

Over the last several years, the issue of: budgetary concerns have been increasingly brought to the forefront. Part of the reason for this, is because many bureaucrats have a difficult time in controlling spending and increasing taxes (when necessary). As a result, this has been eating away at the fiscal stability of many different governments. Where, they are having trouble coping with mounting levels of fiscal debt and the lingering effects on the services that they are providing. Evidence of this can be seen by looking no further than, than comments from the Brookings Institute with them saying, "The gap we face is just too large to close if we declare significant areas of the budget off-limits. Neither party is going to sacrifice only the areas of the budget it most cares about in the absence of corresponding concessions from the other side." (Trumball, 2010) This is important, because it highlights the overall scope of the potential crisis facing a host of different governments. In the case of the Department of Defense, they face similar challenges, as they are forced to rein in spending. To determine how and where the different revenues for this agency are derived requires conducting a careful analysis of their budget. This will be accomplished by: examining which revenues / funds are used by the various areas inside the department, possible restrictions that can be placed on these revenues, evaluating how public policy decisions affect the receipt of revenues and analyzing the conditions that affect revenue projections. Together, these different elements will provide the greatest insights as to how revenues and spending can have an impact upon this agency.

Determine which Revenues are used in which funds: Government, Proprietary and Fiduciary

In general, the federal government will generate revenues from a number of different sources to include: income taxes, excise taxes and special taxes (i.e. various fees etc.). The income tax revenues are generally used by the government to run its day-to-day operations. In the case of the Department of Defense, a part of this income would help to fund and support their different activities. ("The Numbers," 2010)

At the same time, they also have proprietary funds, these are used by the Department for supplemental activities (such as: additional funding for cost overruns in operations around the globe). The types of revenues that would fall into this category include: income tax and excise tax revenues. ("The Numbers," 2010)

The fiduciary funds are those that would be used to provide support for various programs of key personnel (i.e. social security contributions). The types of funds that would be utilized in this part of the budget would include: the Social Security Payroll tax. ("The Numbers," 2010)

Describe any Restrictions that are (or could be) Placed on those Revenues

The biggest possible restrictions are: that various programs could have certain amount of funds earmarked for consistent spending. A good example of this can be found with the Joint Strike Fighter program. Where, the Pentagon would award various contract for the plan to key districts. At the same time, there can be restrictions on how the money will be spent and in what areas. ("Bender," 2010)

Evaluate how Public Policy Decisions Affect the Receipt of Revenues

Politics and attitudes about where the various revenues should be spent can create heated amounts of debate. In the case of the Department of Defense, this can mean that periodic reviews could occur that can have an impact upon a host of different spending programs. At the same time, various assessments will take place with Secretary of Defense. Where, they will review the size and necessity of the various bases / personnel. A good example of this can be seen when the Secretary of Defense will recommend various base closures and force adjustments. As politics and changes in the Department's needs / availability of funds will affect what programs are going to receive the most appropriate amount of revenues.

Analyze the Economic Conditions that Affect Revenue Projections