Chapter 10: Government Spending

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Chapter 10Government Spending
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• 2 Types of Spending
• Goods and Services
• Discretionary spending
• Exhaustive government outlays
• Transfer Payments
• Mandatory spending
• Created by legislation

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Discretionary Spending

• National Defense
• Education and Training
• Transportation
• Veterans Benefits
• Administration of Justice
• Natural Resources and the Environment
• General Science, Space and Technology
• Other
• Agriculture
• International Affairs
• General Government
• Community and Regional Development
• Commerce and Housing Credit
• Energy

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Transfer Payments (Mandatory Spending)

• Entitlements (can not have spending caps)
• Social Security
• Medicare
• Medicaid
• Welfare
• Unemployment
• Non-discretionary spending
• Interest on the debt

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Budget ProcessFiscal Year October 1st
September 30th

• 1. Executive Formulation President and OMB
• (due in early February)
• 2. Action by the House
• debate discretionary spending, set budget
  targets, subcommittees appropriations bills
• (deadline September 15th)
• 3. Action by Senate compromise with the House
• 4. Final Approval Congress sends to President
  for
• approval.

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Deficit and Debt

• Debt Level
• 1900 - 1.3 billion
• 1929 - 16.9 billion
• 2002 - 6.2 trillion
• 2005 - 7.9 trillion
• 2008 - 9.4 trillion
• Thats 9,398,291,310,160.15
• Your Share 30,947.90
• Increases by an average of 1.65 billion / day
• Financing Deficits
• Government bonds
• Impact

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2005 Federal Budget
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2025 Projected Federal Budget
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HmmEssay Question?

• Explain the difference between the deficit and
  the national debt. What is the current level of
  the national debt, and how are deficits financed?
  Discuss the possible impact of the rising
  national debt on future generations, and suggest
  steps that can be taken now to mitigate those
  effects.