The budget for the fiscal year 2019 was based on these pillars: the safety and security of Americans, a stronger and healthier economy, enhanced quality of life, and a commitment to a better future. Creating the national budget for the fiscal year is a process that begins with the presidential budget.
The national spending is organized into three primary categories and is typically budgeted from the first day of the month of October until the end of September of the following year. The federal budget for the 2019 fiscal year is at $4.407 trillion.
The three primary national spending categories are mandatory spending, discretionary spending and interest on the total national debt.
Mandatory spending includes government-funded programs such as Medicare, Medicaid and Social Security. These are necessary programs, but they are not self-sustaining. Medicare is currently underfunded, relying on general tax dollars to make up the difference. Only a portion of the $625-billion Medicare budget is covered by Medicare taxes.
Social Security takes up the largest portion of the mandatory spending dollars. In fact, Social Security demands $1.046 trillion of the total $2.739-trillion mandatory spending budget. It also includes programs like unemployment benefits and welfare.
Mandatory spending helps provide for individuals who need help in some capacity, but it also reduces the amount the government can spend on discretionary programs.
More than half of the $1.203-trillion discretionary spending budget is for defense-related departments, such as military spending and Veteran's Affairs. This also includes spending for the Department of Defense and Homeland Security.
The United States allocates more money to military spending than the next 10 countries combined. The remaining budget must cover all other domestic programs, which include funding for education, health and human services, the Department of Energy, and many more.
One of the ways to increase funding for other discretionary programs involves cuts to mandatory programs or raising taxes, both of which are considered politically controversial.
Interest on the national debt
The government must pay interest on its total outstanding debt each year. These interest payments are the fourth largest budget items in the fiscal budget. However, the intragovernmental debt is not used to calculate interest payments since this is really money the government owes itself. These are funds the government borrowed from the Social Security Trust Fund along with other federal agencies.
Interest on the national deficit for the 2019 fiscal year is expected to reach $363 billion, consuming 8.2 percent of the federal fiscal budget. Interest payments are calculated based on what the U.S. government owes foreign central banks as well as individuals and businesses.
Calculating interest on this debt is complex. These interest payments are usually one of the largest annual budget items. They can rise and fall as a percentage of the federal budget for the fiscal year. They have steadily increased since 2009, and the upsurge is expected to continue.
The congressional fiscal budgeting process
Congress created the national budget process and is largely responsible for its execution. First, the presidential budget for the following fiscal year is submitted to Congress on or before the first Monday of February. Congress typically responds with spending appropriation bills sent to the president by the end of June.
The president has 10 days to reply, and the final budget must be approved by the end of September. In February of this year, Congress ignored the president's budget and approved a two-year discretionary spending bill. Appropriation bills that outline spending by department will be released next year.
The U.S. Federal budget affects everyone. Up to Us is a program that focuses specifically on helping the students and young professionals of today take action to strengthen the financial security of the country.