FREE ESSAY ON BACKGROUD OF THE UNITED STATES BUDGET

BACKGROUD OF THE UNITED STATES BUDGET

Background of the United States Budget
This coming year, in 1999, our Federal Government will spend over $1.7 trillion. They use
this money to support causes that aid to the betterment of society, the health of the
people, research for better and new materials, education, and one of the biggest, the
military. Each year, by the first Monday if February, the President of the United States
presents to Congress the proposed Federal Budget for the next fiscal year. Each fiscal
year starts on October 1st of the preceding year. This budget is gathered and created by
the White House's Office of Management and Budget (OMB). They create the budget based on
requests made by individual agencies and from consulting with the President's senior
advisors and officials from cabinet departments and other agencies. After receiving the
proposed budget from the President, the congress meets to overlook it.
During the process of overlooking the budget, the congress, with the President, decide
how much they are going to spend to each activity that the government endorses. Some
examples are public libraries, police forces, education, national zoo's, the CIA, FBI and
other organizations. Once they have a concrete estimate of how much money the government
will spend in the next year, they then decide how much they are going to have to tax the
American public in order to cover all of the proposed expenditures fo the budget. There
is a fine line that the congress has to worry about. If they tax too much, the people in
the U.S. will not have enough money to spend on products, therefore hurting our economy.
On the other hand, if the government does not tax enough to cover all of the
expenditures, then they have to take our loans to cover all that they are paying for.
When this happens, it is called a deficit.
The deficit of the United States really made news in the late 80's and early 90's when
the deficit climbed dramatically. The government during this time, under the leadership
of President Ronald Reagan, spent a huge amount more then the government was bringing in.
As of 1997, the Gross Federal Debt had accumulated to $5.37 trillion dollars and is
expected to keep rising to a projected debt of $6.336 trillion by the year 2003. Finally
although, the project budget for 1999 shows a budget surplus of $10 billion. 
Many of the deficits occur because of mandatory spending. Mandatory Spending is required
by permanent laws that are directed to help the public. Social Security, Medicare,
Medicaid, Veteran's Benefits, Food Stamps, and interest on the National Debt are all
examples of what the government is required by law to pay for each year. Mandatory
Spending accounts for 67 percent of all government spending. The remaining 33 percent is
considered Discretionary Spending. This money is really what the President and his
officials have control over to appropriate towards causes which they seems worthy, such
as the Coast Guard, FBI, CIA, housing and education, space exploration, highway
construction, foreign aid, and of course, defense.
The money used by the Government comes from various types of taxation. Most of what the
government collects comes from individual income taxes. In the year 1997, the Internal
Revenue Service collected 737 billion dollars from the people of the United States. This
amounted to 46 percent of the total income for the U.S. and is equal to about 9 percent
of the Gross Domestic Product (GDP). Social Insurance payroll taxes were the second
largest collection of income in 1997, amounting to around 539 billion dollars. The rest
are described in the pie chart below.
The Defense Department
The Budget and the Effect of the Economy
Last year, in 1997, the United States government spent 270 billion dollars on National
Defense, or fifteen percent of the total government spending that year. 258 billion
dollars of this went to strictly the Military. Next year for 1999, the budget makers are
predicting a minute drop in funding to 267 billion. This money goes to the payment of
salaries for troops, transportation of the troops, the weapons they use, the actual costs
of war, and the testing and development of new weapons and tactics, as well as other
obvious expenditures (and many other secret projects which are kept classified). Because
of the money we delegate to the military, it is the finest, most talented, and
best-equipped military force in the world. 
The money the government allows the Defense Department to spend is not considered to be
gone. The majority of the money the Military spends is on products made by U.S.
companies. Each depends upon each other to exist. Without the U.S. companies making our
weapons and materials, our military would not be anything that it is today. Without the
military funding, many companies would not even exist and the technology of today would
be much less than it has turned out to be. This type of spending allows the economy to
prosper because we are keeping the circulation of money within our own country. We are
making ourselves richer by buying products from ourselves.
The struggle of businesses to obtain government military contracts is a tough one. Each
year, a published list of the top 100 companies shows the winners of contracts and the
bounty of which they were awarded. These companies, because of these contracts, have
become some of the largest in the nation, if not the world. Each one of these companies
contributes a major aspect that puts our defense department a step above the rest. The
chart below shows the top ten companies and the amount the Defense Department paid to
them in 1996 and 1997.
The companies above all have a large part to do with our military's success. Lockheed
Martin Corporation makes various fighter planes and missile systems. The Boeing Company
contributes many other fighter planes, defense systems, electronics, and missile systems.
Northrop Grumman Corp. follows Lockheed and Boeing in the aeronautics portion of our
military. General Dynamics Corp. works mostly with Naval components. They produce Trident
submarines, and Destroyers for use in the water. Finally, the fifth highest contract goes
to Raytheon, which is a company who develops various navigation systems for both infantry
vehicles and missiles. Boeing and Lockheed, now one company, are the largest contract, by
far, of the American military. 
Even with the amount the military spends each year and the percent of our taxes that go
to the military, is it enough? As of now, the United States is the owner of the finest,
strongest force in the world. Recently, in order to save money and diminish our budget
deficit each year, the government has slowly been declining the defense budget. For the
fourteenth strait year, the government has taken away the resources the government needs
to maintain their forces as the strongest. Our active-duty force has diminished from 2.2
million soldiers to 1.4 million. Yet, even as this happens, our forces are being called
upon to do more all over the world. 
Even though our defense budget is less than it has been, it is just reflecting the fact
that we are not in the Cold War anymore. Also, it displays the fact that we finally have
enough weapons that we do not have to make more to be secure. Despite this even, after a
(Time article)