Public Budgeting

Public budgeting is an area of public administration and is characterized according to the approach, function, formation and type. There are various view points of public budgeting, for a politician; it is a political event, which is carried out for some political advantage in the ongoing political scenario. For an economist, a budget is a way of allocating resources with respect to the associated opportunity cost, where such allocation takes away the resources from one consumer to the other.

Hence, an economist’s role is to provide suitable information to the decision makers for allocation of resources. From an accountant’s perspective, accountability cost in budgeting is the main area of focus, where the analysis is done on the difference between actual cost and the budgeted cost. Public budgeting can be defined as a policy tool which is used by the authority to explain policy implementation for the public. There were various areas where the public budget led emphasis for the socio-economical development of a nation like, health, education, infrastructure, etc.

The public budget of United States is comprised of the federal budget along with the state, local and the agency budgets. We shall now discuss these forms of budgets with respect to their similarities and differences. Federal Budget The Federal budget of US is funding level recommendation that is being proposed by President to the US Congress. The federal budget is dependent on the congressional decisions, which are governed according to certain rules and regulations. There is a long procedure for the sanction of the federal budget after the President’s proposal.

The budget committee is responsible in allocating and setting limits for the cash expenses for House and Senate committees along with appropriation subcommittees. The federal budget is made according to the revenues generated in each fiscal year and then the outlays are planned according to the forecasted need of the nation. The calculation of the federal budget is done mainly on the cash basis. After the transactions are made, the revenues and the outlays were recognized in the budget. Hence, in the federal budget, the reflection of the long-term cost structures of programs on medical and social security is missing.

There are certain federal credit programs whose costs were determined on the basis of net present value and are done under Federal Credit Reform Act of 1990. There are various government agencies which provide the budget data like the Government Accountability Office (GAO), Congressional Budget Office, the Office of Management and Budget (OMB) and the US Treasury Department. The federal budget contains President’s message along with his priorities and the overviews of the budget by different government agencies. It also contains the analytical perspective of different subject areas, where the budget projects to lead emphasis.

The budget also contains analysis on economical and accounting perspective of different specific subject areas. The budget main focus is on receipts and expenditures hence, all analysis are done keeping the revenue factor in mind and importance is given to subject areas according to the President’s priorities. The budget provides all the information on receipts, spending, borrowing and debt structure of the government. The budget is sanctioned after considering all the necessary factors of revenues and expenditure as per the prior requirement of the nation from the President’s perspective.

The federal budget leads the foundation of the national expenditure and then the collected cash is allocated to the state government, the local government and the other government agencies for their yearly proceedings. For the systematic yearly proceedings, the state government, the local government and the other government agencies also makes budget. We shall now discuss these budget structure and the differences and similarities they possess. (Budget of the US Government – Fiscal Year 2011, 2010; The New York Times, 2010)