Budgeting and Tax Policy

A country spends, raises, and regulates money in accordance with its values. In all, the federal government’s budget for 2016 was $3.8 trillion. This chapter has provided a brief overview of some of the budget’s key areas of expenditure, and thus some insight into modern American values. But these values are only part of the budgeting story. Policymakers make considerable effort to ensure that long-term priorities are protected from the heat of the election cycle and short-term changes in public opinion. The decision to put some policymaking functions out of the reach of Congress also reflects economic philosophies about the best ways to grow, stimulate, and maintain the economy. The role of politics in drafting the annual budget is indeed large (Figure), but we should not underestimate the challenges elected officials face as a result of decisions made in the past.

An image of seven people seated around a room. Some are talking to each other. Some are examining papers.
Strategists discuss the budget in the Roosevelt Room of the White House in 2009.