Budget Analysis
The budget of the United States is a very important document that outlines the various areas of expenditure and the probable sources of financing. This document originates from the federal government that is headed by the President of the United States of America. The budget estimates are normally compiled in one document and presented to the U.S Congress. The President writes a letter called the “Budget Message of the President” that acts as a cover page to the whole budget. This message aims at conveying to the Congress the important aspects of the budget that the president deems important. The paper that follows will analyse the president’s budget message, other budget documents, and the budget of the Department of Education and the summary of tables.
Analysis of the Budget Message of the President
This message was issued by President Barrack Obama. In the past year, the country faced very many challenges. The country was deep in debt, families were hard hit by recession. Businesses and companies had to lay off some of their employees. Over 7 million Americans were jobless. Some important sectors of the economy faced dissolution. America’s auto sector almost went into dissolution. Homeowners suffered from the plummeted value of their properties. The unemployed could not afford decent healthcare services. Recession had crippled most parts of the country’s economy.
Looking forward, the current administration has to champion the efforts meant to lead the country out of recession into recovery then onwards to prosperity. However, this is no easy task. The Obama Administration must institute stringent measures to prevent depression and direct the country towards recovery. Some of the challenges facing the administration include an education system that is not relevant to the needs of the 21st Century, a healthcare system that does not care for the middle class, and a taxation system that favours the rich and mighty, and high levels of unemployment. The prevailing economic condition can be said to be one that is on the recovery path. Luckily, the Obama administration plans to institute measure that will prevent the country from going into the great depression.
Analysis of other Documents that Precede the Departmental Budgets
This section will give a brief analysis of a number of documents that precede the departmental budgets
- Rescuing the economy
After taking office, President Obama realised that the economy needed urgent help. The recession that had hit the country in the previous years was still rearing its ugly after effects. The Obama Administration thought it prudent to jumpstart the process of economic recovery by signing a comprehensive bill; the American Recovery and Reinvestment Act into law barely 28 days after taking office. This Act aimed at transforming the American Economy to compete in the 21st Century. This Act had three parts that took care of the small businesses via tax cuts, the underemployed via extended emergency relief fund, and the investment sector for job creation.
- Reviving job creation and laying a new foundation for economic growth
The economy has been rescued from another great depression. Now the country is on its recovery path. However, countless people are still jobless. Unemployment is seen not only to affect the unemployed individual but also his family. Children whose parents were unemployed had to witness their parents struggle to take them to school. The overall school performance of these children was dismal compared to that of their counterparts whose parents were employed. To remedy this situation, Obama’s administration embarked on spurring job creation by encouraging private investors to set up shop, reducing capital gains on small businesses to encourage them to hire more workers, among others.
- Restoring Responsibility
In order to prevent the gains of recovery being lost in another recession, there is need to institute measures that will keep Washington on check. The surest way to ensure that Washington is put in check is by instituting measures that will safeguard the independence of Washington. In his first full day in office, President Barrack Obama issued an executive order prohibiting employees working in the executive branch form accepting gifts from Lobbyists. Additionally, the president directed that all government appointments be based on meritocracy and not political connections. Other measures included the freezing of pays and bonuses of senior political appointees, cut all the wastages of contracting among other measures.
Department of Education
From the President’s budget, Education happens to be one of those sectors that have been given priority. The President believes that both the elementary and secondary levels of education require reforms so that they can deliver curricula that will prepare the students for the jobs of the future. Some of the major areas of funding include the Race to the Top program, Increase in the number of principals and effective teachers, reforms of elementary and secondary school funding, expanded support for promise neighbourhoods, among others.
The mission statement for the section bearing the presidential budget on education would read something like this: To improve the education sector such that the students are taught skills meant for the jobs of the future. The Key strategic goal is to ensure cooperation of all stakeholders to actualize the mission statement. This goal will only be met if funding for the proposed reforms is approved by Congress.
The Department of Education budget reveals that the actual total outlay for 2009 stood at $32,409,000. The estimated outlays for the year 2010 and 2011 stood at $56,024,000 and $71,479,000 respectively. From 2009 to 2010 there was a 17% increase and from 2010 to 2011 there was an increase of 13% in outlays. These outlays represent the amount of money that needs to be expended to finance the various items that require funding.
Summary tables
Budget Totals in Billions of Dollars
| Actual 2009 (in billions) | Estimate 2010 (in billions) | Estimate 2011 (in billions) | |
| Receipts | 2,105 | 2,165 | 2.567 |
| Outlays | 3,518 | 3,721 | 3,834 |
| Deficit | (1,413) | (1,556) | (1,267) |
| Debt held by the public | 7,547 | 9,298 | 10,498 |
| Debt Net of Financial Assets | 6,647 | 8,164 | 9,418 |
| Gross Domestic Product (GDP) | 14,237 | 14,624 | 15,299 |
Budget Totals as a Percentage of GDP
| Actual 2009 (%) | Estimate 2010 (%) | Estimate 2011 (%) | |
| Receipts | 14.8 | 14.8 | 16.8 |
| Outlays | 24.7 | 25.4 | 25.1 |
| Deficit | (9.9) | (10.6) | (8.3) |
| Debt held by the public | 53.0 | 63.6 | 68.6 |
| Debt Net of Financial Assets | 46.7 | 55.8 | 61.6 |
The Line items in the Department of Education Financial Information
| Item | Actual 2009 | Estimate 2010 | Estimate 2011 |
| Legislative Proposal, elementary and Secondary Education Act | 22,413 | 22,266 | 25,288 |
| Special Education State Grants | 12,319
|
12,319 | 12,569 |
| Career and Technical Education Programs | 1,272 | 1,272 | 1,272 |
| Adult Education State Grants | 554 | 628 | 612 |
| Workforce Innovation Fund | – | – | 60 |
| Federal Student Aid | 1,737 | 1,737 | 1,737 |
| Higher education | 2,012 | 2,124 | 2,153 |
| Student Aid Administration | 753 | 870 | 1,170 |
| Institute of Education Sciences | 617 | 659 | 739 |
| All other | 5,173
|
5,241 | 4,432 |
Analysis of US funding levels and its Department of Education
The budget of the Federal Government draws its funding from different sources. Some sources of funding include taxpayers money; that is money collected from different types of taxes levied on the citizens of the US. Another source of funding is from loans that are borrowed from different sources. The US Congress must scrutinize the annual budget presented to it before approving it. The Congress is tasked with the role of ensuring that public finance is fully accounted for. In the budget approval process, the Congress acts as a watchdog to prevent overspending on the part of the Federal Government. A comparison of the receipts against outlays reveals that the budget ends up with a deficit.
The Department of Education Budget is comprehensive and ensures that all the major list items are presented and they are apportioned sufficient funding. The Government’s commitment to reforming the education sector saw it apportion much of its resources to the education sector. Most of the funds dedicated to the Department of Education aimed at boosting programs such as the school turnaround GEAR Up among other programs
Conclusion
The US budget is a perfect ensample of a thought-out budget. Primarily, a budget contains estimates, which are supposed to be presented to an oversight authority that will either pass it in its entirety or recommend some amendments to it. The Budget of the United States of America compares the estimates of the preceding years with the actual expenditures of a previous year. This helps in ensuring that there is no great departure from what is considered normal levels of expenditure. Like any other national or government budget, the budget of U.S government is centered on key areas that include healthcare and education.
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