What good is the federal budget anyway?

The Capitol building.

The Senate hasn’t passed a budget for four years. And yet, we still muddled along. Which got us to thinking: Do we really need Congress to pass a budget?

For much of our history, presidents were totally in charge of the budget process. Congress didn’t have a formal role until the 1970s, after some funding tussles with President Nixon.

“Budgets weren’t required of Congress until 1976," explains Stan Collender, a budget expert at Qorvis Communications. "So for the first 200 years or so of American history, there were no annual budgets produced by Congress. And you know what? We did pretty well.”

It was kind of like many American households. My husband and I don’t have a budget. We know roughly what we take in and what we’re spending, and we have a vague dread of the college tuition bills we’ll face in about 15 years. But we don’t do the numbers.

But these days, you can’t compare a household budget to the government’s spending plan, according to economist Paul Van de Water of the Center on Budget and Policy Priorities. He says, for one, our individual spending decisions won’t tank the economy.

“If I reduce my spending, it’s not causing any bad results for the economy at large," he says. "For the federal government, that’s not the case.”

Linda Bilmes teaches public finance at Harvard. She says, without a budget, Congress hasn’t been able to  get the big picture of how much money it’s taking in -- and spending.

“And that’s contributing to many of the problems that we have including the deficit and duplication of programs and all the other things that people are so familiar with,” she says.

Bilmes says the budget process may need fixing. But we shouldn’t throw out the concept of a congressional budget altogether.


Think you can balance the federal budget? Give it a try with our Budget Hero interactive.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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