FEDERAL BUDGET
An annual effort to balance federal spending in
such areas as forestry, education, space technology,
and the national defense, with revenue, which the
United States collects largely through federal taxes.
Of the three branches of the U.S. government,
Congress has the power to determine federal
spending, pursuant to Article I, Section 9, of the
U.S. Constitution, which states, “No money shall
be drawn from the Treasury, but in Consequence
of Appropriations made by Law.” The drafters of
the Constitution sought to secure the federal
SPENDING POWER with legislators rather than the
president, to keep separate the powers of purse
and sword. In The Federalist No. 58, JAMES MADI-
SON wrote, “This power of the purse may, in fact,
be regarded as the most complete and effectual
weapon with which any constitution can arm the
immediate representatives of the people.”
Still, the Constitution reserved for the presi-
dent some role in legislative decisions regarding
federal spending. The president may recom-
mend budget allowances for what he considers
“necessary and expedient,” and if Congress does
not heed these recommendations, the president
may assert his qualified VETO power. But the
ultimate determinations of federal expenditures
belong to Congress.
When the federal government spends more
money than it collects in a given year, a deficit
occurs. By the mid-1990s, annual budget deficits
were exceeding $200 billion, which alarmed the
public and caused debate over how to balance
the federal budget. President WILLIAM JEFFER-
SON CLINTON was successful in the latter years
of his administration to provide a budget sur-
plus, which reduced the national debt (the total
amount the government owes after borrowing
from the population, from foreign governments,
or from international institutions) by several
billion dollars. In 2000, Clinton announced a
record $230 billion surplus, which exceeded the
previous record surplus of $122.7 million set in
1999. However, the deficit returned under Presi-
dent GEORGE W. BUSH. In 2003, Bush announced
an estimated $304 billion deficit, which estab-
lished yet another record. He anticipated a
deficit for 2004 of $307 billion.
To encourage better communication and
cooperation between the president and Con-
gress on matters concerning the federal budget,
Congress has enacted laws formalizing the
