1939: Budget Of The United States

The Budget and Accounting Act of 1921 provided the United States with a national budget system and created a Bureau of the Budget to prepare for the President the Budget of the United States Government. The Act directs the President to submit to Congress on the first day of each regular session a budget which shall set forth in summary and in detail the expenditures and receipts of the government for the fiscal year just completed, estimated expenditures and receipts for the current and for the ensuing fiscal years, and balanced statements showing the condition of the Treasury at the end of each of these periods. Information regarding the indebtedness and financial condition of the government and recommendations for new taxes and loans are also included in the budget document.

The Budget of the United States is the central instrument of financial control over the program of work which the Administration proposes to carry out in a given year. It involves a never-ending process of executing the program for the current year and developing the plan for the following year.

The Executive Departments and Agencies are required every year to submit to the Bureau of the Budget by September 15 detailed estimates of their expenditures for the next fiscal year starting on the first of the following July. The Bureau then conducts intensive hearings at which the departments and agencies defend and justify their estimated expenditures. The departmental estimates may be revised, reduced, or increased by the Bureau. The President, in conference with the Director of the Bureau of the Budget, indicates points at which any changes in the estimates should be made to conform with his general fiscal program. Estimates of the judicial and of the legislative branch are not subject to revision by the Bureau of the Budget but are included in the Budget document. The Director of the Bureau of the Budget may, however, make recommendations with respect to the estimates of the inferior courts.

The appropriation committees of the Senate and House of Representatives hold hearings on the estimates preparatory to consideration on the floor by both houses. Appropriation measures passed by Congress may be approved or vetoed in toto by the President. Hence, the financial program of the Federal government is contained in the appropriation and revenue acts passed by Congress and approved by the President. Estimates of supplemental or deficiency appropriations for meeting contingencies arising subsequently to the submission of the regular budget may be transmitted by the President and acted upon by Congress.

The various departments and agencies are then required to submit their plans of expenditures in schedules of monthly apportionments which the Bureau of the Budget may waive or modify. No expenditure in excess of the monthly apportionment may be made by any department or agency without the approval of the Bureau. The final audit of expenditures is performed by the General Accounting Office.

The regrouping of agencies carried out under the Reorganization Act of 1939 transferred the Bureau of the Budget from the Treasury Department to the Executive Office of the President wherein are lodged the five agencies principally concerned with overall management and central direction of the executive branch of the Federal government. On Sept. 8, 1939, the President issued an Executive Order which specifically defined the functions and duties of the Bureau of the Budget. Besides assisting the President in the preparation and execution of the Budget and the formulation of the fiscal program of the government, the Bureau of the Budget conducts research in the development of improved plans of administrative management, develops reorganization proposals where they would be in the interest of economical and efficient administration, advises with the departments with respect to improved administrative organization and policy, clears and coordinates departmental advice on proposed legislation, assists in preparing proposed Executive Orders and Proclamations, coordinates Federal statistical services, and informs the President of the current and future work programs of the governmental agencies.

The Bureau of the Budget is thus charged with responsibility for assisting the President in the formulation of the United States Budget and the fiscal program of the Federal government and with advising him as to improved and economical administration of the executive branch of the Federal government. See also BANKS AND BANKING; BUSINESS; PUBLIC FINANCE; UNITED STATES: Budgetary.