2011 National GatheringThe Federal Budget: Why it Matters to

Hungry and Poor People

A Brief Overview

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The Budget Timeline: How does the federal budget

process work?

1. President’s Budget Request

2. Congressional Budget Resolution

3. Appropriations

4. Debt Ceiling

5. Other Budget Bills (deficit reduction, entitlement programs, taxes, balanced budget amendment)

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Budget Basics: Where do our federal tax dollars go?

• Programs for low-income families are a fraction of government spending.

• They have played virtually no role in creating our deficits.

• 1/3 of non-security discretionary spending goes to state and local governments.

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Budget Myths and Realities:

• Myth: Our deficits don’t matter.

• Reality: The long-term fiscal outlook is of serious concern.

• Myth: Our current deficits are so out of control that we must address them immediately with painful spending cuts.

• Reality: Our immediate focus must be on strengthening the economy and creating jobs.

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Budget Myths and Realities:

• Myth: Government spending is out of control.

• Reality: The 2001 and 2003 tax cuts, the wars in Afghanistan and Iraq, and the recession itself are why we see high deficits today.

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Budget Myths and Realities:

• Myth: Government spending is out of control.

• Reality: The real threat is the long-term structural imbalance between spending and revenues. – Rising health care costs– Aging population– Insufficient revenues

Center on Budget and Policy Priorities

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Reducing Deficits and Poverty:We Don’t Need to Choose

• We need to address deficits.

• Ending poverty and hunger requires government action.

• Anti-poverty programs have had a powerful impact.

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Cap on Overall Federal Spending

• Limits all federal spending (share of the economy)

• Keeps programs from growing

• Entitlement programs structured to grow when there’s more need

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Balanced Budget Amendment

• Requires the government to balance the budget every year.

• Government can’t run deficits during recessions.

• Supermajority requirement to waive.

• Most states have BBAs

• Would force harmful cuts in low-income programs—especially during recessions

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Triggers

• Sets a debt target

• Automatic across-the-board cuts and/or tax increases if targets missed

• Intended to force compromise in Congress

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Circle of Protection

• Create a circle of protection around programs for hungry and poor people in the United States and abroad.

• Historical precedent over the past 30 years.

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