The federal budget is critical to the function of our government and fixing the debt. Our resources show you what’s involved and what’s at stake.
The federal budget is composed of various types of government spending and revenue. When spending exceeds revenue, we get a deficit, which adds to the national debt. If we don't change course, annual deficits will drive the debt to levels never seen before.
The annual appropriations process determines how one type of government spending, known as discretionary spending, is managed for a given year. But the vast majority of spending is not subject to this process and is essentially on autopilot. That spending will drive the growth of overall spending, and the debt, if not addressed.
Revenue is the other side of the budget equation. Federal income taxes are the largest source of revenue. About $1.6 trillion in revenue is lost annually due to the various breaks and loopholes, which some refer to as tax expenditures since they are essentially spending through the tax code. Comprehensive tax reform can play an important role in fixing the debt.