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Read this essay to learn about the budgetary procedure followed in U.S.A.
In the United States there was no coherent executive budget before 1921. The various departments prepared their estimates, sent them to the department of Treasury which consolidated them and sent them to the Congress without any scrutiny or co-ordination.
The consideration of the estimates by the Congress was not well-organised. The whole system was in a chaotic state. It was the Budget and Accounting Act 1921 which placed the budgetary process in the U S.A. on a unified and coordinated basis. It set up a Bureau of the Budget for the purpose of preparation of the Budget.
The budget procedure is now as follows:
The fiscal year in the U.S.A. begins on July 1, and ends on June 30. During the summer, the Bureau of Budget requests the various standing agencies to submit their estimates of appropriation for the ensuing financial year. The Bureau receives these estimates by the middle of September.
The estimates forwarded by the agencies are examined by the Bureau. The Bureau calls the official representatives of the various agencies, gives them a hearing and after such revision and review, as it thinks necessary, produces a unified and coherent budget. This budget is transferred by the President as his executive budget. The President submits this budget to the Congress usually in the first week of January.
When the House of Representatives has received the Budget from the President, it is referred to the Committee on Appropriations. There is no budget speech, because on account of separation of powers, the American executive is not represented in the Congress The Appropriation Committee refers the various groups of items to several committees for detailed study and public hearings.
These sub-committees are organized on departmental lines. They work on the figures and if necessary call the various executive officials to explain their respective needs. Those opposing an appropriation may also be heard. When the sub-committees have finished their work each sub-committee drafts its own bill and reports to the appropriation committee.
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The latter examines these bills and co-ordinates them in case they conflict with one another in the matter of policy or programme. Thereafter, it sends the various appropriation bills to the House. The House debates the bills and can make any changes in the estimates, but this is rarely done. The bills go through without a great deal of change.
After the House has passed the Appropriation Bills, they are sent to the Senate. In the Senate also they are referred to a Committee on Appropriations. The Senate Committee examines these bills and may propose any changes.
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The Senate considers the reported bills. It the Senate has made any changes, the appropriations are sent back to the House for concurrence, failing which they are referred to a Conference Committee consisting of representatives from both the Senate and the House of Representatives.
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The revenue measures as prepared by the Bureau are considered by the Ways and Means Committee in the House. The House considers the bill reported by the Committee and after passing it sends it to the Senate where it has to pass through the Senate Finance Committee and thereafter the whole Senate.
The differences are resolved in the Conference Committee. The execution of the budget is looked after by the General Accounting Office headed by the Comptroller-General who enjoys freedom from the executive control.
To conclude, it may be said that the budgetary process in the U.S.A. is largely disintegrated and un-coordinated. Instead of a single Appropriation Bill and a single Finance bill, there are several such bills. The separate bills make it difficult for the Congress to view the year’s programme as a whole. Secondly, any member of the Congress may propose an addition to expenditure. This is not so in India or Britain.
The Parliament can refuse or reduce a demand but it cannot increase a demand. The result is that when the budget emerges out of the hands of the Congress, very little of the original plan on which it was drawn in the Bureau of the Budget may be left in it. Thus the financial systems of U.S.A., India and Britain differ in several respects on account of their different political systems.