Federal budget decisions express Congress's priorities among competing aims and reinforce Congress's influence on federal policies. These federal interventions have helped stimulate economic activity and reduce dislocation in financial markets, but may also expose the federal government to substantial credit risks. Concern remains about the federal government's long-term fiscal situation. The rising costs of federal health care programs and the effects of the baby boom generation's retirement present serious challenges to fiscal stability. Operating these programs in their current form may pass on substantial economic burdens to future generations. Overview

		Revenues, Outlays, and Deficits for FY2008

Over the past decade, federal spending has accounted for approximately a fifth of the economy (as measured by gross domestic product—GDP) and federal revenues have ranged between just under a sixth and just over a fifth of GDP, as shown in Figure 1 . In FY2008, the U.S. government collected $2.5 trillion in revenue and spent almost $3.0 trillion. Outlays as a proportion of GDP rose from 18.4% in FY2000 to 21.0% of GDP in FY2008. Federal revenues as a proportion of GDP reached a post-WWII peak of 20.9% in FY2000 and then fell to 16.3% of GDP in FY2004 before rising to 17.7% of GDP in FY2008. Deficit projections for the next several fiscal years are high relative to historic standards. The FY2009 total deficit was $1,417 billion (10.0% of GDP), the largest in proportion to GDP since FY1946. Federal spending tied to means-tested social programs has been increasing due to rising unemployment, while federal revenues will likely fall as individuals' incomes drop and corporate profits sink. The ultimate costs of these responses will depend on how the economy performs, how well firms with federal credit guarantees weather future financial shocks, and whether or not the government receives positive returns on its asset purchases. 38 , P.L. According to OMB, this should be the last war-related supplemental. 111-32 ) on June 24. 1007, P.L. Budget Fiscal Year 2010

The Obama Administration released an outline of the FY2010 budget on February 26, 2009, the full budget proposal on May 7 and 11, 2009, and the Mid-Session Review on August 25, 2009. The Conference Report on the budget resolution ( S.Con.Res. 13 ) was agreed to on April 29, 2009. As of July 30, 2009, the House had passed all 12 regular appropriations acts. The Legislative Branch appropriations bill ( P.L. 111-68 ), enacted October 1, 2009, contained a continuing resolution to extend funding to the end of the month. On October 30, 2009, the Interior-Environment appropriations bill ( P.L. 111-88 ), which included a second continuing resolution to extend funding until December 18, became the fifth regular appropriations bill to be signed into law. Five of the remaining regular appropriations bills (Commerce-Justice-Science; Financial Services; Labor-HHS; Military Construction-VA; and State-Foreign Operations) were folded into the Transportation-HUD bill, creating an omnibus spending measure ( H.R. The President signed the bill on December 16, which became P.L. 111-117 . The defense bill ( H.R. 111-118 , finishing the regular appropriations process for FY2010. The final deficit projection, the Proposed Budget, illustrates the impact on the budget outlook if all of the policies of the Obama Administration are implemented. The main policy initiatives he emphasized include significant spending and investment targeted toward health care reform, clean energy, and education. A budget resolution conference agreement was filed on April 27, 2009, and included $2,322 billion in revenues and $3,555 billion in outlays for FY2010, resulting in a projected deficit of $1,233 billion.
The federal budget helps implement Congress's "power of the purse" by expressing Congress's spending priorities among competing aims. The Obama Administration's FY2010 budget described several important changes, including increased funding for certain domestic priorities, major programmatic reforms, and proposed spending cuts in some programs. The current economic climate continues to pose major challenges to policymakers. Federal spending tied to means-tested social programs rose due to rising unemployment, while federal revenues are projected to fall as individuals' incomes have dropped and corporate profits have sunk. Federal deficits, according to OMB and CBO projections, will likely be high relative to historic norms over the next few years, as spending rises and revenues fall relative to previously anticipated levels. FY2009 outlays rose to $3,522 billion (24.9% of GDP) and revenues fell to $2,105 billion (14.7% of GDP), yielding a total federal deficit of $1,417 billion (10.0% of GDP).
Over the past decade, federal spending has accounted for approximately a fifth of the economy (as measured by gross domestic product—GDP) and federal revenues have ranged between just under a sixth to just over a fifth of GDP. In FY2008, the U.S. government collected $2.5 trillion in revenue and spent almost $3.0 trillion. Outlays as a proportion of GDP rose from 18.4% in FY2000 to 21.0% of GDP in FY2008. Federal revenues as a proportion of GDP reached a post-WWII peak of 20.9% in FY2000 and then fell to 16.3% of GDP in FY2004 before rising slightly to 17.7% of GDP in FY2008.
The Obama Administration released the FY2010 budget outline on February 26, 2009, followed by the remaining budget documents on May 7 and 11, 2009. Major policy initiatives included new spending targeted toward health care reform, clean energy, and education. The budget resolution (S.Con.Res. 13), which followed most of the President's initiatives, was agreed to on April 29, 2009. It specified $2,322 billion in revenues and $3,555 billion in outlays, resulting in a projected FY2010 deficit of $1,233 billion. A FY2009 war funding supplemental (P.L. 111-32) was enacted in June 2009. The House passed all 12 regular FY2010 appropriations acts by the end of July 2009. The Legislative Branch appropriations bill (P.L. 111-68) enacted October 1 contained a continuing resolution to extend funding to the end of the month. On October 30, the Interior-Environment bill (P.L. 111-88), which included a second continuing resolution to extend funding until December 18, was enacted. Five remaining bills (Commerce-Justice-Science; Financial Services; Labor-HHS; Military Construction-VA; and State-Foreign Operations) were folded into the Transportation-HUD bill, creating an omnibus spending measure (H.R. 3288; P.L. 111-117) that was enacted on December 16. Finally, the defense bill (H.R. 3326; P.L. 111-118), was signed into law on December 19, finishing the regular appropriations process for FY2010.
The federal government made significant financial interventions aimed at alleviating economic recession. The final costs of federal responses to this turmoil will depend on the pace of economic recovery, how well firms with federal credit guarantees weather future financial shocks, and how much the government loses or gains on its asset purchases. Federal loans or loan guarantee programs may help provide liquidity to distressed financial markets and stimulate economic activity, but may also expose the federal government to substantial credit risks. While many economists concurred on the need for short-term fiscal stimulus despite adverse impact on the deficit, concerns remain about the federal government's long-term fiscal situation. Rising costs of federal health care programs and Baby Boomer retirements present serious challenges to fiscal stability. Operating these programs in their current form may pass on substantial economic burdens to future generations. This report will not be updated.