In this module, you’ll play the role of a freshman lawmaker in the U.S. House of Representatives trying to serve your constituents and the long-term goals of the United States. Along the way, you’ll learn about the federal budget process and how federal government initiatives and programs are funded. A government budget will fall into one of three conditions based on the difference between how much the government collects in taxes and fees and how much the government spends. The budget will be balanced, have a budget surplus, or have a budget deficit. If the sum of the accumulation of budget surpluses and deficits from year to year is negative, the result is national debt. As you can imagine, there are costs and benefits to lawmakers’ budget decisions. The budget creation process is complex. This module simulates the process in a general way, using actual names for the various funding categories, but it does not include all the details you might see in an official budget.

After completing this lesson, you will be able to

• define the following terms:
  • appropriations,
  • balanced budget,
  • budget,
  • budget deficit,
  • budget surplus,
  • discretionary spending,
  • expenditure,
  • government collections,
  • mandatory spending,
  • national debt, and
  • transfer payments;
• explain the relationship between a budget deficit and the national debt;
• explain the difference between mandatory and discretionary spending;
• identify the key participants involved in the federal budget-making process;
• identify types of transfer payments; and
• predict potential economic and political effects of changes in a given budget.