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It has been a long, confusing summer for the federal budget. First there was the debt ceiling crisis. Then came the strange, twelve-person Deficit "Supercommittee," tasked with finding a whopping $1.5 trillion in spending cuts over the next 10 years.

The Supercommittee's recommendations -- assuming they are adopted into law -- won't go into effect until fiscal year 2013, (which begins Oct. 1, 2012). Currently, we're winding down fiscal year 2011. So what about fiscal year 2012, that begins a month from now?

The Obama administration has proposed a budget for fiscal 2012 that the president says will put "the nation on a path to live within our means so we can invest in our future -- by cutting wasteful spending and making tough choices on some things we cannot afford, while keeping the investments we need to grow the economy and create jobs."

But what must be remembered about the federal budget is that not all of it is up for negotiation. Rather, federal spending -- which for 2012 was budgeted at $3.7 trillion -- consists of two types of programs. There are the "mandatory" programs, which are mandated by law depending on who qualifies for them and thus can't be trimmed in the budgeting process, and include Social Security, Medicare, and retirement benefits for veterans. Then there is discretionary spending, areas which get hard-and-fast spending limits from Congress -- things like transportation, foreign aid, and military spending. (For more information on mandatory and discretionary spending, please see this article I wrote about the budget for fiscal year 2010, which explains both types of programs in more detail).

Another Decision-Making Deadline Approaches


Discretionary programs are funded with appropriations bills, which grant the government permission to spend specific amounts of money on specific programs. The various discretionary programs are divided up among a number of appropriations bills, and passage of each is required to keep its arm of government operating.

Remember the Federal Aviation Administration shut down earlier this summer? That's what happens when lawmakers can't agree on funding levels for an agency. And it's exactly what Congress wants to avoid. But passing appropriations bills can be tricky. In this instance, Congress has until Oct. 1 to get 12 (yes, 12!) appropriations bills passed, and some hotly contested areas are in play, including defense, homeland security, labor and veterans affairs. (For a complete list, check out this cool infographic. And yes, Congress frequently misses its deadlines and passes stopgap bills to keep the lights on. But one way or another, decision time is rapidly approaching.)

Under Obama's proposal, less than 40% of the $3.7 trillion budget is directed towards discretionary programs. Fully 57% goes toward mandatory programs, with 4.6% ($240 billion) dedicated to interest payments on the nation's $14 trillion debt. (The White House provides a detailed breakdown here). But this is just the administration's proposal: Congress will invariably have a lot to say about the final product.

The idea here is that Congress will pass a budget for fiscal year 2012 in October. Then, in late December, Congress will pass the Supercommittee's longer-term recommendations, and spend the rest of fiscal year 2012 figuring out how to implement them.

It's a complicated process, but one worth taking the time to understand. As Gretchen Hamel, executive director of Public Notice, a nonprofit, nonpartisan organization dedicated to educating Americans about economic policy, explains: "The potential consequences of government spending include higher taxes, inflation -- which means a higher price for everything we want to buy -- and also the possibility that the debt that we have to carry as a nation hampers our standing in the global marketplace. If we don't face it now, future generations have to face it, and the only way to hold our members of congress accountable is if the public is engaged and has the knowledge of what is happening."

Loren Berlin is a reporter with the AOL Huffington Post Media Group. She can be reached at loren.berlin@teamaol.com, on Twitter at @LorenBerlin, and on Facebook.

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z4rock

Next Years Budget ???????? When is H Reid and Obama going to pass last years budget ???? Or the year B4

September 05 2011 at 9:11 PM Report abuse rate up rate down Reply
daballofire

The stock markets fell 5% in Europe today. They don't think Obama can right this economy or get anyone hired no matter what The Jive Turkey says on Thursday, IF you are in the markets - look out below Tuesday's Turkey poop is coming your way before Thursday.

Hes' destroyed:
your job
the equity in your home
your retirement savings
you stock values
your ability to by food and gasoline
your faith in yourself , your country, your employer, your God

and now you are completely dependent on the Messiah that you had waited for oh so long., Thank his father that he was here when we needed him. Good luck with that since he hasn't been to successful doing anything to date except forcing you to have National Health Care against your will,

September 05 2011 at 6:37 PM Report abuse +1 rate up rate down Reply
1 reply to daballofire's comment
daballofire

The tea party sounds really good right now. Can't be any worse than being a slave to Marxists posing as socialist, progressive, liberal democrats who steal you blind, blame you for it and then leave you to die in the gutter like any slave master would.

September 05 2011 at 6:40 PM Report abuse rate up rate down Reply
2 replies to daballofire's comment
savemycountry911

evan must be lurking and giving the old thumbs down.

September 06 2011 at 12:21 AM Report abuse +1 rate up rate down
dabrownman

Evan thought he was voting for his favoite gay cheese.

September 06 2011 at 4:32 PM Report abuse rate up rate down
michael2fortune

THE NEXT PRESIDENT CAN'T FIX THE FEDERAL RESERVE THAT IS BANKRUPTING OUR NATION!...

... paper money will become worthless... you have to prepare yourself and your family for the financial crisis ahead.

*** globaleconomicvideo.blogspot.com ***

This is a must see video... you have you prepare yourself and your loved ones before it's too late.

I'm posting my blog video here because I need to reach out to the real people who are effected by the Global Economic Crisis. Please pass this video on.

September 05 2011 at 10:50 AM Report abuse +1 rate up rate down Reply
sundance1

I worked and paid into S/S for 60 years....I still work and pay into it regularly....so actually I don't as much as I should being that I'm back into it, I'm not any raises or refund checks for over paymnet

September 05 2011 at 1:41 AM Report abuse +4 rate up rate down Reply
sundance1

i have worked for 60 years....I still work part time to keep up with inflation. I have paid into S/S all those years and still am paying into it....soo while I pay into it I draw from it as well.....I think I have paid in it enough....I should be exempt from paying into it more and getting nothing in return.

September 05 2011 at 1:32 AM Report abuse +6 rate up rate down Reply
sundance1

you know I for one would really like to see the way OUR money is spent. A list of those who recieve money and for what reason..... it should be posted so everyone could see it......posted in bold type for those with poor eye site and brail for those who can't see it......

September 05 2011 at 1:27 AM Report abuse +7 rate up rate down Reply
David Finn

What is going on with the budget? Nothing. Obama has absolutely no plans on presenting a budget, he would not know how to even start to formulate a budget, that is how we got into this huge pile of red Ink splattered all over the place.

September 04 2011 at 11:27 PM Report abuse -8 rate up rate down Reply
dabrownman

I say the place to start to cut spending and balancing the budget is to take away, from all federally elected officials including the President, their overly generous private retirement and health care plans the voted to give themselves, that they say are not good enough for us, and force them into SS and Medicare and if they haven't worked enough years to qualify they get zilch like the rest who didn't work enough years. They certainly haven't been working while they have been in congress so that doesn't qualify.

This is something that must be done and I would hold the tea party accountable to get it done, That way no whack job can say these folks are just fakes, racists, homophobes, extortionist holding a gun to head of innocent children, heading to hell lynch mobs, terrorists and who knows what else the weak minded have tossed at them recently.

September 04 2011 at 11:23 PM Report abuse +4 rate up rate down Reply
abcadams1

When we had a Democratic House, Senate, and President, our economy grew the most.
When the Republicans took over the House, the economy slowed.
GDP under Bush 2008: Q3: -3.7%; Q4: -8.9%
GDP under Bush 2009: Q1: -6.7% (1/2 term)
GDP under Obama 2009: Q1: -6.7% (1/2 term)
GDP under Obama 2009: Q2: -0.7%; Q3: +1.6%; Q4: +3.8%
(Democratic House and Senate)
GDP under Obama 2010: Q1: +3.9%; Q2: +3.8%; Q3: +2.5%; Q4:+2.3%
(Democratic House and Senate)
GDP under Obama but Republicans take over House: 2011: Q1: +0.4%; Q2: +1.0%

September 04 2011 at 11:23 PM Report abuse +5 rate up rate down Reply
2 replies to abcadams1's comment
icemanbill23

Hmmm...if memory serves, Pelosi took possesion of the gavel in 2007. I don't believe she is a conservative Republican. In fact, Bush wasn't a fiscal conservative either. All you have shown is that trillions of dollars of wasted "stimulus money" (nearly half of it borrowed) really does slightly boost our GDP for a limited duration. But hey, why worry about any huge future debt that will be passed on to our children and their children's children? If we can slightly improve our current GDP by stealing from future generations of Americans...well then, let's do it!

September 05 2011 at 3:12 AM Report abuse -4 rate up rate down Reply
2 replies to icemanbill23's comment
abcadams1

Did you say anything about spending when Bush spent $869 billion dollars on the Prescription Drug program. Basically a program for people to buy name brand drugs over Generic drugs? Did you say anything when we went into Iraq, a one trillion dollar war and counting, for no reason other than greed? Did you say anything when Bush gave subsidies to the oil companies? And the list goes on.

September 05 2011 at 10:04 AM Report abuse +1 rate up rate down
warrenbent

abc, Bush spent like a drunken sailor, while Obama has become an embarrassment to drunken sailors everywhere.

There were many of us screaming loudly when Bush overspent. Some of those are the same ones screaming even louder now that Obama is overspending even more.

A better question might be, "if you were screaming when Bush overspent, where are you now when Obama is overspending even more"?

September 05 2011 at 10:36 AM Report abuse +2 rate up rate down
daballofire

There was 1.15 trillion in deficit spending under the 12 years the Republicans controlled congress from Fy 2006 to fy 2007. There were many years of surpluses under Newt too. Since then the democrats have run up 4 trillion in deficits in 4 years. Them's the facts but the left will never ever let them get in the way. They don't even know presidents can't spend money, Only Congress can do that. Presidents only have a bully pulpit and a veto pen. The real power to do things lies with Congress. Pelosi and Reid destroyed the country and they are proud if it. They are just typical lefties who hate their country and nothing more. Obama was just their cheer leader.

September 05 2011 at 3:42 PM Report abuse +1 rate up rate down Reply
amercit

You libs actually believe Libya is going to be a free democratic country now? Oh thats right ,you also believe Osama is on the bottom of the ocean. You libs are gul-LIB -le

September 04 2011 at 10:32 PM Report abuse -3 rate up rate down Reply