To people in Britain the budget means an announcement made each year by the Chancellor of the Exchequer , the minister in charge of finance, about the government’s plans concerning taxation and public spending (= money to be spent by the government).
Budget Day is in March each year. A pre-budget report each autumn is given to introduce ideas on which the following year’s budget will be based.
On Budget Day the Chancellor explains in a long speech to the House of Commons the financial policy of the Treasury , plans for government spending, and how the money for this will be raised through taxation. There is then a debate on the budget, which lasts for several days, followed by a vote to accept or reject it. The contents of the budget speech are kept secret until the last moment, and any leak of information is a serious embarrassment. The speech is broadcast on national radio and television and is much discussed by financial and political experts. Photographs of the Chancellor on Budget Day usually show him holding up the red leather case in which the speech is contained. The word budget originally meant a small leather bag.
Many people fear budget changes, because they usually mean tax increases rather than reductions, particularly on alcohol, tobacco and petrol. Some of these increases become effective immediately and car drivers may rush to buy petrol just before the budget. Budgets announced close to general elections usually contain fewer tax increases to avoid making the government unpopular.
In the US the budget is a document describing how much money the government expects to have, and how it will use that money. Congress spends a lot of time discussing how much money each part of the government needs. Each member of Congress tries to make sure that as much money as possible will be spent in the area he or she represents. This is called pork-barrel politics , and money spent to benefit a particular place is called pork . When Congress has decided on a budget the President considers it. In the past the President had to approve or veto the whole budget, but now he has a line-item veto and can veto an individual item. The Office of Management and Budget helps prepare the budget and checks how the money is spent.
The US budget includes revenues (= sources of money) and spending . The government’s largest source of money is income tax . Since the government’s revenues are smaller than its spending, the US has a budget deficit .
Individual states also make budgets, and the laws of a particular state may say that it must not have a deficit.