Institute Fellow Rudy Penner describes how the U.S. budget is prepared by the executive branch and Congress, and how it then is implemented by the executive branch. The budget preparation process could be improved, Penner asserts, but budget implementation works smoothly and efficiently. The severe long-run budget problem the country faces is caused by only three spending programs: Social Security, Medicare, and Medicaid. All are growing faster than the economy, and there is strong opposition against raising tax burdens. Changes are suggested for the budget process so that it is better suited for dealing with this long-run problem.
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