Budget Control Act - BCA
Categories: Accounting, Company Management
Everyone knows the U.S. federal budget is generally out of control with extremely large deficits. But it was particularly bad after the Great Recession, which began in 2008 with revenues plummeting and expenses soaring, and with various stimulus programs being implemented.
With the deficit projected to be a record $1.5 trillion, Congress passed the Budget Control Act of 2011 (BCA). This law created the Joint Select Committee on Deficit Reduction (also known as the “super committee”) that had special, one-time authority to propose a deficit-reduction package.
Unfortunately, this committee with superpowers was never able to come to an agreement on what to cut. The BCA also imposed budget caps for a 10-year period ending in FY 2021. There were separate caps for the defense and nondefense parts of the discretionary budget, but these have been largely ignored. In fact, the entire BCA is often undermined by the actions of Congress. Some want to increase the spending limits, while others think it should be repealed entirely.
The current deficit is now leaving the "billions" to venture into "trillion" territory, with frequent threats of a government shutdown whenever a budget needs to be passed.
Bottom line: We have no money. You may know the feeling.
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Finance: What is a Budget?43 Views
Finance a la shmoop what is a budget? that's that thing you throw right out [Woman throws budget out the window]
the window just before you start doing all your Christmas shopping
right but generally it's a plan that lets you see where your money will be
spent if you have a personal budget well you'll be able to decide ahead of time [Personal budget example]
how much money you'll spend on clothes, food, megaphones to annoy and anger your
neighbors and you know whatever floats your boat if you own a company well
you'll probably have much more complicated budget for things like
advertising and lawyer fees either way the plan helps you make sure that you
have enough moolah for everything you need and maybe some leftover for stuff
you want.....Joan wants to control her money so she decides to set up a budget for [Joan setting up a budget on a laptop]
next month she makes a thousand bucks from her summer job and well here's what
her budget looks like.....
Now Joan knows exactly where every penny is gonna go she's not [Joan driving a car]
gonna be caught off guard by any surprise expenses she's not gonna spend
$200 on safecracking equipment and then realize she doesn't have enough left [Joan stood beside a vault of gold bars]
to pay her phone bill although if she does get hit with some unexpected
expenses well hopefully yeah she can just pawn some of those exotic vases she
took from the Peterson place [Joan holding a vase]