Introduction
The major governmental body playing a role in the budget process is Congress, which works with it every fiscal year. It passes resolutions and creates concrete frameworks for allocating finances. The role of Congress as the supreme legislative body of the United States in the modern budget process is determined by the most important fact that, according to the Constitution of the country (Mikesell, 2018). This presumes that not a single cent and not a single dollar from the federal Treasury can be spent otherwise than in accordance with the federal budget law for the next fiscal year, approved by a simple majority of votes in both chambers (“The role of government,” 2011). The Senate and the House of Representatives are in charge of drafting their plans and resolutions, and whenever the drafts merge, they decide on the result. Twelve subcommittees of the appropriation committee aim to fund each governmental function.
Later, all twelve bills passed by the committees have to be signed by the President as the head of the executive branch no later than September 30. In other words, the federal budget is a financial document on the income and expenses of the federal government and the resulting balance (positive or negative) must be legislatively approved. Only in this case can it become the basis of the socio-economic and political activities of the American state. If the bills are not signed by the beginning of the new fiscal year, Congress must introduce a temporary resolution based on the previous one (Willoughby, 1972). Even though the entire process appears difficult and multi-faceted, it allows for proper budget allocation.
Analyzing the Role of the U.S. Government in Correcting Externalities and Other Market Failures
One of the major governmental roles is to fix market failures both internally and externally. A market failure is a major impediment to the proper development of the state’s economy as it implies an inefficient allocation of resources; hence, the government attempts to maintain equilibrium by correcting faults. In the event that these failures are not maintained, there is a chance of economic decline, which can have a long-lasting impact on the country.
When it comes to fighting externalities such as air or water pollution, traffic congestion, passive smoking, or others, the government introduces taxing systems. Such an approach allows for higher production costs, forcing manufacturers to create less environmentally contaminating products. This tax may be called internalization of the externality, as it implies paying for the full cost of manufacturing (Key, 1940). In addition, the externalities can be reduced by introducing targeted laws and regulations. The U.S. government prohibits dumping toxic waste into the water reservoirs, making the producers stop contaminating the surroundings (Willoughby, 1972). Finally, trade restrictions are introduced to stop the import and export of goods from causing harm to the economy.
The other way of dealing with market failures and externalities is to promote positive externalities. The government may encourage manufacturers by providing subsidies or conditions that ensure side benefits (Rubin, 2008). Money for subsidies typically comes from the taxes paid by the residents. Since these spillover advantages go directly to society, it is possible to generate more positive externalities that would have double-sided benefits. Ultimately, there is a possibility of introducing labor market regulations, implying that employees’ wages and maximum working week standards should be fixed.
Justification of the Use of U.S. Taxpayer Resources to Correct Externalities and Other Market Failures
Taxes are the major resource that the American government uses to correct externalities and market failures. The implementation of taxation on negative externalities is an efficient means of fighting numerous adverse environmental issues. The taxpayer money spent on introducing the new laws and regulations helps reduce multiple negative consequences. In addition, such an approach can boost the economy and introduce new means of its development. It means that these finances may open new opportunities for establishing international trade with other countries.
Conclusion
What is more, it is possible to use taxpayer resources in order to subsidize major programs. It means that the taxes paid by residents of the United States of America will be invested directly in these initiatives (Schick, 1966). These can relate to environmental, educational, or other purposes. This idea of tax usage seems productive because society will receive benefits as well. For instance, if the government uses taxes to build new educational facilities, it creates more opportunities for the population to receive education. Normally, tax deductions go to the transport industry, road rehabilitation, healthcare, repair of schools and educational institutions, construction of sports facilities, and other municipal needs. Therefore, these resources are as valuable as the governmental efforts to develop such conditions so that the nation can strive.
References
Key, V. O. (1940). The lack of a budgetary theory.The American Political Science Review, 34(6), 1137–1144. Web.
Mikesell, J. L. (2018). Fiscal administration: Analysis and applications for the public sector (10th Ed.). Cengage Learning.
Rubin, I.S. (2008). Public budgeting: Policy, process and politics. Routledge.
Schick, A. (1966). The road to PPB: The stages of budget reform.Public Administration Review, 26(4), 243–258. Web.
The role of government in a market economy. (2011). Libraries. Web.
Willoughby, W. F. (1972). The movement for budgetary reform in the states. Ardent Media.