The United States is a federal country that has a large economy as a result of the fast-economic resources found in it’s over fifty states. In order to achieve continued economic stability, the United States has put in place well structured systems and programs that guide its policy on revenue collection, government expenditure and other monetary policies. This has been done carefully to grant the semi-autonomy status of its sates a clean bill of health. It is a fact that the monetary policy enshrined in the United States constitution and the mandate given to various constitutional officers play a great role in influencing and determining the existing financial policy (Shu-Chun & Yang 17).
The United States Treasury Department plays an important role in as far as financial policy, and fiscal management is concerned. The department has well defined roles that give power to influence all the financial-related programs in the United States (Madura 232). This can be categorized in to for functions; formulating fiscal policies, serving as an agent for the government, enforcing the financial related laws and manufacturer of the currency of the United States (Vance 37).
The Treasury Department
The Secretary of the Treasury is the most powerful financial management officer in the United Sates and the Treasury Department. He is the Chief Executive of the treasury and is usually a Presidential appointee. In making financial based decisions, the President consults the Secretary of Treasury as an advisor. This puts him at the centre of monitoring economic stabilization and control. He does this through tools such as taxation and trade policies.
The secretary of the treasury is also the chief financial officer of the government. In this capacity, he sits at the Economic Policy Council as a chairperson. He is the chair of boards on Management of various trust funds including social security and medical care (Shu-Chun & Yang 17). As far as making or minting of money is a concerned, money would only become; legal tender after Secretary of Treasury has signed on the minted papers. This puts the Secretary of Treasury at the help of nay-financial related matter in the United States.
The Department of Treasury has several law enforcement agencies, which make its functions, run smoothly. The Secretary of Treasury is charged with the duty of managing debt of the United States. This is done through control of borrowing, expenditure, and lending levels. He is also in charge of the management of the United States Emergency Economic Stabilization fund. Through this fund, the Secretary comes up with policies that are forwarded to President for consideration before being taken to the Senate (Vance 37). Once accepted, the office of the Secretary of Treasury is charged with the duty of managing this fund.
There exists the office of the Controller of Currency. This office is charged with duties to ensure that the currency remains stable through banking and other related financial policies. This office was created on February 25, 1863 (12 Stat. 665), and falls under agencies of The Treasury Department (Madura 321). The Office of The Controller of Currency watches over banks in the United States and foreign banks that transact business in the United States. This is done to ensure that these banks operate within the provisions of the set rules and guidelines that run the American financial markets. Where financial laws are infringed upon by a bank, the Office of Controller of Currency may take disciplinary action against such bank.
This may include withdrawal of certificate of operation. It may also deny the approval of any new charters. The Office of Controller of Currency normally carries out an annual analysis of banks through the use of about 2,400 staff members. This is to ensure that all these banks operate under the set rules for financial-institutional management.
The Department of Treasury has the responsibility of supervising the national banks. It is through regulation by the Department of Treasury that various banking operations are determined. For instance, the treasury plays a great role in the determination on the levels or limits of the lending rates. This is done on order to avoid economic crisis due to much more yin the economy and at the same time boost economic activity through the availability of loans for investments.
The Treasury Department is also charged with the responsibility of managing government bonds. Where the government would wish to raise funds from the public to finance various development projects, the treasure would initiate the establishment and selling of the bonds. This would be directly managed and run by the Treasury Department until the required sums is availed (Hastedt 68).
United States federal budget
The United States budgets refer to the proposals made by the President on recommended expenditures and techniques of tax collection. The President of the United States usually relies on the Treasury Department, which is led by the Secretary of Treasury to come up with well-streamlined budgets for the US. The President would in many occasions give what he considers being the sectors he wants to be considered or given much priority before the balancing act is done by officials of the treasury (Shu-Chun & Yang 17).
The budget of the United States would in most cases put into consideration the prevailing economic conditions and the economic policy that the administration led by the President would want to take in boosting the economy. The budgets would be brought to the congress for consideration. The expenditure limits are then set by committees before being taken to appropriations subcommittees that are responsible for the formulation of the appropriations bills.
Government Data analysis in the United States is provided by several agencies. These agencies include; The treasury Department, the Government Office, Office of Management and Budget (OMB) and the Congressional Budget Office. This analysis is done by all these agencies with the view that all contentious issues that arise from the budget receive an objective analysis hence making the budget be real and reflect the existing economic levels of the country.
The constitution of the United States has provisions for emergency expenditures. Emergency expenditures may have to pass through less line of authorization before being released. The congress has the power to pass emergency appropriations bill without having to go to through the other budget enforcement rules. This would help reduce the time frame taken to have such funds released. A good case in point was the funds used to help victims of Hurricane Katrina (Madura 143).
The Senate plays an important role as a watchdog. Through the Senate, public spending is monitored. This is meant to ensure efficiency and that the money allocated for various projects are used for the intended course (Madura 654). As a matter of importance, Members of both houses would always call for clarification on expenditures and justification for the same. This help in avoiding unnecessary lose of public funds through corruption and embezzlement of the same.
One of the most significant things to note with the United States budget is the provision for foreign aid and development. As opposed to many countries, the United States usually remits large amounts of money to other countries in terms of aid to support development projects. These monies would in many cases be channeled through United States of America agencies such as USAID. Such funds would go to projects such as Poverty alleviation and fight against hunger (Petrus, et. al., 32). These appropriations would have to be scrutinized by the bicameral house before being authorized by the President to be released.
Financial Management Service
The Financial Management Service is a great asset to the United States in terms of Financial Management. This agency is important as it helps the government in managing finances through linking with its client who are the taxpayers. FMS serves various entities, which include the treasury, financial agencies, and financial policy makers (Yang &Traum 35). This is done by ways of developing critical financial management programs and through advices to its customers.
The Financial management Service also provides numerous checks in expenditure and revenue collection. This checks would extends past 400 million treasury checks. It would also include electronic money transfers of more than 400 million payments (Petrus, et. al., 27). These payments would include; salaries, wages and payments to suppliers by the federal government. Where inefficiencies occur during these transactions, the service would propose a resolute mechanism so as to make the processes more efficient and with fewer risks.
The act of July 11, 1862 (31 U.S.C.A. § 303), gives the Bureau of Engraving and Printing power to print the Federal Reserve notes and produce the coins. The Bureau operates on a reimbursable basis and provides other products such as treasury securities and postage stamps. The bureau operates under the guidance of the Treasury Department and receives directives from the treasury based on economic situations and availability of money in the market to print the various kinds of currency.
Federal Tax expenditures
The United States has a progressive federal personal inco0me system. Through this, individuals have their incomes taxed based on the category on which fall in terms of quantity. In terms of spending, the United States ranks Social Security and Medicare as mandatory spending expenditures. As a result, these industries would often have a constant appropriation bill. This is attributed to the payment of citizens to these programs making them be entitled to the same.
Increase in the share GDP would always result to increase in expenditure on mandatory appropriations. This rises in levels on income and number of employees would result to increase in those who qualify for these entitlements and the share of savings in these programs.
Military spending has remained to be one of the major expenditures that the United States has been making over the years. As a world super power, the country has always put its military as a key tool in ensuring security, not just to the United States but to the rest of the world. This has seen the United States being at war for most of the time. Even as, the Obama administration moves in to change this and save much money, the expenditure levels on Defense are likely to remain high. This is due to the need to run the numerous military bases all over the world and keep in the course with the fight against terror groups (Petrus, et. al., 22).
The United States budget on defense stood at 4% of the total Gross Domestic Product. This reflects to a total of $683 billion. This figure is calculated in monetary basis and does not include the expenditures on the war in Iraq and Afghanistan. In total, the United States had a budget of $737 billion for both Defense and Homeland Security. Even where the government in Washington may want to cut down on costs, expenditure on homeland security and Defense is likely to remain high as a precautionary and defensive measure against terror threats.
In terms of tax collection, the treasury has a duty in providing materials that help in the interpretation of tax related rules. These materials help in interpreting Internal Revenue Code (IRC). Each material provided by the Depart of Treasury would have varied levels of impact in terms of Treasury Regulations and Revenue rulings. This helps taxpayers to follow up issues that affect their taxes and modes in which the taxes are collected and transmitted to the authorities (Mühleisen, et. al., 34).
The Reorganization Act of 1939 (31 U.S.C.A. § 306), saw the establishment of the Bureau of Public Debt was established in 1940. This bureau is charged with the duty of managing the debts status of the federation. The bureau has been helpful as through it. Government can easily get loans to finance projects in the country. The Bureau also facilities offering of securities, and ensuring that matured debts are paid and new ones are obtained. The bureau is enabled to achieve its mandate through programs such as, direct access securities and public debt accounting.
Individual State Expenditures
States have also their own types of expenditures that facilitate the development within the state. In as far as, tax collection is concerned; there is a clear boundary on what goes to the federal government and that, which goes to the State Government. The federal financial policies cover all the sates within the federation and the local sate authorities only serve to provide financial by-laws that affect a given sate (Hastedt 68).
State governments may have their own financial-regulatory laws. These laws may be a little bit different from the federal laws but must agree to the federal financial policies in a matter of Principle. For instance, the state financial laws must ensure that they agree in supporting the National Medical Care policies. Different states may have different policies and programs that entail financial management in these states. The United States has, through its constitution, set up laws that help avoid conflict between individual state laws on financial management and that of the federal government.
Works Cited
Mühleisen, Martin., Towe, Christopher, and Cardarelli, Roberto. U.S. fiscal policies and priorities for long-run sustainability, New York City, NY: International Monetary Fund, 2004. Print
Madura, Jeff. Financial Markets and Institutions. Canberra: Cengage Learning. 2009, Print
Shu-Chun S. & Yang, Traum, Nora. Monetary and Fiscal Policy Interactions in the Post-war U.S., New York City, NY: International Monetary Fund. 2010, Print
Petrus, Dennis & Botman, Johannes. International Monetary Fund, A new-open-economy-macro model for fiscal policy evaluation, Issues 2006-2045, London: International Monetary Fund. 2006, Print
Vance, D. E. Financial analysis and decision-making: tools and techniques to solve
financial problems and make effective business decisions. New York: McGraw-Hill
Professional. 2002, Print
Hastedt, Glenn. Encyclopedia of American foreign policy. New York, NY: Infobase
Publishing, 2004. Print.
