Question 1
The most notable difference between government and business budget making is that the government is keen on achieving development and state building while business budgeting is profit oriented where the management is directly guided by profit as the ultimate goal in their budget making. Another difference is that the government spends to impress and satisfy its people’s needs while business on the other hand strives for minimum expenditure and maximum turn over. Another difference is that the government owes it to the citizens transparency and therefore the money allocated for any activity cannot be changed without proper approval (Lawal & Okoli, 2015). On the other hand, business tries to maximize their profits and therefore they can easily alter their budget to channel more funds where there are high prospects for making profits without a lot of bureaucracy involved.
As an example, I was attached at my dad’s private shoe making company and budgeting was done in a way that activities that generated more sales and more profits were prioritized in the budget making process. This budget could be altered any time to if a more profitable venture arose. On the other hand, as an electrical engineer in a government firm, my cousin was always driven by perfection to satisfy the public needs. They mainly operated with fixed budgets.
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Peer Response
Hello Melissa, I like your answer on the difference between government and business budgeting. The differences are clear and especially on the transparency. However, I would like to add that business too have to be transparent, especially state-owned corporations. It is always a government requirement for them to do so and any changes in the budget have to go through a rigorous approval process.
Question 2
The relationship between Congress and the President in regards to the budget is complicated and often associated with ideological differences. It meets challenges in instances where the congress differs with the President’s decisions requiring funding. The ground behind such conflicts emerges due to ideological differences and financial obligations. To begin with, ideological differences mainly due to nature of their parties, for instance the democrats and the republicans will always have varying opinions. On financial obligation, the congress refuses presidential projects on the basis that they are not worth it. An ideal example is the Guantanamo Bay refuge incident during Obama’s reign. The congress barred the president mission by refusing to approve funds for the project. Thus, the conflict between the two parties is inevitable for as long as State matters are taken into consideration.
Question 3
Budget making is a stepwise process with four main actors playing significant roles. Among the actors, include the president, the congress, departments and agencies, and the legislature, the president plays the major role. It follows that the president participates more than the other parties in budget making process. For instances, he makes his remarks on the draft proposal after the first actor, that is department and agencies draft it into a proposal. Afterwards, he presents it to the congress. Later, after it has been through the legislature, he is summoned to sign it before it an approved law. For instance, different agencies drafted the 2020 U.S. budget and gave their proposal to president Trump. Trump went ahead to submit his proposal to the congress after reviewing its aspects. Later on, Trump signed the budget into law after it went through legislature successfully (“Budget of the U.S. Government”. USA gov. 2021). Thus, the president is the most power actor in budget making process.
References
“Budget of the U.S. Government”. USA gov. 2021. https://www.usa.gov/budget
Isaac, L., Lawal, M., & Okoli, T. (2015). A Systematic Review of Budgeting and Budgetary Control in Government Owned Organizations. Research Journal of Finance and Accounting , Vol 6, NO. 6.
