Civics & Government · 10th Grade · The Legislative Branch: The People's Voice · Weeks 1-9

Budgeting and Fiscal Policy in Congress

Students explore Congress's role in the federal budget process, including appropriations, deficits, and national debt.

• Common Core State Standards
• C3: D2.Civ.3.9-12
• C3: D2.Eco.1.9-12

About This Topic

The federal budget is one of Congress's most consequential responsibilities and one of its most contentious. Students examine the annual budget process: the President submits a proposed budget, congressional committees draft appropriations bills, and the two chambers must eventually agree on funding levels for the government to operate. When agreement fails, the result is a continuing resolution (which maintains prior funding levels) or a government shutdown. Understanding this process helps students see fiscal policy as a product of negotiation and political compromise, not just economic calculation.

Underlying these procedural mechanics are substantive debates about deficits and national debt. A budget deficit occurs when annual spending exceeds tax revenue; the national debt is the accumulated total of past deficits. Students analyze the economic arguments for deficit spending (Keynesian stimulus during recessions) and the concerns about long-term debt obligations (rising interest payments, reduced fiscal flexibility). They also examine how budget decisions reflect political values: what a government funds and what it cuts reveals its priorities.

Economic data analysis paired with role-play budget simulations makes this topic concrete, helping students move beyond abstract numbers to see fiscal choices as expressions of democratic values.

Key Questions

1. Explain the process by which Congress creates the federal budget.
2. Analyze the economic and political implications of budget deficits and national debt.
3. Evaluate the effectiveness of Congress in managing the nation's fiscal policy.

Learning Objectives

• Analyze the steps involved in the creation of the federal budget, from presidential proposal to congressional appropriation.
• Evaluate the economic consequences of budget deficits and national debt on government spending and future fiscal policy.
• Compare and contrast different approaches to fiscal policy used by Congress to manage economic fluctuations.
• Identify the political factors that influence congressional decisions regarding taxation and spending.

Before You Start

Branches of the U.S. Government

Why: Students need a foundational understanding of the roles and powers of the legislative, executive, and judicial branches to understand Congress's specific function in budgeting.

Basic Economic Principles: Supply and Demand

Why: Understanding fundamental economic concepts helps students grasp the impact of government spending and taxation on the broader economy.

Key Vocabulary

Appropriations Bill	A legislative motion that authorizes the government to spend money. Congress must pass these bills annually for most government functions.
Budget Deficit	The amount by which the government's expenditures exceed its revenues in a given fiscal year.
National Debt	The total accumulated amount of money that the federal government owes to its creditors, resulting from past budget deficits.
Fiscal Policy	The use of government spending and taxation to influence the economy. Congress plays a primary role in setting fiscal policy.
Continuing Resolution	A type of appropriations legislation that continues funding for federal agencies at previous levels when a new fiscal year begins before Congress has passed a regular appropriations bill.

Watch Out for These Misconceptions

Common Misconception

The federal government must balance its budget every year, like a household.

What to Teach Instead

No federal law requires a balanced budget (unlike most state governments). The U.S. can borrow by issuing Treasury bonds, and many economists argue deficit spending is appropriate during recessions. The household analogy breaks down because the federal government can also influence interest rates and money supply in ways households cannot.

Common Misconception

Congress writes the entire federal budget from scratch each year.

What to Teach Instead

Mandatory spending programs (Social Security, Medicare, Medicaid) operate under permanent law and represent about 65% of the budget -- Congress does not vote to fund them annually. Only discretionary spending, roughly 30% of the budget, goes through annual appropriations. This structural reality shapes what Congress can realistically change.

Common Misconception

A government shutdown means the entire government stops functioning.

What to Teach Instead

Only non-essential federal operations funded through discretionary appropriations are affected. Essential services -- military operations, air traffic control, emergency response, and Social Security payments -- continue. The budget simulation helps students understand which parts of government are vulnerable to shutdown and why.

Active Learning Ideas

Simulation Game: Congress Balances the Budget

Students receive a simplified federal budget with major categories (defense, Social Security, Medicare, interest on debt, discretionary spending). Working in small groups playing different congressional coalitions, they must cut spending or raise revenue to reduce the deficit. Debrief: What did every group find impossible to cut?

45 min·Small Groups

Data Analysis: Visualizing the National Debt

Students examine charts of U.S. debt as a percentage of GDP over time, annotated with key events (WWII, Reagan tax cuts, 2008 financial crisis, COVID-19). In pairs, they identify patterns, write one claim the data supports, and one question it cannot answer.

25 min·Pairs

Gallery Walk: Budget Priorities

Post 8 federal budget line items around the room with their dollar amounts. Students use colored sticky dots to 'vote' on what they would increase, decrease, or eliminate, adding reasoning notes. A whole-class debrief examines patterns in student priorities.

30 min·Whole Class

Think-Pair-Share: What Causes Government Shutdowns?

Present a brief explanation of a recent shutdown, then ask students: Who bears responsibility? How does a shutdown affect ordinary people? Pairs discuss before sharing with the class, building toward a collective understanding of shutdown causes and consequences.

20 min·Pairs

Real-World Connections

• Members of Congress, like those on the House and Senate Budget Committees, engage in intense negotiations each year to draft and pass appropriations bills that determine funding for everything from national defense to education programs.
• The Congressional Budget Office (CBO) provides non-partisan economic analysis to Congress, projecting the costs of proposed legislation and the long-term impact of the national debt on the U.S. economy, influencing debates on Capitol Hill.
• Citizens often contact their representatives in Congress to express opinions on specific budget proposals, such as funding for infrastructure projects or changes to social security, demonstrating the link between public opinion and fiscal policy decisions.

Assessment Ideas

Quick Check

Present students with a scenario: 'Congress needs to fund a new national park while also addressing a rising national debt.' Ask them to write 2-3 sentences explaining one potential conflict between these two goals and one compromise Congress might consider.

Discussion Prompt

Facilitate a class discussion using the prompt: 'Imagine you are a member of Congress. What criteria would you use to decide whether to increase spending on education or decrease the national debt? Justify your priorities.'

Exit Ticket

On an index card, ask students to define 'budget deficit' in their own words and then list one potential economic consequence of a persistent deficit.

Frequently Asked Questions

How does Congress create the federal budget?

The President submits a budget proposal, but Congress has final authority. The House and Senate Budget Committees draft budget resolutions, then appropriations subcommittees write 12 spending bills covering specific government functions. Both chambers must pass identical bills; differences are resolved in conference. The President then signs or vetoes the final legislation.

What is the difference between a budget deficit and the national debt?

A deficit is a single year's gap when spending exceeds tax revenue. The national debt is the cumulative total of all past deficits minus any surpluses. The U.S. last had a budget surplus in the late 1990s; the national debt now exceeds $34 trillion and grows whenever annual deficits continue.

What happens during a government shutdown?

When Congress fails to pass appropriations bills and no continuing resolution is enacted, federal agencies that lack funding must cease non-essential operations. Federal employees may be furloughed or required to work without pay. Essential services like military, air traffic control, and emergency response continue, but many government functions are disrupted.

Why does simulating a budget negotiation help students learn fiscal policy?

Hands-on budget simulations reveal the political constraints that make fiscal reform difficult. Students discover why every spending category has a constituency that resists cuts, why tax increases face resistance, and why deficits persist even when everyone agrees they are a problem -- a lived experience of trade-offs that sticks far better than reading about them.