What does the 2023 federal budget look like?
The 2023 federal budget provides for revenues and expenditures of 445.2 billion euros: a reduction of 10 percent from last year. The budget is overshadowed by the uncertainties of the coronavirus pandemic and the war in Ukraine, with ongoing doubts about how it will progress. The Federal Government’s primary goal is to respond decisively to these and future challenges and at the same time to mitigate the social and economic impacts. This will require sound finances and a budget that allows the Federal Government to take decisive action.
How will new debt change?
After three challenging years with high levels of new debt, the Federal Government is returning to compliance with the credit limit enshrined in the Basic Law, not just next year but for all years up to 2026. Net borrowing will be significantly reduced in 2023 compared to the previous year, falling from almost 140 billion euros to around 17 billion euros.
The aim is to continue to reduce new borrowing over the next few years. According to the finance plan, the Federal Government only plans to borrow between 12.3 and 13.8 billion euros for the period from 2024 to 2026. “We have to lead the state back out of debt, which means returning to the debt limit in 2023,” explained Finance Minister Christian Lindner. “This sends a clear message to capital markets and central banks that we are serious about fighting inflation.”
What are the priorities of the Federal Government?
A robust financial policy and the return to the debt limit require reviewing and re-prioritising expenditure. But two points are clear:
- Any changes must stringently avoid imposing new burdens on citizens or the economy. The current period of great uncertainty makes it particularly important to avoid new interventions that might thwart economic growth.
- Future-oriented investments are being consolidated at a record level. By doing this, the Federal Government is laying the groundwork for the transformation of Germany’s economy into a sustainable, climate neutral and digital economy.
Now and in future the guiding principle of the Federal Government’s budgetary policy will be “consolidation through prioritisation”. The aim here is to avoid inflationary pressures and to boost lasting economic growth.
How much money is allocated for investments?
As agreed in the coalition agreement, major future-oriented investments are planned for the next few years, particularly for climate protection, mobility, digitalisation, innovation, and education and research. These investments will support the modernisation of this country and boost Germany as a business hub.
Finance Minister Lindner explained that “the Federal Government sees financial policy as a policy of facilitation: transformation, technology and promoting talent are the priorities in our budget. We want to make it possible for Germany to venture progress.”
Spending on investments in 2023 amounts to over 58 billion euros. This is primarily aimed at activating private investment by businesses and boosting forces for innovation and growth in technology.
How has the Ukraine war influenced budget planning?
Russia’s war of aggression against Ukraine has compounded the uncertainty caused by the ongoing effects of the pandemic, which has left its mark on the 2023 budget. For example, the budget provides considerable sums to support Ukraine and to mitigate the effects of the war. It also budgets for measures aimed at securing energy supplies.
The invasion of Ukraine by Russian troops is in breach of international law and has shown how important it is to protect freedom and democracy. Germany is shouldering its responsibility by making available substantial funds for defence, development cooperation, humanitarian aid and international climate protection. The special fund for the Federal Armed Forces is worth up to 100 billion euros and expands the sums allocated to defence in the federal budget for the coming years. These funds will be used to bring Federal Armed Forces equipment fully up to date.
How is the Federal Government preparing for future challenges?
The budget has allocated five billion euros for “global crisis prevention”. This will make it possible to fund additional burdens due to the pandemic or measures that are required in connection with the Ukraine war.
What happens next?
The budget and finance plan will now go to the Bundestag and Bundesrat for approval. The Bundesrat has up to six weeks to state its position on the submissions. The first reading in the Bundestag is planned for late September and adoption of the budget by the Bundestag is planned for the end of November. Following this, the Bundesrat must give its approval; this is scheduled for mid-December.
FAQs
All 12 appropriations bills were enacted as a part of the Consolidated Appropriations Act, 2023, a $1.7 trillion omnibus spending bill that was signed by President Joe Biden on December 29, 2022. The bill also included supplemental appropriations for disaster relief and additional aid to Ukraine.
Did the US government pass a continuing resolution? ›
Congress Passes Another Continuing Resolution, Avoiding Partial Shutdown and Shifting HUD Funding Deadline to 3/8. Congress passed a continuing resolution (CR) on February 29 to extend funding for federal programs – including HUD's vital affordable housing and homelessness programs – to March 8.
Did the fy24 budget pass? ›
WASHINGTON — On Friday, after the House passed a package of the remaining six Fiscal Year (FY) 2024 spending bills by a bipartisan vote of 286 to 134, the Senate took it up and passed it early Saturday morning with wide support by a margin of 74 to 24.
Has a federal budget been passed? ›
WASHINGTON (AP) — President Joe Biden on Saturday signed a $460 billion package of spending bills approved by the Senate in time to avoid a shutdown of many key federal agencies. The legislation's success gets lawmakers about halfway home in wrapping up their appropriations work for the 2024 budget year.
Has the federal budget been passed for 2024? ›
On March 8, the Senate cleared, by a 75-22 vote, full-year appropriations for fiscal year 2024 under a first “minibus” for six appropriations bills: Agriculture, Commerce-Justice-Science, Energy-Water, Interior-Environment, Military Construction-VA, and Transportation-HUD. The President signed the measure.
What are the 3 biggest expenses in the federal budget? ›
CBO: U.S. Federal spending and revenue components for fiscal year 2023. Major expenditure categories are healthcare, Social Security, and defense; income and payroll taxes are the primary revenue sources.
Is the government going to shut down in 2024? ›
The Senate and House now have until Sept. 30, 2024, to negotiate and propose a budget that will pass Congress and get presidential approval - and this during an election year - to avert a shutdown.
When was the last time the U.S. government had a balanced budget? ›
United States
The Colorado Taxpayer Bill of Rights (the TABOR amendment) also bans surpluses and requires the state to refund taxpayers in event of a budget surplus. The last time that the budget was balanced or had a surplus was the 2001 United States federal budget.
When was the last time the U.S. government had a budget surplus? ›
The last surplus for the federal government was in 2001. The chart below shows a breakdown of how the U.S. deficit compares to the corresponding revenue and spending.
What is the Defense spending bill 2024? ›
Compensation: The bill fully funds the requested 5.2% pay raise for servicemembers and civilians and provides $29.6 billion for military housing and $8.4 billion for subsistence for military families—all of which are critical to supporting our servicemembers and their families.
FY 2024 DEFENSE FUNDING LEVELS
Within this topline, the legislation authorizes $841.4 billion for the Department of Defense (DOD), $32.4 billion for national security programs within the Department of Energy (DOE), and $438.0 million in defense-related activities.
What is the new Pentagon budget? ›
On March 11, 2024, the Biden-Harris Administration submitted to Congress a proposed Fiscal Year (FY) 2025 budget request of $849.8 billion for the Department of Defense (DoD), consistent with the caps approved by Congress under the Financial Responsibility Act (FRA) of 2023.
Who executes the federal budget? ›
The Office of Management and Budget oversees the implementation of the President's vision across the Executive Branch. OMB carries out its mission through five main functions across executive departments and agencies: Budget development and execution.
Did the Senate pass the appropriations bill? ›
Washington, D.C. – Today, the Senate voted 72-24 to send the final set of bicameral, bipartisan fiscal year 2024 appropriations bills to the President's desk to be signed into law.
Who passes the federal budget? ›
The House and Senate pass budget resolutions, setting total spending levels for the year. They may or may not take the President's recommendations. House and Senate Appropriations committees put together 12 detailed appropriations bills representing 12 separate areas of government.
How much has the federal government collected in 2023 so far? ›
In 2023, revenues total $4.8 trillion, or 18.3 percent of GDP—well above their long-run average. They then fall as a percentage of GDP over the next two years but rise again in 2026 and 2027 before stabilizing.
When was the last time the US government passed a budget? ›
The government was initially funded through a series of two temporary continuing resolutions. The final funding package was passed as two consolidated spending bills in December 2019, the Consolidated Appropriations Act, 2020 (H.R. 1158) and the Further Consolidated Appropriations Act, 2020 (H.R.
How much of the US budget is discretionary in 2023? ›
Discretionary outlays by the federal government totaled $1.7 trillion in 2023. Outlays for nondefense programs accounted for more than half of that total.
Is Social Security part of the federal budget? ›
Today, Social Security is the largest program in the federal budget and typically makes up almost one-fifth of total federal spending.
