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 continuing resolution get passed? ›
The House Feb. 29 voted 320-99 to pass a continuing resolution that would extend funding through March 8 for four appropriations bills set to expire March 1 and through March 22 for eight appropriations bills set to expire March 8.
Did the federal budget pass for 2024? ›
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.
Did the government pass the budget? ›
WASHINGTON (AP) — The Senate passed a $1.2 trillion package of spending bills in the early morning hours Saturday, a long overdue action nearly six months into the budget year that will push any threats of a government shutdown to the fall. The bill now goes to President Joe Biden to be signed into law.
How much has the federal government collected in 2023 so far? ›
The federal government finances its operations with taxes, fees, and other receipts collected from many different sectors of the economy. In 2023, federal receipts totaled about $4.4 trillion, or 16.5 percent of gross domestic product (GDP).
How much debt is the US in? ›
The $34 trillion gross federal debt equals debt held by the public plus debt held by federal trust funds and other government accounts. In very basic terms, this can be thought of as debt that the government owes to others plus debt that it owes to itself. Learn more about different ways to measure our national debt.
Is the government shutting down 2024? ›
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.
When was the last time the U.S. government passed a budget on time? ›
Congress has completed appropriations before the start of the fiscal year only 4 times in the past 40 years. The last time Congress completed all bills on time was 20 years ago, in 1996.
When was the last time the United States passed a budget? ›
Enacted Federal Budgets
| Fiscal Year | Title | Published Date |
|---|
| 2017 | FY2017 Omnibus; H.R. 244 Consolidated Appropriations Act | 5/5/2017 |
| 2016 | FY2016 Omnibus; H.R. 2029 Consolidated Appropriations Act | 12/18/2015 |
| 2015 | FY2015 Omnibus; Consolidated and Further Continuing Appropriations Act | 12/16/2014 |
| 2014 | FY2014 Omnibus H.R.3547 | 1/17/2014 |
19 more rowsMar 26, 2024
Federal Government has a Budget After Six Months of Continuing Resolutions, Avoids Even a Partial Shutdown.
In fiscal year 2023, the federal government is estimated to spend $6.3 trillion, amounting to 24.2 percent of the nation's gross domestic product (GDP). Of that $6.3 trillion, over $4.8 trillion is estimated to be financed by federal revenues. The remaining amount will be financed by net borrowing.
Did the fy22 budget pass? ›
The final funding package was passed as an omnibus spending bill, the Consolidated Appropriations Act, 2022. The Inflation Reduction Act was passed as the budget reconciliation bill for FY2022.
Can Congress pass the federal budget? ›
Each year Congress undertakes to pass a budget and then, within the constraints set out by that budget, pass 12 appropriations bills that provide discretionary funding for the fiscal year, which begins October 1.
Who executes the federal budget? ›
OMB carries out its mission through five main functions across executive departments and agencies: Budget development and execution. Management, including oversight of agency performance, procurement, financial management, and information technology.
What were the two main reasons that led to the government shutdown? ›
The most significant include the 21-day shutdown of 1995–1996, during President Bill Clinton's administration, over opposition to major spending cuts; the 16-day shutdown in 2013, during the Barack Obama administration, caused by a dispute over implementation of the Affordable Care Act (ACA); and the longest, the 35- ...
When was the 2023 federal budget approved? ›
The links below provide information on Congressionally Directed Spending items included in the Consolidated Appropriations Act, 2023 (P.L. 117-328), signed into law on December 29, 2022.
Has the defense budget been passed? ›
Congress Passes Fiscal 2024 Defense Spending Bill, Pay Raise for Service Members. Both the House and Senate have passed the 2024 National Defense Authorization Act, which is expected to be signed by the president.
Is there going to be a government shutdown in 2024? ›
On January 18, both the U.S. House and Senate passed a Continuing Resolution (CR) to extend current federal appropriations through March 2024 and avoid a government shutdown as lawmakers work to finalize Fiscal Year (FY) 2024 appropriations based on the nearly $1.6 trillion bipartisan topline framework agreement.
