Question

What aspect of the Budget and Accounting Act of 19211921 has had the most profound effect on U.S. politics today?

a. The act allowed Congress to apply for loans to begin rebuilding the postwar economy, a practice which Congress has continued, increasing the current national debt.

b. The act banned the president from cutting funding from agencies, which only led to greater national debts for later generations.

c. The act prevented the president from attending Congressional hearings regarding the budget, which now gives the president less direct control of the annual budget.

d. The act required the president to attend Congressional hearings regarding the budget, a process which continues today and takes most of the year.

e. The act required the president to present a budget to Congress, a process which continues today and is the center of great political contention.

Solution

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Before the Budget and Accounting Act of 1921\textbf{Budget and Accounting Act of 1921} each agency and executive branch sent their budget requests to the secretary of the treasury who forwarded them to Congress for approval, and the president had no significant role in the process.

However, the accumulated debt as a result of World War I encouraged Congress to pass the before-mentioned act which gave the president authority to propose an executive budget.

It also created the Bureau of the Budget, today known as the Office of Management and Budget (OMB)\textbf{Office of Management and Budget (OMB)} to help the president in this task. \ The OMB supervises the preparation of the budget, communicates with agencies, receives their estimates for needed funds, and advises the president.

Making the president the focal point of the budgetary process is the greatest change brought on by the Budget and Accounting Act, even though the establishment of the OMB is also important, because it made the president responsible for the creation of the draft of the federal budget that will be presented to the Congress for approval. Because the president is in the center of the process it is not uncommon for heads of agencies or cabinet members to try to bypass the OMB and to influence the president directly.

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