Fiscal policy is primarily the responsibility of the government, specifically involving both the executive and legislative branches. In the United States:
- The President, as part of the executive branch, plays a major role by proposing the annual budget, which outlines spending priorities and tax policies. The President is advised by key figures such as the Secretary of the Treasury and the Council of Economic Advisers to help shape these proposals.
- Congress, representing the legislative branch, has the authority to pass laws, approve taxes, and appropriate government spending. Congress debates, modifies, and ultimately approves the budget and fiscal measures proposed by the President. Both the House of Representatives and the Senate participate in this process.
- The fiscal policy process requires collaboration between the President and Congress, as the President can propose budgets and tax policies, but Congress must approve them for implementation. This system of checks and balances ensures fiscal policies reflect a broader consensus.
- Additionally, the judicial branch can influence fiscal policy by ruling on the constitutionality of fiscal measures.
In summary, fiscal policy is set and implemented through a cooperative effort between the executive branch (President and advisors) and the legislative branch (Congress), with the judicial branch playing a potential oversight role
