The federal budget is the spending activity of the U.S. government. At almost $2.2 trillion in 2002, the federal budget is larger than the GROSS DOMESTIC PRODUCT (GDP) of every country in the world except Japan, China, and Germany. Yet federal government spending represents only about 21 percent of U.S. GDP, a smaller percentage than almost every other industrialized country in the world. The federal budget is a source of constant debate. While politicians often complain the federal government is too big, few political leaders are willing to cut spending programs for fear of offending important constituents. Until 1998 there were often cries to cut the federal budget as a means of achieving a balanced budget. Beginning that year, budget surpluses (a result of modest growth in the federal budget), tax increases, use of the presidential line-item veto, and increased government revenue and reduced spending from a growing economy allowed political leaders the option of reducing the GOVERNMENT DEBT. The major components of the U.S. federal budget include defense spending, SOCIAL SECURITY, Medicare and Medicaid, other INCOME security, and interest on the government debt. The federal government groups budget spending into mandatory and discretionary spending. The year 2000 budget is summarized below. Outlays: Billions of Dollars Discretionary: Department of Defense (DoD) 278 Non-DoD discretionary 339 Mandatory: Social Security 403 Medicare and Medicaid 316 Means-tested entitlements 110 Other 123 Net interest 220 Total 1,790 Receipts (taxation) 1,956 Unified budget surplus 167 The budget process begins in the government’s executive branch. Every January the president sends to Congress a budget containing spending proposals for all departments and agencies for the coming FISCAL YEAR, which begins October 1. The OFFICE OF MANAGEMENT AND BUDGET represents the president in budgetary matters, and proposed allocations in the federal budget are examined by committees in Congress. Hearings are held with representatives of the government departments and other interested parties testifying for or against the budget proposal. Congress must approve funding for each budget allocation. Some years, when political control is divided between Democrats and Republicans, the approval process has been contentious and often delayed past the beginning of the fiscal year. Congress then passes continuing resolutions, allowing government agencies to operate under the last budget allocation. Because of the federal budget’s size, nearly every industry or business group in the United States watches it closely and attempts to influence spending. The U.S. CHAMBER OF COMMERCE represents the interests of U.S. business groups in general, while industry associations focus on specific parts of federal legislation and spending. Industry association newsletters, websites, and magazines generally summarize pending federal legislation affecting their industry.