    [A Citizen's Guide to the Federal Budget]
    [Front Matter]
    [From the U.S. Government Printing Office, www.gpo.gov]

    A Note to the Reader......................................iii

    1. What Is the Budget?......................................1

    2. Where the Money Comes From--and Where It Goes............5
       Revenues.................................................7
       Spending................................................10
       ``On'' and ``Off'' Budget...............................15

    3. How Does the Government Create a Budget?................17
       The President's Budget..................................17
       The Budget Process......................................17
       Action in Congress......................................18
       Monitoring the Budget...................................20

    4. Deficits and the Debt...................................21
       Why the Deficit is a Problem............................23
       Deficits and Debt.......................................24
       Deficit Reduction Efforts...............................26

    5. The President's 1998 Budget.............................29
       Reaching Balance........................................29
       Investing in the Future.................................30
       Improving Performance in a Balanced Budget World........31

    Glossary...................................................35

    List of Charts and Tables..................................39

    [[Page iii]]

                          A Note to the Reader

    Next year, your Federal Government will spend nearly $1.7 trillion.

    Needless to say, that's a lot of money. And the Government spends it
    on lots of things--on programs as large and popular as Social Security, and on
    activities as small and unknown as repairs to the National Zoo.
    Together, these programs are what make up the Federal budget.

    How much do you know about the budget? If your answer is ``not much,''
    you're not alone. In fact, hardly anybody knows everything that's in the
    thousands of pages, and several books, that make up the budget each year.

    But we know you care a lot about how the Government spends your money.
    That's why we created A Citizen's Guide to the Federal Budget two years ago,
    and why we have published this third edition. With it, we hope to make
    the budget more accessible and understandable.

    The Guide is designed to give you a walking tour of the budget.
    In these pages, we will outline for you how the Government raises revenues and
    spends money, how the President and Congress enact the budget, why the
    budget deficit and Federal debt are problems, and what the President
    hopes to accomplish with his 1998 budget.

    After you read these pages, we hope that you will think the tour was worth
    your time. And we hope you will give us your suggestions about how we can
    make the Guide more useful to you in the future.