Before the U.S. Civil War, budgeting was rather informal and routine at all levels of government. Beginning with the presidency of Thomas Jefferson in 1801, agencies seeking funds had dealt mainly on their own with congressional committees having jurisdiction over their respective operations. The president had no authority to amend agency requests and no institutional means of influencing their formulation.

Starting with the Civil War, some important long-term changes began to affect numerous government practices, and the framework of a truly national economy slowly took shape. The war itself was a watershed in national-state relations, as well as in development of the presidency as a predominant force in national politics. The first of these changes was growth in the national government’s authority to regulate the expanding industrial economy and to exercise war power in foreign affairs, where the president’s role especially was enhanced. At the same time, the power to tax was used to a greater degree than ever before.

The regulatory power represented government response to the Industrial Revolution and to the emergence of powerful private economic interests. The war power was exercised most visibly in the U.S. Civil War and in the Spanish-American War. The tax power was expanded by ratification of the Sixteenth Amendment in 1913, permitting a federal graduated income tax. The second change—government involvement in the private economy— meant more than simply regulating the flow of commerce. Starting in 1864, when the National Banking Act created a single, unified banking system as another step toward a national economy, the government’s role in financial affairs became more regularized.

Equally important, the way was paved for expanded government activity. In the twentieth century, this included not only increasing regulation of private economic enterprise, but also greater participation in planning and managing various public enterprises. The third pattern was growth in presidential strength and influence, beginning in the last half of the nineteenth century and continuing to the present. Presidents Roosevelt, Truman, Kennedy and Nixon all actively supported expansion of presidential prerogatives, albeit for widely varying purposes. Action by Congress delegating discretionary authority to the president was a recurring feature of the twentieth century.

At its simplest, a budget can be a device for counting and recording income and expenditures. Many fiscal and other public-policy functions also can be served through budgeting, some or all of them simultaneously. It may not even be appropriate to label such a document a budget; perhaps ledger is more precise. Another function of budgeting is to generate a statement of financial intent constructed on the basis of anticipated income and expenditures. A closely related function is to indicate programmatic intent, showing priorities in deciding what to do with available funds. Budgets should also reflect the mission, or purpose, for a bureaucratic agency’s existence.

The budget of any organization may be read as something of an index to relative distribution of power in the economic and political systems in which the budget was enacted.