Our country has no budget. It has been almost 1,100 days since the last federal government annual budget was approved and adopted.

So how does the administration in Washington know how much to spend this year? Well, President Barack Obama proposed one budget, which most Democrats supported. Congressman Paul Ryan proposed a very different budget, which most Republicans got behind. Neither got enough votes to be adopted. The Congressional Appropriations Bill, which was passed and signed last December, allocates dollars for many programs, and puts at least a partial cap on monies the administration can spend. 

Where is the government heading without a budget? Every other level of government, whether state or local, is required to have a budget, under state or local laws. Most businesses have budgets, especially publicly traded ones. So do all the nonprofit organizations that I know. And individuals and families, who want to manage their expenditures wisely, try to set appropriate budgets.

For individuals and families, the income you earn from your job determines what and how much you can afford to spend on daily living expenses, groceries, housing rental or mortgage payments, utilities, clothing, medical expenses, and a rainy day saving account.

A planned budget helps you to live within your income, by planning to buy only what you can afford to pay for, such as an auto, fuel and repairs, insurance and household expenses. When the economy is depressed, individuals or families who spend more than their income will be in trouble. Unexpectedly losing your job, for example, could lead to debt pile up, home foreclosure, loss of assets, and finally,  bankruptcy.

Business enterprises, big or small, need to set up business plans that include a budget both for anticipated revenue and all likely costs. Expenses, capital equipment, personnel and general and administrative costs like salaries, rent, office supplies, insurance, employee benefits, telephones and professional fees all need to be figured into the budget, to see the whole picture.

A budget plan is essential for any business wanting investments or bank credit. An “unimpeachable business plan” is what it takes “to get a small business bank loan in today’s economy,” according to the Kiplinger Letter, a management decision-making newsletter.

Many nonprofit organizations, which provide important community services, are feeling the pinch of the depressed economy now, too, because donations are down for many of them.

Several local and state governments are also feeling pain, because their expenses are up, while revenues are down. When people lose jobs, they need more government support. Often, they cannot pay their taxes. If property values fall in the community, there will be less real estate taxes collected. Declining sales lead to a loss of sales tax revenue. Budgets need to reflect these realities. Several cities in America have already declared bankruptcy, for example, because of unrealistic commitments they had made to pension plans and other expenditures.

The government needs a budget to help us deal more realistically with our needs and debts. Right now, our country faces a huge deficit of $15.3 trillion and growing. We are slowly running out of money to run our government. Many government-funded programs are draining the economy and should be downsized or totally eliminated.

We need to eliminate Congressional earmarks, and make major cuts in some entitlement programs. We need to cut foreign aid, and use the money to help Americans get jobs. Also, we need to close tax loopholes, so that everyone pays their fair share of taxes. And changes will have to be made in Social Security and Medicare, to keep them solvent. 

Some increased taxes will be needed. The debt cannot be reduced enough only through spending cuts. We will all have to learn to do more with a little less.

We are unlikely to get a new federal budget until after the November election. Of course, it would be great if both sides would grow up and do something sensible, like supporting a reasonable budget ”“ now. That new budget should reflect increased revenues from federal taxes and be tempered by large spending cuts to reduce our debt.

Our government must approve a budget, and then live within its means. We will all suffer if it does not.

— Bernard Featherman is a business columnist for the Journal Tribune and former president of the Biddeford-Saco Chamber of Commerce.