The Public Social Security Budget

SIMONA MARIA POP

THE PUBLIC SOCIAL SECURITY BUDGET

The budget of a government is a summary or plan of the intended revenues and expenditures of that government. In some countries, such as the United States, the budget is mainly prepared by the legislature, in others it is prepared by the government.

Budgets are an essential element in the planning and control of the financial affairs of a nation or business and are made necessary essentially because income and expenditure do not occur simultaneously.

Social security defines a system of government-financed income transfers designed to effect a distribution of income considered desirable. The main component of most social-security systems is welfare benefits, given to those in poverty. This can be done in two ways:

- by identifying groups that are likely to be poor and giving benefits to them (e.g. the unemployment, the elderly and the disabled) irrespective of their actual income.

- by identifying, through means tests, people who are poor. This approach is a less expensive method of eradicated poverty, but leads to the problem of poverty trap.

State budget is a fundamental of Public Finance. It can be approached legally and economically.

From legal perspective, the budget represents the stipulation and the authorization of the state yearly incomes and expenditures. It is compulsory and it must be passed by the Parliament.

It represents an official document which reflects the provision of the public financial resources and it is compiled annually. The state budget laws are influenced by the political, economical and social beliefs specific to a certain period of time.

As an official document, the state budget emphasizes the approved levels of the next year expenditures and the amount of the income that can be used for that matter.

Economically, the budget refers to correlation in macroeconomics, especially the connection to the levels and the evolution of the state GDP. A certain level of the GDP and the way it is assigned to form the capital and the expenditure, determines the levels of the budget measures and sets up the ground for the positive evolution of the resources in the future.

1. The structure of the national state budget

In the Romanian system, according to the Constitution and the Public Finance Law, it was established an original budgeting method, which is applied through the Ў§national state budget ЎЁ. According to the Romanian Constitution, the national public budget is composed by

:

1. state budget

2. local budgets

3. public social security budget

The originality of this budgeting method results from the fact that the national state budget includes, apart from the state budget and the local budgets, the public social security budget. The social security budget, the same as the local budgets, is independent from the state budget. At the same time, the legal procedure stipulates that the public financial resources are gathered and managed in a unique system of budgets, represented by:

- the public budget

- the public social security budget

- local budgets

- special funds budgets

- the budget of state treasury

- budgets of other self-governing institutions.

2. The economic content of the public social security budget

Till 1990, the public social security budget was a part of the state budget and a distinct chapter of the republican budget.

Since 1991, according to the legal procedures concerning public finance, the public social security budget is prepared distinctly from the state budget and they are both passed by the Parliament, but each has its own full autonomy. The public social security budget is the annual financial plan which emphasizes the preparation, distribution and usage of the monetary funds necessary for the protection of pensioners, employees and family members.

The public social security budget is made of:

1. The social security budget ЎV is elaborated by a specialized department, part of Ministry of Labor, Social Solidarity and Family and which includes the public revenue and expenditure that have a centralized feature.

2. The social security budgets from every county and Bucharest Directorates of Labor, Social Solidarity