US Senate: What It Does, How It Affects the US Economy

Tea Party Advocate Ted Cruz
••• Senator and former GOP presidential candidate Ted Cruz answers questions from local media following a town hall meeting at the Beacon Drive-in restaurant on April 3, 2015 in Spartanburg, South Carolina. The Beacon Drive-in, traditionally a popular venue for campaigning politicians, was Cruz's 2nd stop of the day in South Carolina. Photo by Richard Ellis/Getty Images

What Is the U.S. Senate?

The Senate is the senior body in the U.S. Congress, which is the legislative branch of the federal government. 

How Many Senators Are There?

There are 100 elected Senators, two from each state. Many of our Founding Fathers argued for the Senate to be representational like the U.S. House of Representatives. However, smaller states realized that, if that happened, they would not have much say in what happened.

They threatened to leave.

Two Senators were chosen for logical reasons. One was not be enough, because the state would have no representation if he became ill. Three or more was too expensive for states at that time.

Each Senator is elected for a six-year term and no term limits are placed on a Senator's seat. The length is longer than that in the House to provide stability. Longer terms also made the Senate less political, and subject to vagaries in the voting population. Very few wanted longer terms, since that was too similar to the life-long terms in the British Parliament.

The head of the Senate is the Vice-President. He only casts a vote in case of the tie. This removes the partiality or threats of political favoritism if the head of the Senate were elected from that body. (Source: The Senate and the Constitution, The U.S. Senate.)

What Does It Do?

The Senate, in addition to the other functions of Congress, has a few functions only it can perform.

 These include:

  • Confirm or disapprove any treaties the president drafts.
  • Confirm or disapprove the presidential appointments. These include the Cabinet, officers, Supreme Court justices and ambassadors.
  • Hold a trial for a federal official who commits a crime against the country.

How the Senate Affects the U.S. Economy

The Senate is a major force is determining fiscal policy by guiding federal spending and taxation.

The 1974 Budget Control Act gave it that power.  It also gives Congress three additional powers:

  1. Have its own standing budget committee to create its own version of the budget. It bases this on the president's budget and on hearings held with agency officials.
  2. Meet in a Conference Committee with the House to create a final budget resolution.
  3. Review the spending appropriation bills prepared by the House for each agency. The revised and approved bills go to the president for signature. For more, see Federal Budget Process

Like most elected officials, Senators usually advocate expansionary fiscal policy. That's because voters like tax cuts and the benefits of more spending. But during the boom phase of the business cycle, they should raise taxes and cut spending to slow growth. This is known as contractionary fiscal policy.

Fiscal policy should work with monetary policy to create healthy economic growth, but usually doesn't. Why? Legislators and their constituents have different ideas of the best way to create a healthy economy. Republicans usually believe in supply-side economics, which advocates tax cuts. Democrats prefer increased spending, paid for by taxing the wealthy.

​The Senate Budget Committee relies on the expertise of the Congressional Budget Office for estimates of the costs and consequences of budget decisions.

How It Affects You

A good Senator can help you personally. To find out who your Senator is, go to the Senators of the 110th Congress. To find out how your Senator has been affecting you, go to the link on that page.