The United States budget process is the framework used by

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of a ...

and the

President of the United States The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United Stat ...

to formulate and create the

United States federal budget The United States budget comprises the spending and revenue In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business. Commercial revenue may also b ...

. The process was established by the Budget and Accounting Act of 1921, the

Congressional Budget and Impoundment Control Act of 1974 The Congressional Budget and Impoundment Control Act of 1974 (, , ) is a United States federal law that governs the role of the Congress in the United States budget process. The Congressional budget process Titles I through IX of the law are als ...

, and additional budget legislation. Prior to 1974, Congress had no formal process for establishing a federal budget. When President

Richard Nixon Richard Milhous Nixon (January 9, 1913April 22, 1994) was the 37th president of the United States, serving from 1969 to 1974. A member of the Republican Party, he previously served as a representative and senator from California and was ...

began to refuse to spend funds that Congress had allocated, they adopted a more formal means by which to challenge him. The Congressional Budget Act of 1974 created the

Congressional Budget Office The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. Inspired by California's Legislative Analyst's Office that manages ...

(CBO), which gained more control of the budget, limiting the power of the President's

Office of Management and Budget The Office of Management and Budget (OMB) is the largest office within the Executive Office of the President of the United States (EOP). OMB's most prominent function is to produce the president's budget, but it also examines agency programs, pol ...

(OMB). The Act passed easily while the administration was embroiled in the

Watergate scandal The Watergate scandal was a major political scandal in the United States involving the administration of President Richard Nixon from 1972 to 1974 that led to Nixon's resignation. The scandal stemmed from the Nixon administration's continual ...

and was unwilling to provoke Congress.

Discretionary spending

Discretionary spending requires an annual appropriation bill, which is a piece of legislation. Discretionary spending is typically set by the

House A house is a single-unit residential building. It may range in complexity from a rudimentary hut to a complex structure of wood, masonry, concrete or other material, outfitted with plumbing, electrical, and heating, ventilation, and air condi ...

and Senate Appropriations Committees and their various subcommittees. Since the spending is typically for a fixed period (usually a year), it is said to be under the ''discretion'' of the Congress. Some appropriations last for more than one year (see

Appropriation bill An appropriation, also known as supply bill or spending bill, is a proposed law that authorizes the expenditure of government funds. It is a bill that sets money aside for specific spending. In some democracies, approval of the legislature is ne ...

for details). In particular, multi-year appropriations are often used for housing programs and military procurement programs. As of 2019, there are 12 appropriations bills which need to be passed each fiscal year in order for continued discretionary spending to occur. The subject of each appropriations bill corresponds to the jurisdiction of the respective House and Senate appropriation subcommittees: Multiple bills are sometimes combined into one piece of legislation, such as the

Omnibus Appropriations Act, 2009 The Omnibus Appropriations Act, 2009 (, ) is an Act for the United States government that combines bills funding the operations of each of the Cabinet departments, except Defense, Homeland Security, and Veteran Affairs into a single appropria ...

. A

continuing resolution In the United States, a continuing resolution (often abbreviated to CR) is a type of appropriations legislation. An appropriations bill is a bill that appropriates (gives to, sets aside for) money to specific federal government departments, ag ...

is often passed if an appropriations bill has not been signed into law by the end of the fiscal year.

Authorization bills

In general, funds for federal government programs must be authorized by an "authorizing committee" through enactment of legislation. Then, through subsequent acts by Congress, budget authority is appropriated by the Appropriations Committee of the House. In principle, committees with jurisdiction to authorize programs make policy decisions, while the Appropriations Committees decide on funding levels, limited to a program's authorized funding level, though the amount may be any amount less than the limit. But it all starts with the president's budget.

Annual process

Presidential budget request

The United States budget process begins when the

submits a budget request to Congress. The President's budget is formulated over a period of months with the assistance of the

(OMB), the largest office within the

Executive Office of the President The Executive Office of the President (EOP) comprises the offices and agencies that support the work of the president at the center of the executive branch of the United States federal government. The EOP consists of several offices and agenci ...

. The budget request includes funding requests for all federal executive departments and

independent agencies A regulatory agency (regulatory body, regulator) or independent agency (independent regulatory agency) is a government agency, government authority that is responsible for exercising autonomous dominion over some area of human activity in a licen ...

. Budget documents include supporting documents and historical budget data and contains detailed information on spending and revenue proposals, along with policy proposals and initiatives with significant budgetary implications. The President's budget request constitutes an extensive proposal of the administration's intended revenue and spending plans for the following fiscal year. The budget proposal includes volumes of supporting information intended to persuade Congress of the necessity and value of the budget provisions. In addition, each federal executive department and independent agency provides additional detail and supporting documentation on its own funding requests. The documents are also posted on th
OMB website
The Budget and Accounting Act of 1921 requires the President to submit the budget to Congress for each

fiscal year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...

, which is the 12-month period beginning on October 1 and ending on September 30 of the next calendar year. The current federal budget law ((a)) requires that the President submit the budget between the first Monday in January and the first Monday in February. In recent times, the President's budget has been submitted in the first week of February. The budget submission has been delayed, however, in some new presidents' first year when the previous president belonged to a different party. The 2014 United States federal budget was not submitted by the President until April 10, 2013 due to negotiations over the

United States fiscal cliff The United States fiscal cliff refers to the combined effect of several previously-enacted laws that came into effect simultaneously in January 2013, increasing taxes and decreasing spending. The Bush tax cuts of 2001 and 2003, which had been ex ...

and implementation of the sequester cuts mandated by the

Budget Control Act of 2011 The Budget Control Act of 2011 () is a federal statute enacted by the 112th United States Congress and signed into law by US President Barack Obama on August 2, 2011. The Act brought conclusion to the 2011 US debt-ceiling crisis. The law inv ...

(the House had already prepared its budget proposal on March 21, and the Senate proposed a budget on March 23). President

Warren G. Harding Warren Gamaliel Harding (November 2, 1865 – August 2, 1923) was the 29th president of the United States, serving from 1921 until his death in 1923. A member of the Republican Party, he was one of the most popular sitting U.S. presidents. A ...

brought about the enactment of the Budget and Accounting Act of 1921, which, for the first time, required the President to submit a budget annually to Congress and which established the Bureau of the Budget, the forerunner of the

, to assist in the formulation of the budget. Initially the Bureau was within the

U.S. Department of the Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and t ...

, but in 1939 it was moved to the Executive Office of the President.

Budget resolution

The budget resolution is in the form of a

concurrent resolution A concurrent resolution is a resolution (a legislative measure) adopted by both houses of a bicameral legislature that lacks the force of law (is non-binding) and does not require the approval of the chief executive (president). Concurrent resolut ...

passed by both the

House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entitles. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often c ...

and the

Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...

but is not presented to the

President President most commonly refers to: *President (corporate title) *President (education), a leader of a college or university *President (government title) President may also refer to: Automobiles * Nissan President, a 1966–2010 Japanese ful ...

and does not have the force of law. It sets out the congressional budget. The budget resolution establishes various budget totals, allocations, entitlements, and may include reconciliation instructions to designated House or Senate committees. A particularity of the budget (and

reconciliation Reconciliation or reconcile may refer to: Accounting * Reconciliation (accounting) Arts, entertainment, and media Sculpture * ''Reconciliation'' (Josefina de Vasconcellos sculpture), a sculpture by Josefina de Vasconcellos in Coventry Cathedra ...

) process is that members of Congress may offer unlimited amendments to budget resolutions, which are normally quickly disposed of at the end of the statutory 50 hours of debate in a so-called "

vote-a-rama A "vote-a-rama" (or "vote-arama", "vote-athon") is a procedure in the United States Senate that allows senators to propose an unlimited number of amendments to budget-related measures. After brief debate, the amendments are each voted on in rapid ...

". The President's budget submission is referred to the

and Senate Budget Committees and to the

(CBO). Other committees with budgetary responsibilities submit requests and estimates to the budget committees during this time. In March, the CBO publishes an analysis of the President's proposals. The CBO budget report and other publications are also posted on th
CBO website
CBO computes a current-law baseline budget projection that is intended to estimate what federal spending and revenues would be in the absence of new legislation for the current fiscal year and for the coming 10 fiscal years. However, the CBO also computes a current-policy baseline, which makes assumptions about, for instance, votes on tax cut

sunset provision In public policy, a sunset provision or sunset clause is a measure within a statute, regulation or other law that provides that the law shall cease to have effect after a specific date, unless further legislative action is taken to extend the law ...

s. The current CBO 10-year budget baseline projection grows from $4.1 trillion in 2018 to $7.0 trillion in 2028. In March, the budget committees consider the President's budget proposals in the light of the CBO budget report, and each committee submits a budget resolution to its house by April 1. The House and Senate each consider these budget resolutions, and are expected to pass them, possibly with amendments, by April 15. A budget resolution is a kind of

; it is not a law, and therefore does not require the President's signature. There is no obligation for either or both houses of Congress to pass a budget resolution. There may not be a resolution every year; if none is established, the previous year's resolution remains in force.Budget Resolution Explainer
, Rudolph Penner, Urban Institute For example, the Senate had not passed a budget resolution for FY2011, FY2012, or FY2013, but did pass the FY2014 budget resolution on March 23, 2013, 23 days before the April 15 deadline set by the

No Budget, No Pay Act of 2013 The No Budget, No Pay Act of 2013 (; ) is a law passed during the 113th United States Congress. The Act temporarily suspended the US debt ceiling from February 4 to May 18, 2013. It also placed temporary restrictions on Congressional salaries. B ...

. This was the first budget resolution passed by the Senate since a FY2010 budget passed on April 29, 2009. The House and Senate may propose a budget independently of the President's budget. For example, for the 2014 budget process, the House prepared its budget proposal on March 21, and the Senate proposed a budget on March 23, while the President's budget was not submitted until April 10. After both houses pass a budget resolution, selected Representatives and Senators negotiate a

conference report In the United States Congress, a conference report refers to the final version of a bill that is negotiated between the House of Representatives and the Senate via conference committee. It is printed and submitted to each chamber for its considerat ...

to reconcile differences between the House and the Senate versions. The conference report, in order to become binding, must be approved by both the House and Senate. The budget resolution serves as a blueprint for the actual appropriation process and provides Congress with some control over the appropriation process. All new discretionary spending requires authority through enactment of

appropriation bill An appropriation, also known as supply bill or spending bill, is a proposed law that authorizes the expenditure of government funds. It is a bill that sets money aside for specific spending. In some democracies, approval of the legislature is ne ...

s or

s. Each function within the budget may include "budget authority" and "outlays" that fall within the broad categories of discretionary spending or direct spending.

Allocations

The 302(a) allocation specifies the total amount of money available to appropriates. They are generally included in the report accompanying the budget resolution, or if a budget resolution is not passed, each chamber may determine its own 302(a) allocation. This process was modified somewhat by the

, which is in effect though FY2021, which sets two overall caps for defense and nondefense spending that the 302(a) allocation must adhere to. The

Bipartisan Budget Act of 2018 The Bipartisan Budget Act of 2018 is a federal statute concerning spending and the budget in the United States, that was signed into law by President Donald Trump on February 9, 2018. Delays in the passage of the bill caused a nine-hour fundi ...

and the Bipartisan Budget Act of 2019, also in effect through FY2021, gave the Chairs of the Budget Committees authority to determine 302(a) allocations. The 302(b) allocations specify how funds are divided among the individual appropriations subcommittees, corresponding to the 12 appropriations bills. 302(b) allocations are adopted by the full House and Senate Appropriations Committees.

Appropriations bills

The budget resolutions specify funding levels for the

and Senate Appropriations Committees and their 12 subcommittees, establishing various budget totals, allocations, entitlements, and may include reconciliation instructions to designated House or Senate committees. The appropriations committees start with allocations in the budget resolution and draft appropriations bills, which may be considered in the House after May 15. Once appropriations committees pass their bills, they are considered by the House and Senate. When there is a final budget, the spending available to each appropriations committee for the coming fiscal year is usually provided in the joint explanatory statement included in the conference report. The appropriations committees then allocate that amount among their respective subcommittees, each to allocate the funds they control among the programs within their jurisdiction. A

conference committee A committee or commission is a body of one or more persons subordinate to a deliberative assembly. A committee is not itself considered to be a form of assembly. Usually, the assembly sends matters into a committee as a way to explore them more ...

is typically required to resolve differences between House and Senate appropriation bills. Once a conference bill has passed both chambers of Congress, it is sent to the President, who may sign the bill or veto it. If he signs, the bill becomes law. Otherwise, Congress must pass another bill to avoid a shutdown of at least part of the federal government. In recent years, Congress has not passed all of the appropriations bills before the start of the fiscal year. Congress may then enact

s that provide for the temporary funding of government operations. Failure to appropriate funds results in a partial government shutdown, such the federal government shutdown in October 2013. In practice, the separation between policy making and funding and the division between appropriations and authorization activities are imperfect. Authorizations for many programs have long lapsed, yet still receive appropriated amounts, while other programs that are authorized receive no funds at all. In addition, policy language, which is legislative text changing permanent law, is included in appropriation measures.

Reconciliation bills

The budget resolution may also specify that a reconciliation bill may be introduced, which is subject to restrictions in its content but cannot be

filibustered A filibuster is a political procedure in which one or more members of a legislative body prolong debate on proposed legislation so as to delay or entirely prevent decision. It is sometimes referred to as "talking a bill to death" or "talking out ...

in the Senate.

Apportionment

Apportionment is the process by which the

specifies the funding level for specific agencies and programs within the constraints of the appropriations bills after they have passed.

Mandatory spending

Direct spending, also known as mandatory spending, refers to spending enacted by law, but not dependent on an annual or periodic appropriation bill. Most mandatory spending consists of transfer payments and earned benefits such as

Social Security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...

benefits, Medicare, and

Medicaid Medicaid in the United States is a federal and state program that helps with healthcare costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and pers ...

. Many other expenses, such as salaries of federal judges, are mandatory, but account for a relatively small share of federal spending. The

(CBO) estimates costs of mandatory spending programs on a regular basis. Congress can affect spending on entitlement programs by changing eligibility requirements or the structure of programs. Certain programs, because the language authorizing them are included in appropriation bills, are termed "appropriated entitlements." This is a convention rather than a substantive distinction, since the programs, such as Food Stamps, would continue to be funded even were the appropriation bill to be vetoed or otherwise not enacted.

Budget functions

The federal budget is divided into categories known as budget functions. These functions include all spending for a given topic, regardless of the federal agency that oversees the individual federal program. Both the President's budget, and Congress' budget resolution provide summaries by function, but they do not line up with the twelve appropriations bills. List of budget functions:

References

External links

The Congressional Budget Process: an Explanation
- published by the

Senate Budget Committee The United States Senate Committee on the Budget was established by the Congressional Budget and Impoundment Control Act of 1974. It is responsible for drafting Congress's annual budget plan and monitoring action on the budget for the Federal G ...

, 1998 (

PDF file Portable Document Format (PDF), standardized as ISO 32000, is a file format developed by Adobe in 1992 to present documents, including text formatting and images, in a manner independent of application software, hardware, and operating systems. ...

)
Congressional Budget Resolutions: Historical Information

Congressional Research Service The Congressional Research Service (CRS) is a public policy research institute of the United States Congress. Operating within the Library of Congress, it works primarily and directly for members of Congress and their committees and staff on a c ...

March 13, 2012
Deeming Resolutions: Budget Enforcement in the Absence of a Budget Resolution

Updated October 29, 2018
2007 Financial Report of the United States Government

* ttp://www.house.gov/budget_republicans/budgettutorial.shtml Budget Process Tutorial From the House Budget Committee (Republican Staff)
The Congressional Budget Office
* Eric M. Patashnik,
Ideas, Inheritances, and the Dynamics of Budgetary Change
" Governance, 12.2 (April 1999): 147-174
Understanding the Federal Budget
{{DEFAULTSORT:United States Budget Process

Process A process is a series or set of activities that interact to produce a result; it may occur once-only or be recurrent or periodic. Things called a process include: Business and management *Business process, activities that produce a specific se ...