By the Numbers: The Federal Budget Process

Although Congress has the “power of the purse strings” and writes the actual budget legislation each year, the President starts off the annual budget process by submitting a White House budget request with baseline figures.  The President’s proposed budget is a set of Federal objectives with price tags attached, and it provides a spending framework for Congress to use in deciding how much money to spend, what to spend it on and how to raise the money that will be spent each year.

 

 

The annual budget is a “fiscal year” budget.  The Federal government's fiscal year begins on October 1st and ends on September 30th of the next calendar year.  Therefore, the budget that is in effect from October 1, 2008 through September 30, 2009 is the 2009 fiscal year budget.

 

The process of creating a fiscal budget starts about a year before it is due to be submitted to Congress.  According to the Budget and Accounting Act of 1921, the President is required to annually submit a budget to Congress by the first Monday in February.  The President develops an overall budget strategy in the spring of each year, based on administrative policies and initiatives, and the President’s budget includes many continuing line items from the previous fiscal year budget.

 

 

Oftentimes administrative initiatives are spelled out in the “State of the Union” speech the President delivers to Congress in January each year.  By the summer, Federal agencies submit their budget estimates based on the initiatives outlined.  During the fall, estimates provided by the agencies are reviewed by the Office of Management and Budget (OMB), an Executive branch department that helps the President execute a wide range of duties.  By the winter, the White House budget is reviewed, finalized, and submitted to Congress in February.

 

The White House budget proposal includes volumes of supporting materials that are intended to persuade Congress to use the President’s budget provisions as the framework for the fiscal year budget resolution and the 13 appropriations bills.  Funding requests for all Legislative branch and Independent agencies, as well as for the Executive branch (including the 15 Cabinet-level agencies), are contained in the White House budget proposal.

 

The OMB assists the President in the creation of the budget proposal by gathering data from agencies and compiling it into the final plan to be approved by the President.  As part of this process, OMB also studies government services in detail and recommends changes to the budget that are intended to increase the economy and efficiency of government operations.  Each Federal agency and department provides additional details and supporting documentation to Congress on its own funding requests, as well.

 

In addition to the proposed spending plan, the White House budget indicates:

 

-- The condition of the Treasury at the end of the last completed fiscal year.

 

-- The estimated condition of the Treasury at the end of the current fiscal year.

 

-- The estimated condition of the Treasury at the end of the next fiscal year if the budget proposals are carried out.

 

The annual budget process is similar to the normal legislative process, except that the President has the statutory right to establish the starting point and framework for the annual Federal budget debate.

 

 

In most years, the Congress takes the White House budget request after it is proposed and translates it into the fiscal year budget resolution.  The House of Representatives and the Senate each have their own Appropriations Committees that interpret the White House budget proposal, modify it and assemble a fiscal year budget resolution with a total figure to be spent.  The money is parsed out into 13 appropriations bills and the President’s Budget Director from the OMB lobbies Congress to keep the White House budget proposal as intact as possible.

 

When the fiscal year appropriations bills are finally completed and passed by the House and Senate, they are sent to the White House for the President’s signature. The appropriations bills can be packaged together, but are typically passed as individual bills and signed separately.  The President can then sign each bill or veto it.  If the President vetoes one or more of the 13 fiscal year appropriations bills, Congress must figure out how to modify the legislation so that it will be signed by the President when it is passed through Congress again.

 

 

This complicated Federal budget process goes on every year.  In years that the Congress and the President cannot agree on an overall budget resolution or pass all 13 appropriations bills, the outstanding appropriations are wrapped into a Continuing Resolution in which the budget is funded at current fiscal year levels.

 

Important Web links for the Federal budget process include:

 

Office of Management and Budget (OMB)

 

The Library of Congress Thomas Web site

 

Government Printing Office (GPO)