US: Federal Budget Process

The Federal Budget process begins the first Monday in February of each year and should conclude by October 1, the start of the new Federal Fiscal Year.

Step 1: Budget Introduction

The President Submits a Proposed Budget to Congress

On or before the first Monday in February, the President submits to Congress a detailed budget request for the upcoming federal fiscal year, which begins on October 1. However, the work of preparing this budget begins long before February. Based on the input of the agencies and the Office of Management and Budget (OMB), the President's budget projects estimated spending, revenue, and borrowing levels broken down by functional categories for the coming fiscal year.

The President's budget serves as a starting point for the Congress, as Congress is under no obligation to adopt all or any of the President's budget and often makes significant changes. However, the President must ultimately approve the appropriations bills resulting from the budget process either through signature or failure to sign, or veto the appropriations bills. Congress can still override a Presidential veto, ultimately making the bill become a law.

Step 2: Budget Resolution

Congressional Budget Committees Report the Budget Resolution

The next step is development of a concurrent budget resolution. The House and Senate Budget Committees usually hold hearings to question administration officials about their requests and then draft the budget resolution. The Budget Resolution provides Congress with an opportunity to lay out its own spending, revenue, borrowing, and economic goals for the upcoming fiscal years and following five fiscal years. After drafting by the committee, the budget resolution goes to the House and Senate floor. The Budget Committees are required to present or report their final Budget Resolution for consideration by the full House and Senate by April 1.

Congress Considers the Budget Resolution

The full House and Senate debate, amend, and vote on the Budget Resolution as reported to them by their respective Budget Committee. Since the versions of the Budget Resolution passed by the House and Senate will always differ, each body appoints conferees to meet and resolve the differences. The Conference Committee works to come up with a single version of the Budget Resolution that will be agreed to by at least half of the conferees from both the House and Senate.

The Budget Act requires that by April 15, both the House and Senate approve by majority votes the final version of the Budget Resolution reported by the conference committee. The terms of the final approved Budget Resolution govern the remainder of the budget process for the year.

Step 3: Spending Allocations

Congress Sets Discretionary Spending Allocations

Congress must agree on spending allocations or limits on how much money can be spent on discretionary programs during the coming fiscal year and at least the next 5 fiscal years. Discretionary funding refers specifically to money provided each year through the allocations process. These spending allocations establish aggregate totals of money that cannot be exceeded by the House and Senate Appropriations Committees during the upcoming annual spending process.

The report accompanying the budget resolution includes a table called the “302(a) allocation,” which takes the total spending figures that are laid out by budget function in the budget resolution and distributes these totals by congressional committee. The various committees with jurisdiction over mandatory programs each get an allocation that represents a total dollar ceiling for all of the legislation they produce that year.

Appropriations Committees Develop the 12 Spending Bills

The Appropriations Committee receives a single 302(a) allocation for all of its programs and then decides how to divide this funding among its many subcommittees, into what are known as 302(b) sub-allocations:

  1. Agriculture, Rural Development, Food and Drug Administration, and related agencies
  2. Commerce, Justice, Science, and related agencies
  3. Defense
  4. Energy and Water Development, and Related Agencies
  5. Financial Services and General Government
  6. Homeland Security
  7. Interior, Environment, and Related Agencies
  8. Labor, Health and Human Services, Education and Related Agencies
  9. Legislative Branch
  10. Military Construction, Veterans Affairs and Related Agencies
  11. State, Foreign Operations, and Related Programs
  12. Transportation, Housing and Urban Development, and Related Agencies

The Appropriations Committees have from May 15 until June 10 to finalize the 12 spending bills and forward them to the full House and Senate.

Key Appropriations Subcommittees Addressing Natural Resources



Congress Considers the Annual Spending Bills

The full House and Senate begin consideration of the 12 annual spending bills. Except for some special rules of debate, these appropriations bills follow the same legislative procedure as other bills.

Since the spending bills are debated and amended separately, House and Senate versions will have to go through the same conference committee process as the Budget Resolution. The conferees must agree on one version of each bill capable of passing in both the House and Senate. Once the Conference Committees have forwarded their agreements to the chambers, the House and Senate must each approve the agreements by a majority vote. The Budget Act stipulates that the House should have given final approval to all 12 spending bills by June 30, although this deadline is rarely met.

Step 4: Final Decision

The President Decides on the Appropriations Bills

The President has ten days in which to decide:

  1. To sign an appropriations bill, thereby making it law;
  2. To veto the bill, thereby sending it back to Congress and requiring much of the process to begin again with respect to the programs covered by that bill; or
  3. To allow the bill to become law without his signature, thereby making it law but doing so without his express approval.

The Government Begins a New Fiscal Year

If the process goes as planned, all 12 spending bills have been signed by the President and become Public Laws by October 1, the start of the new Fiscal Year.

Getting Involved in the Process

Members of Congress and government agencies rely on the input of professionals and the public when considering which programs should be a priority for funding each year. The federal budget process provides many opportunities for interested members of the public and NGOs to provide input on what programs are valuable and should receive increased funding, including:

  • Contacting the agency before they finalize their budget request, to provide information and support for programs you feel should be a priority.
  • Contacting OMB as it reviews the agency requests, again to provide information and support for programs you feel should be a priority.
  • Contacting the Appropriations Committee as they develop their 302(b) allocations, to encourage them to provide adequate funding for natural resources.
  • Contacting Appropriations Committee and relevant Subcommittee members as they consider appropriations bills that cover programs of interest (usually Agriculture and Interior).
  • Providing formal written testimony on the president’s budget request to the Appropriations Committee, and testify at public witness day, if held.