US federal budget process 101

US federal budget process 101

We’re fighting for global poverty-fighting programs that are funded through the US federal budget, but how does that budget get put together anyways? It comes down to 1, 2, 3….

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1. President submits request to Congress

The president submits a detailed request of a budget for the next fiscal year (which begins on October 1), including a recommendation to Congress for how much money the federal government should spend on public purposes, how much it should take in as tax revenue and how much of a deficit or surplus the federal government should run (the difference between the first two). The request also includes the priorities for federal programs (defense, agriculture, education, health, etc) and recommends spending and tax policy changes. This is submitted on or before the first Monday in February.

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2. House and Senate budget committees propose budget resolutions

After the president has submitted the budget request, it gets sent to the House and the Senate. The House and the Senate both have Budget Committees that meet with Administration officials to learn more about their requests and ultimately develop a budget plan, referred to as a “budget resolution.” Once these resolutions are passed, the bills go to the floor where they can be amended by a majority vote. A conference with the House and the Senate resolves any differences.  The resolution is adopted after both pass the results from the conference. This is supposed to take place by April 15, but usually takes longer.

This budget resolution does not go to the president for their signature or veto, so it can’t enact spending or tax law. The goal of the resolution, therefore, is to set targets on how much each congressional committee can spend or reduce revenues over the next fiscal year.

If no budget resolution is passed, the previous year’s resolution (a multi-year plan) stays in effect, but often times special procedures are adopted to set spending levels.

3. Budget legislation gets enacted

Once the budget resolution is passed, the House and the Senate appropriations committees split up the discretionary spending described in the resolution amongst the 12 subcommittees. These subcommittees consider the annual appropriations bills needed to fund discretionary programs in the coming fiscal year. They conduct hearings on their respective programs to create a bill, which is then sent to the full appropriations committee and then to the floor. Once the House and the Senate both pass their bills, they work out the differences in conference, vote again and send to the president for approval.

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Process for discretionary spending

 

Congress also considers legislation to enact changes to mandatory spending or revenue levels, outlined in the resolution. If they need to legislate policy changes in mandatory spending or tax law to meet the resolution’s targets, reconciliation occurs. The relevant authorizing committees then come up with a plan and report back to the budget committees, who combine all of the plans into one big package and send it to a vote on the floor. Just like the budget resolution, differences are worked out with a House-Senate conference, another vote takes place and a final version is sent to the president for approval.

Process for mandatory spending

Process for mandatory spending

Looking for more? Check out the Washington Post’s one-page explainer or the Center on Budget and Policy Priorities.

Want to make sure the global poverty-fighting programs are a part of this year’s budget? Sign the petition now.

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