UPDATED: January 11, 2024

Who Approves the Annual Budget

Ever wondered who gives the thumbs up to the United States' annual budget? It's a big deal because it decides how much money goes into everything from defense to education. You're about to get a crash course on who calls the shots and how they do it. Think of it like a relay race where different government players pass the baton until they reach the finish line: an approved budget.

First off, there's a whole process that unfolds before any decisions are made. It starts with the President putting together a proposal, but that's just the beginning. Then Congress steps in, and boy do they have power! They can change things up, add their own ideas, and really shape how our country spends its cash. And you know what? This isn't just about numbers; it's about priorities—what does our government think is important right now? So if you're curious about how your tax dollars are being used or want to understand why certain programs get funded (or don't), keep reading because this affects you directly!

Understanding the Budget Approval Process

The process to approve the federal budget is quite detailed and involves several steps. First, the President kicks things off by submitting a budget request to Congress. Then, both the House and Senate get busy passing budget resolutions to set total spending levels for the year. After that, they work on 12 appropriations bills that cover different areas of government spending. These bills are voted on by both chambers of Congress, and any differences between them are ironed out.

Once all 12 appropriations bills have been agreed upon, it's over to the President who signs each one into law—and just like that, you've got yourself a new federal budget! This whole process isn't quick; it typically takes several months from start to finish. Agencies begin setting their priorities and developing their requests in spring or early summer—about half a year before Congress sees anything. There's a lot of back-and-forth with reviews and negotiations which can take anywhere from 25 days for top performers to over 56 days for others before everything is finalized at the end of December or early January in an average year. If you're curious about more details on this process, check out National Priorities.

Key Players in Budget Approval

When it comes to approving the annual budget, several key players are involved. The President kicks things off by submitting a budget request to Congress. Then, the Office of Management and Budget along with both the House and Senate Committees on the Budget get to work reviewing and tweaking that proposal. After that, it's up to the House and Senate Appropriations Committees to draft appropriations bills which are based on earlier budget resolutions. If there are any differences between what each committee comes up with, a conference committee steps in to iron them out. Finally, Congress votes on this final bill before sending it over to the President for a signature.

Now, different branches of government have their own roles in this process too. The Executive Branch is where everything starts—the President puts together that initial budget plan. Over at Congress, they take this plan under consideration while setting guidelines for spending through a budget resolution. They also write appropriations bills which might not always match what the President wants but need his approval nonetheless since he can veto them if he chooses. Once signed by him though, these appropriations bills set financial plans into motion for the new fiscal year. In state governments, governors also submit budgets which legislatures then approve or adjust as needed; governors may even use line-item vetoes if there's something specific they don't agree with in those budgets.

The President's Role in the Budget Process

When it comes to the annual budget, the President plays a key role but doesn't have the final say. They start by sending a budget request to Congress, which is like setting out their wishlist for spending limits, tax policies, and how much money they think will come in. This request sets the stage for what's to come but keep in mind it's just a starting point. Congress then gets down to business writing appropriations bills that actually decide where money goes. The President can flex some muscle by vetoing these bills if they don't like them, but once signed, these bills make up your country's new budget.

The President's budget proposal is pretty important because it shows everyone what the administration wants to focus on financially and policy-wise for the next year—think of things like programs for homelessness or changes in immigration laws. It also guesses how these plans might affect stuff like overall economic output and whether you'll see more or less debt as a result. But here’s something crucial: all those numbers about money coming in or going out are best guesses—they're not set in stone and can definitely change.

Proposal of the Executive Budget

The President is expected to submit the budget proposal to Congress by the first Monday in February each year, but it's not uncommon for this deadline to be missed. In fact, for 30 of the past 49 fiscal years, the budget resolution has been late. For instance, the fiscal 2021 budget resolution didn't make it to Congress until February of that year.

In this proposal, you'll find a variety of funding requests such as those for clean water infrastructure and state parks. It also seeks money for environmental initiatives like the Environmental Protection Fund and efforts to reduce electric bills. The President's executive budget proposal outlines detailed financial estimates including how much authority agencies will have over spending (budget authority), actual spending (outlays), expected savings, changes in how much money the government brings in (budget receipts), and employment figures related to these plans. This comprehensive document is then reviewed by Congress who has final say on what gets approved.

Strategic Priorities and Fiscal Policy

When the President of the United States prepares the annual budget, it's all about setting priorities that align with national goals. Think of it like planning your own expenses but on a massive scale. The military, for example, decides what equipment and forces to update based on national security strategies. These strategies are big plans that tell everyone in government how to work together to keep the country safe and stable. The President's budget takes these plans and figures out where money needs to go to make them happen.

Now, even though the President kicks things off with a budget proposal, it doesn't stop there. Congress has a huge say in how money is actually spent because they're the ones who control taxes and decide on government spending—this is what we call fiscal policy. After the President proposes a budget that outlines spending and revenue plans for the year, Congress gets busy creating their own resolutions and deciding exactly how funds should be used. But before any of this becomes real, both sides need to agree—the President must sign off on Congress's appropriations bills before any money starts moving around. So really, both branches play critical roles in shaping fiscal policy through this back-and-forth process.

Congressional Action on the Budget

When it comes to shaping the annual budget, you've got Congress stepping in with some serious power. They take the President's budget proposal and can change it up by writing their own appropriations bills. These bills might be different from what the President wanted, but they're crucial because without them, there's no budget for the new fiscal year. The President does have a say though—they can veto these bills if they don't agree with them.

Now, Congress isn't just tweaking numbers; they've got a whole toolbox of powers in this process. They're in charge of setting up the government's yearly financial plan which means deciding on taxes and borrowing as well as where to spend money. Plus, they've got investigative powers to check out how money is being used and make sure everything is on track. The Senate also gets into action by handling treaties and appointments that need approval. All this budget magic happens under rules set by the Congressional Budget and Impoundment Control Act of 1974, with a special committee in the House keeping an eye on all things related to spending your tax dollars wisely.

Budget Resolutions in the House and Senate

When it comes to setting up the financial game plan for the U.S. government, a budget resolution is like the playbook. It outlines how much money can be spent and earned, and what the debt limits are. The Budget Committee kicks things off by drafting this resolution, using projections from the Congressional Budget Office (CBO) as a starting point. This isn't just about numbers; it's about setting rules for how Congress will handle money matters throughout the year, including changes to taxes and spending through a process called reconciliation. Once they've hashed out their draft, they bring it to all of Congress where everyone gets a say through amendments before making a final decision.

Now let's say both houses of Congress—House and Senate—come up with different versions of this financial blueprint; they've got to get on the same page before moving forward. They do this by forming a joint conference where representatives from both sides work out their differences until they agree on one version that works for everyone. If they hit an impasse or if time runs out without passing any budget resolution at all, things can get tricky and slow down other parts of government funding work like creating appropriation bills which decide exactly how much cash each part of government gets to use. These bills come together after lots of discussion in Appropriations Committees and their subcommittees who really dive into details about funding needs across different areas of federal operations.

The Role of the Budget Committees

In Congress, the budget committees have a big job. They create the annual budget resolution, which tells us how much money the government plans to spend and make, and whether there will be a deficit or surplus. They also look at what the President wants in terms of spending and bring in officials to explain why. Plus, they check out what other committees think about budget stuff that's related to them. The House Budget Committee is especially important here; its members can't stay on it forever—they're limited to four terms within six Congresses.

These committees don't just plan; they influence how money gets used by the government too. They use all sorts of info like estimates from the Congressional Budget Office (CBO) and details from other committees to shape federal spending and revenue policies. When it comes to laws about mandatory programs or taxes, they have special rules for how those should work financially—like making sure new costs are balanced with savings elsewhere (that's called pay-as-you-go). And when it comes to discretionary programs—stuff that isn't required by law but is still funded—they make sure there's a cap on spending so things don't get out of hand. The CBO helps by predicting if these laws will increase or decrease our national debt over time.

Reconciliation and Amendments

In the U.S., the budget reconciliation process lets Congress pass certain budget-related laws quickly, bypassing the usual debate rules. This means they can get things done with just a majority vote in the Senate, not needing as many votes as usual. It starts with a budget resolution that tells committees to suggest changes to spending or taxes to meet specific goals. But there are rules about what can be in these bills, and they're meant to move through Congress fast with limited debate and no big changes allowed.

Amendments play a role too; they can change how budget resolutions work by doing things like cutting down on debate time or setting up rules for how amendments are checked before voting. They might also keep funding steady from year to year to stop government shutdowns or ask for a balanced budget from the President. Some amendments even set spending limits unless more votes say otherwise and try to make sure courts don't force tax hikes. But people have concerns about these ideas because they could lead to tricky accounting, make it hard for the government to help in tough times, or mess up benefits when folks need them most. If you want more details on this topic, check out Budget Process Reform Recommendations, Balanced Budget Amendment Pros and Cons, and Key Balanced Budget Amendment Pros and Cons.

The Appropriations Process

When you're looking at how the U.S. annual budget comes to life, it all starts with appropriations bills. These are special types of legislation that set aside funds for specific federal government departments, agencies, and programs. They're crucial because they determine how much money each area will get for the year ahead.

Here's how things usually go down: The President kicks things off by sending a budget request to Congress in February. Then, both the House and Senate work on their own budget resolutions to decide on total spending limits. Next up, they split into 12 different groups within their Appropriations committees to hash out details for 12 distinct parts of the government. After both chambers agree on these bills and iron out any differences between their versions, they send them over to the President who needs to sign off on each one—and that's when it becomes official! Just keep in mind that sometimes this process can shift around a bit; like right now, Congress hasn't settled on a budget resolution for FY 2023 yet.

Dissecting Appropriations Bills

When it comes to the annual budget, appropriations bills are key. They're divided up by committees in both the House and Senate, with each committee further breaking down their share among subcommittees. This is all about deciding how much money goes where—for things like education, human services, and criminal justice. The bills lay out specific spending for state operations and other areas, sometimes even putting limits on what government agencies can do with the funds.

During this process, Congress has to pass these appropriations acts so federal agencies can start using the money for their designated purposes. If they don't get it done by October 1st, they might use a continuing resolution to keep things running temporarily. It's not just about handing out money; there are rules to follow that make sure spending stays within set limits. And if something unexpected comes up that needs funding outside of this process? Congress has to step in again and figure out what to do.

Committee Deliberations and Markup

When it comes to approving the annual budget, there's a detailed process that involves several steps. First, the Budget Committee starts with baseline data from the Congressional Budget Office (CBO). They then mark up a budget resolution, which includes setting budget aggregates and functional categories. During this time, members can propose amendments. After thorough discussion and revisions, they vote on whether to report the bill with changes or not. If there are many amendments, they might even create a new bill that includes all of them.

Another key part of this process is committee hearings. These are held to examine the President's budget request and hear justifications for it from officials. The hearings also collect information from other House committees and consider their “views and estimates” on budget matters within their areas of responsibility. Sometimes, if there's talk about changing how budgets are made (budget process reform), special task forces might be set up to look into it and hold hearings for expert testimony and recommendations. You can learn more about these procedures by checking out Budget Committee details online.

Floor Action and Voting

When it comes to the annual budget, it's a detailed process before approval. Bills start on the floor of Congress where they're read and possibly amended. After a series of readings and votes, both the House and Senate must pass them. Sometimes, appropriations bills are bundled into larger packages for efficiency. If spending goes over set limits, there are rules to handle that too.

For voting on these budget bills in Congress, they first go through committees with opportunities for amendments and public input. Each chamber of Congress votes on their version before working out any differences in a conference committee. The President has the final say by signing off on the budget; however, this is after Congress has made its own decisions based on its priorities—Congress holds the purse strings here!

The Final Approval

When the House and Senate have different versions of the budget, they come together in a joint conference to work out those differences. They need to agree on a final version that both chambers can pass. If they don't get this done, it makes everything else harder. The Appropriations Committees in both the House and Senate play a big role too; they write bills that say exactly how much money government programs can spend. These bills have to be passed by Congress and signed by the President before they're official. If there's no agreement by the start of the fiscal year, Congress might pass a continuing resolution to keep funding going temporarily.

Now, if the President doesn't like a budget bill and vetoes it, it's back to Congress' court. They can try to override that veto with a two-thirds vote in both houses—if they manage that, then the bill becomes law despite the veto. But if not enough members vote to override, then it's back to square one: more talking, tweaking of numbers or even starting over with another budget bill until everyone agrees or finds enough common ground for approval.

Conference Committees and Resolution of Differences

In the budget process, conference committees play a crucial role. They're like problem-solvers who step in when the House and Senate have different ideas about the budget. These committees hash out the differences and work towards a compromise on spending limits and allocations for various parts of the federal budget. Their discussions can lead to formal amendments and fiscal analyses that make it easier for everyone to understand what's going on.

When it comes time to finalize the budget legislation, it's all about reaching a middle ground through several steps. The General Assembly gets things rolling by reviewing and tweaking the proposed budget bill. After both houses of Congress vote on their preferred versions, any disagreements are ironed out by—you guessed it—a conference committee. Once they've found common ground, they pass their compromise back to both houses for approval before sending it off to either the Governor or President for that final signature of approval. If there's a delay in this whole process, continuing resolutions keep things running temporarily until everything is settled.

Presidential Action: Signing or Vetoing the Budget Bill

When the budget bill lands on the President's desk, they have a big decision to make. Unfortunately, what options they have aren't detailed here. But if the President decides to veto it, things can get complicated. The bill won't become law right away, and Congress has to step back in. They can try to override the veto with a two-thirds majority vote in both chambers – that's the House of Representatives and the Senate.

If Congress can't muster enough votes to override it, then there's no deal on the budget. This could lead to some tough situations like a government shutdown or having to pass a continuing resolution just to keep things running temporarily. It all depends on how well or not so well the President and Congress can negotiate with each other after that veto happens. If you're curious about more details on this process, check out these resources: Peter G. Peterson Foundation, Committee for a Responsible Federal Budget, and Congressional Budget Office.

Frequently Asked Questions

The annual federal budget is a big deal, and it's Congress that has the final say on what gets approved. The process starts with the President, who kicks things off by sending over a budget request to Congress. This request is like a wish list of where the administration thinks money should be spent for the next year. But it's just a starting point—Congress then gets down to business, setting spending limits and working out all the nitty-gritty details in appropriations bills for different parts of government.

Now, these bills have to pass through both the House and Senate before they can become law. They're poked at and prodded in committee meetings, debated on by our representatives, and sometimes changed quite a bit from what the President originally asked for. If there are any disagreements between what each side wants, they have to hash it out until they reach an agreement that works for everyone. Once that happens, it's up to the President again—but this time to sign off on everything with their signature or use their veto power if something's not right. So while Congress holds most of the cards when it comes to deciding where money goes, nothing's set in stone until both Congress and the President are on board. Learn more about how this process works.


So, you've just zipped through the ins and outs of how our government decides where its money goes each year. It's a big deal because it affects everything from schools to roads to national defense. The President kicks things off with a proposal, but it's really Congress that has the power to say ‘yes' or ‘no'—and they can change things up quite a bit. Both the House and Senate have to agree on the final numbers, and even then, the President can veto their decisions if he's not on board. But don't forget: getting this budget right means lawmakers have to work together across party lines; otherwise, nothing gets done. And in the end, that cooperation—or lack thereof—has real consequences for all of us and how our country runs.