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Federal Budget 101

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1/3 Budget = Discretionary Budget:  Budgets set on an annual basis.

additional charts on budget

2/3 Budget = Mandatory Spending: Basically an automatic process, primarily entitlement programs.  Amounts controlled by eligibility rules or other payment guidelines. Examples is Social Security.

Visible Steps in The Annual Budget Process or Appropriations Process
Step 1: President Submits a Budget Proposal;
Step 2: Congress Passes a Budget Resolution;
Step 3: Congressional Subcommittees 'Markup' Appropriation Bills;
Step 4: The House and Senate Vote on Appropriation Bills and Reconcile Differences;
Step 5: The President Signs each Appropriation Bill and the Budget is Enacted.

Steps not visible to the public, in chronological order:

First Monday in February: The President's Budget
President submits the 'Budget Request': The President's Budget is a proposal for the coming fiscal year which will start on October 1st and run through September 30th of the following year. For example, FY2007 began on October 1, 2006 and will end September 30, 2007. This proposal actually follows a lengthy preparation process which is not very visible to the public yet largely determines priorities.

• President and Cabinet decide policy priorities.
• Based on these priorities, the Office of Management and Budget (OMB), which is part of the Executive Branch, gives guidelines to federal agencies instructing them how to prepare their strategic plans and budgets.
• The agencies then submit their budget requests and write documents defending their budget requests.
• These budget documents are also submitted to the appropriations committee of the House and Senate.
• The OMB evaluates these documents and prepares the budget request (the President's Budget).
• The President's Budget comes out in six thick volumes including:

-Budget of the US Government
-Analytical Perspectives
-Historical Tables
-Appendix
-Budget Systems and Concepts
-Citizen's Guide to the Federal Budget

The President's Budget can be viewed on-line and downloaded from the Office of Management and Budget (OMB), purchased through the Government Printing Office, and many libraries obtain copies.

February-mid-April: House and Senate submit Budget Resolutions
Budget Resolution = framework for budget decisions re: spending and taxation (non-binding for some programs.)

• The House and Senate traditionally prepare Budget Resolutions after the President signs his budget. •
• The two chambers pass their budget resolutions.
• A joint conference is formed to reconcile the two versions
• Reconciled budget is voted on by each chamber.

Late Spring-Early Fall: Mark-up Appropriations Bills

• House Appropriation Committee and Senate Appropriation Committee set allocations for each of its subcommittees (10 in the House and 12 in the Senate)
• Each committee takes the budget requests and justifications submitted by agencies
• Each committee conducts hearings and does follow-ups with agencies to obtain answers to questions about the agency requests.
• Each committee writes a first draft of its Appropriation Bill. This is called the 'Chairman's Mark'.
• The committee votes on its bill
• After passage, it moves back to the appropriations committee.
• The appropriations committee reviews and sends it to the floor for a vote, attaching any special riders that it deems necessary.

Alongside the process of appropriations, there may be one or more pieces of tax or other legislation affecting federal revenues:

Summer-Early Fall (in practice, through December: Floor Votes:
Individual appropriation bills are debated and voted on by their respective chambers. After both versions of a particular appropriation bill are passed in their respective chambers, a conference committee is set up to resolve differences between the House and Senate versions. The House and Senate both vote on a conference report for each bill. Each one is then signed or vetoed by the President.

You can obtain the Status of Appropriation Bills through Thomas which offers extensive legislative information to the public.

October 1st: Budget is Enacted:

• The President must sign each appropriation bill after it has passed Congress. When he has signed all of the bills, the budget is enacted. However, the process is not normally finished by October 1st. For the past several years, this process didn't finish until December.

• If the budget is not enacted by October 1st, Congress must pass "continuing resolutions" in order for the government to continue its functions. These resolutions simply continue funding for agencies and programs at current levels until the budget for the fiscal year is enacted.

October 11th: The General Accounting Office should begin overseeing how the money is spent.

How to Get Involved
Stay Informed: A number of non-governmental organizations (in addition to governmental agencies listed above) provide credible infomation about the federal budget:
National Priorities Project
OMB Watch
Center on Budget and Policy Priorities
Women's Action for New Directions
Center for Community Change
Coalition on Human Needs
The above organizations all provide information on their websites and have email lists which you can join. The email lists differ in length, frequency and content, so you are likely to find one appropriate for your interests.

Contact your legislators: You can email your House Representative or visit her/his website for further contact information, or visit the website of your Senators. "Snail mail" letters tend to be taken more seriously by representatives and their aides than emails or telephone calls. Even more effective is visiting your representatives. Make an appointment with them if you are visiting Washington, or find out their office hours in the nearest office to your home. This gives you a better opportunity to talk to them about what concerns you have and hear them respond to those concerns. They are elected to serve you.