4.4 Federal Budget Cycle
The federal budget cycle follows a structured timetable beginning with the submission of the President’s budget no later than the first Monday in February. Six weeks later, the Congressional budget committees report their budget estimates.
Key dates in the process include April 15, by which Congress must complete its budget resolution, and May 15, when the House begins considering appropriations bills. By June 15, reconciliation should be completed, and the House is expected to finalize appropriations by June 30. On July 15, the President submits a mid-session budget review, and the fiscal year officially starts on October 1.
4.4.1 President’s Budget Request
The President’s budget request is developed by the Office of Management and Budget (OMB) based on submissions from federal agencies. It begins with an outline of the President’s overall fiscal policies, detailing expected spending, tax revenues, and projections of deficits or surplus spending.
The budget also provides an outline of the President’s priorities for federal programs over the next five years, highlighting areas such as defense, agriculture, and education. Additionally, it includes recommendations for changes in spending and tax policies to align with the administration’s goals. More information can be found:
More information:
4.4.2 Congressional Budget Resolution
The CBO explains the Congressional Budget Resolution as follows:
…a blueprint to guide Congressional action on budget-related legislation over the course of the year. It does not provide funding for federal programs or change tax law; rather, it sets overall spending and revenue targets, sometimes for as many as 10 years. A budget resolution is not a law, because it is not signed by the President; it takes effect if approved by both Houses of Congress.
The Congressional Budget Resolutions set spending ceilings for 20 budget functions and include revenue estimates. The budget resolution is drafted by the House and Senate budget committees, followed by floor votes where amendments are passed by majority vote. Any differences between the House and Senate are resolved in conference committees, and the resolution cannot be filibustered.
The resolution is expected to pass by April 1, but if delayed or not passed, the previous year’s resolution remains in effect. Budget resolutions are enforced by allowing House and Senate members to block legislation that violates the resolution, although this can be waived by a simple majority in the House or 60 votes in the Senate.
Budget reconciliation is used to enforce spending cuts or tax increases specified in the resolution, with reconciliation directives providing detailed instructions for achieving these fiscal targets by a set deadline.
4.4.3 Appropriation Bills
Annual appropriations are necessary for discretionary (but not mandatory) funding. Those appropriation bills become law with the President’s signature. The appropriation bills are drafted by the appropriation committees (i.e., Senate and House). In the past, the on-time passage of all appropriation bills before the start of the Federal fiscal year has be difficult (see Congress has long struggled to pass spending bills on time from the Pew Research Center). Since 1977 (the first year of the current system), only four years (1977, 1989, 1995, and 1997) had all appropriation bills passed on time. Often, so-called omnibus bills are passed meaning all appropriation bills are packed into one bill. The Appropriations Status Table shows the progress of the current bills.
Example of an appropriation bill
Appropriation Accounts Appropriation accounts serve as a key framework for expenditure control, reflecting Congress’s “power of the purse” as outlined in the U.S. Constitution (Article I, Section 9). These accounts are the primary mechanism through which Congress allocates funds to specific programs and are essential for agencies in preparing budget requests. They function as the basic units for internal control within agencies, ensuring spending remains within the limits set by Congress. Appropriation accounts also provide the foundation for reporting and auditing processes.
Appropriations and Budget Resources
Departments to Accounts Departments to Bureaus
- Subdivision of departments into bureaus (main organizational units)
- Various appropriation accounts by bureau
- Determination of account funding by Congress
Bureaus to Accounts
- Subdivision of bureaus into accounts by operations
- Level for budget determination by Congress of the Department of Interior