4.2 Federal Budget Process and Major Institutions

There are many institutions that are involved in the federal budget process. The main executive branch office is the Office of Management and Budget (OMB), which was mentioned previously as a major data source. Legislative branch offices (i.e., those reporting to Congress) are the following: Congressional Budget Office (CBO), Government Accountability Office (GAO), and Congressional Research Service (CRS). Let us present those institution in more detail:

Office of Management and Budget (OMB): The OMB is responsible for the construction of the President’s budget. It is (1) setting the funding priorities, (2) evaluates the effectiveness of agency programs, policies, and procedures, and (3) assess competing funding demands among agencies. The OMB submits the President’s annual budget and supporting materials to Congress. It supervises and coordinates the administration’s procurement, financial management, information, and regulatory policies. The OMB is also tasked with improving the administrative management and developing performance measures. And lastly, it ensures consistency of agency reports, rules, testimony, and proposed legislation with the President’s budget and administration policies and priorities.

Congressional Budget Office (CBO): The CBO provides nonpartisan budgetary information and analyses to Congress and its committees. In addition, it is tasked with the following:

• Annual five-year economic forecast
• Review of President’s annual budget submission
• Budget baseline projections
• Preparation of financial reports
• Evaluation of spending and revenue options for reducing budget deficit