the budget process

A Joe Primer

Congress spends about half of its time and energy each year on the painstaking ritual of passing a budget, a process that can take over a year. With all its complexities and politics, it's no wonder most Americans pay no attention. Yet at the same time, the budget is where most choices about our national priorities are made; since there's never enough of the pie to fully fund all federal programs, Congress has to choose which programs get the thick slices and which are left with the crumbs.

As always citizenJoe offers, below, our attempt to make the process a little less daunting to follow. For more on what goes into the budget, see our budget facts page. To keep up with recent budget processes, see our 2008 budget tracker.

Deficits and surpluses

When the federal government writes up its budget, it doesn't necessarily have to make sure its income is larger than its expenses. In fact, most years the federal government runs a deficit, which it covers by borrowing money. See our facts pages for more info on deficits and our national debt.

The budget process

Passing a $2.9 trillion budget is not a simple, snappy event - it usually, in fact, takes an entire congressional year to pull off. There are a few steps:

  • The president's proposal. After getting feedback from federal offices, the president formally kicks off the budget process in February by proposing a budget.

  • The budget resolution. Congress takes the next step by passing a budget "resolution" in April, a nonbinding blueprint for congressional committees to follow as they knock out the nitty gritty of the budget over the rest of the year. (Congress doesn't have to write a resolution and usually doesn't - see "reconciliation" below for why it even bothers.)

  • Appropriation. Appropriation committees write the 10+ spending - or "appropriation" - bills that set the fine print of the budget. Each bill then needs to be okayed by the full House and Senate.

  • Conferences. Any disagreements in the bills are ironed out by reps from the House and Senate "in conference" - and then okayed again by the full House and Senate.

  • Reconciliation. Here's the trickiest part - many parts of the budget need separate bills to be passed in order to "reconcile" current law with the budget. (See below)

For more details on the budget process, see the Congressional Research Service (pdf).

The reconciliation process

Congress doesn't pass a budget resolution every year (and, if fact, before 2005, it hadn't done so since 1997). Although having a budget resolution isn't necessary, it does make it easier for Congress to pass their final spending bills. The big advantage is the reconciliation process. This is the deal: normally passing a budget is just about numbers - assigning how much money goes to what services and seeing how much money you'll raise to pay for it all - and is not where policy decisions are made. But through the budget resolution and reconciliation, Congress can also cut spending and raise money by changing the laws that govern how much is raised and spent; for example, by deciding to raise or cut a tax or changing the rules on how benefits are doled out. When one of those changes makes it into the budget resolution, it has to be voted into law through reconciliation. What makes folks excited about reconciliation bills is that they can't be filibustered in the Senate. That allows the "reconciliation" process to move controversial items through the budget process, when they likely couldn't make it through otherwise.

Two kinds of reconciliation: Congress breaks up reconciliation into two bills: one that covers spending cuts and one that makes any changes to the tax code.

Authorizations and appropriations

After putting their budget resolution guidelines in place, the House and Senate get to business writing the specifics of their appropriation bills. The House traditionally starts off the process.

Appropriation committees can only, technically, budget money for programs that have already been "authorized" by Congress (in other words, they can't make policy - they can only pay for policy that's already been made). Programs don't have to be authorized every year (the highway authorization bill, for example, took seven years to be re-authorized), but appropriation bills are a yearly happening. The two steps sometimes get confused (or, at least, they've confused us). But it's not just because the words "authorization" and "appropriation" sound so much alike; the Washington Post suggests that as Congress gets slower and slower at reauthorizing bills, appropriation bills are picking up the slack and setting more and more policy, however legally or not.

What's not included in the budget

  • Iraq and Afghanistan costs. The president and Congress have gotten into the habit of approving funds for the Iraq and Afghanistan wars through emergency supplemental funding - but that looks to change in 2008, as the president includes his request for war funding as part of the 2008 budget.
  • Other funding. The same is true for a lot of other "emergency" spending - such as Katrina recovery costs and avian flu preparedness.

Updated February 5, 2007.

Did we miss something, let some slant slip in, lose a link - or do you just have something to say? Drop a line below! In the spirit of open dialogue, cJ asks you keep it civil, keep it real and keep it focused on the message, not the messenger. See our policy page for more on what that all means.

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