What Exactly Is the “Budget”? A Short Explanation of the Federal Budget Process

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What Exactly Is the “Budget”? A Short Explanation of the Federal Budget Process
By: David Berteau

On March 4, the president submitted to Congress his administration’s proposed budget for Fiscal Year 2015. Now the House and the Senate are each required to pass their budget by April 15. Eventually, Congress passes one or more appropriations bills called “budgets,” or they pass temporary budgets (a “continuing resolution” to keep the government running). What are all these “budgets”? Each one has a different meaning, and politicians deliberately misuse the terms. Let’s look at each in turn and how they can be misused.

The President’s Budget submission to Congress is technically only a formal budget request for the entire federal government, but the president’s request forms a large part of what Congress eventually passes. Members of Congress have attacked it as too low in one area (like defense) or too high in others (say, education funding), as if they have no say in final spending.

First, though, the House and the Senate each have to pass a Budget Resolution. These bills do not change the president’s budget but instead set baselines for Congress to appropriate funds for each government agency. Republicans criticized the Senate for not passing a “budget” for four years, but that had no impact because there are alternate ways to reach the same results. The Senate is likely to use last December’s Bipartisan Budget Act instead. The House may pass a budget resolution that defies its own Budget Control Act caps. Each of these approaches serves the political goals of the Senate and House leadership.

What matters to federal agencies, though, are appropriations, the only part of the entire budget process that is in the Constitution. These bills actually change the president’s budget, raising or lowering requests, adding or deleting programs and line items. That’s the third “budget,” and without it, the government shuts down (as happened last October). With it, each agency releases funds for spending. In wartime Iraq, for example, the Army often released funds just one week at a time. For the soldiers at the end of that process, that was the only “budget” they cared about!

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