The Budget Process Explained in 13 Facts

ExplainerThe Budget Process Explained in 13 Facts

Budget & Tax,  | Quick Take
Feb 12, 2018  | 4 min read | Print Article

New to the budget process and how the government goes about deciding how to spend your money? Look no further.

Taxpayers for Common Sense has been tracking the details and watching Congress for twenty years and change. Here’s a baker’s dozen quick facts about the federal budget:

  1. The current federal budget process was created by the Congressional Budget and Impoundment Control Act of 1974.
  2. In theory, the process revolves around both chambers of Congress passing resolutions that set both spending and revenue levels. After conferencing – meeting and comparing – the two resolutions to work out any differences, the House and the Senate pass a concurrent resolution, which is not submitted to the President and does not have force of law.
  3. The President’s Budget Request is supposed to be submitted to Congress the first Monday of February and kicks off the budget process. The budget request proposes spending and revenue levels, and outlines the priorities for the administration. It also often includes a list of programs the administration proposes to eliminate.
  4. After the introduction of the President’s Budget Request, Congress usually holds hearings which involve senior officials at different government agencies discussing and defending their budget proposal.
  5. Congress is under no obligation either to hold hearings on the budget request or even consider any of the president’s suggestions.
  6. In the 42 years since the establishment of the current budget process, Congress has failed to pass a concurrent budget resolution 8 times – almost 20 percent of the time.
  7. The Budget resolution is not subject to filibuster (super majority) in the Senate, but all germane amendments must be considered. The Senate consideration ends in a “vote-a-rama” where all amendments are disposed of consecutively. Since the resolution does not have the force of law, many of these amendments are about scoring policy points rather than governing.
  8. Based on the spending levels set by the budget resolution (or by a “deeming resolution” in years when a budget resolution has not been adopted), the Appropriations committees are charged with drafting 12 separate bills to fund the next fiscal year.
  9. In 2011, Congress passed the Budget Control Act which established a $1.2 trillion deficit reduction target, this in turn created annual spending limits for a 10 year period, enforced by sequestration (across-the-board cuts to amounts excess of the limit). Congress has amended the spending limits upwards four times – in 2012, 2013, 2015, and most recently this month, avoiding sequestration and deferring deficit reduction. Other budget control mechanisms are routinely evade.
  10. While the budget resolution can include recommendations on the mandatory side of the budget – things like social security, farm subsidies, and Medicare – the spending levels apply only to the discretionary budget, about a third of overall federal spending.
  11. In the last 42 years, Congress has only passed all appropriations bill on time four times, the last time in 1996. The last time all the bills were passed individually and on time (regular order) was 1994.
  12. The concurrent budget resolution can include reconciliation instructions regarding revenue, mandatory spending (except Social Security) and the debt limit. These direct the tax-writing and authorization committees (those overseeing the two-thirds of the budget not subject to annual appropriations) to adjust the tax code and programs to reduce or increase spending.
  13. Adoption of budget reconciliation requires a simple majority vote in the Senate and is not subject to filibuster. The instructions are adopted by Congress with presidential approval, but the final reconciliation package with changes to law is sent to the president’s desk for signature or veto.
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