Blog #9: Federal Budget Process

The federal budget process is the process of creating the budget for the United States government. The federal budget process begins with the President's submitting to Congress his proposed federal budget for the next fiscal year. The federal government's fiscal year currently begins on October 1st and ends on September 30th of the next calender year. The President's budget request constitutes an extensive proposal of the administration's intended spending and revenue plans for the following fiscal year. The budget proposal includes volumes of supporting information intended to persuade Congress of the necessity and value of the budget provisions. Next, the House and the Senate budget committees draft a budget resolution, which is a framework within which the members of the committees will make their decisions about spending and taxes. A budget resolution includes targets for total spending, total revenues, and the surplus or deficit, and allocations within the spending target for discretionary spending and mandatory spending. Discretionary spending, which accounts for one-third of all Federal spending, is what the President and Congress must decide to spend for the next fiscal year through the 13 annual appropriations bills. Mandatory spending, which accounts for two-thirds of all Federal spending, is spending authorized by permanent laws rather than the 13 annual appropriations bills. For discretionary programs, Congress and the President must act each year to provide spending authority, while for mandatory programs, they may act to change the spending that current laws require. Once both houses pass the resolution, selected Members of the Senate and the House typically negotiate a conference report to reconcile differences between the House and the Senate versions. The conference report, in order to become binding, must be approved by both the House and Senate. Once both Houses of Congress and the President approve the the budget resolution, the Government then monitors the spending through agency programs, the OMB, the GAO, and Congressional committees.

http://www.gpoaccess.gov/usbudget/fy02/pdf/guide.pdf