The Federal Budget Process
Under Article 1 of the U . S . Constitution , Congress is granted the exclusive power to “ lay and collect Taxes , Duties , Imposts and Excises , and to pay the Debts and provide for the common Defence and General Welfare of the United States .”
In 1974 , lawmakers passed the Congressional Budget and Impoundment Control Act in an effort to standardize the annual process for deciding tax and spending policy for each federal fiscal year and to prevent the executive branch from making spending policy reserved to Congress . Among other things , it created the House and Senate Budget Committees and set timetables for each step of the budget process .
Perhaps most significantly , the 1974 Budget Act also created the Congressional Budget Office ( CBO ). This non-partisan agency has come to play a pivotal role in not just the budget process , but in the lawmaking process in general . The CBO issues economic forecasts , policy options , and other analytical reports , but it most significantly produces estimates of how much individual legislation would cost or save the federal government . Those estimates can and do often determine if legislation passes or fails .
The annual budget process is supposed to begin the first Monday in February , when the President is to present his proposed budget for the fiscal year that begins the following Oct . 1 . This is one of the few deadlines in the Budget Act that is usually met .
After that , the action moves to Congress . The House and Senate Budget Committees each write their own “ Budget Resolution ,” a spending blueprint for the year that includes annual totals for mandatory and discretionary spending . Because mandatory spending ( roughly twothirds of the budget ) is automatic unless changed by Congress , the
budget resolution may also include “ reconciliation instructions ” to the committees that oversee those programs ( also known as “ authorizing ” committees ) to make changes to bring the cost of the mandatory programs in line with the terms of the budget resolution . The discretionary total will eventually be divided by the House and Senate Appropriations Committees between the 12 subcommittees , each responsible for a single annual spending ( appropriations ) bill . Most of those bills cover multiple agencies – the appropriations bill for the Department of Health and Human Services , for example , also includes funding for the Departments of Labor and Education .
After the budget resolution is approved by each chamber ’ s Budget Committee , it goes to the House and Senate floor , respectively , for debate . Assuming the resolutions are approved , a “ conference committee ” comprised of members from each chamber is tasked with working out the differences between the
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NEWS AND TRIBUNE HEALTHCARE GUIDE 2025
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