The Federal Budget Process

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Running head: The Federal Budget Process

The Federal Budget Process

Abstract
This report focuses on the federal budget process of the United States of America. The annual federal budget begins with a detailed proposal from the President in February. The budget request is developed by the President’s Office of Management and Budget (OMB). Next, Congress creates a blueprint called a budget resolution that sets limits on how much each committee can spend (or reduce revenues) over the course of the year. The terms of the budget resolution are then enforced against individual appropriations, entitlement bills, and tax bills on the House and Senate floors. In addition, Congress sometimes uses a special procedure called “reconciliation” to facilitate the passage of deficit reduction legislation or other major entitlement or tax legislation.

The Federal Budget Process
The federal Budget of the United States of America is the President’s proposal to the Congress recommending funding levels for the next fiscal year which begins on October 1 (Heniff, 2001). It is through the budget that the nation chooses what areas it wishes to leave to private choice and what services it wants to provide through government. When enacted, the budget represents the decisions of the Nation’s elected representatives as to which governmental services should be provided at the Federal rather than the State or local level (Mikesell, 2011; Myers, Rumburg, & Johnson, 1989). The basic law governing the content of the president’s budget is the Budget and Accounting Act of 1921 (Posner, 2009). This law not only created the requirement for the president’s budget, but set in motion ever-increasing demands for information to support the preparation and packaging of the president’s budget. Further, by the creation of the General Accounting Office, this law codified the need to check spending before the fact (Posner, 2009). On or before the first Monday in February, the president is required to submit to Congress a detailed budget request for the coming federal fiscal year (Mikesell, 2011). However, in years where there is a change in administration, the budget is submitted later (Policy Basic, 2011). The budget process is guided by a set of procedures laid out in the Congressional Budget Act of 1974 (Apfel, 2008). In the last four decades, Congress has reformed its budget process several times (Reischauer, 1990). The major reforms include the 1974 Congressional Budget Act; the 1985 Balanced Budget and Emergency Deficit Control Act; and the 1990 Budget Enforcement Act (Heniff, 2001). Prior to the 1974 Congressional Budget Act, Congress did not have a budget process that considered the entire budget, rather it had separate appropriations, tax-writing, and authorization processes (Heniff, 2001). The centerpiece of the Congressional Budget Act of 1974 is the requirement that Congress each year develop a “budget resolution” setting aggregate limits on spending and targets for federal revenue (Policy Basics, 2011). The limits set by the budget resolution, along with a companion “pay-as-you-go”, apply to all tax or spending legislation developed by individual committees as well as to any amendments offered on the House or Senate floor (Policy Basics, 2011). The federal budget process includes; the President’s annual budget request, the congressional budget resolution, enforcing the terms of the budget resolution in the House and Senate, and budget reconciliation process (Policy Basics, 2011). The president’s budget is the first step in the complex process of funding the federal government (Yourish & Stanton, 2011). As mentioned above, the president is required to submit a detailed budget request for the next fiscal year on or before the first Monday in February. The budget request is developed by the President’s Office of Management and Budget (OMB) and it has three main roles (Policy Basics, 2011). First, through the...
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