Apr 17, 2011 - 7 Comments - economy, politics -

How a government budget is born

Total budgetary spending

Total budgetary spending

Each federal department prepares their own respective budget, about 10 months before the President is required by law to send the complete proposal to Congress. Then, after each federal agency has prepared their budget, each department sends its funding requests to the President’s Office of Management and Budget. The OMB department takes a look, reviews each federal agency’s budget, either approves each department’s request or sends it back with recommended changes. If an agency’s budget is declined by the OMB, that federal department can either amend their budget and resubmit it or appeal to the director. Of course no department wants their budget proposal bounce back to them.

In some cases, an agency can appeal to the President to overrule the OMB’s decisions. Once the OMB approves of each agency’s budget they are all compiled into one document by the OMB and the complied budget is sent to the President. The President then sends the complete budget proposal to Congress. During the ten months, the President is developing his or her budget; Congress is developing its own budget. This is a concurrent budget. The President’s budget is not legally binding, but provides a framework for Congress to work with.

Each year most of the proposed budget is in the form of mandatory spending, the remaining being in the form of discretionary spending. Concerning mandatory spending, the laws authorizing the original act also include the budgetary authority to continue spending on the program. These acts would include our major entitlement programs such as Social Security, Medicare and Medicaid. The funding for most of our major entitlements is open-ended having no upper spending limits. However, there are exceptions such as the act authorizing the Food Stamp program. Funding for the Food Stamp program requires periodic renewal by Congress. Discretionary spending programs require authorization annually and must go through the House and Senate committees on Appropriations for each upcoming fiscal year.


Once Congress receives, the President’s budget proposal the House and Senate budget committees review it. The OMB and other officials from the administration testify to the House and Senate budget committees with their justifications as to why there should be a proposed increase or decrease in the funding of certain federal programs. The House and Senate Budget committees then draft the budget resolutions necessary to fund our government programs. Once this is accomplished, each budget resolution is voted on or amended on the House and Senate floors. Once Congress has reviewed all necessary budget resolutions, the annual appropriations bills can then be passed. Approved appropriations bills are forwarded to their matching respective sub-committees, authorizing each subcommittee to spend money by producing legislation for the next fiscal year. The subcommittees develop legislation to spend the money and forward their recommendations through to their own committee. The committee reviews the subcommittee’s legislation and if it accepted, it is then sent to the House or Senate floor to be amended and/or voted on. Once the bill is finally passed, the federal agency the bill is meant for receives the approval to spend its appropriations for that year.

Each annual budget resolution sets forth spending and credit amounts for each year by functional category. There are total of 20 functional categories in a yearly budget resolution. A yearly budget resolution includes a 302(a) allocation table that outlines what funding is to be distributed to each of the 12 subcommittees that decide how our federal revenue is spend each year. Each committee’s budget is dictated by their respective budget resolution, and the funding is then distributed accordingly. This represents the total dollar limit each committee can spend by passing legislation to spend it each year. For example, the education committee could produce legislation to increase Title I spending, however it cannot be spent until the Labor-HHS Education appropriations bill is passed, which sets the total amount of Title I spending that can be spent in that year.

Some committee categories outlined by the 302(a) table are: National Defense (50) Energy (270) Education, training, employment and social services (500)

Each category is then divided into its respective subcategories. One example is category 500. Category 500 is broken down into subcategories such as: Elementary, secondary, and vocational education (501) Higher education (502) Research and general education aids (503)  Training and employment (506)  Scientific and health research are in subcategories (250) and (552) respectively.

Although the budgetary process is somewhat removed from direct political intervention (popular vote), it is effected by the public. Note: You can effect change in the budget. The budget is in large part a reflection of the President’s political views. Our federal budget’s priorities will change based on who is President and those whom are elected in Congress. Since the party who controls the House and/or Senate takes control of all committees and their appointments, voting matters. This means that lobbying the various committee and subcommittees that oversee the budget for health research can increase the spending on such worthy endeavors. Endorsing candidates who run for Congress or the Presidency will have a major effect on what is eventually presented in the budget if that candidate is voted into office. So, actions such as voting, endorsing candidates, lobbying for additions to a bill and sending petitions requesting budgetary changes in a bill to those who may increase funding or have views in favor of healthcare research and cancer research, will in fact probably increase the funding of such items.

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