LegiStorm

Summary:

Under the U.S. Constitution, Congress exercises the "power of the purse." This power is expressed through the application of several provisions. The power to lay and collect taxes and the power to borrow are among the enumerated powers of Congress under Article I, Section 8. Furthermore, Section 9 of Article I states that funds may be drawn from the Treasury only pursuant to appropriations made by law. The Constitution, however, does not prescribe how these legislative powers are to be exercised, nor does it expressly provide a specific role for the President with regard to budgetary matters. Instead, various statutes, congressional rules, practices, and precedents have been established over time to create a complex system in which multiple decisions and actions occur with varying degrees of coordination. As a consequence, there is no single "budget process" through which all budgetary decisions are made, and in any year there may be many budgetary measures necessary to establish or implement different aspects of federal fiscal policy. This report describes the development and operation of the framework for budgetary decisionmaking that occurs today and also includes appendices that provide a glossary of budget-process-related terms and a flowchart of congressional budget process actions. Since the early years of the Republic, procedures and practices concerning the consideration, enactment, and execution of budgetary legislation have evolved to meet changing needs and circumstances. Many aspects of the framework for budgetary decisionmaking were established in the early years, including the idea that appropriations be considered separate from general policy legislation. The 19th century also saw Congress take action in several ways to exercise control over how federal agencies spent money. One approach involved enacting increasingly specific appropriations legislation to direct the use of funds. General restrictions on agency discretion were also imposed by statute. For example, beginning in 1870, antideficiency acts were enacted to prevent agencies from exceeding appropriations made by Congress for any fiscal year or obligating payments in anticipation of future appropriations. In the 20th century, the Budget and Accounting Act of 1921 created a statutory role for the President by requiring agencies to submit their budget requests to him and, in turn, for him to submit a consolidated request to Congress. Other important changes included the advent of direct (mandatory) spending and the enactment of the Congressional Budget and Impoundment Control Act of 1974, which provided Congress with a vehicle for making decisions about overall fiscal policy and priorities and also established the House and Senate Budget Committees and the Congressional Budget Office. Since 1985, budgetary decisionmaking has also been subject to various budget control statutes designed to restrict congressional budgetary actions or implement particular budgetary outcomes. Altogether, this evolution has resulted in the framework in which budgetary decisionmaking occurs today. Many budgetary actions result from permanent or long-term statutes, but the cycle for decisionmaking remains based on a characteristically annual timetable. The President is required to submit a budget request to Congress early in the legislative session. The President's budget is only a request to Congress, but it establishes the President's wishes regarding the direction of national policies and priorities and often influences the direction of congressional revenue and spending decisions. Congress can coordinate various budget-related actions (such as consideration of revenue and spending measures) through the adoption of a concurrent resolution on the budget to set aggregate budget policies and functional spending priorities for at least the next five fiscal years. Because a concurrent resolution is not a law—the President cannot sign or veto it—the budget resolution does not have statutory effect, so no money is raised or spent pursuant to it. Revenue and spending levels set in the budget resolution, however, do establish the basis for enforcement of congressional budget policies through points of order. In recent years, the use of a budget resolution has often been supplanted by the use of various deeming provisions that use alternate means to establish the basis for budgetary enforcement actions. Budget policies are subsequently implemented through action on individual revenue and debt limit measures, annual appropriations acts, and direct spending legislation. If Congress agrees to a budget resolution, it may later consider reconciliation legislation pursuant to reconciliation instructions included in the budget resolution. Reconciliation legislation is subject to expedited procedures that can be used to bring existing revenue and direct spending laws into conformity with policies established in the budget resolution. Action on annual appropriations measures allows Congress to set the level of discretionary spending annually. Congress passes three main types of appropriations measures: regular appropriations to provide budget authority to fund programs and agency activities for the next fiscal year, supplemental appropriations to provide additional budget authority during the current fiscal year if the regular appropriation is insufficient or to finance activities not provided for in the regular appropriation, and continuing appropriations (often referred to as continuing resolutions or CRs) to provide interim (or sometimes full-year) funding to agencies for activities or programs not yet covered by a regular appropriation.