Understanding the Federal Budget Appropriations Process
Introduction
Congress annually considers 13 or more appropriations measures that
provide funding for a variety of activities, such as national defense,
education, disaster assistance, crime prevention programs, and general
government operations, e.g., the administration of most federal
agencies. Certain rules and practices devised by Congress for the
consideration of appropriations measures are referred to collectively as
the appropriations process.
Generally, the appropriations process includes the following:
• the annual appropriations cycle;
• spending ceilings for appropriations associated with the
annual budget resolution; and
• prohibitions against certain language (in appropriations
measures) that violates separation of the authorization and
appropriations functions into separate measures.
In considering appropriations measures, Congress exercises the power
granted to it by the Constitution, which states, “No money shall
be drawn from the Treasury, but in Consequence of Appropriations made by
Law ....” The power to appropriate is exclusively legislative. The
executive branch may not spend more than the amount appropriated, and it
may use available funds only for the purposes established by
Congress.
By virtue both of his constitutional power to approve or veto entire
measures and of the various duties imposed upon him by statute, such as
submitting an annual budget to Congress, the President also has an
important role in the appropriations process.
Following is a brief synopsis of the annual appropriations cycle,
spending ceilings, and the relationship between authorization and
appropriations measures.
Annual Appropriations Cycle
PRESIDENT SUBMITS BUDGET
The President initiates the appropriations process by submitting to
Congress his annual budget for the upcoming fiscal year. The President
is required to submit his annual budget on or before the first Monday in
February. (On occasion, Congress has extended the deadline, statutorily
or informally.)
Because Congress provides budget authority rather than cash to
agencies, the President recommends spending levels for the
government’s various programs and agencies in the form of
budget authority , or BA. Budget authority represents the legal
authority for federal agencies to make obligations that usually result
in expenditures (or outlays). These obligations (for example, entering
into a contract to construct a ship or purchase supplies) usually result
in outlays—payments from the Treasury—typically in the form
of checks, electronic funds transfers, or cash disbursements.
Generally, appropriations are a type of budget authority.
Appropriations measures provide new budget authority (as opposed to
previously enacted budget authority). Typically, appropriations must be
obligated in the fiscal year for which they are provided.
Not all new budget authority provided for a fiscal year is expended
that year. For example, outlays may occur over several years, until a
project is completed:
• FY2003, no outlays;
• FY2004, $40 million;
• FY2005, $40 million;
• FY2006, $40 million.
In this scenario, a total of $120 million in outlays is spent over
four fiscal years. As Congress considers appropriations measures
providing new budget authority for a particular fiscal year, discussions
on the resulting outlays only involve estimates. Data on the actual
outlays for a fiscal year are not available until the fiscal year has
ended.
When the President submits his budget to Congress, the agencies
provide detailed justification materials to the House and Senate
appropriations subcommittees, which have jurisdiction over funding for
the particular agencies. In the case of GEAR UP, the Department of
Education is responsible for providing a recommended funding level as
well as funding justification.
CONGRESS ADOPTS BUDGET RESOLUTION
The Congressional Budget and Impoundment Control Act of 1974, as
amended (the Congressional Budget Act), requires Congress to adopt an
annual budget resolution. In the 27 fiscal years in which it has
considered budget resolutions, Congress has adopted a budget resolution
in every year but two (FY1999 and FY2003). There is no penalty if a
budget resolution is not completed.
Usually, the budget resolution is Congress’s response to the
President’s budget. The budget resolution must cover at least five
fiscal years: the upcoming fiscal year plus four additional fiscal
years. The budget resolution is never sent to the President, nor does it
become law. It does not provide spending authority or raise or lower
revenues but instead is a guide for Congress to use as it considers
various budget bills, including appropriations and tax measures.
The budget resolution sets total new budget authority and outlay
levels for each fiscal year covered by the resolution. It also
distributes federal spending among 19 functional categories, e.g.,
national defense, agriculture, transportation, etc., and sets similar
levels for each function. The resolution includes revenue floors for
each fiscal year.
Total new budget authority and outlays are distributed among both the
House and Senate committees with jurisdiction over spending, thereby
setting spending ceilings for each committee.
The Congressional Budget Act provides an April 15 deadline for final
congressional adoption of the budget resolution. However, Congress
frequently does not meet this deadline, and there is no penalty if it is
not met.
The Congressional Budget Act generally prohibits House or Senate
floor consideration of revenue or spending measures for a fiscal year
until Congress adopts the budget resolution. However, even if the budget
resolution is not in place, the House may begin considering regular
appropriations bills after May 15 without violating the act. No such
provision exists in the Senate.
TIMETABLE FOR CONSIDERATION OF REGULAR APPROPRIATIONS
MEASURES
Traditionally, the House of Representatives has initiated
consideration of regular appropriations measures. The House
Appropriations Committee has jurisdiction over appropriations measures
and usually has begun the legislative process by reporting the 13
regular appropriations bills separately to the full House.
Recently, both the House Appropriations Committee and the Senate
Appropriations Committee (which has jurisdiction over appropriations
measures in the Senate) have been reporting the regular appropriations
bills in May or June. The House committee completes all or almost all of
the bills by the annual August recess; the Senate measures typically are
reported prior to the August recess or in September.
During the fall, the appropriations committees usually are heavily
involved in conferences to resolve differences between the two
chambers’ bills. Relatively little or no time remains before the
fiscal year begins to resolve what may be wide disparities between the
House and Senate, to say nothing of those between Congress and the
President. Congress usually is faced with the need to enact one or more
temporary continuing resolutions pending final disposition of the
regular appropriations bills.
TIMING OF APPROPRIATIONS CONSIDERATION AND THE CONGRESSIONAL
BUDGET ACT
The Congressional Budget Act establishes a timetable for the
consideration of appropriation legislation.
April
15
Adoption of the budget resolution.
May 15
Annual appropriation bills may be considered in the House.
June 10
House Appropriations Committee reports last annual appropriation
bill.
June 30
House completes action on annual appropriation bills.
October
1 Fiscal
year begins [all appropriations actions to be completed].
The deadlines focus on the House because the conventional pattern for
consideration of appropriations is for the House to originate the
measures; this works to ensure timely consideration by the House, the
Senate, and conference committees.
WORK OF THE APPROPRIATIONS COMMITTEES
After the President submits his budget, the House and Senate
Appropriations Committees hold full committee and subcommittee hearings
on the segments of the budget under their jurisdiction. The 13
appropriations subcommittees in each house hold more detailed hearings
on the agencies’ justifications, obtaining testimony primarily
from agency officials and, occasionally, from public witnesses.
TYPES OF APPROPRIATIONS MEASURES
Annually, Congress considers 13 regular appropriations bills that
correspond to the 13 appropriations subcommittees in the House and
Senate:
• Agriculture;
• Commerce, Justice, State, The Judiciary;
• Defense;
• District of
Columbia;
• Energy and Water Development;
• Foreign Operations;
• Homeland Security;
• Interior;
• Labor, Health and Human Services, Education (bill containing
GEAR UP);
• Legislative Branch;
• Military Construction;
• Transportation, Treasury, Independent Agencies; and
• Veterans Affairs, Housing and Urban Development, Independent
Agencies.
Each appropriations subcommittee has jurisdiction over one regular
appropriations bill, with the House and Senate appropriations
subcommittees sharing jurisdiction over the same agencies and programs.
For example, the House and Senate Labor/HHS/Ed appropriations
subcommittees have jurisdiction over federal spending for these
agencies.
After the hearings have been completed and the House and Senate
Appropriations Committees have received their committee spending
ceilings from the budget resolution, the House and Senate appropriations
subcommittees begin to mark up the regular bills under their
jurisdiction and report them to their respective full committees. Each
committee considers each of its subcommittee’s recommendations
separately. The committees may adopt amendments to a subcommittee bill
and then report the bill as amended to their respective floors for
action.
Recently, the Senate Appropriations Committee has reported either
original Senate regular appropriations bills or substitute amendments
replacing the texts of the House-passed bills.
HOUSE AND SENATE FLOOR ACTION
After the House or Senate Appropriations Committee reports an
appropriations bill, the bill is brought to the floor.
At this point, Representatives or Senators are provided an
opportunity to propose floor amendments to the bill.
House—Prior to floor consideration of a regular
appropriations bill, the House generally considers a special rule
reported by the House Rules Committee setting parameters for floor
consideration of the bill. If the House adopts the special rule, it
usually considers the appropriations bill immediately.
The House considers the bill in the Committee of the Whole, of which
all Representatives are members. A special rule on an appropriations
bill usually provides for one hour of general debate on the bill. The
debate includes opening statements by the chairman and ranking minority
member of the appropriations subcommittee with jurisdiction over the
regular bill, as well as other interested Representatives.
After the Committee of the Whole debates the bill, it considers
amendments. Amendments must meet the following requirements:
• House standing rules and precedents: for example, amendments
must be germane to the bill;
• authorization-appropriations process, which enforces the
relationship between authorization and appropriations measures in the
congressional budget process; and
• special rule providing for consideration of the particular
bill.
If an amendment violates any of these requirements, any
Representative may raise a point of order to that effect. If the
presiding officer rules the amendment out of order, it cannot be
considered on the House floor. The special rule may waive any of these
requirements, thereby allowing the House to consider the amendment.
During consideration of individual regular appropriations bills, the
House sometimes sets additional parameters, either by adopting a special
rule or by unanimous consent. The House agrees to the parameters only if
no Representative objects. For example, the House sometimes agrees to
limit debate on individual amendments by unanimous consent.
After the Committee of the Whole completes consideration of the
measure, it reports the bill with any adopted amendments to the full
House. The House then votes on the adopted amendments and passage. After
House passage, the bill is sent to the Senate.
Senate—The full Senate considers the bill as reported by
its Appropriations Committee. The Senate does not utilize the device of
a special rule to set parameters for consideration of bills. Before
taking up the bill, however, or during its consideration, the Senate
sometimes sets parameters by unanimous consent.
When the bill is brought up on the floor, the chairman and ranking
minority member of the appropriations subcommittee make opening
statements on the contents of the bill as reported.
Committee and floor amendments to the reported bills must meet
requirements under the Senate standing rules and precedents, the
authorization-appropriations process, and the congressional budget
process. The specifics of the Senate and House requirements differ. As
in the House, the Senate sometimes waive some of these rules.
When the Senate Appropriations Committee reports a Senate bill and
after the full Senate has completed action on it, the Senate waits for
the House to send its bill to the Senate and amends the House-passed
bill with usually a substitute amendment that contains the text of
the Senate bill as amended on the Senate floor.
HOUSE AND SENATE CONFERENCE ACTION
Members include those of the
House and Senate appropriations subcommittees having jurisdiction over a
particular regular appropriations bill, the chairmen of the full
committees, and the ranking minority members of the full committees.
Members of both houses meet to negotiate differences between the House-
and Senate-passed bills.
Under House and Senate rules,
the negotiators (or conferees or managers) typically are required to
remain within the scope of the differences between the positions of the
two chambers. Their agreement must be within the range established by
the House- and Senate-passed versions. For example, if the House-passed
bill appropriates $3 million for a program and a separate Senate
amendment provides $5 million, the conferees must reach an agreement
that is within the $3–5 million range. However, these rules are
not always followed.
When the Senate passes a single
substitute amendment to a House bill, the conferees must reach agreement
on all points of difference between the House and Senate versions before
reporting the conference report in agreement to both houses. When this
occurs, the conferees propose a new conference substitute for the bill
as a whole. Conferees attach a joint explanatory statement (or
managers’ statement) explaining the new substitute.
By tradition, the House usually
considers conference reports on appropriations measures first. The first
house to consider a conference report has the option of voting to
recommit the report to the conference for further consideration to
reject the conference report, or adopt it. After the first house adopts
the conference report, the conference is automatically disbanded,
leaving the second house two options: to adopt or to reject the
conference report. Conference reports cannot be amended.
If the conference report is
rejected or recommitted by the first house, the conferees negotiate
further over the matters in dispute. The measure cannot be sent to the
President until both houses have agreed to the entire text of the
bill.
PRESIDENTIAL ACTION
After Congress sends the bill to the President, he has 10 days to
sign or veto the measure. If he takes no action, the bill automatically
becomes law at the end of the 10-day period. Conversely, taking no
action once Congress has adjourned constitutes a “pocket
veto” of the bill.
If the President vetoes the bill, he sends it back to Congress.
Congress may override the veto by a two-thirds vote in both houses. If
Congress successfully overrides the veto, the bill becomes law. If
Congress is unsuccessful, the bill dies.
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