The Federal Budget
The US constitution designates the authority to formulate the laws applied in the creation and collection of taxes as well as borrowing of the required finances to the congress. The budgeting process has evolved overtime as the congress passed laws that shaped it into its current status, and formed the federal agencies, such as Government accountability office, office of management and budget, and congressional budget office involved in oversight and conducting of the budgetary research. This paper describes the process of making a federal budget.
The democratic principles that characterize the American constitution reflect the values supported by the majority of the American people. However, Patterson (2006) avers that most people feel that the budget process does not reflect their values, and that the budgeting process is complicated to understand. The federal budget sets the priorities and levels of spending, the means through which spending plans will be financed, and setting forth of a plan for managing funds. Thus, the budget that is adopted every year includes the receipt and spending for fiscal year that has been completed and the spending estimates for the upcoming fiscal year and nine years to come. The five steps involved in the budget process includes submission of the budget request to the congress by the president, congressional budget resolution, marking up of the appropriations bill by House and Senate Subcommittees to the house appropriations committee, voting on the appropriations bill, and resolving any arising differences by the house and signing of the appropriations bill into law by the president (Figure 1).
Figure 1: Annual Budget Process Flowchart
The president is supposed to submit the administration’s budget before the first Monday of the month of February. Although it lacks the force of the law, the president’s proposal sets the tone for the budget making process through revealing his/her belief on the amount of spending levels, and their priorities for spending, and suggesting changes for spending and tax policies. The president’s proposal request is reviewed by the House and Senate committees on budget in a month long process, with each writing a budget resolution (Congressional Research Service, 2011). The budget resolution is a blueprint that provides the framework for congress to make decisions on spending and taxes. It sets the general spending limits for all federal agencies; it does not dwell on the specific limits for distinct programs. The House and Senate vote and pass the budget after all differences have been resolved through the joint conference. The precise levels of budgetary allocations are determined by the appropriations committees that are further broken down into subcommittees that review the president’s budget request under specific jurisdictions. The information gathered from leaders of the concerned federal agencies is used by the chair of each subcommittee to write the first draft of the appropriations bill that is amended, and voted for by the subcommittee members. The appropriations bills for the 12 subcommittees are presented to the two chambers for consideration. A conference committee is set to resolve any differences between the house and senate versions of each appropriations bill after voting independently. This leads to the production of a reconciled version of the bill that is subjected to another round of voting on an identical bill in both chambers. The bills from the two chambers are then submitted to the president for signing.
The federal budget process commences with the president’s proposal, development of a budget resolution by the parliament, enforcement of individual appropriations on the House and Senate floors, voting of the appropriations bill by the chambers, and signing of the bill into law by the president. Some of the factors that affect the process include party politics and distinct economic philosophies.
Congressional Research Service, (2011). The Congressional Budget Process: A Brief
Overview. Report 20-095.
Patterson, T. E. (2006). We the people: a concise introduction to American politics. (6th Ed).