The Federal Budget Process and the Role Played by Congress

• Neville Gabby
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• April 27, 2019

The Federal Budget Process is a 9-step plan outlined by the 1974 Budget Control Act, establishing the role and authority of Congress in appropriating government funds, which the latter will present as a centralized and consolidated budget plan for the federal government at the start of every fiscal year.

Take note that a fiscal year is different from the calendar year that conventionally starts on January 01 and ends on December 31. A fiscal year also covers a 12-month period, but may start and end on any date agreed and settled upon by the federal Congess, state Congress or by a business entity, as the cyclic period. Currently, the the Federal Budget Process is being carried out to create a Budget Resolution for a 12-month period starting October 01 and ending September 30.

The Federal Budget Process

The 9-step process mainly involves submission of budget requests to the Office of Management and Budget (OMB), coming from all federal agencies. The OMB in turn, carries on with the process by reviewing, assembling and preparing all budget requests before they are forwarded to the Office of the President.

Once forwarded, the Office of the President will in turn prepare a budget proposal indicating in dollar values, the President’s funding levels and priorities for each federal agency. The proposal may include changes to mandatory programs that Congress had already enacted; and/ or make certain changes to the tax code.

After which, the President’s final budget proposal will be submitted to Congress, where the final steps of the Federal Budget Process, take place.

The Role of Congress in the Federal Budget Process

The U.S. Constitution empowered Congress to raise revenue from where government spends will be derived and appropriated. Elected officials voted as representatives of their respective state take up positions in Congress either as house representative (congressman) or senator.

Both the House of Representatives and the Senate maintain their own budget committees, whose output will be significant during deliberations and negotiations for the final appropriations bill. Part of their output are the results of hearings with the head of federal agencies, to establish the propriety and necessity of the funds requested.

In addition, there is also a Congressional Budget Office to which certain congressional members are tasked to provide non-partisan analysis and review of the budget proposed by the President of the United States for each fiscal year.

After which, a consensus must be reached by Congress on where the tax burdens must fall, on who are the recipients of the spending benefit and on funding priorities.

The final budget projections and allocations are stated in hard numbers. Once all matters have been considered and agreed upon by the members of the House of Representatives, a Budget Resolution will be prepared and passed to the Senate for review and approval. Once the Senate approves the Budget Resolution passed by the House of Representatives, the approved budget will then be forwarded to the President of the United Stated for approval.