The Budget Process

February 13, 2012

THE BUDGET PROCESS: A TIMELINE OF TARDINESS

Before the government’s next fiscal year begins (runs from October 1, 2012 – until September 30, 2013), Congress and the President must fund some of government’s spending. The federal budget process has been muddied and been made confusing, so let’s examine exactly how it works.

THE BUDGET PROCESS

Step one: Gearing up for the budget process, the Congressional Budget Office reports to Congress its annual economic forecast.

On January 31, 2012, the non-partisan Congressional Budget Office (CBO) submitted its annual economic outlook, something it does each January. In this document, it establishes what is known as the CBO baseline, an important figure in the federal budget process.1 According to the CBO “baseline projections must estimate the future paths of federal spending and revenues under current law and policies…[the baseline] is meant to serve as a neutral benchmark that lawmakers can use to measure the effects of proposed changes to spending and taxes2.”

Step two: The President Submits Budget Request (a.k.a. “the President’s budget) to Congress.

The Budget and Accounting Act of 1921 requires the President to submit a budget to Congress on an annual basis. It also created the Bureau of the Budget, now known as the Office of Management and Budget (OMB), to assist the President in creating a budget. The OMB also serves as the principle auditing agency of the federal government. The President is required by law to submit his budget to Congress by the first Monday in February.3 However, the budget is sometimes delivered late, as is the case this year since the President isn’t releasing his budget until February 134 . Although the President is one week late with his request this year, he’s not tardy as Congress has been in the last several years —it hasn’t enacted a budget for nearly three years5, even though they are required by law to do so6.

Step three: Congressional committees submit policy priorities and funding requests to Budget Committees (a.k.a. views and estimates).

After the President submits his budget proposal to Congress, within six weeks, House and Senate committees are to submit to their respective Budget Committee “views and estimates” regarding spending and revenue matters in their jurisdiction. In theory, this information is used as the House and Senate Budget Committees draft their budget outlines.7

Step four: The Senate Budget Committee reports a Concurrent Resolution on the budget by April 1 (usually late, if it happens at all).

Even though the Senate Budget Committee has a specific deadline to report out a budget, no specific date is established for the House to do the same8 . This year, as Senate Majority Leader Reid has indicated9, the Senate is unlikely to report a budget by April 1.

Step five: Congress passes concurrent resolution on budget by April 15.

Congress rarely passes a budget by April 1510 . Generally, the budget sets a topline discretionary spending number—the limit that the Appropriation Committee can spend. Some consider this limit setting to be the most important aspect of a budget process, since it lays out what the Appropriation Committee can spend.

So what happens if no budget is passed? Congress will pass a “deeming resolution” that sets the topline spending number11 or do what they did last year—insert the topline spending number in a piece of legislation (such as the Budget Control Act that raised the debt ceiling)12.

The facts are clear: Congress has not passed a budget resolution in three years. This failure is nothing new – past Congresses have a poor track record of passing budgets, too, including for Fiscal Years 2003, 2005, and 200713.

Step six: With a topline discretionary spending number set on how much they can spend, Appropriations Committees in House and Senate Gear up to Consider Spending bills14.

Step seven: House Appropriation Committee may begin reporting appropriation bills out of the committee to full House (May or June); the Senate may begin reporting its appropriation bills later (June or July and continues throughout fall).15

Reporting out a bill simply means it is favorably reported by a Committee and moves to the full House or Senate where it may be considered.

Step eight: Fiscal Year begins (October 1)

Congress routinely misses this deadline—to fund the government in full by the start of the new fiscal year.

 

To view this .pdf, click here.

1 Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2012-2022. January, 2012. http://www.cbo.gov/doc.cfm? index=12699

2 Congressional Budget Office: FAQ’s. http://www.cbo.gov/aboutcbo/faqs.cfm
3 Congressional Research Service: The Congressional Budget Process. P. 1. January 28, 2004. http://fpc.state.gov/documents/organization/34649.pdf

4 Reuters: Obama to deliver budget on February 13. January 23, 2012. http://www.reuters.com/article/2012/01/23/us-usa-obama-budget- idUSTRE80M1YH20120123

5 Library of Congress: Thomas. 111th Congress, S.Con. Res 13. Accessed February 9, 2012. http://thomas.loc.gov/cgi-bin/bdquery/z? d111:SC00013:@@@X

6 Congressional Research Service: The Congressional Budget Process. P. 6. January 28, 2004. http://fpc.state.gov/documents/organization/ 34649.pdf

7 Congressional Research Service: The Congressional Budget Process. P. 2. January 28, 2004. http://fpc.state.gov/documents/organization/ 34649.pdf

8 Congressional Research Service: The Congressional Budget Process. P. 6. January 28, 2004. http://fpc.state.gov/documents/organization/ 34649.pdf

9 Subscription Service: Congressional Quarterly. Reid: No Vote on Fiscal 2013 Budget Resolution. February 3, 2012. http://www.cq.com/doc/ news-4022481

10 Congressional Research Service: The Congressional Budget Process. P. 6. January 28, 2004. http://fpc.state.gov/documents/organization/ 34649.pdf

11 http://fpc.state.gov/documents/organization/34649.pdf. P. 4.


12 Subscription Only. Congressional Quarterly: Reid: No Vote on Fiscal 2013 Budget Resolution. February 3, 2012. http://www.cq.com/doc/news-4022481
13 http://www.senate.gov/CRSReports/crs-publish.cfm?pid=’0E%2C*PLS2%23%20%20%20%0A. P. 4.

14 Congressional Research Service. The Congressional Appropriations Process: An Introduction. PP. 4 – 5. http://assets.opencrs.com/rpts/ 97-684_20101202.pdf

 

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