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Public Policy
Your nonprofit can make known how significant federal budget decisions are to your constituents and your ability to meet their needs without being a budget expert. See below to learn what makes up the federal budget and when important decisions are made.
The budget consists of three primary components: 1. the amount of money the government is going to raise; 2. the amount it is going to spend; and 3. the amount by which it is going to raise or lower its outstanding debt.
Spending initiatives likewise can be divided into three categories:
- Financing of services like Social Security, Medicaid, the Food Stamp Program, and the State Children's Health Insurance Program, programs whose funding levels are set by statute and which those in Washington call "mandatory" or "entitlement" spending;
- Funding of defense-related "discretionary" activities, whose funding levels must be determined annually through the appropriations process, and which include the salaries of soldiers and sailors, research and development, and the
acquisition of weapons, vehicles, and other technology; and
- Financing of non-defense initiatives or non-defense "discretionary" programs, whose funding levels must also be determined annually through the appropriations process.
In real terms, non-defense discretionary funding guides the operations of nearly every federal government agency and program and largely determines how much federal assistance state and local governments will receive. The programs fall into a wide range of categories of benefit to Americans throughout the nation. Just a few examples include programs in the areas of agriculture, education, housing, health and human services, the environment, arts, and transportation.
Where Does the Money Go? a powerpoint guide to the federal budget from the editors of Public Agenda online
Learn more from "A Citizen's Guide to the Federal Budget" (PDF) from the Office of the President.
Also see the Center on Budget and Policy Priorities' "Introduction to the Federal Budget Process."
Look up additional budget terms in our Budget Terms Glossary.
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See an outline of the budget approval process below or visit our Budget Intervention Points, which outlines concrete points in time when you can easily get involved.
February |
On or by the first Monday in February, the President presents a budget proposal to Congress after the state of the union. The President's budget request includes proposed funding levels for discretionary and mandatory programs and changes to the tax code, as well as the level of deficit or surplus on which the government should run.
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February through April |
Taking into consideration the President's budget request and their own priorities, the House and Senate Budget Committees each develop a budget resolution outlining how much the government must spend according to 19 broad categories or budget "functions," how much revenue the government must collect, and the level of deficit or surplus on which the government will run. In particular, the resolution determines the total level of discretionary funding that will be available for the upcoming fiscal year. The full Senate and House each approve their respective resolutions, before meeting in conference to agree on a single, joint resolution, which does not require the President's approval. |
April/May through Early Fall |
The Appropriations Committees of each chamber consist of 12 subcommittees and set allocations for each one based on the budget resolution. Following hearings, each Subcommittee drafts a bill proposing spending levels for the programs and agencies under its jurisdiction, adhering to the overall discretionary spending level set by the budget resolution. After passage by the Subcommittee, the bill is sent to the full Appropriations Committee for passage. |
Summer through Early Fall |
Following passage by the Appropriations Committee, the individual appropriations bills are voted on separately in the House and Senate. After passage by their respective chambers, the bills are sent to a conference committee where the differences between the two chambers’ bills are resolved. |
September 30 |
The budget is enacted after the President has signed each individual appropriations bill. |
The Budget Process in Practice
In practice, each year varies -- Congress frequently modified this schedule when it is unable to agree on a joint budget resolution or appropriations legislation. On the occasions when Congress and the President have not agreed on all 12 appropriations bills, Congress must pass a stop-gap measure, known as a continuing resolution, which provides temporary funding for all of the departments, agencies, and programs covered in the unfinished bills. Continuing resolutions can last for only a few weeks -- in order to provide the House, Senate, and President time to work out differences -- for the remainder of the session of Congress, or longer.
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Last updated October 3, 2008
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