Cecily Zamora
The U.S. Constitution grants Congress the power of the purse, meaning that it holds authority over the country's spending and budgeting. Congress is responsible for creating and collecting taxes, borrowing money, and deciding how and where to allocate funds. While the President can suggest laws through the budget by submitting a budget request to Congress, outlining fiscal policy and budget priorities, Congress is not obligated to adhere to the President's suggestions. The President's power over the budget lies primarily in their ability to veto appropriations bills passed by Congress.
| Characteristics | Values |
|---|---|
| Can the president suggest laws through the budget? | The president can suggest laws through the budget request. However, Congress writes its own appropriations bills, which may differ significantly from the president's request. |
| Who holds the power of the purse? | The Constitution grants Congress the power of the purse, giving it the authority to spend money, create and collect taxes, and borrow money. |
| Who has the final say on the budget? | Congress has the final say on the budget. The president's power over the budget comes from the ability to veto appropriations bills passed by Congress. |
| When does the president submit the budget request? | The president submits a budget request to Congress for the coming fiscal year by the first Monday in February. |
| When does the fiscal year start? | The federal government's fiscal year runs from October 1 to September 30. |
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What You'll Learn
The President's budget request
- How much money the federal government should spend on public purposes.
- How much tax revenue should be collected.
- The projected deficit or surplus, which is the difference between spending and revenue.
The budget request also outlines the administration's priorities for federal programs, such as defense, agriculture, education, and health, and recommends funding levels for individual "budget accounts." It typically covers the upcoming fiscal year and the subsequent nine years.
While the President's budget request is just a suggestion, it plays a significant role in shaping the budgetary process. Congress then creates its own appropriations bills, which may differ significantly from the President's request. The President has the power to veto these appropriations bills, giving them a degree of influence over the final budget.
It's important to note that the U.S. Constitution grants Congress the "power of the purse," giving it the authority to tax, spend, and borrow money. This means that while the President can suggest laws through the budget request, Congress ultimately holds the power to approve or reject those suggestions.
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Congress's role in the budget
The US Constitution gives Congress the power of the purse, that is, the authority to spend money, create and collect taxes, and borrow money. It does not, however, specify how Congress should exercise these powers or where the money should go. Over time, Congress has developed various rules and practices to govern the consideration of budgetary legislation.
Congress makes spending and tax decisions through a variety of legislative actions. It passes two kinds of laws that set the budget: authorization, necessary for both mandatory and discretionary spending, and appropriations, which legislate discretionary spending. Discretionary spending includes funding for the military, public education, housing, public health, medical research, energy, the environment, federal law enforcement, and veterans' benefits. Congress sets funding levels for discretionary programs each year through the appropriations process, with the President playing a supporting role.
The Congressional Budget Act of 1974 established an internal process for Congress to formulate and enforce an annual plan for acting on budget legislation. It also established the Congressional Budget Office and standing committees in both chambers of Congress with jurisdiction over the concurrent resolution on the budget. The annual federal budget process traditionally starts when the President submits a detailed budget request to Congress for the coming fiscal year, which begins on October 1. The President's budget request tells Congress their recommendation for overall federal fiscal policy, including how much money the federal government should spend and collect in taxes, and how much of a deficit or surplus to run. Congress then creates funding bills for the President to sign.
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The President's veto power
The veto was first exercised on April 5, 1792, by President George Washington, who vetoed a bill outlining a new apportionment formula for dividing seats in the House of Representatives among the states. Washington argued that the bill did not apportion representatives according to states' relative populations, and thus violated the Constitution. This use of the veto was controversial, but it was not overridden. The first time Congress overrode a presidential veto was on March 3, 1845, during the presidency of John Tyler.
The veto power continued to be rarely used until the presidency of Andrew Jackson, who vetoed 12 bills. In 1983, the Supreme Court struck down the one-house legislative veto, and in Clinton v. City of New York, the line-item veto was also struck down. The Line Item Veto Act of 1996 was an effort to give the President more flexibility in controlling how funds allocated by Congress are spent.
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The Congressional Budget Act of 1974
One of the key provisions of the Act is the establishment of dedicated Budget Committees in both the House of Representatives and the Senate. These committees, as outlined in Title I, are responsible for studying the impacts of budget outlays and devising strategies to align tax policies with budget expenditures. They play a crucial role in providing expertise and guidance to their respective chambers during the budget deliberation process.
Additionally, Title VI of the Act amends the Budget and Accounting Act of 1921, requiring that the Presidential budget include the same elements as the Congressional Budget. This amendment promotes consistency and transparency between the executive and legislative branches regarding fiscal planning and budget projections.
Furthermore, the Act addresses the role of the Comptroller General in assisting Congressional committees with program reviews and evaluation studies, as outlined in Title VII. This provision ensures that legislative objectives and goals are clearly defined and assessed, facilitating evidence-based decision-making and budget allocation. The Act has been amended over the years to adapt to changing fiscal and political landscapes, but the original 1974 legislation remains the foundational framework for budget procedures in the United States.
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The Impoundment Control Act
The ICA created a procedural framework for Congress to review executive branch withholdings of budget authority. It requires the President to report promptly to Congress whenever there is a withholding of budget authority and to abide by the outcome of the congressional impoundment review process. The Act specifies that the President may request that Congress rescind appropriated funds. If both the Senate and the House of Representatives do not approve a rescission proposal within 45 days of continuous session, any funds being withheld must be made available for obligation. Spending deferrals under the ICA must not extend beyond the current fiscal year, and Congress can override deferrals using an expedited process.
The ICA has been amended several times since its enactment, including provisions in the Balanced Budget and Emergency Deficit Control Act of 1985, the Budget Enforcement Act of 1990, and the Balanced Budget Act of 1997. However, the original 1974 legislation remains the basic blueprint for budget procedures today.
The Act came into question during the 2025 United States federal government grant pause and the Trump impeachment investigation in 2019, where there were concerns over the withholding of approved Ukraine military funds.
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Frequently asked questions
The president can suggest laws through the budget request, which includes the president's preferred tax policies and how the government will bring in money. However, the president's budget request is just a suggestion, and Congress writes its own appropriations bills, which may differ significantly from the president's request.
The president's budget request includes:
- The president's recommendation for overall federal fiscal policy, including how much money the federal government should spend and collect in taxes.
- The administration's relative priorities for federal programs, such as defence, agriculture, and education.
The president is supposed to submit the budget request to Congress each February for the coming fiscal year. However, the submission is sometimes delayed, especially when a new administration takes office.
Congress creates funding bills based on the president's budget request and passes them to the president to sign or veto. Congress also sets funding levels for federal programs and discretionary spending.
While the president must approve or reject a bill as presented, there have been instances where presidents have refused to spend funds approved by Congress, known as impoundment. This has led to conflicts between the executive and legislative branches.
