The Long Road: Bill To Law

The process of a federal budget bill becoming a law in the United States involves several steps and the collaboration of various governmental entities. It begins with the President submitting a proposed budget to Congress, which serves as a starting point for consideration. Congress then works on creating funding bills, holding hearings, and developing a budget resolution. This resolution outlines spending, revenue, and borrowing goals for the upcoming fiscal year. The House and Senate create their own budget resolutions, which must be negotiated and merged into a single version. Congress then sends the approved funding bills to the President for signature or veto. The President can sign the bill into law, veto it, or let it become law without their express approval. If vetoed, Congress can vote to override the veto. This intricate process ensures the federal budget bill undergoes thorough review and discussion before becoming a law.

The President's budget request

Development of the Budget Request

Submission to Congress

The President submits a detailed budget request to Congress on or around the first Monday in February. This submission is required by the Congressional Budget and Impoundment Control Act of 1974 and is often referred to as the "starting point" for Congress in developing the federal budget. The budget request includes funding requests for all federal executive departments and independent agencies. It contains detailed information on spending and revenue proposals, along with policy proposals and initiatives that have significant budgetary implications.

Role and Impact of the Budget Request

• Fiscal Policy Recommendation: The budget request outlines the President's recommendation for overall federal fiscal policy, including spending, tax revenue, and the deficit or surplus.
• Administration Priorities: It lays out the relative priorities of the administration for different federal programs, such as defense, agriculture, education, and health.
• Mandatory Program and Revenue Law Proposals: The budget request may include proposals to alter mandatory programs and aspects of revenue law, even if Congress may not consider them.

Congress's Response

After receiving the President's budget request, Congress generally holds hearings to question administration officials about their requests. Based on these hearings and their own deliberations, Congress may then develop its own budget plan, known as a "budget resolution." The House and Senate Budget Committees draft and enforce the congressional budget resolution, which is then amended and negotiated between the two chambers. It's important to note that Congress is not obligated to adopt the President's budget and often makes significant changes. However, they may consider the President's priorities as the President must ultimately approve future bills.

The Congressional Budget Resolution

The Congressional Budget Act requires the passage of an annual Congressional Budget Resolution, which is a concurrent resolution passed in identical form by both the House and the Senate. It does not require the President's signature. The resolution provides Congress with an opportunity to outline its spending, revenue, borrowing, and economic goals for the upcoming fiscal year, as well as the next five fiscal years. It consists of a set of numbers stating how much Congress should spend in each of 19 spending categories (known as budget functions) and how much total revenue the government should collect. The difference between these totals represents the expected deficit or surplus for each year.

The budget window refers to the number of years to which the spending and revenue decisions in a budget resolution apply. The law requires that the budget resolution cover at least five years—the upcoming year plus the next four years. While a 10-year window is currently standard, the length of the budget window has varied over time.

Appropriations bills

The House and Senate Appropriations Committees play a pivotal role in this process. They hold hearings to scrutinise budget requests and the needs of federal spending programs. Each committee has 12 subcommittees, and together they produce appropriations bills to fund the federal government. These bills are then "marked up" (amended as needed) and approved by the respective appropriations committees.

The bills then proceed to the House and Senate floors, where they may undergo further amendments. It is common for the bills passed by the House and Senate to differ significantly, necessitating reconciliation. Once a final bill is negotiated between the two chambers, it must pass both the House and Senate and be signed by the President to become law.

As of 2019, there are 12 appropriations bills that need to be passed each fiscal year to facilitate continued discretionary spending. These bills correspond to the jurisdiction of the respective House and Senate appropriation subcommittees and cover a range of areas, including agriculture, commerce, energy, labour, health, transportation, and more.

In the event that Congress cannot agree on new funding levels before the start of the fiscal year on October 1, a continuing resolution is required to temporarily fund government operations. Failure to appropriate funds results in a partial or complete government shutdown, as seen in October 2013.

The House and Senate's role

The House and Senate play a crucial role in the federal budget process, which begins with the President submitting a proposed budget to Congress. The House and Senate then develop their own budget resolutions, which set spending levels and often deviate from each other and the President's request. This is where the role of the House and Senate diverge slightly:

The House

The House Appropriations Committee, along with the Senate Appropriations Committee, holds hearings to examine budget requests and needs of federal spending programs. The House then produces its own appropriations bills to fund the federal government, which are "marked up" (amended as needed) and approved by the appropriations committees. Once the bills are approved, they head to the House floor, where they may be further amended and eventually passed.

The Senate

The Senate also produces its own appropriations bills, which are "marked up" and approved by the Senate Appropriations Committee. After approval, these bills head to the Senate floor, where they may be amended and passed.

Joint Actions

Most times, the bills passed by the House and Senate differ in some significant ways and must be reconciled. Once a final bill has been negotiated between the two chambers, it must then pass both the House and Senate and be signed by the President. If Congress cannot agree on new funding levels before October 1, a continuing resolution is required to avoid a government shutdown.

The President's approval

The President's Budget Request:

The process typically begins with the President's annual budget request, which is submitted to Congress. This request is developed with the assistance of the Office of Management and Budget (OMB) and includes funding requests for all federal executive departments and independent agencies. The President's budget proposal projects estimated spending, revenue, and borrowing levels for the upcoming fiscal year, which starts on October 1. It serves as a starting point for Congress to consider and sets the administration's relative priorities for federal programs.

Congressional Budget Resolution:

After receiving the President's budget request, Congress works on its own budget resolution. The Congressional Budget Act of 1974 established the Congressional Budget Office (CBO), which plays a crucial role in this process. The CBO publishes an analysis of the President's proposals, providing a baseline budget projection. The House and Senate Budget Committees then draft and pass their budget resolutions, which are submitted to their respective chambers for consideration.

Appropriations Bills:

Based on the budget resolutions, the House and Senate Appropriations Committees develop appropriations bills. These bills allocate funding to various government functions, such as defense, energy, health, and education. The appropriations committees hold hearings, examine budget requests, and make amendments as needed. Once the appropriations committees pass their bills, they are sent to the House and Senate for further discussion and potential amendments.

Final Approval and Signing:

After the House and Senate pass their respective versions of the appropriations bills, a conference committee is typically convened to resolve any differences. Once a final bill is negotiated and approved by both chambers, it is presented to the President for approval. The President has the authority to approve and sign the bill into law or to veto it. If the President chooses to veto the bill, Congress can vote to override the veto, and the bill can still become a law. This step concludes the federal budget process, resulting in the enactment of the federal budget for the upcoming fiscal year.

Frequently asked questions