Budgeting Basics


March 2008

Budgeting Basics

The president has released his spending plan for fiscal year 2009. Here's a refresher on how the budgeting process works.


Even if you know next to nothing about the federal budgeting process, you have probably heard the phrase invoked by social studies teachers nationwide: "The president proposes; Congress disposes." President Bush kicked off the FY09 budget process on February 4 when he released his budget requests—just over a month after the FY08 budget process culminated in the passage of an omnibus appropriations act. For the first time ever, the president's budget was issued online as part of a money-saving, environmentally friendly initiative known as E-Gov (see www.budget.gov).

After the president releases a budget proposal, Congress examines the president's budget requests and develops its own recommendations before passing legislation authorizing and appropriating money for specific government programs. The president may veto these bills if they stray too far from his budget requests. If a bill has significant Congressional support, however, Congress can override a presidential veto and enact a bill without the president's support. (You may remember that Congress overrode the president's veto of the Water Resources Development Act of 2007 in November.)

The 2009 budgeting process is already shaping up to be somewhat thorny. The president has vowed to veto FY09 appropriations bills unless earmarks are reduced by half from FY08 levels. Matters were further complicated when House Appropriations Committee Ranking Member Jerry Lewis (R-CA) announced at the end of January that Republican committee assignments would be reshuffled following the appointment of Rep. Roger Wicker (R-MS) to the Senate. Wicker held coveted Appropriations Committee assignments on the Defense and Military Construction and Veterans Affairs Subcommittees. The committee reshuffling includes the following:

  • Rep. Kay Granger (R-TX) will relinquish her seat on the Energy and Water Subcommittee to replace Wicker on Defense and Military Construction.
  • Rep. Zach Wamp (R-TN) will trade his position as ranking member of the Legislative Branch Subcommittee to replace Wicker as ranking member on Military Construction and Veterans Affairs.
  • Rep. Tom Latham (R-IA) will give up his seat on the Energy and Water Subcommittee to replace Wamp as ranking member of the Legislative Branch Subcommittee.
  • Reps. Denny Rehberg (R-MT) and Ken Calvert (R-CA) will both resign their positions on the Financial Services Subcommittee to fill Granger and Latham's seats on Energy and Water.
  • Rep. Virgil Goode (R-VA) will trade his seat on the Legislative Branch Subcommittee to replace one of the empty seats on Financial Services left by Rehberg and Calvert.

The remaining vacancies on the Legislative Branch and Financial Services Subcommittees will likely be filled by Wicker's replacement to the full committee.  Wicker's successor was expected to be announced in mid-February.

The Appropriations Committee is, arguably, the most powerful committee in Congress, deciding how much money programs receive. The decision is based on the president's budget requests and the authorization a program has received. Authorization is the backbone of appropriations and is exactly what it sounds like: legislation that grants authority for discretionary funding to be spent.  Congress uses authorizations to recommend funding levels for programs. An appropriation actually allocates the money, obligating the government to spend a specific amount on a program before the end of the fiscal year. Money cannot be appropriated unless it has been authorized.

There are safeguards in place to keep federal programs running when Congress and the president cannot agree with each other, including rolling appropriations into an omnibus bill and using continuing resolutions to fund programs at the current level until an authorization or appropriations bill is passed. Of course, some years are more contentious than others: In 1995, when House Speaker Newt Gingrich (R-GA) faced off against President Clinton, their disagreement about the budget eventually forced a government shutdown. More often than not, though, Congress and the president have successfully used omnibus bills and continuing resolutions to prevent the government from grinding to a halt.