The Federal Budget Process

The budget is determined by a formal, yearly process that begins with the President's Budget, which typically is released in February. Both the House and Senate then follow with their own budget proposals in the spring. Ultimately, the House and Senate must agree on the same budget if it to become a concurrent budget resolution, and will proceed to a budget conference committee to reconcile any differences between the two chambers. The law states that Congress should have a topline budget set by April 15th, from which point lawmakers can work on passing appropriations bills, but this deadline is frequently missed.

In recent years, the budget process has not worked as its creators intended it. Lawmakers have relied on over XXX temporary budgets, known as continuing resolutions, that largely freeze or adjust all spending by a generic percentage. These CRs take the place of a typical budget and detailed appropriations bills.

While an annual budget resolution may set discretionary levels for the upcoming year, it cannot make changes that would impact revenues and mandatory spending. Mandatory spending and revenues must be changed through the regular order of Congress or through a special process called budget reconciliation. While reconciliation has been used to both increase and reduce the deficit, some of the largest deficit reduction bills, particularly OBRA of 1990 and OBRA of 1992, were done through budget reconciliation. To learn more about budget process reforms, read the Pew-Peterson Commission reports.