|About the Book|
The U.S. Constitution vests Congress with the power to raise revenue and borrow money. Those funds may only be drawn from the Treasury in consequence of appropriations made by law. The Constitution, however, is largely silent with respect to theMoreThe U.S. Constitution vests Congress with the power to raise revenue and borrow money. Those funds may only be drawn from the Treasury in consequence of appropriations made by law. The Constitution, however, is largely silent with respect to the President’s role in the budget process. Instead, the current executive budget process is largely the result of statutes enacted by Congress.The executive budget process consists of three main phases: development of the President’s budget proposal, submission and justification of the President’s budget proposal, and execution of enacted appropriations and other budgetary legislation. The purpose of this report is to provide an introduction to many elements of the executive budget process, highlighting the roles of the President, the Office of Management and Budget (OMB), and executive agencies.The Budget and Accounting Act of 1921 established the modern executive budget process. It created a legal framework for a federal budget proposal to be developed by the President and submitted to Congress prior to the start of each fiscal year. In practice, development of the President’s budget proposal begins approximately 18 months prior to the start of the fiscal year to which it applies. Executive agencies submit their requests and justification materials to OMB for examination and review. After final decisions have been made by the President, the budget proposal is compiled by OMB. Under current law, the President must submit the budget proposal to Congress no later than the first Monday in February.Once the President has submitted the budget, OMB and agency officials explain and justify the request to Congress. Early in the congressional budget process, often in the week following the submission of the President’s budget, the OMB director and other cabinet officials typically provide testimony regarding the President’s broad budgetary objectives before congressional committees. In addition, agencies typically submit written justifications of their budget requests to Congress and agency officials often will testify before the committees of jurisdiction.The President’s budget, though not legally binding, provides Congress with recommended spending levels for programs, projects, and activities that are funded through appropriations and other budgetary legislation. Funds provided in appropriations and other budgetary legislation are not immediately available for obligation or expenditure. With certain exceptions, the Antideficiency Act requires that funds be apportioned (or divided), often by fiscal quarter, prior to obligation or expenditure. Agencies then allocate those funds to programs, projects, and activities.Congress has recognized the need to permit agencies some flexibility during budget execution, and it has provided agencies with limited authority to make spending adjustments. For example, Congress may provide agencies with limited authority to reallocate funds from one appropriations account to another (i.e., transfers), or from one purpose to another within an appropriations account (i.e., reprogramming). Under the Impoundment Control Act (ICA) of 1974, the President may withhold appropriated funds temporarily (referred to as deferrals) or propose to Congress permanent cancellations of budget authority (referred to as rescissions).Finally, certain executive budgetary procedures are triggered under limited, less common circumstances. For example, OMB and agencies have established procedures for implementing a shutdown of certain government operations in the event that their full-year or interim appropriations are not enacted by the start of the fiscal year. OMB and agencies may also be subject to additional procedures in the event of a statutorily prescribed sequestration.