The Federal Budget Process

To better understand the federal budget process, start by downloading the NASFAA Monograph - A Primer on the Federal Budget Process

Below, hover your mouse over each step of the budget process in the graphic for a description and link to more information if available. 

 

Every February, the president is to submit a budget request to Congress outlining the fiscal priorities of the administration. The request does not assign program-specific funding levels, but instead serves as a policy narrative with justifications for requested aggregate spending levels. Click for an example of a Budget RequestThe House Budget Committee is a standing committee in the U.S. House of Representatives that provides legislative oversight for the federal budget process. The Budget Committee's primary responsibilities are drafting a budget resolution, setting aggregate spending levels, and assigning allocations to appropriations subcommittees.A Budget Resolution is a non-binding document outlining the high-level budget priorities of the House. The document provides aggregate spending levels for the different spending 'buckets' of the federal government and includes accompanying policy directives. Click for an example of a Budget ResolutionThe Senate Budget is a standing committee in the U.S. Senate that provides legislative oversight for the federal budget process. The Budget Committee's primary responsibilities are drafting a budget resolution, setting aggregate spending levels, and assigning allocations to appropriations subcommittees.A Budget Resolution is a non-binding document outlining the high-level budget priorities of the House. The document provides aggregate spending levels for the different spending 'buckets' of the federal government and includes accompanying policy directives.There are twelve different appropriations subcommittees within the federal government. Funding for the student aid programs comes from the Labor, Health, Human Services, and Education Appropriations Subcommittee, commonly referred to as Labor-H. As the name suggests, this subcommittee funds not only education programs, but also programs in labor, health, and human services. The Subcommittee on Labor, Health, Human Services and Education works to pass a bill that assigns specific fund levels to each program (using the high level spending parameters as designated in the Budget Resolution). For example, they would determine what the maximum Pell Grant would be set at for the following year. Once the House passes this bill they send it to the Senate for approval.There are twelve different appropriations subcommittees within the federal government. Funding for the student aid programs comes from the Labor, Health, Human Services, and Education Appropriations Subcommittee, commonly referred to as Labor-H. As the name suggests, this subcommittee funds not only education programs, but also programs in labor, health, and human services. The Subcommittee on Labor, Health, Human Services and Education works to pass a bill that assigns specific fund levels to each program (using the high level spending parameters as designated in the Budget Resolution). For example, they would determine what the maximum Pell Grant would be set at for the following year. They review the House's version of the spending bill and make any necessary modifications.Assuming that both Appropriations Committees have arrived at a compromise on a spending bill (achieved through a conference committee), the bill gets passed by both chambers of Congress and is sent to the president to be signed into law, officially establishing the levels at which the government can spend money for the upcoming year.In the event that the Appropriations Subcommittees are not able to write and approve all twelve spending bills, those pieces that are able to be completed are gathered up, along with other miscellaneous programs that there is consensus on, into one single 'omnibus' and passed in lieu of an official appropriations bill. This enables the House and Senate to pass a stop-gap spending measure with a single round of voting, rather than having to bring each smaller bill up for a vote independently. Omnibus spending bills have become more common in recent years.In the event that Congress and the president cannot agree to pass any form of appropriations bill, regular or omnibus, Congress can instead pass a continuing resolution (CR), which maintains current levels of spending (sometimes with small modifications) for a defined period of time. Critics contend that CRs allow lawmakers to avoid making difficult choices and bring uncertainty to many important federal programs.