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The Federal Budget Process

The annual congressional budget is the blueprint for all federal spending, revenue, and debt limits.  The process begins each year usually in early February when the President sends Congress a proposed budget outlining all federal funding for the upcoming fiscal year. 

The federal fiscal year ends on September 30th and differs from a calendar year or even a State or local government‘s fiscal year.  This means that unless authorized otherwise, federal agencies must expend all funding by September 30th.  This is also the deadline by which the annual federal appropriations bills should be completed.  If Congress does not complete consideration of the annual appropriations bills and the budget without passing a stop-gap measure, known as a continuing resolution, the federal government comes to a halt.  Literally, hundreds of thousands of non-essential employees are furloughed and federal agencies and offices across the country are closed.

Each October at the beginning of the new fiscal year, federal agencies begin compiling their budgets for the upcoming fiscal year and submit their proposals to the Office of Management and Budget (OMB).  OMB edits, calculates, and coordinates the budget for final review and approval by the President.  After approving the budget, the President, through OMB, sends his budget proposal to the U.S. House of Representatives and the U.S. Senate.

The funding levels for all federal departments, bureaus, offices, programs, independent agencies, discretionary grants, etc. is determined by the annual budget resolution.  All legislation concerning fiscal matters (e.g. budget resolution, appropriations, taxes, etc.) must originate in the House of Representatives. 

Once Congress receives the fiscal year budget proposal from the President, various Committees begin reviewing their respective sections of the budget; the process is spear-headed by the Budget Committee.  (For example, the Ways and Means Committee has jurisdiction over tax and revenue issues in the budget; so the Committee holds hearings and sends a Views and Estimates Letter to the House Budget Committee expressing its analysis and recommendations for the approaching fiscal year.) 

The House Budget Committee in turn reviews, modifies, and compiles the entire federal budget for each fiscal year.  After being marked up and passed by the Committee, the budget resolution is then considered on the House Floor and goes through a similar process in the Senate.  After the budget differences are reconciled between the House and Senate, the compromise resolution is then passed by the House and Senate. 

The target date for the annual budget resolution's completion is April 15th.   Unless waived through the adoption of a rule, Congress cannot consider any spending, revenue, or debt-limit legislation for the upcoming fiscal year until the budget is completed.  The only exception to this procedure is a House rule that permits consideration of appropriations and tax bills if the budget resolution has not passed by May 15th.  This permits the Appropriations Subcommittees to begin moving their respective bills for federal discretionary funding.