The Presidents Role in the U.S. Federal Budget Process

The annual federal budget process begins the first Monday in February of each year and should be concluded by October 1, the start of the new Federal Fiscal Year. In some -- make that most -- years, the October 1 date is not met. Here is how the process is supposed to work. The President Submits a Budget Proposal to Congress In the first step of the annual U.S. federal budget process, the President of the United States formulates and submits a budget request for the upcoming fiscal year to Congress. Under the Budget and Accounting Act of 1921, the president is required to submit his or her proposed budget to Congress for each government fiscal year, the 12-month period beginning on October 1 and ending on September 30 of the next calendar year. Current federal budget law requires the president to submit the budget proposal budget between the first Monday in January and the first Monday in February. Typically, the president’s budget is submitted during the first week of February. However, especially in years when the new, incoming president belongs to a different party than the former president, submittal of the budget may be delayed. The president’s budget proposal may also be delayed by pressing government financial difficulties. For example, President Barack Obama did not submit his FY 2014 budget proposal until April 10, 2013, due to ongoing negotiations with Congress over the implementation of the budget sequester and mandatory spending cuts dictated by the Budget Control Act of 2011. In fiscal year 2016, the federal budget called for the expenditure of nearly $4 trillion. So, as you might imagine, deciding exactly how that much taxpayer money is to be spent represents a major part of the president’s job. While the formulation of the president’s annual budget proposal takes several months, the Congressional Budget and Impoundment Control Act of 1974 (the Budget Act) requires that it be presented to Congress on or before the first Monday in February. In formulating the budget request, the president is assisted by the Office of Management and Budget (OMB), a major, independent part of the Executive Office of the President. The president’s budget proposals, as well as the final approved budget, are posted on the OMB website. Based on the input of the federal agencies, the presidents budget proposal projects estimated spending, revenue, and borrowing levels broken down by functional categories for the coming fiscal year to start on October 1.The president’s budget proposal includes volumes of information prepared by the president intended to convince Congress that the president’s spending priorities and amounts are justified. In addition, each federal executive branch agency and independent agency includes its own funding request and supporting information. All of these documents are also posted on the OMB website. The presidents budget proposal includes a suggested level of funding for each Cabinet-level agency and all programs currently administered by them. The presidents budget proposal serves as a starting point for the Congress to consider. Congress is under no obligation to adopt all or any of the Presidents budget and often makes significant changes. However, since the President must ultimately approve all future bills they might pass, Congress is often reluctant to completely ignore the spending priorities of the Presidents budget. House and Senate Budget Committees Report the Budget Resolution The Congressional Budget Act requires passage of an annual Congressional Budget Resolution, a concurrent resolution passed in identical form by both House and Senate, but not requiring the Presidents signature. The Budget Resolution is an important document providing Congress an opportunity to lay out its own spending, revenue, borrowing and economic goals for the coming fiscal year, as well as the next five future fiscal years. In recent years, the Budget Resolution has included suggestions for government program spending reforms leading to the goal of a balanced budget. Both the House and Senate Budget Committees hold hearings on the annual Budget Resolution. The committees seek testimony from presidential administration officials, Members of Congress and expert witnesses. Based on testimony and their deliberations, each committee writes or marks-up its respective version of the Budget Resolution. The Budget Committees are required to present or report their final Budget Resolution for consideration by the full House and Senate by April 1. Next Steps: Congress Prepares its Budget Resolution