A Beginner’s Guide to the Federal Budget Process


The federal budget is the government’s spending plan for the upcoming fiscal year. It outlines how the government will allocate funds to various programs, agencies, and initiatives. The federal budget process is complex and can be difficult to understand for those who are not familiar with it. In this article, we will provide a beginner’s guide to the federal budget process and explain how it works.

Federal Budget Process

What is the Federal Budget Process?

The first step in the federal budget process is the creation of the President’s budget proposal. The President, with the assistance of the Office of Management and Budget (OMB), puts together a budget proposal that outlines how the federal government will spend its money in the upcoming fiscal year. This proposal includes funding requests for each government agency and program.

The President’s budget proposal is typically released in February of each year, although it can be delayed in some instances. Once the proposal is released, it is sent to Congress, where it is reviewed and debated by members of both the House of Representatives and the Senate.

Congressional Budget Resolution

After the President submits the budget proposal, Congress begins its review and approval process. This process involves multiple steps, including:

Congressional Budget Resolution

Congress first passes a budget resolution, which sets overall spending levels for the upcoming fiscal year. This resolution does not have the force of law, but it guides Congress’s subsequent actions.

Appropriations Bills

Congress then passes 12 appropriations bills, which allocate funds to specific agencies and programs. These bills must be passed by both the House and Senate and signed by the President to become law.


If Congress needs to make changes to programs or policies to meet spending targets, it can use a process called reconciliation. This allows Congress to make changes to mandatory spending programs, such as Medicare or Social Security, with a simple majority vote in the Senate.

Appropriations Bills

With the budget resolution in place, Congress begins work on appropriations bills. These bills allocate funding to specific government agencies and programs. There are typically 12 appropriations bills each year, which are divided up among the House and Senate Appropriations Committees.

Each committee reviews and marks up its assigned appropriations bill, making changes as necessary. Once the committee has approved the bill, it is sent to the full House or Senate for consideration. Once the House and Senate have each passed their appropriations bills, a conference committee is formed to reconcile any differences between the two bills.

The President’s Signature

Once the appropriations bills have been reconciled, they are sent to the President for signature. If the President signs the bills, they become law, and the federal budget for the upcoming fiscal year is in place.

If the President does not sign the bills, they can be vetoed, which means they are sent back to Congress. If Congress can override the veto with a two-thirds majority in both the House and Senate, the bills become law despite the President’s objection. If Congress cannot override the veto, the appropriations bills must be renegotiated.

Budget Implementation

With the appropriations bills signed into law, the federal budget is in place, and the government can begin implementing its spending plan for the upcoming fiscal year. Each government agency is responsible for managing its budget and allocating its funds according to the appropriations bills.

Throughout the fiscal year, the government closely monitors its spending to ensure that it stays within the budget. If additional funding is needed, Congress can pass supplemental appropriations bills to provide additional funding to specific programs or agencies.

The Importance of the Federal Budget Process

The federal budget process is important because it determines how the government will allocate its resources. It affects everything from national defense to education to social welfare programs. The budget process also plays a role in the government’s overall economic policy, as it can impact economic growth and the national debt.

Common Misconceptions about the Federal Budget Process

There are several common misconceptions about the federal budget process, including:

The President controls the budget

While the President submits the budget proposal, it is ultimately up to Congress to approve the final budget.

The budget is balanced

The federal budget is rarely balanced, and the government often runs a deficit, meaning it spends more than it takes in through taxes and other revenue sources.

The budget is set in stone

The budget can be changed throughout the year through supplemental appropriations bills and other legislative actions.

Major Issues in the Federal Budget Process

There are several major issues that arise during the federal budget process. One of the biggest issues is the federal deficit, which is the difference between the amount of money the government spends and the amount it collects in taxes and other revenue. The deficit has grown significantly in recent years, and many government officials are concerned about its long-term impact on the economy. Other major issues include the allocation of resources between different programs and initiatives, the need for entitlement reform, and the overall size and scope of the federal government.

Efforts to Improve the Federal Budget Process

Over the years, numerous efforts have been made to improve the federal budget process. These efforts have included changes to the rules governing the process, the use of technology to streamline the process, and the creation of new agencies and organizations to provide oversight and guidance. Despite these efforts, many government officials and experts believe that the budget process remains in need of significant reform.


The federal budget process is a complex and often confusing process, but it is essential for ensuring the proper functioning of government and the allocation of funds to key programs and agencies. Understanding the key players and steps involved can help you better understand how the federal budget affects you and your community.

Frequently Asked Questions

Q: What is the federal budget process?

A: The federal budget process is the system by which the United States government creates and approves a budget for the upcoming fiscal year. It involves several key players, including the President, Congress, and various government agencies.

Q: What is the role of the President in the federal budget process?

A: The President plays a critical role in the federal budget process. Each year, the President proposes a budget that outlines the administration’s priorities for spending and revenue. The President’s budget proposal sets the tone for the budget process and is an important starting point for negotiations with Congress.

Q: What is a budget resolution?

A: A budget resolution is a non-binding agreement between the House and Senate that sets out a framework for spending and revenue for the upcoming fiscal year. It includes top-level spending and revenue numbers, but does not provide specific details on how those funds will be allocated.

Q: What are appropriations bills?

A: Appropriations bills are the legislation that actually provides funding to specific government programs and agencies. These bills go through a detailed review process and are subject to debate and amendment. Each bill typically covers a specific area of spending, such as defense or education.

Q: What is the role of the budget committee in Congress?

A: The budget committee is responsible for overseeing the federal budget process in Congress. This committee is made up of members from both the House and Senate, and is responsible for creating the budget resolution and overseeing the appropriations process.

Q: When does the federal fiscal year begin?

A: The federal fiscal year runs from October 1 to September 30.

Q: What is the timeline for the federal budget process?

A: The federal budget process typically begins several months before the start of the fiscal year, with the President releasing their budget proposal in February. Congress then has until the end of September to pass all appropriations bills and finalize the budget for the upcoming fiscal year.

Q: How does the federal budget process impact the economy and citizens?

A: The federal budget has a significant impact on the economy and citizens. It provides funding for essential government programs and agencies, such as national defense, education, and social programs. The federal budget also affects taxes and government revenue, which can have a ripple effect on the economy as a whole.

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