The process of approval of a budget size for the next fiscal year is a compound, long, and nuanced one. Everything starts with the President’s budget request, a lengthy bill of all the discretionary programs that he suggests to be financed. Soon after that, the Houses of Senate and Congress hold a number of meetings in which various authorities are questioned on the subject of budget spending for the upcoming year. It has an incredible amount of details and implications; however, all of the steps done correctly ensure the functionality of the whole system of government of the United States. In this essay, the procedures of budget execution, establishment, assessment, implementation, and control will be discussed, including the tools for altering the budget and the so-called “discretion-abuse-control” cycle.
Before the beginning of a new fiscal year, The President compiles a document called Budget Request, which serves three main roles. It provides a detailed explanation of the government programs and projects to fund, establishes priorities, and recommends the amount for tax changes for the upcoming year. Furthermore, it becomes a matter of agreement between the President and Congress since it is developing its own version to negotiate.
As soon as the President has signed his budget request, Congress starts developing a bill that is based on the current needs expressed by various Administrations’ senior officials. This bill holds quite a unique position, as it cannot be slowed down in Senate, like ordinary ones, and is called a Budget Resolution (Center on Budget and Policy Priorities [CBPP], 2020). The resolution sets a target for congressional committees able to propose legislation capable of affecting spending and taxes directly (CBPP, 2020). The amount of spending is defined primarily by budget authority, which is an estimation that Congress allows a certain agency to spend, and outlays, which is an actual sum of money that is spent.
The control mechanism that comes into play at this stage is known as “302 (a) allocations” (CBBP, 2020, p. 5). This procedure serves the purpose of setting spending limits and is done the following way: “the spending totals that are laid out by budget function in the budget resolution and distributes them by congressional committee” (CBPP 2020, p. 5). The House and Senate tables differ, and in both, the Appropriations committee receives a 302 (a) allocation – on the basis of which it then spreads the budget across 12 subcommittees (CBPP, 2020). That way, every committee with jurisdiction in each field receives a document in which the budget limits for the upcoming year are outlined for their respective programs.
An enforcement mechanism preventing Congress from passing legislation that violates any set of terms and rules is a single Senator’s ability to block such legislation. This way, any legislation that exceeds the allocated norms of Budget Resolution is potentially under the threat of being taken down. Another optional step that Congress sometimes takes is compiling a Reconciliation, which provisions have the capability to affect the federal budget directly (CBPP, 2020, p. 7). In case no finance bill has not been proposed until October 1st, the beginning of a new fiscal year, the President must sign a Continuing Resolution (CR). Although this process comes with a defense mechanism as well – in the situation in which the President does not agree with CR, all the agencies that have not yet received funding must temporarily shut down.
The Deficit-Control mechanisms play an important role in the process of budget defense as they prevent budget abuse. The first is the PAYGO act, which says: “any legislative changes to taxes or mandatory spending increasing projected multi-year deficits must be paid or offset” (CBPP, 2020, p. 8). Another one, the “2011 Budget Control Act (BCA),” put limits on programs – violations cause the funding levels to reduce to the allowed limits. Thus, only budget allowances that subscribed to all the rules and allocations mentioned above and were voted for by the Houses and approved by the President can be enacted.
References
Center on Budget and Policy Priorities. (2020). Introduction to the Federal Budget Process. Web.