Transcript Congressional Budget Process

Your tax dollars at work
Congressional Budget Process
 Enacted to bring order to decision making of how to
 Establishes timetable for orderly decision making
 Establishes rules and procedures for fiscal legislation
 Intended to give Congress a level playing field with the
Executive Branch
 Budget and Accounting Act of 1974
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Creates the Congressional Budget Office (CBO) to counter the
OMB (Office of Management and Budget); but the GAO
(General Accounting Office) is more trustworthy
Key Players
 Interest Groups-lobby agencies, the President and
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subcommittees
Bureaucratic Agencies-send requests to OMB
Office of Management and Budget-creates the President’s
budget
Tax committees in Congress-Ways and Means and Senate
Finance committees write tax codes
Budget committees and CBO-set parameters of Congressional
budget process and bind Congress to spending limits
Subject matter Committees-write new laws which require new
spending and have oversight powers
Appropriations Committees-decide in each chamber who gets
what through hearings
Congress
GAO-audit, monitor and evaluate what agencies are doing with
their budget
Budget Process Simplified
 President submits a budget (1st Monday in February)
 Congress considers Budget Resolution (“target”
spending limits)
 Congress seeks Reconciliation instructions to
Committees/Allocations of funding
 Reconciliation enacted
 Appropriations enacted
Tools of the Trade
 Congress adopts a “Budget Resolution” or a blueprint
for spending and revenues for the year ahead
 No force of law, only guidelines, also doesn’t need
President’s signature
 Allocates budget authority to the Appropriations
Committee/Reconciliation
 Congress spends rest of the year (and typically more)
building the structure they laid out
Income vs. Spending
Income side
Spending side
 Revenues (income taxes,
 Discretionary appropriations
payroll taxes, etc.)
 Receipts (fees, asset sales)
(defense 40%, domestic,
international, salaries, grants,
contracts) can be changed
without changing law (30%40% of budget) comes in 13
appropriations bills
 Entitlements (Social Security,
Medicare, GSL, veterans
benefits) are 60%-70% of
budget, can only be changed
by law or Reconciliation
Budget Terms
 The Budget Resolution is the blueprint Congress
uses to make spending decisions. It is enforced
through House and Senate rules and procedures.
 It is a concurrent resolution and does not need the
President’s signature
 The Resolution allocates funds to the Appropriations
Committees to appropriate discretionary funds and
directs Authorizing Committees to recommend
changes in laws to bring legislation into line with the
plan through reconciliation
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Reconciliation makes changes in taxes, mandatory and
entitlements spending, and the debt ceiling; it also requires
the President’s signature (supposed to be done by June 15th)
Budget Timetable
First Monday in February President submits
budget to Congress for the following fiscal
year which starts October 1st.
Congressional committees hold hearings and
submit views and estimates of budget ,
sometimes they don’t even consider the
president’s budget (remember iron triangles)
April
th
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 Congress completes action on the Congressional
BUDGET RESOLUTION for the fiscal year they are
working on 10 years ahead, which may include
RECONCILIATION Bills to committees of jurisdiction.
(Only in 1976, 1977, and 1994 did Congress meet this
deadline.)
House Action
 In late May, the House considers appropriations even in
the absence of a Budget Resolution
 House Appropriations Committees finish reporting the
13 regular appropriations bills for the fiscal year on June
10th
 By June 15th Congress completes action on
RECONCILIATION legislation, in order to bring
congressional action into line with the Budget
Resolution blueprint (Congress never completes
Reconciliation legislation by this date, earliest was July 31st,
1981)
 June 30th, House completes action on all 13
appropriations bills for fiscal year
Senate action
 July/August the Senate completes action on
appropriations bills and conference committees
meet to work out differences
 On September 30th the House and Senate complete
action on the conference report on appropriations
for the fiscal year that starts October 1st (Bills sent to
President for his [or her] signature)
Beginning the Fiscal year
 October 1st is new fiscal year, and since this date is rarely
met, except for the defense budget, Congress has to pass
continuing resolutions authorizing agencies to operate on
last years appropriations
 Many times Congress will pass omnibus bills, which
combines several appropriations bills together because of
deadlines missed
 In some cases if Congress and the President can’t agree, some
programs will be shutdown such as in 1995 when over 300,000
federal employees had to stay home through November and
December
Other Influences on budget
 Size of the debt-$13,735,428,931,737.52 Nov. 16th
 “Blessed are the young, for they shall inherit the national debt.”
Herbert Hoover (1874-1964)
 Cost of war
 Natural Disasters
 Tax cut politics
 Election year
 Economic conditions
 Some of these unexpected changes may require
supplemental appropriations bills (Iraq War)
Budget Breakdown