THE BUDGET PROCESS AND THE BUDGET RESOLUTION

THE BUDGET PROCESS & THE BUDGET RESOLUTION

"You know, our Founding Fathers considered the power of the purse the most important responsibility of the legislative branch. If that power is abused, it can have very serious consequences for our nation, not only threatening our prosperity with huge budget deficits but, ultimately, undermining the economic foundations of our safety and national security. And that’s why we must start now.......to reform the budget process."
- President Ronald Reagan in a Radio Address to the Nation on November 8, 1986
The budget process which President Reagan urged Congress to reform is an amalgamation of important laws and rules including the Congressional Budget and Impoundment Control Act of 1974; the Balanced Budget and Emergency Deficit Control Act of 1985; the Budget Enforcement Act of 1990; rules of the House and Senate relating to the budget process; and, provisions of chapter 11 of title 31 of the United States Code.
The President’s Budget: Although the Constitution does not require the President to submit an annual budget, in 1921 the Budget and Accounting Act laid the foundation for the modern budget process, including the President’s budget. More recently, the Budget Act of 1974 established a timetable for the annual budget process (table below), which is kicked off each year by the President’s budget submission. The Budget Act specifies that the President’s budget should be presented to Congress on or before the first Monday in February, which usually coincides with the President’s State of the Union Address.
The President’s budget is generally viewed as a detailed outline of the Administration’s policy and funding priorities as well as a presentation of the economic outlook for the coming fiscal year. The President’s budget, which estimates spending, revenue and borrowing levels, is compiled from input by the various federal agencies, with funding broken down into twenty budget function categories.
The Budget Resolution: While Congress is not bound by the President’s budget, it is often used as a starting point for the Congressional budget process. The Budget Committees of the House and Senate hold hearings on the budget, taking testimony from Administration officials, Members of Congress and expert witnesses in preparation of the annual budget resolution. Committees of the House and Senate are expected to submit their views on the budget no later than six weeks after the President’s submission. After testimony, the committees "markup" their respective budget resolutions. This process allows members of the Budget Committees to offer amendments and make changes to the starting text, which is usually presented as the Chairman’s mark. Under the Budget Act, the Senate Budget Committee must report its version of the budget resolution by April 1. While the House Budget Committee has no similar requirement, House action generally proceeds concurrently with that of the Senate.
THE TIMETABLE OF THE BUDGET PROCESS

Title III of the Budget Act establishes a statutory timetable for the congressional budget process*:

On or before: Action to be completed:

First Monday in February President submits his budget

February 15 Congressional Budget Office submits report to Budget Committees.

Not later than 6 weeks after the President submits budget Committees submit views and estimates to Budget Committees.

April 1 Senate Budget Committee reports concurrent resolution on the budget.*

April 15 Congress completes action on the concurrent resolution on the budget.

May 15 Annual appropriation bills may be considered in House.

June 10 House Appropriations Committee reports last annual appropriation bill.

June 15 Congress completes action on reconciliation legislation.

June 30 House completes action on annual appropriation bills.

October 1 Fiscal year begins.

The budget resolution provides Congress with the opportunity to lay out its spending, revenue, borrowing and economic goals and serves as the vehicle for imposing internal budget discipline through established enforcement mechanisms. The Budget Act requires a series of provisions be included in this concurrent budget resolution. This resolution must ultimately pass both the House and the Senate in identical form, but does not require signature by the President. The budget resolution, which covers the upcoming fiscal year and at least five ensuing fiscal years, must contain spending limits for discretionary spending that serve as an internal control on spending through the Appropriations process. In addition, the budget resolution must include a projection of annual budget deficits, as well as a statement of the aggregate federal debt. The budget resolution may also contain reconciliation instructions for various committees of the House and Senate to make changes in the laws governing entitlement programs. In recent years, as the budget resolution has become a blueprint for achieving a balanced budget, the budget resolution has included illustrative lists of program reforms to achieve that goal.
Once the Budget Committees have marked-up and reported their budget resolutions, the full House and Senate take action. The Budget Act outlines the procedures for floor consideration of the budget resolution in both bodies. However, in the House, the budget resolution traditionally is granted a special rule by the Rules Committee to dictate the terms of floor consideration. In recent years, the House has followed a policy of allowing only complete substitute budget resolutions to be considered as amendments. An additional requirement, added during the 104th Congress, mandates that all proposed substitutes must achieve a balanced budget within a set period of time. The Senate has generally operated under fewer constraints.
After appointing conferees and reaching a conference agreement both the House and the Senate must pass (by majority vote) the conference report on the budget resolution. The House usually considers the conference report under a rule granted by the Rules Committee. The Senate generally debates the conference report as proscribed by the Budget Act or by unanimous consent agreements on the Senate floor. The Budget Act specifies that Congress should complete action on its budget resolution by April 15 of each year. Once the budget resolution conference report is adopted by both the House and the Senate, its terms govern the remainder of the budget process for that year.
Among the provisions in the joint explanatory statement accompanying the conference report on the budget resolution are spending allocations often referred to as the 302(a) allocations. These spending allocations for budget authority and for outlays are provided for the coming fiscal year and at least the ensuing five fiscal years. The aggregate spending allocations for discretionary spending serve as an internal control, enforceable through points of order and other procedural mechanisms as Congress next considers its thirteen annual appropriation bills.