Federal Budget 101 | Federal Budget Season Opens Soon

Federal Budget 101 | Federal Budget Season Opens Soon

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The federal budget and appropriations process is expected to begin  in March, when President Biden releases his budget proposals for fiscal year 2022. Congress then is supposed to follow a multi-step process that entails adoption of a “budget resolution,” enacting a dozen appropriations bills, and perhaps change policies through a “budget reconciliation” bill. The following descriptions explain what the terms mean in practice:

  • President’s Budget: Unlike in some states where a governor’s budget is treated as the first or near-final draft of spending legislation, the annual budget proposal from the President is only a blueprint of spending requests and a list of policy priorities that the House and Senate are free to consult or ignore.
  • Budget Resolution: The House and Senate Budget Committees are responsible for drafting Congress' annual budget plan for the federal government, known as the "budget resolution." This instructs the Appropriations Committees on how much they can spend and perhaps policy changes that will be incorporated in a “budget reconciliation” package.
  • Appropriations: The Appropriations Committees in the House and Senate are tasked with designating the line-item spending of each federal department, agency, and program. Each of twelve subcommittees in each chamber produces a bill which is supposed to be enacted individually, but this rarely happens.
  • Budget Reconciliation: With Republicans now in control of the House and Senate, there is growing interest in a process known as “budget reconciliation” as a tool for securing statutory changes in mandatory spending (entitlements) or revenue programs (tax laws) to achieve goals set forth by the budget resolution. The majority party in the Senate typically favors the reconciliation process because filibusters are not allowed and controversial changes to law can be approved with a simple majority.

Learn more about the federal budget process

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