The Congressional Budget Process

The proposal is prepared by the Office of Management and Budget (OMB) and covers every agency and program in the federal government. It outlines the administration's spending priorities, revenue estimates (mostly tax projections), and any new programs or cuts the President wants Congress to consider.

Critically, the President's budget is not law, Congress can ignore it entirely. It functions more as a public statement of priorities and a starting point for negotiations than a binding directive. In some years, Congress formally votes to reject it without debate.

The fiscal year being budgeted runs from October 1 of that year through September 30 of the next, so a budget submitted in February is planning about 8 months ahead.

The requirement dates to the Budget and Accounting Act of 1921, which for the first time made the President responsible for submitting a single consolidated budget and created the Bureau of the Budget, renamed OMB in 1970. Before 1921, individual agencies sent their funding requests directly to Congress with no central review. In a President's first year the February deadline is almost always missed; new administrations typically release a short outline, often called a skinny budget, in the spring and the full document weeks later.

A budget resolution is a blueprint, not a law. It sets overall spending caps and revenue targets that appropriations committees must work within, but it doesn't actually spend a single dollar or cut any taxes on its own.

By law, Congress is supposed to pass a budget resolution by April 15. It rarely meets this deadline. When no resolution passes, appropriations committees often work from informal frameworks or previous years' limits.

Unlike most legislation, a budget resolution does not go to the President for signature. It is purely an internal agreement between the House and Senate about how they plan to proceed.

The resolution also sets the stage for a special process called budget reconciliation, which allows certain budget-related legislation to pass the Senate with a simple majority instead of the usual 60-vote threshold needed to overcome a filibuster.

The federal budget is divided into 12 appropriations bills, each covering a broad category of government: Agriculture; Commerce, Justice & Science; Defense; Energy & Water; Financial Services; Homeland Security; Interior & Environment; Labor, Health & Education; Legislative Branch; Military Construction & Veterans Affairs; State & Foreign Operations; Transportation & Housing.

Each subcommittee holds its own hearings, calls agency officials to testify, debates line items, and drafts its specific bill. This is where the detailed work of funding the government actually happens.

There is an important distinction between authorization and appropriation that most people don't know: Authorization creates a government program and sets a spending ceiling. Appropriation actually hands over the money. A program can exist (authorized) but receive no funding (not appropriated). Congress frequently funds programs beyond their authorized levels, or passes appropriations for programs whose authorization has technically lapsed.

Once a budget resolution sets the overall discretionary total, the House and Senate Appropriations Committees divide that number among their 12 subcommittees in what are called 302(b) allocations. The current 12-subcommittee structure was set in 2007, when the House and Senate aligned their panels; the subcommittee chairs are known informally as the appropriations "cardinals" and are among the most sought-after positions in Congress.

The House typically moves first, passing its version of each appropriations bill through the full chamber. The Senate then passes its own version, which frequently differs on spending levels, policy riders (unrelated legislative provisions attached to spending bills), and program priorities.

Both chambers must pass identical text before a bill can go to the President. If the versions differ, which they almost always do, the differences must be resolved.

Debate, amendments, and procedural maneuvers can slow or stall individual bills. Controversial policy riders (for example, attaching an unrelated policy change to a must-pass spending bill) are a common source of conflict between the chambers and with the White House.

Appropriations bills are historically considered on the House floor under relatively open rules that permit many amendments, so a single bill can absorb dozens of votes over several days. In the Senate, most appropriations bills still need 60 votes to end debate, which means the majority normally cannot pass them without support from the other party; when that support is absent, the bills stall and the work shifts to a year-end negotiation.

Conference committees are temporary, joint committees formed specifically to reconcile the differences between House and Senate versions of a bill. Members are appointed by House and Senate leadership.

The committee negotiates a compromise version, the conference report, which must then pass both the full House and full Senate without further amendment. Each chamber votes yes or no on the final package.

If both chambers adopt the conference report, the enrolled bill goes to the President. The President has 10 days to sign it into law or veto it. Congress can override a veto with a two-thirds majority in both chambers.

Formal conference committees on spending bills have become rare. Since the 2010s, congressional leaders more often settle differences through "amendments between the houses," trading versions back and forth, or by folding several bills into one omnibus or a smaller "minibus" package negotiated by the four appropriations leaders (the chair and ranking member of each chamber's committee) and leadership staff.

If all 12 appropriations bills pass both chambers and are signed by the President before September 30, the government has a full-year funding agreement in place and the new fiscal year begins smoothly on October 1.

This ideal outcome almost never happens. Since fiscal year 1977, when the modern budget process was established, Congress has met every single deadline only four times: fiscal years 1977, 1989, 1995, and 1997.

When the deadline is missed, Congress has three options: pass a Continuing Resolution to keep the government temporarily funded, bundle unfinished bills into an Omnibus package, or allow a government shutdown. Often all three happen at different points in the same funding cycle.

Every fiscal year since 1998 has begun under at least one Continuing Resolution. The longest full shutdown on record ran 43 days, from October 1 to November 12, 2025, breaking the previous 35-day record set from December 22, 2018 to January 25, 2019; the Congressional Budget Office estimated the 2018-19 lapse reduced economic output by about $11 billion, of which roughly $3 billion was never recovered.

The U.S. government operates on a fiscal year that begins October 1 and ends September 30 of the following year. Fiscal Year 2025 (FY2025), for example, runs from October 1, 2024 through September 30, 2025.

This schedule was established in 1974 by the Congressional Budget Act, which also created the Congressional Budget Office (CBO) and formalized the budget process. Before 1977, the fiscal year ran July 1 through June 30.

The October 1 start gives Congress the summer months after a new administration takes office (in January) to work on the first full budget. In practice, the transition year is almost always funded through a combination of Continuing Resolutions and Omnibus bills.

Congress passed the 1974 Budget Act largely in response to President Nixon's practice of impounding, or simply refusing to spend, funds it had appropriated. The same law created the House and Senate Budget Committees and the Congressional Budget Office, and its Impoundment Control Act title sharply limited a President's ability to withhold appropriated money without congressional approval.