The process of creating the budget for the United States Government is known as the budget process. The specific procedures for formulating the budget were established in the Congressional Budget and Impoundment Control Act of 1974. The United States federal budget is a piece of legislation passed by the American Congress to allocate funding for the next fiscal year, which begins on October 1st. ... The Congressional Budget and Impoundment Control Act of 1974 is a U.S. federal law passed by the United States Congress specifying that the President may propose to Congress that funds be rescinded. ...

The President's Budget

The budget process begins in February with the submission of the President's budget. According to the act, the budget is submitted to the Congress on the first Monday in February. At this stage, the budget is not binding but merely constitues an extensive proposal of the administration's intended spending for the following fiscal year. In addition to the actual proposal, the President submits volumes of supporting information intended to persuade Congress of the necessity and value of the budget provisions. In addition to the President, each independent agency and cabinet department also submits its own budget proposal which will be incorporated into the final version of the budget. The presidential seal was used by President Hayes in 1880 and last modified in 1959 by adding the 50th star for Hawaii. ... Seal of the U.S. Congress. ... Federal independent agencies were established through separate statutes passed by Congress. ... Cabinet meeting on May 16, 2001. ...

Budget Resolution

The next step is the drafting of a budget resolution. The resolution is drafted concurrently by the House and the Senate budget committees. Following the traditional calendar, by early April both committees finalize their drafts and submit it to the respective floors for consideration and adoption. The U.S. House Committee on the Budget, commonly known as the House Budget Committee, is a standing committee of the United States House of Representatives, the lower house of Congress. ... The United States Senate Committee on Budget was established in 1974 by the Congressional Budget and Impoundment Control Act. ...

Once both houses pass the resolution, a conference report is drafted by members of the Senate and the House. The purpose of the conference report is to reconcile any differences that may exist between the House and the Senate versions. Usually, the conference report is adopted finalizing the budget resolution.

In contrast to most legislation passed by Congress, the budget resolution is a concurrent resolution and thus does not become law and does not require the signature of the President. As a result, no money has actually been appropriated at that point. The budget resolution then serves as a blueprint for the actual appropriation process. In the United States a concurrent resolution is a legislative measure, designated S. Con. ... An appropriation bill or supply bill is a legislative motion which authorizes the government to spend money. ...

The fiscal year begins on October 1st.

Structure of the Budget

Fundamentally, the budget resolution is structured along 20 budget functions, which are simply categories of spending. A listing of the budget functions can be found below.

Note 1: Estimated budget authority as presented in the President's budget (in million USD)

Discretionary vs. Mandatory Spending

Each function within the budget contains some line items as discretionary and some as mandatory spending.

Discretionary spending requires an annual appropriation bill, which is a piece of legislation. All discretionary spending is determined by the U.S. House Committee on Appropriations and its various sub-committees. Since the spending is typically for a fixed period (usually a year), it is said to be under the discretion of the Congress. Some appropriations last for more than one year (see Appropriation bill for details). The Committee on Appropriations, or Appropriations Committee (often referred to as simply Appropriations, as in Hes on Appropriations) is a committee of the United States House of Representatives. ... A Congressional subcommittee in the United States Congress is a subdivision of a standing committee that considers specified matters and reports back to the full committee. ... An appropriation bill or supply bill is a legislative motion which authorizes the government to spend money. ...

Mandatory spending refers to spending enacted by law, but not dependent on an annual or periodic appropriation bill. Commonly, "mandatory" programs are send to refer to certain entitlement programs that do not require annual appropriations. Social Security benefits, for example, entitle certain individuals to Federal government payments through legislation enacted in the past. The cost of spending for these benefits is estimated every year, but is not subject to periodic congressional approval. The Congress may, however, change mandatory programs or spending through subsequent legislation.

See also

• United States Office of Management and Budget
• United States Budget Deficit

The Office of Management and Budget (OMB) is a body within the Executive Office of the President of the United States (EOP) which is tasked with coordinating United States Federal agencies. ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ...

External links

• The Budget Graph A graphical representation of the 2007 United States federal discretionary budget
• Budget Calculator Online calculator that places specific tax or spending numbers in the context of the total U.S. budget. It also compares any spending or revenue item to projected defense spending. (Center for Economic and Policy Research)
• Basics of the Budget Process - published by majority staff on the House Committee on the Budget 2001 (PDF file)
• The Budget System and Concepts - a white house publication describing in detail the U.S. Budget System and related concepts (PDF file)
• The President's Budget of the United States Government, FY 1996 -- present.