Functional Categories of the Federal Budget

Functional Categories of the Federal Budget
Bill Heniff Jr.
Analyst on the Congress and Legislative Process
Government and Finance Division
The President’s budget and the congressional budget resolution classify federal
budgetary activities into functional and subfunctional categories that represent the major
purposes of the federal government. Each budgetary activity of the federal government,
including budget authority, outlays, tax expenditures, and credit authority, is classified
into a subfunction based on the primary purpose it serves without regard to the agency or
other unit responsible for it. The functional categories provide a broad statement of
budget priorities and facilitate the analysis of trends in related programs regardless of the
type of financial transaction or agency organization. See the CRS Guides to
Congressional Processes at [] for
more information on the budget process.
The annual budget resolution sets forth spending amounts for each functional
category. The amounts are used for informational purposes in the congressional budget
process and are not enforced by points of order. Instead, amounts in each functional
category are distributed to the various congressional committees with jurisdiction over the
spending activities. The committee allocations made under Section 302 of the
Congressional Budget Act of 1974 (Titles I-IX of P.L. 93-344, 2 U.S.C. 601-688) are
enforceable through points of order on the floor of each house. In subdividing their
allocations, the appropriations committees, for instance, effectively may alter the
functional distributions made in the budget resolution.
While the use of functional classifications by the federal government can be traced
to the first appropriations act, the modern structure of functional categories originated1
with the 1948 budget and has evolved over time. Under 31 U.S.C. 1104(c), the President
may change the functional categories only in consultation with the House and Senate
Appropriations Committees and Budget Committees.
A list of the 20 functional categories currently included in the federal budget, as well
as the subfunctions, is presented in Table 1. Generally, the first 17 functional categories
reflect major policy areas, while the remaining three represent non-programmatic
elements of the budget that must be included to complete the presentation. Every

1 See Government Accountability Office, Budget Function Classifications: Origins, Trends, and
Implications for Current Uses, GAO/AIMD-98-67, February 1998.

budgetary account is assigned an identification code, and the last three digits of these
codes designate the subfunction into which it is classified.
Table 1. List of Functional and Subfunctional Categories
Functional categoriesSubfunctional categories
National defense (050)Department of Defense-Military (051); Atomic energy defense
activities (053); Defense-related activities (054)
International affairs (150)International development and humanitarian assistance (151);
International security assistance (152); Conduct of foreign affairs
(153); Foreign information and exchange activities (154); International
financial programs (155)
General science, space, andGeneral science and basic research (251); Space flight, research, and
technology (250)supporting activities (252)
Energy (270)Energy supply (271); Energy conservation (272); Emergency energy
preparedness (274); Energy information, policy, and regulation (276)
Natural resources andWater resources (301); Conservation and land management (302);
environment (300)Recreational resources (303); Pollution control and abatement (304);
Other natural resources (306)
Agriculture (350)Farm income stabilization (351); Agricultural research and services
Commerce and housingMortgage credit (371); Postal Service (372); Deposit insurance (373);
credit (370)Other advancement of commerce (376)
Transportation (400)Ground transportation (401); Air transportation (402); Water
transportation (403); Other transportation (407)
Community and regionalCommunity development (451); Area and regional development (452);
development (450)Disaster relief and insurance (453)
Education, training,Elementary, secondary, and vocational education (501); Higher
employment, and socialeducation (502); Research and general education aids (503); Training
services (500)and employment (504); Other labor services (505); Social services
Health (550)Health care services (551); Health research and training (552);
Consumer and occupational health and safety (554)
Medicare (570)Medicare (571)
Income security (600)General retirement and disability insurance (excluding social security)
(601); Federal employee retirement and disability (602);
Unemployment compensation (603); Housing assistance (604); Food
and nutrition assistance (605); Other income security (609)
Social security (650)Social security (651)
Veterans benefits andIncome security for veterans (701); Veterans education, training and
services (700)rehabilitation (702); Hospital and medical care for veterans (703);
Veterans housing (704); Other veterans benefits and services (705)
Administration of justiceFederal law enforcement activities (751); Federal litigative and judicial
(750)activities (752); Federal correctional activities (753); Criminal justice
assistance (754)

Functional categoriesSubfunctional categories
General government (800)Legislative functions (801); Executive direction and management
(802); Central fiscal operations (803); General property and records
management (804); Central personnel management (805); General
purpose fiscal assistance (806); Other general government (808);
Deductions for offsetting receipts (809)
Net interest (900)Interest on Treasury debt securities (gross) (901); Interest received by
on-budget trust funds (902); Interest received by off-budget trust funds
(903); Other interest (908)
Allowances (920)Varies by year
Undistributed offsettingEmployer share, employee retirement (on-budget) (951); Employer
receipts (950)share, employee retirement (off-budget) (952); Rents and royalties on
the Outer Continental Shelf (953); Sale of major assets (954); Other
undistributed offsetting receipts (959)