Overview of the Executive Budget Process



Development of the President’s Budget....................................................................................1
Interaction with Congress.........................................................................................................1
Execution of the Budget............................................................................................................2
Author Contact Information............................................................................................................2




Prepared for Members and Committees of Congress


he executive budget process consists of three main phases: development of the President’s
budget; interaction with Congress; and execution of the budget. This fact sheet provides a
brief overview of each of these phases. For more information on the budget process, see T


the CRS Guides to Congressional Processes at http://www.crs.gov/products/guides/
guidehome.shtml.
The legal framework originally established by the Budget and Accounting Act of 1921 requires
the President to submit annually a comprehensive budget to Congress that covers the full range of
federal activities. Current law requires the President to submit his budget proposal no later than
the first Monday in February (31 U.S.C. 1105(a)).
The formulation of the budget usually begins approximately 10 months before the President
submits his budget to Congress (about 18 months before the start of the fiscal year). During the
early stages of the budget’s formulation, federal agencies prepare their budget requests following
their own procedures. OMB plays a coordinating role in this process and provides policy
guidelines through circulars, bulletins, and other detailed communications. In particular, OMB
Circular No. A-11, available on OMB’s Web site at http://www.whitehouse.gov/omb/, contains
detailed instructions and schedules for submission of agency budget requests and other material
to ensure that budget requests adhere to standardized conventions and formats.
Agency budget requests are submitted to OMB in early fall, often in September. These requests
then are reviewed by OMB staff, with the agencies notified of the OMB director’s decisions
through a “passback.” Agencies may appeal these recommendations to the director, and in some
cases, directly to the President. Once final decisions on the budget requests are made by the
President, agencies revise their budget requests accordingly, and prepare supporting material for
inclusion in the President’s budget submission. The President’s budget then is compiled and
submitted to Congress.
The President’s budget does not have any legally binding effect, but rather initiates the
congressional budget process and provides a statement of the budgetary goals of the President.
After the President submits his budget proposal, OMB and other administration officials testify
before congressional committees. Individual federal agencies also justify and explain their
specific budget requests at congressional hearings as budgetary legislation is formulated.
Agencies submit extensive written justifications, usually focusing on the proposed increase or
decrease in spending, to the responsible appropriations subcommittees of each chamber. OMB
ensures that agency budget justifications, testimony, and other submissions are consistent with the
President’s policies by requiring agencies to clear any material through OMB before providing it
to Congress.
The President is required to submit a Mid-Session Review by July 15 of each year. This budget
update must reflect changes in economic conditions, any legislative actions taken by Congress,
and other factors affecting the President’s initial budget submission. For a more comprehensive
discussion of the mid-session review, see CRS Report 98-768, The President’s Budget:
Requirement for a Mid-Session Review. The President also may revise his budget
recommendations any time during the year.



OMB communicates the administration’s position on budgetary legislation during the
congressional budget process by issuing “Statements of Administration Policy,” commonly
referred to as SAPs (also available on OMB’s Web site). Typically, the President and his aides
will negotiate with congressional leaders in order to have an impact on budgetary legislation.
These negotiations may involve overall budget policies or program details, and may occur at any
point during congressional consideration. As with any other legislation, the President may sign or
veto the appropriations acts and any other budgetary legislation enacted by Congress.
Once appropriations acts and any other budgetary legislation, such as revenue or reconciliation
measures, become law, they are executed by the appropriate federal agencies. However, funds
provided in statutes are not automatically available to agencies for obligation. Appropriated funds
first must be apportioned by fiscal quarter or by activity as appropriate. OMB is responsible for
reviewing apportionment requests and making funds available to agencies. The Antideficiency
Act (31 U.S.C. 1341-42; 1511-1519) prohibits agencies from obligating funds in excess of levels
provided in law.
Any withholding of funds must follow impoundment procedures established by the Impoundment
Control Act (ICA) of 1974 (Title X of P.L. 93-344, 2 U.S.C. 681 et seq.). The act defines two
types of impoundments: deferrals and rescissions. Deferrals delay the spending of funds, while
rescissions permanently cancel budgetary resources. The President must report any deferrals to
Congress, but may only propose rescissions. Congress usually acts on rescission proposals in
annual appropriations acts rather than by the legislative procedures established under the ICA. If
Congress does not act on the President’s rescission proposals within 45 days, the President must
make the funds available for obligation. Other techniques for making spending adjustments after
legislation has been enacted include reprogramming funds (a shift within appropriations
accounts) and transferring funds (a shift between accounts, which requires statutory authority).
Bill Heniff Jr.
Analyst on the Congress and Legislative Process
wheniff@crs.loc.gov, 7-8646