The process of formulating and implementing federal budget is cyclic in nature. The entire cycle of the federal budget can be divided into four important stages. These steps are described below.
Submission of the budget request to the Congress
This is the first step of the federal budget cycle and the President plays the most vital role in it. The President of the United States submits a budget request to the Congress in the month of February every fiscal year. The fiscal year of the United States starts on 1st October. However, in reality, the cycle begins almost 18 months prior to the beginning of the fiscal year and the federal agencies start to plan their internal budgets. These agencies utilize the recommendations of the advisory boards, the national academics panels. The budget request by the President is founded on these internal budgets.
The Congressional Process
After the submission of the budget request, the Congress is responsible for approving it and provide funding in the form of appropriations. The process involves the passage of twelve bills of appropriations that provide funding to the government every year. Moreover, the Congress also uses the long-term economic outlook reports provided by the Congressional Budget Office for this purpose.
The first step of this stage is the passage of the annual budget resolution formulated by the Budget Committees of the Senate and the House. This resolution serves as the framework for the decisions of funding.
The Appropriations Committee
The next step involves the Appropriations Committees. In each chamber, it divides the spending target between the subcommittees. These subcommittees are twelve in number and hence, pass 12 individual bills, in regards to different departments of the government. The process of the subcommittees starts merely weeks after the submission of the budget request by the President.
After the spending bills are passed by the Appropriations Committee, they may be amended by the chamber. They are passed in the House and the Senate in a majority, however, the President may veto the bills. On passing both the chambers, the differences among the two are solved by a conference committee. In the end, the final bill is sent to the President for his signature.
End of the Fiscal Year
The spending bills must be signed by the fiscal year’s end on 30the September each year. However, if such is not the case, the Congress may pass a continuing resolution to prevent the government from shutting down. They usually extend the funding level from the previous year. However, if they change the funding at particular programs, then the changes are called anomalies.