DOCSLIB.ORG

The Federal Budget and Appropriations Process

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Federal Budget and Appropriations Process The Federal Budget and Appropriations Process By Sarah Saadian, Vice President of congressional policy priorities. Public Policy, NLIHC Mandatory Spending unding the federal government is a two-part Mandatory spending is almost entirely made process that occurs annually. First, a federal up of spending on entitlements, such as Social budget resolution is passed, and then funds Security and Medicaid. Expenditures for Fare appropriated among federal agencies and entitlements are based on a formula applied programs. to the number of households eligible for a Both the Administration and Congress participate benefit. The amount of funding in a given year in the process of developing a federal budget is determined by that formula. Typically, the resolution that establishes the overall framework Administration and Congress do not focus and maximum dollar amount for government much on this spending in the budget and spending in a fiscal year (FY). The appropriations appropriations processes. However, Congress can process is also handled entirely by Congress and use the budget resolution to direct authorizing establishes the amount of funding for individual committees to participate in a budget cutting activities of the federal government. Although processes called budget reconciliation, whereby the budget resolution should be completed, authorizing committees are required to suggest and funds appropriated during the prior FY, in savings from mandatory programs. recent years Congress has not completed the Tax Revenue appropriations processes in advance of the start Taxes provide revenue to the government to of the FY due to disagreements between the fund spending priorities. Tax policy includes House and Senate over top line budget amounts. not just revenues, but also expenditures in the TYPES OF FEDERAL SPENDING form of deductions, credits, and other tax breaks. These expenditures reduce the total tax amount AND REVENUE that could potentially be collected to provide There are three categories of spending for revenue for the federal government. Each year, which the budget and appropriations process the Administration and Congress decide what tax establishes limits and defines uses: discretionary revenues to collect and what tax expenditures to spending, mandatory spending, and tax revenue. make by forgoing revenue collection in pursuit of Discretionary Spending certain policy priorities. As the name suggests, government expenditures BUDGET PROCESS in the discretionary portion of the budget are subject to annual evaluation by the president The federal FY runs from October 1 through and Congress. Although the discretionary September 30. Planning for the upcoming FY portion of the budget represents less than begins as early as a year-and-a-half before the half of total annual expenditures, it is the area beginning of the FY. of spending that the president and Congress President’s Budget Request focus on most. Each year, the Administration The budget process officially commences on the and Congress re-evaluate the need to allocate first Monday of February, when the president is funds for federal departments, programs, and required by law to provide a budget request to activities. Discretionary spending amounts vary Congress for all Administration activities in the annually, depending upon the Administration and NATIONAL LOW INCOME HOUSING COALITION 2–3 coming FY. If Congress does not pass its appropriations bills by the October 1 start of the FY, it must provide The president’s budget request to Congress funding for the period after the FY ends and includes funding requests for discretionary before an appropriations bill is passed. This programs, mandatory programs, and taxes. funding is provided by a continuing resolution The majority of housing programs are funded (CR). A CR continues funding for programs through the discretionary portion of the budget. funded in the prior FY, usually at the funding The president’s funding request for discretionary level from the year prior, although exceptions programs varies from year to year to reflect the or “anomalies” may sometimes be included for Administration’s evolving policy priorities. certain programs. If Congress does not pass a CR Congressional Budget Resolution and appropriations bills have not been enacted, Once the president submits a budget to the government shuts down, as it did for 17 days Congress, the House and Senate Committees in October 2013. on the Budget prepare a budget resolution. The budget resolution sets the overall framework THE APPROPRIATIONS PROCESS for spending for a one-year fiscal term. The Unlike the budget process, which is initiated by resolution includes a top-line spending figure the Administration, the appropriations process for discretionary activities. The House and rests entirely in the hands of Congress. After Senate Committees on Appropriations use this Congress passes a budget resolution, the House figure as the maximum amount of funding and Senate Committees on Appropriations divide that can be appropriated in the next FY. This the top-line figure for discretionary spending new discretionary cap either increases or among their 12 respective appropriations decreases the overall amount of funding that the subcommittees. The two appropriations Committees on Appropriations have available subcommittees that provide the majority of to allocate to HUD and the United States funding for affordable housing and community Department of Agriculture (USDA)’s affordable development programs are the Transportation, housing activities. Even though the budget Housing, and Urban Development (THUD) resolution establishes the overall spending level Subcommittee and the Agriculture, Rural for the FY, it does not go into detail as to how Development, Food, and Drug Administration this funding will be allocated. The details are Subcommittee in each chamber of Congress. the job of the Committees on Appropriations, Each subcommittee must divide the amount which begin their work after Congress agrees to a of funding allocated by the Committee on budget resolution. Appropriations between the various priorities To craft the budget resolution, the House and funded in its bill. Each subcommittee must also Senate Committees on the Budget first hold determine the priority programs within each of hearings at which Administration officials testify their bills and provide sufficient funding for those regarding the president’s budget request. The priorities. In order to determine its priorities, Committees on the Budget each craft their own the THUD subcommittees hold hearings, during budget resolutions. The House and Senate then which HUD or USDA officials testify regarding attempt to agree on a final budget resolution. specific programs and initiatives included in Since this is a resolution and not a bill, it does not the president’s request. Witnesses in these have to be signed into law by the president. hearings provide a far greater level of detail on Once Congress passes a budget resolution, the programmatic activity than witnesses testifying appropriations work begins. If Congress does not at budget committee hearings, which focus on pass a budget resolution by the statutory deadline overall proposed spending rather than particular of April 15, the Committees on Appropriations activities. are free to begin their appropriations work. After appropriations hearings are completed, 2–4 2021 ADVOCATES’ GUIDE the subcommittees craft their bills. The programs under the Transportation, HUD, and subcommittees then hold a markup of their Agriculture 302(b) allocations. These allocations draft bills and report out the bill they pass to are the top-line spending numbers available their respective appropriations committees. The for the THUD and Agriculture spending bills. appropriations committees hold a markup of Congress must provide a substantial allocation in each bill and report out on those bills to Congress. order to prevent the loss of affordable housing. The House and Senate must then negotiate final THUD and Agriculture bills. Once these bills are WHAT TO SAY TO LEGISLATORS passed by Congress, they are signed into law by Advocates should weigh in with the the president. Administration and Congress on the importance of strong funding for affordable housing. FORECAST FOR 2021 • Advocates should urge their Members of For the past decade, Congress was limited by low Congress to provide robust funding for HUD spending caps that were put in place under the and USDA affordable housing programs. “Budget Control Act of 2011” (BCA). These low If Members of Congress do not hear from spending caps have made it difficult for Congress advocates, they will not know how important to fund domestic programs, including affordable these programs are in their districts and housing and community development, at the states. necessary levels. Some conservative Members of Congress advocate for even deeper cuts below • Advocates should let their Members of BCA levels. Congress know that the low spending caps required by law resulted in the loss of FY 2021 will be the first year in a decade where affordable housing opportunities in their Congress is not limited by BCA budget caps. states and districts. Budget caps should not be This provides an opportunity for advocates continued into future years. and congressional champions to secure robust resources for housing investments. For More Information It is critical that housing advocates urge Congress NLIHC, 202-662-1530, https://nlihc.org/federal- to provide the highest level of funding possible for budget-and-spending. affordable housing and community development NATIONAL LOW INCOME HOUSING COALITION 2–5.
Load more

Recommended publications
  • Section 10 – Overview of the Budget Process
    SECTION 21—OVERVIEW OF SCORING LEGISLATION SECTION 21—OVERVIEW OF SCORING LEGISLATION Table of Contents 21.1 What is scoring? 21.2 When does scoring occur during the budget process? 21.3 What are the basic concepts I need to know to score legislation? (a) Overview of budget laws (b) Definition of discretionary spending (c) Definition of mandatory spending (d) Committee of jurisdiction (e) How are scoring estimates measured? (f) Economic and technical assumptions (g) Scoring timeframes 21.4 What are the budget enforcement mechanisms for discretionary and mandatory spending? (a) Caps on discretionary spending (b) Pay-as-you-go for mandatory spending (c) Congressional enforcement procedures 21.5 What resources are available to help me score legislation? 21.6 When are scores of legislation due to OMB? 21.1 What is scoring? Scoring is the process of estimating the change in Government spending and collections resulting from enacted or proposed legislation, compared to what would happen in the absence of that legislation. These estimates are prepared both to inform policy makers of the budgetary effects of proposed legislation, and to inform congressional and statutory budget enforcement procedures. 21.2 When does scoring occur during the budget process? Scoring occurs typically during budget formulation, the consideration of proposed legislation, and after a law has been enacted. Budget formulation. As part of the budget formulation process, agencies submit baseline program levels and discretionary, mandatory, and governmental receipt proposals to OMB for consideration. Agencies work with OMB to determine the effect of proposals on budget authority, collections, and outlays based on the Administration’s economic and technical assumptions.
    [Show full text]
  • Uncontrollable Spending Has Been Growing Much More Rapidly Than Total Spending and Thus Accounts for an Ever-Larger Share of the Total
    How much spending is uncontrollable? Spending is generally said to be uncontrollable for political rather than legal reasons. Entitlement spending can always be controlled legally by reforming programs, but when an entitlement is extremely popular, reform may require more political courage than is readily available. The federal budget divides government spending into three categories, discretionary spending, mandatory or direct spending, and net interest. Discretionary spending, set in annual appropriations acts controlled by the House and Senate Appropriations Committees, includes most defense programs as well as spending for education, transportation, environmental protection, law enforcement and border security, and international assistance. Mandatory spending, controlled by laws other than appropriations act, includes spending on entitlement programs including the big three—Social Security, Medicare, and Medicaid—and many smaller programs such as supplemental nutrition assistance, federal civilian and military retirement benefits, and unemployment insurance. Government spending on mandatory programs (often called entitlement programs), and net interest on the public debt are often described as “uncontrollable.” Entitlements can be controlled legally by reforming them, but this can be highly unpopular politically. Interest costs can be controlled indirectly by curbing spending growth or raising revenues, but that is also never easy. Uncontrollable spending has been growing much more rapidly than total spending and thus accounts for an ever-larger share of the total. However, most growth has been concentrated in entitlements that serve the elderly and in health insurance. The population has been aging rapidly, and that affects both Social Security and health programs. The latter have grown doubly rapidly because health costs per beneficiary have been growing faster than incomes per capita.
    [Show full text]
  • Federal Mandatory Spending for Means-Tested Programs, 2009 to 2029
    JUNE 2019 Federal Mandatory Spending for Means-Tested Programs, 2009 to 2029 Means-tested programs (which provide cash payments growth rates have been adjusted to exclude the effects of or other forms of assistance to people with relatively low shifts in the timing of certain federal payments.3 income or few assets) currently account for a little more than a quarter of all mandatory spending.1 The largest Comparing Historical and Projected means-tested mandatory programs are Medicaid, the Growth Rates earned income and child tax credits (which are refund- Historical and projected growth rates are affected by able and thus affect outlays), the Supplemental Nutrition changes in law and the economy. For example, several Assistance Program (SNAP), and the Supplemental mandatory programs have been or are scheduled to be Security Income program. The largest non–means- significantly affected by changes specified in law over the tested mandatory programs are Social Security, most of next 10 years. The 2007–2009 recession and the ensuing Medicare, and the federal civilian and military retirement recovery also have influenced growth rates. As a result, programs. important aspects of the programs may differ signifi- cantly from their past, and those differences may be the In its May 2019 baseline, the Congressional Budget Office projected that if current laws generally remained the Low Income Home Energy Assistance Program), which are unchanged, mandatory spending on means-tested pro- controlled by annual appropriation acts. However, each table grams would grow more slowly than spending for non– shows discretionary spending for the Federal Pell Grant Program means-tested programs.
    [Show full text]
  • Blueprint for Balance: a FEDERAL BUDGE T F OR FY 20 18
    Blueprint for Balance: A FEDERAL BUDGET FOR FY 2018 The Heritage Foundation © 2017 by The Heritage Foundation 214 Massachusetts Avenue, NE Washington, DC 20002 (202) 546-4400 | heritage.org All rights reserved. ISBN: 978-0-89195-163-6 Contents Contributors .................................................................................................................................................... ix Introduction: Blueprint for Balance ........................................................................................ 1 Chapter 1: Policies for a Congressional Budget ........................................................... 5 Chapter 2: Budget Proposals ..........................................................................................................13 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Repeal the USDA Catfish Inspection Program ........................................................................................16 Eliminate the Conservation Technical Assistance Program..................................................................17 Eliminate the Rural Business Cooperative Service.................................................................................18 Prohibit Funding for National School Meal Standards ............................................................................................ and the Community Eligibility Provision 19 Withhold Funding for Federal Fruit and Vegetable Supply Restrictions ............................................20 Repeal
    [Show full text]
  • Department of Education Funding: Key Concepts and FAQ
    Department of Education Funding: Key Concepts and FAQ Updated February 19, 2019 Congressional Research Service https://crsreports.congress.gov R44477 Department of Education Funding: Key Concepts and FAQ Summary Like most federal agencies, the Department of Education (ED) receives funds in support of its mission through various federal budget and appropriations processes. While not unique, the mechanisms by which ED receives, obligates, and expends funds can be complex. For example, ED receives both mandatory and discretionary appropriations; ED is annually provided forward funds and advance appropriations for some—but not all—discretionary programs; ED awards both formula and competitive grants; and a portion of ED’s budget subsidizes student loan costs (direct loans and loan guarantees). As such, analyzing ED’s budget requires an understanding of a broad range of federal budget and appropriations concepts. This report provides an introduction to these concepts as they are used specifically in the context of the congressional appropriations process for ED. The first section of this report provides an introduction to key terms and concepts in the federal budget and appropriations process for ED. In addition to those mentioned above, the report includes explanations of terms and concepts such as authorizations versus appropriations; budgetary allocations, discretionary spending caps, and sequestration; transfers and reprogramming; and matching requirements. The second section answers frequently asked questions about federal funding for
    [Show full text]
  • “Mandatory" Knowledge: Truths About Government Spending 1
    Center Forward Budget Basics “Mandatory" Knowledge: Truths Vol. 1, No. 2 About Government Spending April 2011 (updated March 2012) Overview Key Facts The intense spotlight on government support for public radio, Planned Total federal spending for fiscal 2011: Parenthood and, until recently, earmarks, may have created the impression that $3.598 trillion most government spending goes to programs like these. In truth, 60% of government spending goes to benefit individuals—such as seniors, veterans and Amount of mandatory spending: unemployed workers—under so-called “mandatory” spending. $2.025 (56% of total) Amount of discretionary spending: What’s “mandatory” spending? $1.346 trillion (37% of total) Net interest on the national debt: “Mandatory” spending is money the government must spend because of laws $227 billion (6% of total) defining who is “entitled” to get government money and in what amount (hence, “entitlements”). For example, the Social Security Act guarantees any American Top sources of mandatory spending in over age 62 benefits according to a formula fixed by law. If more people reach age fiscal 2011: 62 and want benefits (which is in fact happening), spending automatically rises. Social Security: $725 billion The only way to stop these increases is to change who gets the money—i.e. by Medicare: $560 billion raising the retirement age—or the amount people get—i.e. by cutting benefits. Medicaid: $275 billion Other examples of mandatory spending include: Unemployment insurance: $159 Medicare (available to anyone over 65 or anyone who is disabled); billion Medicaid and food stamps (available to anyone whose income is low Top sources of discretionary spending enough to qualify); in fiscal 2011: Unemployment insurance; and National defense (including wars in Veterans’ benefits.
    [Show full text]
  • Federal Spending on Benefits and Services for People with Low Income: in Brief
    Federal Spending on Benefits and Services for People with Low Income: In Brief Gene Falk Specialist in Social Policy Karen E. Lynch Specialist in Social Policy Jessica Tollestrup Specialist in Social Policy February 6, 2018 Congressional Research Service 7-5700 www.crs.gov R45097 Federal Spending on Benefits and Services for People with Low Income: In Brief Contents Introduction ..................................................................................................................................... 1 Trends in Spending on Federal Benefits and Services for People with Low Income ...................... 2 Federal Spending on Benefits and Services for Low-Income People by Category ......................... 2 Mandatory and Discretionary Spending .......................................................................................... 4 Federal Spending on Benefits and Services for Low-Income People by Program .......................... 5 Figures Figure 1. Federal Spending on Benefits and Services for People with Low Income, FY2008-FY2016 .......................................................................................................................... 2 Figure 2. Federal Spending on Benefits and Services for People with Low Income, Health and Non-health, FY2008-FY2016 ................................................................................................ 4 Figure 3. Federal Spending on Benefits and Services for People with Low Income, by Budget Classification, FY2016 ...................................................................................................
    [Show full text]
  • Mandatory Spending in Fiscal Year 2020
    THE FEDERAL BUDGET IN FISCAL YEAR 2020 A CLOSER REVENUES, $3.4 TRILLION OUTLAYS, $6.6 TRILLION Net Interest LOOK AT $0.3 T Mandatory Discretionary $ $ 2020 4.6 T 1.6 T MANDATORY SPENDING Primarily payments for benefit programs for which laws set eligibility rules and benefit formulas $4.6 $1.9 21.8% 11.7% Trillion Trillion of GDP of GDP Mandatory outlays (net Outlays for Mandatory outlays Average mandatory of osetting receipts) by Social Security and (net of osetting outlays (net of GLANCE the federal government Medicare (net of receipts) in 2020 osetting receipts) in 2020 osetting receipts) between 2000 in 2020 and 2019 AT A AT MANDATORY SPENDING IN 2020 Billions of Dollars 1,450 917 458 74 Other Major Health Medicare Medicaid Care Programs 1,090 945 144 Disability Insurance Social Security Old-Age and Survivors Insurance Supplemental Supplemental Nutrition Other Security Income Assistance 341 275 133 105 86 57 57 Program Income Security1,052 Programs COVID−19 Unemployment Recovery Other Compensation Rebates Unemployment Earned Income, Compensation Child, and Other Tax Credits 526 149 118 184 Other Other 977Programs Paycheck Protection Program Coronavirus Student Relief Fund Loan Programs 0.1 Other 171 109 62 Funds collected by government agencies from other government Federal Civilian and Military accounts or from the public that are credited as an oset to gross Military Retirement Civilian spending. Osetting receipts include Medicare premiums, intragovernmental payments for federal employees’ retirement, 110 12 Other and receipts related to natural resources (such as those from oil Veterans’ 122Programs and gas exploration and development).
    [Show full text]
  • Options for Reducing the Deficit: 2019 to 2028
    CONGRESS OF THE UNITED STATES CONGRESSIONAL BUDGET OFFICE Options for Reducing the Deficit: 2019 to 2028 Left to right: © Syda Productions/Anatoliy Lukich/Garry L./Andriy Blokhin/Juanan Barros Moreno/lenetstan/Shutterstock.com DECEMBER 2018 Notes The estimates for the various options shown in this report were completed in November 2018. They may differ from any previous or subsequent cost estimates for legislative proposals that resemble the options presented here. Unless this report indicates otherwise, all years referred to regarding budgetary outlays and revenues are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. The numbers in the text and tables are in nominal (current-year) dollars. Those numbers may not add up to totals because of rounding. In the tables, for changes in outlays, revenues, and the deficit, negative numbers indicate decreases, and positive numbers indicate increases. Thus, negative numbers for spending and positive numbers for revenues reduce the deficit, and positive numbers for spending and negative numbers for revenues increase it. Some of the tables in this report give values for two related concepts: budget authority and outlays. Budget authority is the authority provided by federal law to incur financial obligations that will result in immediate or future outlays of federal government funds. The budget projections used in this report come from various sources. The 10-year spending projections, in relation to which the budgetary effects of spending options are generally calculated, are those in Congressional Budget Office,An Analysis of the President’s 2019 Budget (May 2018, revised August 2018), www.cbo.gov/publication/53884.
    [Show full text]
  • Options for Reducing the Deficit: 2021 to 2030 Left to Right: © Bluebarronphoto/Photofriday/Robert Young/ESB Professional/Lane V
    CONGRESS OF THE UNITED STATES CONGRESSIONAL BUDGET OFFICE Options for Reducing the Deficit: 2021 to 2030 Left to right: © BlueBarronPhoto/photofriday/Robert Young/ESB Professional/Lane V. Erickson/Shutterstock.com Professional/Lane V. Left to right: Young/ESB © BlueBarronPhoto/photofriday/Robert DECEMBER 2020 Notes The estimates for the options in this report were completed in November 2020. They may differ from any previous or subsequent cost estimates for legislative proposals that resemble the options presented here. Unless this report indicates otherwise, all years referred to regarding budgetary spending and revenues are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. The numbers in the text and tables are in nominal (current-year) dollars. Those numbers may not add up to totals because of rounding. In the tables, for changes in outlays, revenues, and the deficit, negative numbers indicate decreases, and positive numbers indicate increases. Thus, negative numbers for outlays and positive numbers for revenues reduce the deficit, and positive numbers for spending and negative numbers for revenues increase it. Certain changes in tax provisions would reduce outlays for refundable credits; those effects are incorporated in the increase in revenues. Some of the tables in this report give values for two related concepts: budget authority and outlays. Budget authority is the authority provided by federal law to incur financial obligations that will result in immediate or future outlays of federal government funds. The budgetary effects of options are generally calculated relative to the 10-year spending and revenue projections in Congressional Budget Office, An Update to the Budget Outlook: 2020 to 2030 (September 2020), www.cbo.gov/publication/56517.
    [Show full text]
  • Is There More Room to Negotiate with the IMF on Fiscal Policy?
    November 2014 Paper 9 Is There More Room to Negotiate with the IMF on Fiscal Policy? By Cornel Ban Executive Summary During the 1980s the IMF emerged as a global “bad cop,” demanding harsh austerity measures in countries faced with debt problems. Has the Great Recession changed all that? Is there more room to negotiate with the Fund on fiscal policy? The answer is yes. If we take a close look at what the IMF researchers say and what its most influential official reports proclaim, then we can see that there has been a more “Keynesian” turn at the Fund. This means that today one can find arguments for less austerity, more growth measures and a fairer social distribution of the burden of fiscal sustainability. The IMF has experience a maJor thaw of its fiscal policy doctrine and well-informed member states can use this to their advantage. These changes do not amount to a paradigm shift, a la Paul Krugman’s ideas. Yet crisis-ridden countries that are keen to avoid punishing austerity packages can exploit this doctrinal shift by exploring the policy implications of the IMF’s own official fiscal doctrine and staff research. They can cut less spending, shelter the most disadvantaged, tax more at the top of income distribution and think twice before rushing into a fast austerity package. This much is clear in all of the Fund’s World Economic Outlooks and Global Fiscal Monitors published between 2009 and 2013 with regard to four themes: the main goals of fiscal policy, the basic options for countries with fiscal/without fiscal space, the pace of fiscal consolidation, and the composition of fiscal stimulus and consolidation.
    [Show full text]
  • The Statutory Pay-As-You Go Act and the Role of the Congress Congressional Budget Office Nonpartisan Analysis for the U.S
    The Statutory Pay-As-You Go Act and the Role of the Congress Congressional Budget Office Nonpartisan Analysis for the U.S. Congress August 2020 The Statutory Pay-As-You-Go Act of 2010 (often called S-PAYGO) established procedures to control the effects of newly enacted legislation on the deficit by constraining increases in spending and reductions in revenues. This document describes how estimates of the budgetary effects of enacted legislation are recorded and used to enforce S-PAYGO requirements. Is All Legislation Subject to S-PAYGO? Who Enforces S-PAYGO Requirements and How? Yes. All legislation is evaluated for compliance with In keeping with the law’s provisions, OMB enforces S-PAYGO. Although the S-PAYGO law sets out per- S-PAYGO requirements through sequestration—the manent budget-reporting and enforcement proce- cancellation of mandatory budgetary resources.1 To dures for all legislation, only provisions that affect do that, the agency uses 5- and 10-year scorecards mandatory spending and revenues are subject to (see the table) to track the projected budgetary S-PAYGO enforcement. effects of new laws subject to S-PAYGO.2 The scorecards align with the budget window that the Mandatory, or direct, spending includes outlays Congressional Budget Office uses for its baseline for most federal benefit programs and for certain projections and legislative cost estimates: other payments to people, businesses, nonprofit the current year, the upcoming budget year, and institutions, and state and local governments. Such either four or nine subsequent fiscal years. Unless spending is generally governed by statutory crite- otherwise directed by law, OMB uses its own esti- ria and is not normally constrained by the annual mates to create those scorecards.
    [Show full text]