(For more on the budget, click on [ID:nN30164446])
Jan 31 President Barack Obama unveils his
budget request on Monday, but the actual decisions about how
the government raises and spends money are made on Capitol Hill
in a process that usually lasts most of the year.
Here's how it works, in three easy steps:
1. PRESIDENT'S BUDGET REQUEST. After asking federal
agencies how much money they need to get their work done, the
White House compiles a budget request and submits it to
Congress on or before the first Monday in February.
The budget request shows broadly how the president wishes
to implement fiscal policy -- how much he aims to raise in
taxes, how much he wants to spend, and how much the gap between
the two will add to the country's debt.
This year, Obama will propose a three-year spending freeze
on many domestic government programs to help bring down a
budget deficit that hovers at levels not seen relative to the
economy since World War Two.
The document also offers a detailed look at the president's
priorities. For example, Obama requested a 37 percent increase
for the Environmental Protection Agency last year after what
Democrats saw as years of neglect under the administration of
Republican George W. Bush.
The budget request also shows how the president aims to
implement specific policy goals. In his State of the Union
speech on Wednesday, he said the United States should expand
its use of nuclear power, and his budget proposal is expected
to triple government loan guarantees to build new reactors.
2. CONGRESS DRAWS UP ITS PLAN
After the budget request is submitted, the House and Senate
Budget committees develop their own "budget resolution" -- a
guide that states how much revenue the government expects to
collect and how much it will spend.
Congress is supposed to approve this resolution by April
15, but it often misses that goal. Congress has failed to adopt
a resolution at all three times over the past 10 years.
Spending totals are defined in two ways: authority, or how
much money a federal agency is authorized to spend, and
outlays, or how much that agency will actually spend in the
For example, the Navy may be authorized to spend $750
million to build a new aircraft carrier, but only a small
fraction of that total will be outlaid the first year, when
plans for the ship are drawn up but construction has not
The budget resolution divides the money up across 19
categories that represents broad functions of government, such
as international affairs or transportation.
The document also divides the money up by congressional
committee, telling other lawmakers how much they have to work
with as they set spending levels for individual government
Both the House and the Senate have rules that can be used
to enforce these spending ceilings.
3. CUTTING THE CHECKS
After the budget resolution passes, the 12 appropriations
subcommittees in each chamber set funding levels for individual
government programs and write up detailed instructions for the
agencies that oversee them -- such as how to divide highway
construction money among individual projects.
Lawmakers often insert "earmarks" into these spending
bills, which ensure funding for specific projects in their home
districts that are not requested by the president.
Earmarks have figured in several corruption scandals in
recent years as some lawmakers have used them to steer money to
supporters, and reformers often suggest banning them entirely.
Appropriators say earmarks are a necessary part of the
process because they build support for the spending bills
needed to keep government running and ensure that Congress
exerts some control over the massive federal bureaucracy.
Ideally, Congress passes all 12 appropriations bills
individually by Oct. 1, the start of the fiscal year.
If this deadline is missed, as is common, lawmakers must
pass "continuing resolutions" to fund government agencies at
current levels while they finish their work.
Finally, the president must sign the spending bills into
law or veto them if he finds them unacceptable.
At this point, the White House is already canvassing
agencies to determine what their funding needs will be for the
coming fiscal year, and the process begins again.
(Reporting by Andy Sullivan in Washington; Editing by Eric