The Federal Budget: Understanding the Process
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While there is a traditional budget process, legislators in recent years have relied on less-traditional funding mechanisms. This document outlines the traditional budget process and frequently-relied-on funding strategies. For a deeper introduction to the federal budget process, please click here. For a visual guide to the federal budget process, please click here.
The Traditional Federal Budget Process
The federal appropriations process traditionally includes the following sequence:
Step One: The President’s Budget Request
- Traditionally the President’s request is submitted to Congress on the first Monday in February, although the date often changes—especially when a new administration takes office.
- The President’s budget request details the administration’s position on the full range of federal revenue and spending.
- The administration uses the budget request to introduce new policies, programs, or changes they would like to see enacted.
- The budget request is a proposal and has no binding authority on Congress.
How You Can Participate: Find out whether there are any proposals or initiatives related to early childhood education in the President’s proposed budget. Working with NAEYC and your Affiliate, think about why you support or oppose the proposals, and what you would like to see funded through the federal budget. You can thank the President for what you do like, speak up about what you wish to see included, and get ready to start reaching out to Congress!
Step Two: Congress’s Response
- Congress’s response begins in the Budget Committees of the House and the Senate. They create a concurrent congressional budget resolution that sets the total level of discretionary funding for the next fiscal year. While this resolution looks at total federal spending over a 10-year window, it is not binding beyond the approaching fiscal year.
- Budget resolutions are reviewed by relevant committees and must be approved by the whole chamber.
- Unlike traditional bills, budget resolutions do not require presidential action but pass with a simple majority.
How You Can Participate: Identify key Budget Committee members and staff and work with NAEYC, your Affiliate, and other partners to engage them via letters, emails, and in-person meetings.
Step Three: Congressional Appropriations
- Once discretionary funding limits have been determined, the funding process moves to the Appropriations Committees in each chamber.
- The Appropriations Committees determine program-by-program funding levels by addressing the 12 separate appropriations bills that are generated by the subcommittees covering federal agencies.
- Appropriations bills are supposed to be passed in regular order, meaning the full passage through both chambers by the start of the federal fiscal year, October 1.
- As the fiscal year ends, leadership in both chambers often negotiate an omnibus bill, which combines all appropriations bills into one piece of legislation.
- The final step in enacting program funding is the President signing the bills or the omnibus. The President has the authority to veto appropriations bills.
How You Can Participate: Identify key members in the House and Senate Labor, Health and Human Services, and Education Appropriations Subcommittees, as well as the Chair and Ranking Member of the overall Appropriations Committee. In partnership with NAEYC, your Affiliate, and other partners, work to engage these policy makers and their staff via letters, including sign-on letters, emails, and in-person meetings, related to early childhood education funding and policy priorities.
Alternative Funding Strategies
In recent years Congress has rarely passed appropriations bills as outlined above. Instead, legislators enact a series of continuing resolutions (stopgap measures), which are short-term spending bills that typically maintain funding levels at the previous year’s level in order to avoid a government shutdown.
Should Congress not complete the appropriations process or pass a continuing resolution by the start of the fiscal year (October 1), the federal government, with a few exceptions, shuts down. The funding gap created during the time of a government shutdown results in hundreds of thousands of government employees out of work. Unfortunately, the threat of government shutdown is an often-used strategy for elected officials seeking particular priorities to be included in or removed from continuing resolutions.
Continuing resolutions usually last for a number of weeks or months, and are typically renewed when negotiations extend beyond the new deadline. Continuing resolutions can contain policy provisions and revisions to funding levels.
Congress also uses emergency spending and deficit legislation to impact funding changes outside of the typical budget and appropriations process. Emergency funding is commonly associated with ongoing military operations. Unlike most states (all but Vermont), there is no balanced budget requirement included in the U.S. Constitution, permitting the federal government to carry debt year-to-year. As a result, legislation has also been used in an effort to address the federal deficit though the implementation of spending limits.