A Brief Overview of the Congressional Budget
January 10, 2023
Process
James V. Saturno
Under the U.S. Constitution, Congress exercises the “power of the purse.” This power is
Specialist on Congress and
expressed through the application of several provisions. The power to lay and collect
the Legislative Process
taxes and the power to borrow are among the enumerated powers of Congress under

Article I, Section 8. Furthermore, Section 9 of Article I states that funds may be drawn
from the Treasury only pursuant to appropriations made by law. The Constitution,

however, does not prescribe how these legislative powers are to be exercised, nor does it expressly provide a
specific role for the President with regard to budgetary matters. Instead, various statutes—as well as congressional
rules, practices, and precedents—have been established over time to create a complex system in which multiple
decisions and actions occur with varying degrees of coordination. As a consequence, there is no single “budget
process” through which all budgetary decisions are made, and in any year there may be multiple budgetary
measures necessary to establish or implement different aspects of federal fiscal policy.
This report is intended to describe in brief each of the parts of the budget process, discuss the role of Congress in
each aspect, and explain how they operate together. They include the President’s budget submission, the budget
resolution and reconciliation, the authorization and appropriations process, and budget enforcement and
sequestration. In addition, this report provides a flow chart of congressional budgetary actions. For a more
extensive discussion of the budget process, including citations to additional CRS reports on the topic and a
glossary of budget terms, see CRS Report R46240, Introduction to the Federal Budget Process, by James V.
Saturno.

Congressional Research Service

A Brief Overview of the Congressional Budget Process

Introduction
Under the U.S. Constitution, Congress exercises the “power of the purse.” This power is
expressed through the application of several provisions. The power to lay and collect taxes and
the power to borrow are among the enumerated powers of Congress under Article I, Section 8.
Furthermore, Section 9 of Article I states that funds may be drawn from the Treasury only
pursuant to appropriations made by law. The Constitution, however, does not prescribe how these
legislative powers are to be exercised, nor does it expressly provide a specific role for the
President with regard to budgetary matters. Instead, various statutes—as well as congressional
rules, practices, and precedents—have evolved over time to meet changing needs and
circumstances to establish a complex system in which multiple decisions and actions occur with
varying degrees of coordination. As a consequence, there is no single “budget process” through
which all budgetary decisions are made, and in any year there may be multiple budgetary
measures to establish or implement different aspects of federal fiscal policy.
The Budget Cycle
Since FY1977, the federal fiscal year has run from October 1 through September 30, and much of
the focus of the budget process for Congress concerns the upcoming fiscal year (referred to as the
budget year). The Budget and Accounting Act of 19211 established a requirement that the
President submit a budget request for the next fiscal year at the beginning of each calendar year.
Likewise, the Congressional Budget Act of 1974 (CBA)2 provides for the consideration of a
concurrent resolution on the budget (i.e., a budget resolution) to allow Congress to make
decisions about fiscal policy and budget priorities on an annual basis. In addition, since
appropriations legislation typically provides budget authority to be obligated over the course of a
single fiscal year, Congress must enact new appropriations legislation each year prior to the start
of the fiscal year.
On the other hand, while much of the congressional agenda and workload in any given session is
focused on annual budgetary actions, most federal spending (in the form of direct, or mandatory,
spending), as well as most revenue, occurs as a consequence of permanent law or laws with
sunset dates beyond the next fiscal year.3 While changes to laws concerning direct spending or
revenue are not tied directly to the annual budget cycle, such legislation may be a necessary part
of budgetary actions in any given year.
The President’s Budget
The Constitution does not assign a formal role in the federal budget process to the President. This
was changed by the Budget and Accounting Act of 1921, which established the requirement for a

1 Public Law 13, 67th Cong., 42 Stat. 20. Requirements concerning the President’s budget submission are codified at 31
U.S.C. §§1104-1113. For more on the budget cycle, see CRS Report R47088, The Executive Budget Process Timeline:
In Brief, by Dominick A. Fiorentino; and CRS Report R47235, The Congressional Budget Process Timeline, by Drew
C. Aherne.
2 Titles I-IX of the Congressional Budget and Impoundment Control Act, P.L. 93-344. Codified at 2 U.S.C. §§601-688.
3 Direct spending has grown to comprise the majority of all federal outlays. For example, in FY2021, such spending
accounted for approximately 70% of total federal outlays. U.S. Office of Management and Budget, Budget of the U.S.
Government Fiscal Year 2023, Historical Tables, Table 8.1 Outlays by Budget Enforcement Act Category, 1962-2027,
https://www.whitehouse.gov/omb/historical-tables/.
Congressional Research Service

1

A Brief Overview of the Congressional Budget Process

consolidated budget proposal to be developed by the President, with the assistance of the Office
of Management and Budget (OMB), and submitted to Congress. Although it also does not have
the force of law, the President’s budget submission reflects his policy priorities and offers a set of
recommendations regarding federal programs, projects, and activities funded through
appropriations acts, as well as any proposed changes to revenue and direct spending laws. As
currently provided under 31 U.S.C §1105, the President is to submit the request “on or after the
first Monday in January but not later than the first Monday in February of each year.”4
In support of the President’s appropriations requests, executive branch agencies prepare
additional materials, frequently referred to as congressional budget justifications. These materials
provide more detail than is contained in the President’s budget documents and are used in support
of agency testimony during Appropriations subcommittee hearings on the President’s budget.5
The Budget Resolution and Reconciliation
Until the 1970s, congressional consideration of the multiple budgetary measures considered every
year lacked any formal coordination. Instead, Congress considered these various budgetary
measures separately, sometimes informally comparing them to proposals in the President’s
budget. The CBA changed that. It provides for the adoption of a concurrent resolution on the
budget, allowing Congress to make decisions about overall fiscal policy and priorities, as well as
coordinate and establish guidelines for the consideration of various budget related measures.6
This budget resolution sets aggregate budget policies and functional priorities for the upcoming
budget year as well as at least four additional fiscal years. In recent practice, budget resolutions
have often covered a 10-year period.
Because a concurrent resolution is not presented to the President and cannot become law, it has
no statutory effect, and no money can be raised or spent pursuant to it. The main purpose of the
budget resolution is to establish a framework within which Congress can consider separate
revenue, spending, and other budget-related legislation. Revenue and spending amounts set in the
budget resolution establish the basis for the enforcement of congressional budget policies through
points of order during House and Senate floor consideration. Most budget points of order in the
Senate require a three-fifths supermajority to be waived. The budget resolution may also be used
to initiate the reconciliation process (described below) for conforming existing revenue and direct
spending laws to congressional budget policies.
In the absence of a budget resolution, Congress may use alternative means to establish
enforceable budget levels. When Congress has been late in reaching final agreement on a budget
resolution, or has not reached agreement at all, the House and Senate, often acting separately,
have established alternate legislative procedures to deal with enforcement issues on an ad hoc
basis. These alternatives are typically referred to as “deeming resolutions,” because they are
deemed to serve in place of an agreement between the two chambers on an annual budget

4 For more, see CRS Report R47019, The Executive Budget Process: An Overview, by Dominick A. Fiorentino and
Taylor N. Riccard.
5 For more, see CRS Report R47090, Executive Agency Justification of the President’s Budget: In Brief, by Dominick
A. Fiorentino.
6 For more, see CRS Report R47336, Content and Consideration of the Budget Resolution: In Brief, by Sarah B.
Solomon.
Congressional Research Service

2

A Brief Overview of the Congressional Budget Process

resolution for the purposes of establishing enforceable budget levels for the upcoming fiscal year
(or multiple fiscal years).7
The budget resolution represents an agreement between the House and Senate concerning the
overall size of the federal budget and the general composition of the budget in terms of functional
categories. The amounts in functional categories are translated into allocations to each House or
Senate committee with jurisdiction over spending in a process called “crosswalking” under
Section 302(a) of the CBA. Legislation considered by the House and Senate must be consistent
with these allocations, as well as with the aggregate levels of spending and revenues. Both the
allocations and aggregates are enforceable through points of order that may be made during
House or Senate floor consideration of such legislation. These allocations are supplemented by
nonbinding assumptions concerning the substance of possible budgetary legislation that are
included in the report from the Budget Committee that accompanies each chamber’s respective
budget resolution.
In some years, the budget resolution includes reconciliation instructions.8 Reconciliation
instructions identify the committees that must recommend changes in laws affecting revenues or
direct spending programs within their jurisdiction in order to implement the priorities agreed to in
the budget resolution. Although the level of budgetary changes in a committee’s instructions are
enforceable, the choice of policy changes necessary to achieve it remains the prerogative of the
committee. In some instances, reconciliation instructions have included particular policy options
or assumptions regarding how an instructed committee might be expected to achieve its
reconciliation target, but such language has not been considered binding or enforceable.
Reconciliation instructions may further direct the committee to report the legislation for
consideration in its respective chamber or to submit the legislation to the Budget Committee to be
included in an omnibus reconciliation measure. If it will be included in an omnibus measure,
Section 310(b)(2) of the CBA requires that the Budget Committee report such a measure “without
any substantive revision.”
Once it is reported, a reconciliation bill may then be considered, and possibly amended, by the
full House or Senate. In the House, reconciliation bills are typically considered under the terms of
a special rule setting any limits on debate or amending. In the Senate, reconciliation legislation is
eligible to be considered under expedited procedures. The CBA (primarily in Sections 305, 310,
and 313) provides for limits on the contents and consideration of a reconciliation bill. The limits
on the contents of the measure and any amendments are enforced by points of order and would
require a three-fifths supermajority to be waived in the Senate. In addition, debate on a
reconciliation bill is limited to 20 hours. Because the 20-hour limit is on debate rather than
consideration, after debate time has expired, Senators may continue to offer amendments and
make other motions or appeals but without further debate (often referred to as a “vote-a-rama”).
The time limit on floor debate has meant that, in practice, reconciliation bills can be passed by the
Senate by a simple majority without the need for a supermajority of three-fifths of the Senate to
first invoke cloture.

7 For more, see CRS Report R44296, Deeming Resolutions: Budget Enforcement in the Absence of a Budget
Resolution, by Megan S. Lynch.
8 For a discussion of the reconciliation process, see CRS Report R44058, The Budget Reconciliation Process: Stages of
Consideration, by Megan S. Lynch and James V. Saturno.
Congressional Research Service

3

A Brief Overview of the Congressional Budget Process

Direct Spending Legislation
Congressional budgetary procedures distinguish between two types of spending: discretionary
spending (which is controlled through the annual appropriations process) and direct spending
(also referred to as mandatory spending, for which the level of funding is controlled outside of the
annual appropriations process). Discretionary and direct spending are both included in the
President’s budget and the congressional budget resolution, and they both provide statutory
authority for agencies to enter into obligations for payments from the Treasury. The two forms of
spending, however, are distinct in most other respects in terms of both formulation and
consideration.
Direct spending characteristically provides budget authority in the form of a requirement to make
payments to individual recipients according to a formula that establishes eligibility criteria and a
program of benefits. The resulting overall level of outlays for a direct spending program
represents an aggregation of obligations for these individual benefits. In general, direct spending
programs are established in permanent law that continues in effect until such time as it is revised
or terminated. In some cases, however, such as the Child Health Insurance Program (CHIP) and
Temporary Assistance for Needy Families (TANF), the program may require periodic
reauthorization. For some programs (termed “appropriated entitlements”), appropriations
legislation may provide the means of financing, but, in practice, the requirements for funding
such programs are determined through their authorizing legislation so that the Appropriations
Committees have little or no discretion over the amounts provided.
Jurisdiction over direct spending programs (including those funded in annual appropriations acts)
is exercised in the House and Senate through legislative committees (such as the Senate
Committee on Health, Education, Labor and Pensions or the House Agriculture Committee) based
on their jurisdiction over legislation concerning the structure of direct spending programs
including formulas regarding eligibility criteria and benefit payments.
While direct spending legislation may be included in reconciliation legislation, it may also be
considered under the regular procedures of the House and Senate. The scheduling for
consideration of legislation making such changes is determined by congressional leadership
through their agenda-setting authority rather than keyed to the beginning of the fiscal year.
The Authorization/Appropriations Process
Discretionary spending is provided through a characteristically annual process in which Congress
enacts regular appropriations measures.9 As an exercise of their constitutional authority to
determine their rules of proceeding, both chambers have adopted rules that broadly distinguish
between legislation that addresses questions of policy on the one hand and, on the other,
legislation that addresses questions of funding and that also provide for their separate
consideration. In common usage, the terms used to describe these types of measures are
authorizations and appropriations, respectively.
An authorization may generally be described as a statutory provision that defines the authority of
the government to act. It can establish or continue a federal agency, program, policy, project, or
activity. Further, it may establish policies and restrictions and deal with organizational and

9 For more, see CRS Report R47106, The Appropriations Process: A Brief Overview, by James V. Saturno and Megan
S. Lynch.
Congressional Research Service

4

A Brief Overview of the Congressional Budget Process

administrative matters. It may also, explicitly or implicitly, authorize subsequent congressional
action to provide appropriations. By itself, however, an authorization of discretionary spending
does not provide funding for government activities.10
An appropriation may generally be described as a statutory provision that provides budget
authority, thus permitting a federal agency to incur obligations and make payments from the
Treasury for specified purposes, usually during a specified period of time.
Congress regularly considers three main types of appropriations measures: regular annual
appropriations to provide budget authority to fund programs and agency activities for the next
fiscal year, supplemental appropriations to provide additional budget authority during the current
fiscal year if the regular appropriation is insufficient or to finance activities not provided for in
the regular appropriation, and continuing appropriations (often referred to as continuing
resolutions or CRs) to provide interim (or sometimes full-year) funding to agencies for activities
or programs not yet covered by a regular appropriation. By custom, appropriations bills originate
in the House but may be amended by the Senate, as with other legislation.
The House and Senate Appropriations Committees are organized into subcommittees, each of
which is responsible for developing one of the regular annual appropriations bills. Appropriations
bills are constrained in terms of both their purpose and the amount of funding they provide.
Appropriations are broadly constrained in terms of purpose because the rules of both the House
(Rule XXI) and the Senate (Rule XVI) generally limit appropriations to programs and purposes
previously authorized by law.
Constraints in terms of the amount of funding exist on several levels. For individual items or
programs, funding may be limited to the level recommended in authorizing legislation. The
overall level of discretionary spending provided in all appropriations acts is limited by the
allocation of discretionary spending in the budget resolution to the Appropriations Committees
under Section 302(a) of the CBA. Section 302(b) of the CBA further requires the House and
Senate Appropriations Committees to subdivide the overall amount of discretionary spending
among their subcommittees. Section 302(b) further requires these suballocations to be made “as
soon as practicable after a concurrent resolution on the budget is agreed to.” Because each
subcommittee is responsible for developing a single general appropriations bill, the process of
making suballocations effectively determines a spending limit for each of the regular annual
appropriations bills. Legislation (or amendments) that would cause the suballocations made under
Section 302(b) to be exceeded is subject to a point of order during floor consideration. The
Appropriations Committees can (and do) issue revised subdivisions over the course of
appropriations actions to reflect changes in spending priorities effected during floor consideration
or in conference committee actions.
Revenue and Public Debt Legislation
The budget resolution provides a guideline for the overall level of revenues but not for their
composition. Legislation controlling revenues is reported by the committees of jurisdiction (the
House Ways and Means Committee and the Senate Finance Committee). The revenue level
agreed to in the budget resolution acts as a minimum, limiting consideration of revenue
legislation that would decrease revenue below that level. In addition, Article I, Section 7, of the
Constitution requires that all revenue measures originate in the House of Representatives,
although the Senate may amend them, as with other legislation. Revenue legislation may be

10 For more, see CRS Report R46497, Authorizations and the Appropriations Process, by James V. Saturno.
Congressional Research Service

5

A Brief Overview of the Congressional Budget Process

considered at any time, although revenue provisions are often included in reconciliation
legislation.
When the receipts collected by the federal government are not sufficient to cover outlays, it is
necessary for the Treasury to finance the shortfall through the sale of various types of debt
instruments to the public and federal agencies. Federal borrowing is subject to a statutory limit on
public debt (referred to as the debt limit or debt ceiling). The budget resolution includes an
appropriate level for the public debt that reflects the budgetary policies agreed to in the
resolution. However, any change to the authorized limit on the public debt must be implemented
through a statutory enactment. In recent years, Congress has chosen to suspend the debt limit for
a set amount of time instead of raising the debt limit by a fixed dollar amount. When a suspension
ends, the debt limit is reestablished at a dollar level that accommodates the level of federal debt
issued during the suspension period.
Budget Enforcement and Sequestration
The CBA includes several provisions designed to encourage congressional compliance with the
budget resolution. The House and Senate have also adopted other limits as part of their standing
rules, as procedural provisions in budget resolutions, or as a parts of some other measures to
establish other budgetary rules, limits, and requirements. In particular, the overall spending
ceiling, revenue floor, and committee allocations of spending determined in a budget resolution
are all enforceable by points of order in both the House and the Senate during floor consideration.
In addition, Appropriations Committees are required to make subdivisions of their committee
allocation, and these too are enforceable. Legislation breaching other budgetary limits or causing
increases in the deficit would also generally be subject to points of order.
Points of order enforce prohibitions against certain types of legislation or other congressional
actions being taken in the legislative process. Points of order are not self-enforcing, however. A
point of order must be raised by a Member on the floor of the chamber before the presiding
officer can rule on its application and, thus, for its enforcement.
In the Senate, most points of order related to budget enforcement may be waived by a vote of
three-fifths of all Senators (60 if there is no more than one vacancy). As with other provisions of
Senate rules, budget enforcement points of order may also be waived by unanimous consent. In
the House, points of order, including those for budget enforcement, may be waived by the
adoption of special rules, although other means (such as unanimous consent or suspension of the
rules) may also be used.
Since 1985, budgetary decision-making has often been subject to various budget control statutes
designed to restrict congressional budgetary actions or enforce particular budgetary outcomes in
order to reduce the budget deficit, limit spending, or prevent deficit increases.11 The mechanisms
included in these acts have sought to supplement and modify the existing budget process and also
added statutory budget controls, in some cases seeking to require future deficit reduction
legislation or limit future congressional budgetary actions and in some cases seeking to preserve
deficit reduction achieved in accompanying legislation. These control statutes have used
sequestration as a means for their enforcement. Sequestration involves a presidential order that
permanently cancels non-exempt budgetary resources for the purpose of achieving a required

11 For more, see CRS Report R41901, Statutory Budget Controls in Effect Between 1985 and 2002, by Megan S.
Lynch.
Congressional Research Service

6

A Brief Overview of the Congressional Budget Process

amount of outlay savings. Once an executive determination triggers sequestration, spending
reductions are made automatically.
Between FY2012 and FY2021, the Budget Control Act of 2011 (BCA) reestablished statutory
limits on discretionary spending, divided into separately enforceable defense and nondefense
limits, for FY2012-FY2021.12 Several measures were subsequently enacted that modified the
spending limits or enforcement procedures included in the BCA.13
Currently, sequestration is used as an enforcement mechanism associated with the Statutory Pay-
As-You-Go (PAYGO) Act of 2010.14 In the case of the Statutory PAYGO Act, OMB is required to
record the budgetary effects of revenue and direct spending provisions enacted into law, including
both costs and savings, on two PAYGO scorecards covering five- and 10-year periods. The
budgetary effect of PAYGO measures is determined by statements inserted into the Congressional
Record by the chairmen of the House and Senate Budget Committees and referenced in the text of
the measures. If this procedure is not followed, the budgetary effect of the measure is determined
by OMB. If OMB reports the net impact of changes to direct spending and revenue laws over the
course of an annual session of Congress is projected to increase the deficit over either of these
time periods, the President is required to issue a sequester order to eliminate it.
For a more extensive discussion of the budget process, including citations to additional CRS
reports on the topic and a glossary of budget terms, see CRS Report R46240, Introduction to the
Federal Budget Process, by James V. Saturno.

12 P.L. 112-25. For more, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions, by Grant A.
Driessen and Megan S. Lynch.
13 These included the American Taxpayer Relief Act of 2012 (P.L. 112-240), the Bipartisan Budget Act of 2013 (P.L.
113-67), the Bipartisan Budget Act of 2015 (P.L. 114-74), the Bipartisan Budget Act of 2018 (P.L. 115-123), and the
Bipartisan Budget Act of 2019 (P.L. 116-37).
14 P.L. 111-139.
Congressional Research Service

7

A Brief Overview of the Congressional Budget Process

Appendix. Congressional Budget Process Actions

Congressional Research Service

8

A Brief Overview of the Congressional Budget Process

Author Information

James V. Saturno

Specialist on Congress and the Legislative Process

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

Congressional Research Service
R46468 · VERSION 3 · UPDATED
9