Budgetary Decisionmaking in Congress



Updated December 1, 2022
Budgetary Decisionmaking in Congress
Understanding the Congressional
Budget Process
Anticipating what may occur within an upcoming
The Constitution grants Congress enormous power and
annual congressional budget cycle requires
freedom to engage in what is now referred to as budgeting.
consideration of the varying types of legislative
First, the Constitution grants Congress the power of the
opportunities and their specific constraints, as well as
purse but does not prescribe or require specific budgetary
the ever-changing practical and political influences
legislation or budgetary outcomes. Further, the Constitution
inherent in budgetary decisionmaking.
allows the House and Senate to determine the rules of their
internal proceedings but does not prescribe or establish
budgetary rules or restrictions. Congress has therefore
Primary Types of Legislation Used by
developed certain types of budgetary legislation as well as
Congress to Affect the Budget
rules and practices that govern the content and
Below is a summary of the general types of budgetary
consideration of that budgetary legislation. This collection
legislation that Congress often uses.
of budgetary legislation, rules, and practices is often
referred to as the congressional budget process.
The Budget Resolution
The Congressional Budget Act of 1974 (Budget Act) directs
The congressional budget process may be better
Congress to adopt a budget resolution each spring,
understood as an array of legislative opportunities for
establishing an agreement between the House and Senate on
affecting the federal budget rather than a linear set of
a budgetary plan. The budget resolution does not become
events.
law; therefore no money is spent or collected as a result of
its adoption. Instead, the budget resolution includes certain
spending and revenue levels that become enforceable
Types of budgetary legislation vary greatly. For example,
through points of order once both chambers have adopted
some types of legislation may design a new program, while
the resolution. It is privileged for fast-track consideration in
other legislation provides a program’s funding. Further,
the Senate and therefore does not require the support of
some legislation does not spend or collect money at all but
three-fifths of Senators for adoption. The budget resolution
instead reflects a budgetary plan to be implemented through
can trigger the budget reconciliation process, which
subsequent legislation.
provides fast-track procedures in the Senate for certain
mandatory spending, tax, and debt limit legislation. While
When Congress uses such legislative opportunities, varying
the Budget Act directs Congress to adopt a budget
requirements and restrictions may shape their actions.
resolution each year, Congress does not always do so. In the
These requirements and restrictions are derived from a
past 20 fiscal years (FY2003-FY2022), there were 11 for
continually growing patchwork of rules, laws, constitutional
which Congress did not adopt a budget resolution. The
requirements, and customs that have developed over the
budget resolution is under the jurisdiction of the House and
past two centuries. Adding complexity to the process is the
Senate Budget Committees, and its content, consideration,
fact that different requirements and restrictions apply to
and implementation are shaped primarily by the Budget
different types of budgetary legislation.
Act.
This variation—both in the type of budgetary measure and
Direct Spending Legislation
the particular rules and requirements specific to them—can
Direct spending programs are generally federal programs
sometimes cause confusion. Adding to this confusion is the
that provide payments to beneficiaries that meet certain
fact that Congress seldom considers budgetary measures
requirements established by law. Such programs—also
each year in a predictable pattern. Such dissimilarity can be
referred to as mandatory spending programs or entitlement
the result of countless factors, such as political dynamics,
programs—generally continue without any annual
competing budgetary priorities, the economy, natural
congressional action required. Direct spending comprises
disasters, and military engagements. These factors not only
roughly 70% of federal spending (including interest on the
shape congressional priorities but can also create
debt) and includes programs such as Social Security,
complications, obstacles, and interruptions within the
Medicare, Medicaid, income security programs, and federal
policymaking process.
retirement. Each year, Congress considers legislation that
affects direct spending in varying degrees. Most legislative
committees have jurisdiction over some type of direct
spending program, and the content and consideration of
direct spending legislation are shaped primarily by House
and Senate rules, the budget resolution, and the Budget Act.
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Budgetary Decisionmaking in Congress
Appropriations Legislation
revenue, as well as changes to the level of the statutory
Appropriations legislation provides discretionary spending
limit on the debt limit. Reconciliation is privileged for fast-
to agencies on an annual basis. Appropriations in some
track consideration in the Senate and therefore does not
form must be enacted by the beginning of a new fiscal year
require the support of three-fifths of Senators for adoption.
(October 1) or a funding lapse may cause a government
The content and consideration of budget reconciliation
shutdown to occur. Discretionary spending typically
legislation is shaped primarily by the budget resolution and
comprises about 30% of the federal budget and includes
the Budget Act.
both defense and nondefense spending programs. In most
years, Congress will consider three different types of
Budget Enforcement Legislation
appropriations legislation. First, the appropriations process
Congress may consider legislation designed to create new
assumes annual enactment of 12 regular appropriations
methods of budget enforcement or alter existing budget
bills providing funding for various categories of federal
enforcement mechanisms. Such budgetary restrictions can
programs. Typically, one or more of the 12 regular
take many forms. If they are to be enforced internally by the
appropriations are not enacted by October 1. Congress,
House and Senate, they may be added to the House and
therefore, regularly employs a second type of
Senate rules or included in a rule-making statute that
appropriations legislation—continuing resolutions—that
becomes law. Congress has typically incorporated some
provide funding in the absence of regular appropriations
type of internal budget enforcement in each recent
measures. Congress also typically provides a third type of
Congress. Congress has also passed legislation that creates
appropriations legislation—supplemental appropriations
budgetary requirements that are enforced outside of the
which are often provided in response to an unforeseen
House and Senate. For example, in 2010 Congress passed
event. Appropriations are under the jurisdiction of the
the Statutory Pay-As-You-Go Act, and in 2011 Congress
House and Senate Appropriations Committees, and their
passed the Budget Control Act. Both laws articulated
content and consideration are shaped primarily by House
certain budgetary objectives as well as statutory
and Senate rules, levels in the budget resolution, and the
enforcement in the form of a sequester that requires
Budget Act. (Statutory limits on annual discretionary
automatic spending cuts in the event the specified
spending are not currently in effect but were in place in the
budgetary requirement is violated. In addition, Congress
1990s and between FY2012 and FY2021.)
has sometimes developed language proposing to amend the
Constitution to create specific budgetary objectives. Such
Authorizations of Appropriations Legislation
budget enforcement legislation is primarily within the
Authorization legislation establishes, continues, or alters a
jurisdiction of the House and Senate Budget Committees
federal program and creates the legal foundation for the
and often the Rules Committees as well. Consideration of
program’s existence, but it does not provide the program’s
such legislation is shaped primarily by House and Senate
funding. Funding is provided separately by appropriations
rules as well as the Budget Act.
measures, described above. Each year Congress considers a
large volume of legislation creating or altering some federal
Debt Limit Legislation
programs in varying degrees, and its content and
When total federal spending exceeds total federal revenue,
consideration are shaped largely by House and Senate rules
it produces a budget deficit. When faced with a deficit, the
as well as House leadership protocols. Most legislative
Department of the Treasury typically acquires debt in order
committees have jurisdiction over authorizations.
to obtain the funds necessary to meet current federal
obligations. The amount of money that Treasury may
Revenue Legislation
borrow is limited by a statutory limit on the debt. Federal
Revenue legislation provides authority for the collection of
debt is projected to reach the statutory debt limit, currently
taxes to fund the federal government. Most revenue is
set at $31.385 trillion, sometime in 2023. Congress
collected by the federal government as a result of
typically responds to such a situation by either (1)
previously enacted law that continues in effect without any
increasing the debt limit or (2) suspending the debt limit for
need for congressional action. Congress, however, routinely
a specified period of time. When considering debt limit
considers revenue legislation that repeals existing
legislation, Congress sometimes includes in the legislation
provisions, extends expiring provisions, or creates new
other budget-related provisions, such as new budget
provisions. The Constitution requires that revenue
enforcement mechanisms. Congress generally acts on debt
legislation originate in the House. Generally, revenue is
limit legislation on an average of once per year.
under the jurisdiction of the House Ways and Means
Consideration of debt limit legislation is shaped largely by
Committee and the Senate Finance Committee. The content
House and Senate rules as well as the budget resolution and
and consideration of revenue measures is shaped primarily
the Budget Act. The House Ways and Means Committee
by House and Senate rules and the budget resolution.
and the Senate Finance Committee have jurisdiction over
debt limit legislation generally.
Budget Reconciliation Legislation
Budget reconciliation legislation is developed and
Megan S. Lynch, Specialist on Congress and the
considered as a result of the adoption of a budget resolution
Legislative Process
that includes reconciliation directives to specified
committees. Reconciliation legislation may include
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Budgetary Decisionmaking in Congress


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