The Executive Budget Process: An Overview
February 13, 2024
The Constitution vests Congress with the power of the purse, with several provisions referring to
congressional authority to levy taxes, authorize the issuance of debt, and make appropriations to
Dominick A. Fiorentino
fund the federal government. The Constitution does not provide an explicit role for the President
Analyst in Government
in the budget process. The executive budget process, as currently constituted, exists primarily due
Organization and
to statutes enacted by Congress.
Management
The Budget and Accounting Act of 1921 centralized many functions of the executive budget
Taylor N. Riccard
process within the institutional presidency. The executive budget process consists of three main
Analyst in Government
phases: development of the President’s budget proposal, submission and justification of the
Organization and
President’s budget proposal, and execution of enacted annual appropriations and other budgetary
Management
legislation. Congress may become involved in any of these phases. This report provides an
introduction to many elements of the executive budget process, highlighting the roles of the
President, the Office of Management and Budget (OMB), and executive agencies.
The President’s budget is a statement of the President’s policy priorities and a unified plan for the allocation of federal
budgetary resources. The President’s budget is a set of recommendations, which Congress is not required to adopt. Under
current law, the President must develop and submit a consolidated budget to Congress no later than the first Monday in
February prior to the start of the fiscal year. In practice, the President has delegated to OMB certain budgetary tasks and
authorities necessary for developing the budget, such as providing guidance to executive branch agencies, reviewing agency
budget requests, and reviewing agency budget justifications.
After budgetary legislation is enacted, individuals in the executive branch are responsible for the execution of the budget.
With certain exceptions, the Antideficiency Act requires that appropriated funds be apportioned (i.e., subdivided), often by
fiscal quarter, prior to obligation or expenditure. Agencies then allocate those funds to programs, projects, and activities.
Congress has recognized a need to permit agencies some flexibility during budget execution, and it has provided agencies
with limited authority to make spending adjustments. For example, Congress may provide agencies with limited authority to
reallocate funds from one appropriations account to another (transfers) or from one purpose to another within an
appropriations account (reprogramming). Under the Impoundment Control Act of 1974, the President may withhold
appropriated funds temporarily (deferrals) or propose to Congress permanent cancellations of budget authority (rescissions).
Certain executive budgetary procedures are triggered under limited, less common circumstances. For example, OMB and
agencies have procedures for implementing a shutdown of certain government operations in the event that their full-year or
interim appropriations are not enacted by the start of the fiscal year. OMB and agencies may also be subject to additional
procedures in the event of a statutorily prescribed sequestration.
The federal budget sustains government functions and plays an important role in shaping policy decisions. Congress regularly
reviews the appropriate balance of budgetary responsibilities between the legislative and executive branches, the transparency
of budget execution decisions made by the President and OMB, and whether the existing budget timeline continues to meet
the needs of the federal government. In light of these considerations, Congress may evaluate legislative or oversight options
that amend aspects of the executive budget process. Relevant topics may include the length of the budget cycle and its effect
on information technology investment; congressional oversight of agency transfers and reprogramming; transparency of
OMB’s apportionment processes; and agency budget planning for shutdowns, funding gaps, and sequestration.
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The Executive Budget Process: An Overview
Contents
Introduction ..................................................................................................................................... 1
Development of the President’s Budget .......................................................................................... 2
Initial Preparation of Agency Budget Requests ........................................................................ 3
OMB Review and Modification of Agency Budget Requests .................................................. 4
Budget Requests and Agency Bypass Authority ....................................................................... 5
Submission and Justification of the President’s Budget .................................................................. 6
Composition of the President’s Budget Submission to Congress ............................................. 6
Revisions and Supplements to the President’s Budget Request ................................................ 7
Agency Budget Requests and Justifications .............................................................................. 8
Statements of Administration Policy and Other Presidential Actions ....................................... 9
Execution of Enacted Budgetary Legislation ................................................................................ 10
Apportionment and Allocation of Budget Authority ................................................................ 11
Entering into Obligations ........................................................................................................ 14
Public Reporting of Obligations .............................................................................................. 14
OMB SF-133 Reports ....................................................................................................... 14
USASpending.gov Website ............................................................................................... 15
Budget Appendix .............................................................................................................. 15
Outlay of Funds ....................................................................................................................... 15
Expiration and Cancellation of Unobligated Funds ................................................................ 15
Reallocation of Budget Authority During Budget Execution ........................................................ 17
Use of Obligation Discretion .................................................................................................. 19
Reprogramming: Moving Funds Among an Account’s PPAs ................................................. 20
Transfers: Moving Funds from One Account to Another ........................................................ 21
Congressional Notification and Holds ........................................................................................... 22
Impoundment of Budget Authority: Rescissions and Deferrals .................................................... 22
Rescissions .............................................................................................................................. 23
Deferrals .................................................................................................................................. 23
Occasional Procedures During Budget Execution ......................................................................... 23
Budget Execution During Federal Funding Gaps and Government Shutdowns ..................... 24
Budget Execution in the Event of Sequestration ..................................................................... 24
Potential Issues for Congress......................................................................................................... 26
Length of Time Between Budget Formulation and Enactment of Full-Year
Appropriated Funds: Implications for Information Technology .......................................... 26
Effect of Transfer and Reprogramming Authorities on Congressional Oversight and
Agency Actions .................................................................................................................... 27
Transparency of OMB’s Apportionment Processes ................................................................ 28
Effects of Funding Gaps, Shutdowns, and Sequestration on Agency Budget Planning .......... 29
Figures
Figure 1. Executive Budget Process Milestones Before and After Annual Submission to
Congress ....................................................................................................................................... 3
Figure 2. Example of Appropriated Funds Lifecycle ..................................................................... 11
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The Executive Budget Process: An Overview
Figure 3. Expiration and Cancellation of Unobligated Funds ....................................................... 17
Figure 4. Example of Transfers, Reprogramming, and Other Forms of Budgetary
Discretion Within and Among Agencies .................................................................................... 19
Figure B-1. Executive Budget Process and the Congressional Budget Process for FY2025 ........ 32
Figure B-2. Concurrent Budget Planning for Multiple Fiscal Years ............................................. 33
Appendixes
Appendix A. Selected Statutes Relevant to the Executive Budget Process ................................... 30
Appendix B. Executive Budget Process Timelines ....................................................................... 32
Contacts
Author Information ........................................................................................................................ 34
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The Executive Budget Process: An Overview
Introduction
The Constitution vests Congress with the authority to levy taxes, authorize the issuance of debt,
and make appropriations to fund the federal government—collectively known as the power of the
purse.1 Notably, those funds may be drawn from the Treasury only in consequence of
appropriations made by law.2 The Constitution does not provide an explicit role for the President
in the budget process. The executive budget process, as currently constituted, exists primarily due
to statutes enacted by Congress.
Prior to the enactment of the Budget and Accounting Act of 1921,3 executive budgeting was
highly decentralized. At that time, agencies submitted their budget estimates to Congress
individually, either directly or through the Secretary of the Treasury, with varying levels of
involvement or direction by the President.4 The Budget and Accounting Act centralized many
functions of the executive budget process within the institutional presidency. This statute, and
subsequent legislation, instituted the current executive budget process timeline and milestones.
For more information about historical statutes related to the executive budget process, see
Appendix A.
The executive budget process consists of three main phases during which Congress may become
involved:
1. Development of the President’s budget proposal
2. Submission and justification of the President’s budget proposal
3. Execution of enacted annual appropriations and other budgetary legislation
The President’s budget is one of the institutional presidency’s most significant policy tools.
Through the executive budget process, the President may set forth legislative and program
objectives and attempt to influence the nation’s overall fiscal course. It also creates a starting
point for congressional revenue and spending actions. The executive budget process provides a
venue for complex and often nuanced dynamics between Congress and actors in the executive
branch. The process vests executive branch agencies with some budgetary discretion to carry out
their missions, which may create additional oversight implications for Congress.
This report outlines many of the budgetary procedures performed by the President, the Office of
Management and Budget (OMB), and agencies, including an overview of the development,
submission, and justification of the President’s budget proposal.5 The report also describes how
the President, OMB, and agencies execute the federal budget following the enactment of annual
appropriations and other budgetary legislation by Congress. Finally, the report highlights a
number of potential issues for congressional consideration. CRS has also published a suite of “In
Brief” products covering components of the executive budget process, including:
1 U.S. Const., art. I, §8, cl. 1, §9, cl. 7. See also CRS Report R46417,
Congress’s Power Over Appropriations:
Constitutional and Statutory Provisions, by Sean M. Stiff.
2 U.S. Const., art. I, §9, cl. 7.
3 P.L. 67-13, Budget and Accounting Act, 1921, June 10, 1921 (42 Stat. 20, at 22), currently codified in part at 31
U.S.C. §501.
4 Allen Schick,
The Federal Budget: Politics, Policy, Process, 3rd ed. (Washington, DC: Brookings Institution Press,
2007), pp. 13-14.
5 For an overview of how information technology budgeting aligns with key steps in the executive budget process, see
CRS Report R46877,
Federal Information Technology (IT) Budgeting Process in the Executive Branch: An Overview,
by Dominick A. Fiorentino.
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• CRS Report R47089,
The Role of the Office of Management and Budget (OMB)
in Budget Development: In Brief, by Taylor N. Riccard;
• CRS Report R47092,
The Role of the President in Budget Development: In Brief,
by Taylor N. Riccard;
• CRS Report R47091,
The Role of Executive Agencies in Budget Development: In
Brief, by Dominick A. Fiorentino;
• CRS Report R47090,
Executive Agency Justification of the President’s Budget: In
Brief, by Dominick A. Fiorentino; and
• CRS Report R47088,
The Executive Budget Process Timeline: In Brief, by
Dominick A. Fiorentino.
Development of the President’s Budget
The President’s budget proposal—referred to by statute as the
Budget of the United States
Government—is a statement of the President’s policy priorities and a unified plan for the
allocation of federal budgetary resources.6 The President’s budget is a set of recommendations
which Congress may consider but is not required to adopt. Though it is not legally binding, the
President’s budget usually initiates the congressional budget process.7 It provides Congress with
recommended spending levels for agency programs, projects, and activities funded through the
annual appropriations acts. Additionally, the budget includes proposals to change revenues and
mandatory (also known as “direct”) spending programs that are controlled by other legislation.
The President’s budget also includes budgetary projections based on existing law and provides
Congress with estimates of the effects the President’s revenue and direct spending proposals
would have on those projections.
Under current law, the President must develop and submit a consolidated budget to Congress no
later than the first Monday in February prior to the start of the upcoming fiscal year.8 In practice,
the President sometimes fails to meet this submission deadline, particularly during transition
years.9 There is no statutorily established consequence for missing this submission deadline;
however, a late submission could delay other aspects of the budget process. The other dates and
milestones in the executive budget process are based on a mixture of statutes, OMB
administrative practices, and appropriations committee and subcommittee norms and practices
(se
e Figure 1).
The development of the President’s budget begins approximately 18 months prior to the start of
the fiscal year that the budget will cover. To put this timeline in context, as Congress begins
action on appropriations bills and other budgetary legislation for the upcoming fiscal year, OMB
and agencies have already begun planning for the subsequent fiscal year. (See
Appendix B for a
graphical representation of how the executive budget process overlaps with the congressional
6 31 U.S.C. §1105(a).
7 See CRS Report R47092,
The Role of the President in Budget Development: In Brief, by Taylor N. Riccard.
8 31 U.S.C. §1105. The President’s budget includes budget requests for all executive departments and agencies as well
as budget requests for entities in the legislative and judicial branches. The President and OMB play no role in the
development of legislative- and judicial-branch requests. Instead, entities in the legislative and judicial branches
transmit their budget requests to the President, who then is required to include them in the budget submission to
Congress without modification (31 U.S.C. §1105(b)).
9 For more information about the submission of the President’s budget during transition years from FY1977 to present,
see CRS Report RS20752,
Submission of the President’s Budget in Transition Years, by Taylor N. Riccard.
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The Executive Budget Process: An Overview
budget process, as well as how agencies concurrently plan and execute budgets for multiple fiscal
years.)
Figure 1. Executive Budget Process Milestones Before and After Annual Submission
to Congress
Sources: CRS analysis of
U.S. Code, OMB guidance documents, and Presidents’ budget submissions. Milestones
that are established by law are also indicated by listing relevant
U.S. Code citations.
Notes: Initial passback decisions are made by OMB. Disagreements between agencies and OMB may be
resolved by the President or designated White House officials. The degree of presidential involvement in the
passback decisionmaking process may vary between Administrations.
Initial Preparation of Agency Budget Requests
In practice, the President has delegated to OMB certain budgetary tasks and authorities necessary
for developing the budget.10 OMB coordinates the development of the President’s budget
proposal by issuing circulars, memoranda, and guidance documents to the heads of executive
10 See CRS Report RS21665,
Office of Management and Budget (OMB): An Overview, coordinated by Taylor N.
Riccard.
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The Executive Budget Process: An Overview
agencies.11 Executive agencies then prepare their budget requests in accordance with the
instructions and guidance provided by OMB.12
In particular, OMB’s
Circular No. A-11 is an extensive document that contains instructions and
schedules for agency submission of budget requests and justification materials to OMB.13
Updated annually,
Circular No. A-11 provides agencies with an overview of applicable budgetary
laws, policies for the preparation and submission of budgetary estimates, and information on
financial management and budget data systems.
Circular No. A-11 also provides agencies with
directions for budget execution and guidance regarding agency interaction with Congress and the
public. A separate document, OMB’s
Circular No. A-19, governs the process for OMB clearance
(and potential modification) of agencies’ draft legislation, testimony, and reports for submission
or delivery to Congress.14
Early in the development phase of the executive budget process, OMB usually issues a budget
planning guidance memorandum that observers often refer to as the “spring guidance.” This
memorandum provides executive agencies with detailed instructions and deadlines for submitting
their budget requests and supporting materials to OMB.15 The guidance may also include specific
instructions for how agency budget requests may help achieve the President’s budgetary priorities
and other policy goals. For example, the FY2019 budget guidance instructed
Unless otherwise directed by OMB, your initial discretionary FY 2019 budget submission
to OMB should continue the proposals included in the FY 2018 Budget, and should reflect
a level no higher than the net total provided for your agency in the FY 2019 column of the
FY 2018 Budget.16
The relevant statute does not require a certain date for submission of these budget requests to
OMB. OMB typically has administratively set the annual submission dates for September, which
occurs 13 months before the beginning of the forthcoming fiscal year. Agencies rely on internal
processes and analysis to formulate their budget requests, which may vary from agency to agency.
In practice, budget preparation is a time- and data-intensive process for agencies involving
detailed analysis and estimation of past and future budgetary resources.17
OMB Review and Modification of Agency Budget Requests
Agency budget requests are submitted to OMB in early fall, approximately four to five months
before the President must submit the budget to Congress. In practice, the President delegates to
11 See CRS Report R47089,
The Role of the Office of Management and Budget (OMB) in Budget Development: In
Brief, by Taylor N. Riccard.
12 See CRS Report R47091,
The Role of Executive Agencies in Budget Development: In Brief, by Dominick A.
Fiorentino.
13 OMB,
Circular No. A-11, Preparation, Submission and Execution of the Budget, August 2021,
https://www.whitehouse.gov/omb/information-for-agencies/circulars/.
14 OMB,
Circular No. A-19, Legislative Coordination and Clearance, September 20, 1979,
https://www.whitehouse.gov/omb/information-for-agencies/circulars/. For discussion of OMB’s process under the
circular, see CRS Report RS21665,
Office of Management and Budget (OMB): An Overview, coordinated by Taylor N.
Riccard.
15 The budget planning guidance memorandum is usually issued in mid- to late spring, nearly a year before the
President submits the budget proposal to Congress. However, the memorandum has been issued as late as August.
16 OMB, Memorandum from Mick Mulvaney, Director of OMB, M-17-28, “Fiscal Year 2019 Budget Guidance,” July
17, 2017, https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2017/M-17-28.pdf.
17 Schick,
Federal Budget, pp. 92-93.
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OMB responsibility for reviewing executive agency requests and justification materials to ensure
that they are consistent with the President’s policy objectives.
Agency requests are first reviewed by the OMB program examiners who are responsible for the
associated policy areas. Agency requests may also be reviewed by more senior OMB officials.
Prior to making a recommendation, OMB program examiners may ask for additional information
from agencies, either informally or by conducting formal hearings. Examiners’ recommendations
are reviewed by more senior OMB officials, culminating in review and approval by the OMB
director and the President.18
Agencies are notified of OMB’s initial decisions through a process known as “passback.” During
passback, OMB officials notify agencies of their approved budgetary levels, which may differ
from the agencies’ budget requests.19 The passback process and the content of passback decisions
may differ under each Administration and each OMB director. For example, passback decisions
may also include program policy changes.20 Agencies may appeal these decisions to the OMB
director, a group of officials, or, in some cases, to the President directly, depending on the
procedures established by the OMB director.21
Budget Requests and Agency Bypass Authority
Before 1921, executive branch agencies often submitted their budget requests directly to
Congress without review and modification by the President.22 The Budget and Accounting Act of
1921 established in law the duty of the President to submit each year a single, consolidated
budget proposal for congressional consideration.23 It meant that the President was responsible for
making all executive agency budget requests; thus, each executive department and agency would
no longer be able to act independently of presidential direction. For more information about the
Budget and Accounting Act of 1921, se
e Appendix A.
Congress has provided statutory authorization, however, for some agencies to submit budget
and/or legislative information directly to Congress, in effect bypassing the President and OMB.
This “bypass authority” has also been referred to as “concurrent” or “direct” submission.24
OMB has acknowledged the existence of some statutory bypass authorities in guidance
documents, but OMB does not publicize a full list. Specifically,
Circular No. A-11 lists several
18 Shelley Lynne Tomkin,
Inside OMB: Politics and Process in the President’s Budget Office (New York: M.E. Sharpe,
1998), pp. 120-130.
19 Tomkin,
Inside OMB, p. 131.
20 U.S. Government Accountability Office (GAO),
A Glossary of Terms Used in the Federal Budget Process, GAO-05-
734SP, September 2005, p. 105, https://www.gao.gov/products/gao-05-734sp (hereinafter “GAO,
Glossary”).
21 Tomkin,
Inside OMB, pp. 131-134.
22 This section draws in part from CRS Insight IN10715,
When an Agency’s Budget Request Does Not Match the
President’s Request: The FY2018 CFTC Request and “Budget Bypass,” by Jim Monke, Rena S. Miller, and Clinton T.
Brass (an example of an agency bypassing OMB and the President with a budget submission [available upon request
for congressional clients]).
23 This particular requirement is now codified at Title 31, Section 1105, of the
U.S. Code. Although the act is formally
cited as the “Budget and Accounting Act, 1921” (42 Stat. 20), it is more commonly cited as the “Budget and
Accounting Act of 1921.”
24 For an example of an agency with bypass authority, see the authorizing statute for the Commodity Futures Trading
Commission, at Title 7, Section 2(a)(10)(A), of the
U.S. Code:
Whenever the Commission submits any budget estimate or request to the President or the Office of
Management and Budget, it shall concurrently transmit copies of that estimate or request to the
House and Senate Appropriations Committees and the House Committee on Agriculture and the
Senate Committee on Agriculture, Nutrition, and Forestry.
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agencies that are not subject to OMB modification “by law or custom.”25 Additionally,
Circular
No. A-19 states that some agencies have statutory requirements to transmit legislative proposals,
reports, or testimony to Congress “without prior clearance,” but these agencies are not listed.26 A
Freedom of Information Act case resulted in OMB releasing a memorandum from 2001 that lists
agencies with various types of bypass authority.27
The President is not required to include an agency’s direct budget submission in his annual
budget submission to Congress.28 Rather, OMB may amend the agency request to reflect the
President’s policy preferences. Direct budget submission allows Congress to see any differences
between an agency’s budget submission and the President’s budget submission.
Submission and Justification of the
President’s Budget
In recent decades, the President’s budget submission has comprised a multi-volume set of printed
and electronic documents, which may vary in size and composition from Administration to
Administration. This section briefly discusses typical components of the President’s budget
submission to Congress and highlights some of the formal and informal interactions among
Congress, the President, OMB, and agencies.29
Composition of the President’s Budget Submission to Congress
The President is statutorily required to provide certain information in the budget submission to
Congress, including (1) estimated receipts, expenditures, and proposed appropriations for the next
five fiscal years; (2) actual receipts, expenditures, and appropriations for the previous fiscal year;
(3) information on the public debt; and (4) separate statements of amounts for specified
appropriations accounts and trust funds.30 The manner in which the information is packaged may
change across Administrations.
The budget submissions of the past three Presidents have each included the following volumes:
•
Budget of the U.S. Government. Sometimes referred to as “the budget volume,” it
includes a short budget message summarizing the President’s policy priorities,
summary tables of budgetary aggregates, and a detailed narrative description of
proposed government activities organized by issue and agency.
•
Appendix. This volume includes detailed budget estimates and financial
information on individual programs and appropriations accounts, proposed text
of appropriations language, and information on the legislative and judicial branch
25 OMB,
Circular No. A-11, §25.1.
26 OMB,
Circular No. A-19, §4.
27 For the court decision, see
Public Citizen Inc. v. Office of Management and Budget, March 11, 2010,
https://www.citizen.org/wp-content/uploads/ombunsealedopinion.pdf. For the then-most-recent version of OMB’s list,
see OMB, “Memorandum for OMB Policy Officers and DADs: Agencies with Legislative ‘Bypass’ Authorities,”
February 20, 2001, https://www.citizen.org/wp-content/uploads/ombdocument1.pdf. CRS contacted the OMB Office of
Legislative Affairs to request a more recent version of the memorandum listing agencies with bypass authorities but did
not receive a response.
28 OMB, “Memorandum for OMB Policy Officers and DADs,” p. 3.
29 The details of the congressional budget process are outside the scope of this report. For discussion of congressional
budgetary procedures, see CRS Report R46240,
Introduction to the Federal Budget Process, by James V. Saturno.
30 31 U.S.C. §1105.
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appropriations that are not included in other volumes of the President’s budget
proposal.31
•
Analytical Perspectives. This volume contains in-depth discussion of government
programs, including credit and insurance programs, discussion of crosscut
budgets that span two or more agencies, and technical explanation of the budget
baselines used in the analyses and estimates contained in the President’s budget
proposal.
•
Historical Tables. This volume provides a historical overview of federal
government finances, including time series statistics on budget authority,
government receipts, outlays, government employment, gross domestic product,
and the federal debt going back several decades and in some cases as far back as
1789.32
The President’s Budget Submission and Congressional Oversight
Budgetary reporting may facilitate Congress’s oversight of federal government operations and may help Congress
to make better-informed decisions about the allocation and use of government resources. The President’s budget
submission provides a comprehensive presentation of the financial activities of the federal government. The
Appendix provides a record of obligations by agencies and accounts. Furthermore, the
Historical Tables volume
includes summary-level (as well as more detailed) reporting of receipts, outlays, surpluses, and deficits.33
Presidents have also included additional materials in their submissions to Congress, such as
legislative proposals for budget process reform, federal credit supplements, a brief guide to the
budget intended for the public, and a summary of proposed spending reductions or program
consolidations sometimes referred to as a “Major Savings and Reforms” volume.34
Revisions and Supplements to the President’s Budget Request
The President may update the budget proposal by submitting revisions to the original request
(sometimes called “budget amendments”). In the wake of key events, the President may submit
supplemental appropriations requests to Congress. These revisions and supplements are typically
posted on OMB’s website.35
Separately, the President is required to submit certain updated information several months after
the budget proposal is submitted to Congress. Under current law, the President is required to
submit a “supplemental summary” of the budget, commonly referred to as the “Mid-Session
Review” (MSR), after the January/February budget submission deadline but before July 16 of
each year.36 The MSR is required to contain a statement of changes in budget requests.
31 See CRS Report R43475,
FY2024 Budget Documents: Internet and GPO Availability, by Carol Wilson.
32 The time frame for the information contained in the
Historical Tables volume varies from table to table. For
example, information on aggregate levels of receipts and outlays is provided for all years starting with 1789, while
information on total levels of federal government employment is provided as far back as 1962. This volume is only
available electronically.
33 OMB,
Historical Tables, Budget of the United States Government, FY1996-Present,
https://www.govinfo.gov/app/collection/budget.
34 OMB typically posts the most recent budget submission on its website at https://www.whitehouse.gov/omb/budget/.
The most recent and some historical submissions are posted separately by the U.S. Government Publishing Office
(GPO) at https://www.govinfo.gov/app/collection/budget.
35 OMB, “Supplementals, Amendments, and Releases,” https://www.whitehouse.gov/omb/supplementals-amendments-
and-releases/.
36 31 U.S.C. §1106.
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Furthermore, the MSR must include a summary of substantial changes in estimates of
expenditures and receipts and substantial changes to obligations incurred within the current fiscal
year. In addition to covering the current fiscal year, the MSR is required to include certain
information pertaining to future fiscal years. Previous MSRs have reflected changes in economic
conditions, budgetary actions taken by Congress, or other factors that have led the President to
make adjustments to the initial budget submission.
Agency Budget Requests and Justifications
Once the President has submitted the budget, OMB and agency officials explain and justify the
request to Congress.37 This frequently involves both formal and informal interactions. Early in the
congressional budget process, often in the week following the submission of the President’s
budget, the OMB director and other Administration officials may provide testimony regarding the
President’s budgetary objectives before congressional committees.
Agencies submit written justification of their budget requests to the appropriations committee and
subcommittees of jurisdiction in each chamber. Agencies also post their justifications on their
websites. The form and content of agency budget justifications (also referred to as congressional
budget justifications or “CBJs”) have been shaped by appropriations committee and
subcommittee norms and practices. OMB also provides guidance for the creation of CBJs in
Circular No. A-11.38
As Congress formulates budgetary legislation, agency officials are often called before the
appropriations subcommittees to justify and explain their budget requests to Congress. To ensure
that testimony and written justification materials are consistent with the President’s policy
objectives, OMB may review materials before agencies provide them to Congress.39
Agency testimony and written justification materials facilitate dialogue and information sharing
between federal agencies and congressional committees. Agency justification materials also
provide program details that Congress may use when determining the amounts to be appropriated
and the language to be included in reports accompanying appropriations acts.
37 See CRS Report R47090,
Executive Agency Justification of the President’s Budget: In Brief, by Dominick A.
Fiorentino.
38 OMB,
Circular No. A-11, §22.6.
39
Circular No. A-11 establishes guidelines regarding agency conversations with Congress or the public and emphasizes
statutory restrictions on attempts to influence legislation outside of official channels; see OMB,
Circular No. A-11, §22.
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Congressional Budget Justification Transparency Act of 2021 (P.L. 117-40)
In 2021, Congress passed legislation to newly define agency budget justifications by statute and require their
posting online.40 Prior to the enactment of this law, statutory provisions that establish key aspects of the executive
budget process in Title 31 of the
U.S. Code were relatively silent on the topic of agency budget justifications that
are submitted to Congress. 41 In practice, this silence left considerable discretion in the creation of these
documents.42 OMB’s
Circular No. A-11 provides guidance to agencies requiring them to consult with appropriators
before submitting their budget justifications.43 Typically, the written justifications vary in form and content with
each agency and appropriations subcommittee, reflecting the ongoing relationship between them.44 An agency's
budget justification usually contains a detailed description of its programs and activities and their purposes, as well
as an explanation of the proposed changes in appropriations and program activities for the next fiscal year.
Among other things, P.L. 117-40 newly defined in statute that agency “‘budget justification materials’ [are] the
annual budget justification materials of a Federal agency, or a component of a Federal agency, that are submitted,
in conjunction with” the President’s annual submission.45 Prospectively, these materials are required to be posted
on the website currently known as USAspending.gov, subject to OMB-developed data standards. Separately, the
President’s budget submission is also required to include a “tabular list” of the justifications.
Statements of Administration Policy and Other
Presidential Actions
As Congress is considering budgetary legislation, formal and informal communications may be
used to clarify and reiterate the President’s policy positions. For example, OMB may formally
communicate the President’s position on proposed or pending legislation by issuing Statements of
Administration Policy.46
The President and other executive branch officials may also negotiate with Congress informally
at any time during the congressional budget process by holding summits or private meetings with
Members of Congress. The President may also attempt to influence Congress indirectly by
promoting his or her policy priorities through direct appeals to the public.47 Finally, the President
may veto, or threaten to veto, any budgetary legislation passed by Congress. Between 1979 and
2020, for example, Presidents vetoed 83 appropriations acts.48
40 P.L. 117-40, Congressional Budget Justification Transparency Act of 2021, September 24, 2021 (135 Stat. 337),
amending the Federal Funding Accountability and Transparency Act of 2006 (P.L. 109-282); located at 31 U.S.C.
§6101 note.
41 Title 31, Section 1105, of the
U.S. Code requires the President to submit an annual budget request to Congress. Prior
to enactment of P.L. 117-40, the provision made no mention of agency-produced budget justifications.
42 As part of the process for developing the President’s submission, Title 31, Section 1108, of the
U.S. Code requires
agencies to submit budget requests to the President for potential modification. These agency-to-President submissions
“shall be prepared and submitted in the form prescribed by the President under this chapter and by the date established
by the President” (31 U.S.C. §1108(b)(1)).
43 OMB,
Circular No. A-11, August 2021, §22.6.
44 See CRS Report R47090,
Executive Agency Justification of the President’s Budget: In Brief, by Dominick A.
Fiorentino.
45 Federal Funding Accountability and Transparency Act of 2006, §3(b)(2).
46 OMB, “Statements of Administration Policy,” https://www.whitehouse.gov/omb/statements-of-administration-
policy/. See CRS Report R44539,
Statements of Administration Policy, by Meghan M. Stuessy.
47 Samuel Kernell,
Going Public: New Strategies of Presidential Leadership, 4th ed. (Washington: CQ Press, 2006).
48 See CRS Report RS22188,
Regular Vetoes and Pocket Vetoes: In Brief, by Meghan M. Stuessy; also see U.S. Senate,
“Vetoes, 1789 to Present,” https://www.senate.gov/legislative/vetoes/vetoCounts.htm. The number of vetoed
appropriations acts includes regular, supplemental, and continuing appropriations acts.
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Execution of Enacted Budgetary Legislation
The Constitution provides that federal spending may occur only through appropriations passed by
Congress and enacted into law. Accordingly, agencies cannot begin to execute the budget until
this occurs.49 The President, OMB, and agencies execute the budget in accordance with the
budgetary laws that have been enacted. They possess limited authority to make spending
adjustments.
Budget execution occurs in multiple steps.
• “Budget authority” is enacted into law by appropriations legislation. Budget
authority provides agencies with the legal basis to incur obligations.
• “Apportionment” occurs when OMB subdivides the budget authority made
available to agencies.
• “Obligations” are incurred when agencies enter into legally binding
commitments, such as employing personnel or awarding contracts for the
provision of goods or services.
• “Outlays” are payments made to liquidate these obligations.50
For an illustrative example of how appropriated funds are executed through these three steps, see
Figure 2.
49 In the event that an agency’s regular appropriations act has not become law prior to the start of the fiscal year, a
temporary continuing appropriations act (i.e., a continuing resolution or CR) may be enacted. This allows the agency to
continue operating programs funded with annual appropriations for the period of time covered by the CR. See CRS
Report R46595,
Continuing Resolutions: Overview of Components and Practices, coordinated by James V. Saturno.
50 GAO,
Glossary, p. 78.
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Figure 2. Example of Appropriated Funds Lifecycle
Relationship Between Budget Authority, Obligations, and Outlays
Source: CRS analysis.
Notes: This graphic serves as an il ustrative example and does not represent a particular appropriations account
or appropriated amount. In a given fiscal year, outlays may pay for obligations incurred within the same fiscal year
or during prior fiscal years.
Apportionment and Allocation of Budget Authority
Annual appropriations and other budgetary legislation provide agencies with budget authority,
which allows agencies to enter into obligations.51 With certain exceptions, the Antideficiency Act
requires that appropriated funds be apportioned (i.e., subdivided)—by time period, function, or
program—to prevent agencies from exhausting their appropriated funds prematurely.52 (See
Appendix A for more information about the Antideficiency Act.)
Under the Antideficiency Act, funds appropriated for a definite time period shall be apportioned
“to prevent obligation or expenditure at a rate that would indicate a necessity for a deficiency or
supplemental appropriation,” while funds appropriated for an indefinite amount of time shall be
apportioned “to achieve the most effective and economical use.”53 Appropriations must be
apportioned by (1) 30 days prior to the start of the fiscal year for which the appropriations were
51 See CRS In Focus IF12105,
Introduction to Budget Authority, by James V. Saturno.
52 The collection of statutes commonly referred to as the Antideficiency Act have been codified in multiple sections of
Title 31 of the
U.S. Code (31 U.S.C. §§1341-1342, 1349-1350, 1511-1519). Selected government entities are exempted
from the apportionment requirements of the Antideficiency Act, including the Senate, the House of Representatives,
congressional committees, and the Office of the Architect of the Capitol (31 U.S.C. §1511(b)(3)).
53 31 U.S.C. §1512(a).
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provided or (2) 30 days after the date of enactment of the appropriations act, whichever comes
later.54
OMB apportions funds appropriated to executive agencies.55 By statute, the agencies must submit
apportionment requests to OMB at least 40 days before the start of the fiscal year or within 15
days of the enactment of the appropriations act, whichever comes later.56 OMB determines how
executive agency funds will be apportioned, generally by fiscal quarter or by project.57 OMB may
also apportion multi-year and no-year funds for a future fiscal year, but apportionments may not
last longer than one fiscal year. These funds must be apportioned at the beginning of each fiscal
year.58
OMB may include “footnotes” on an apportionment, which provide additional information or
direction associated with one or more lines on the apportionment.59 In some cases, a footnote will
state that apportioned amounts are available for obligation only when a specified event occurs,
such as an agency taking a particular action.60 For FY2022, Congress passed new transparency
requirements for apportionments. In FY2023, Congress made these requirements permanent (see
text box, below).
Executive agencies are responsible for ensuring that their obligations and expenditures stay
within the allowable limits throughout the fiscal year. Agency heads must report any
Antideficiency Act violations to the President, to Congress, and to the Comptroller General.61
If an agency’s budgetary needs are perceived to exceed its funding resources, the President may
request, and Congress may enact, additional funding for selected activities in the form of one or
more supplemental appropriations measures. Supplemental appropriations are enacted subsequent
to a regular annual appropriations act when the need for funds is too urgent to be postponed until
54 31 U.S.C. §1513(a).
55 Under Title 31, Section 1513(b)(1), of the
U.S. Code, the President is statutorily responsible for apportioning funds
for executive branch agencies. This responsibility has been delegated to OMB under Executive Order 6166, as
amended. For the legislative and judicial branches, apportionments are made by the officials who maintain
administrative control of each appropriations account.
56 Title 31, Section 1513(b)(1), states that agencies must submit “information required for the apportionment” to the
President.
Circular No. A-11 has further specified that agencies should submit their apportionment requests by August
21 or “within 10 calendar days after the approval of the appropriation or substantive acts providing new budget
authority, whichever is later.” See OMB,
Circular No. A-11, §120.23.
57
Circular No. A-11 defines
apportionment as “a plan, approved by OMB, to spend resources provided by one of the
annual appropriations acts, a supplemental appropriations act, a continuing resolution, or a permanent law (mandatory
appropriations).” See OMB,
Circular No. A-11, §120. OMB may also apportion nonfinancial resources, such as
personnel and motor vehicles. In addition to apportioning appropriated funds, OMB may also attempt to provide
agencies with guidance regarding the implementation of laws related to mandatory spending (i.e., spending provided in
acts other than annual appropriations acts), such as laws authorizing certain entitlement programs. For discussion of
one past practice, see CRS Report R41375,
OMB Controls on Agency Mandatory Spending Programs: “Administrative
PAYGO” and Related Issues for Congress, by Clinton T. Brass and Jim Monke.
58 OMB,
Circular No. A-11, §120.52. Multi-year funds are appropriations that remain available for obligation for more
than one year. No-year funds are appropriations that remain available until expended. When funds are apportioned,
still-unobligated balances from each quarter accumulate and remain available until the end of the fiscal year without a
need for reapportionment. See GAO,
Glossary, p. 26.
59 OMB,
Circular No. A-11, §120.34.
60 OMB,
Circular No. A-11, §120.12.
61 31 U.S.C. §1517(b). OMB
Circular A-11 states that the Antideficiency Act calls for these notifications to the
President to be made through the OMB director (
Circular No. A-11, §145.1). Notification through OMB is no longer
the statutorily prescribed notification process as of 1970. See “Editorial Notes” in U.S. House of Representatives,
Office of the Law Revision Counsel, 31 U.S.C. §1517,
https://uscode.house.gov/view.xhtml?hl=false&edition=prelim&req=granuleid%3AUSC-prelim-title31-section1517.
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the next regular annual appropriations act.62 OMB reviews and may modify agency requests for
supplemental appropriations prior to the President’s transmittal of those requests to Congress. In
Circular No. A-11, OMB states that it will consider requests for supplemental appropriations only
in limited circumstances such as an unforeseen emergency situation or natural disaster.63
Apportionment Transparency Requirements in the Consolidated Appropriations
Act, 2022 (P.L. 117-103) and the Consolidated Appropriations Act, 2023
(P.L. 117-32)
As a part of the FY2022 omnibus appropriations bil , Congress passed legislation requiring OMB and agencies to
publicly disclose certain information about the apportionment of appropriated funds. Previously, OMB’s
apportionment decisions were not made publicly available as a matter of course. These statutory provisions were
enacted in the wake of congressional concerns that OMB may use its apportionment authority to implement the
policy preferences of the President without seeking congressional approval. More specifically, apportionment
decisions (and accompanying footnotes) may attempt to condition funding availability on agency actions that are
unrelated to the Antideficiency Act’s express purposes.64
Provisions related to the reporting of OMB’s apportionment decisions included the fol owing:
•
Within 10 days of enactment, OMB must provide the House and Senate Appropriations and Budget
Committees each apportionment document and any associated footnotes within two business days of OMB’s
apportionment approvals.65
•
Within 120 days of enactment, OMB must post apportionment documents including footnotes on a publicly
accessible website not later than two business days after their approval, including an explanation for any
footnotes accompanying an apportionment.66
•
Within 15 days of enactment, OMB must publish and continually update any delegation of apportionment
authority on a publicly accessible website and in the
Federal Register. Additionally, OMB must report any
change of officials with delegated apportionment authority and the rationale for the personnel change to
“appropriate congressional committees” within five days of OMB action.67
•
Executive agencies are required to notify House and Senate Appropriations and Budget Committees, and
“any other appropriate congressional committees,” if an apportionment (1) is not provided in the statutorily
required time period; (2) conditions funding availability on further action; or (3) may hinder the agency’s
prudent obligation of appropriated funds or the execution of a program, project, or activity.68
62 OMB,
Circular No. A-11, §20.3.
63 OMB,
Circular No. A-11, §110.1. For a list of supplemental appropriations enacted since FY2000, see Congressional
Budget Office, “Supplemental Appropriations: 2000-Present,” https://www.cbo.gov/topics/budget/status-
appropriations.
64 U.S. Congress, House Committee on the Budget, “Chairman Yarmuth Statement on Signing of Omnibus, Inclusion
of Power of the Purse Reforms,” press release, March 15, 2022, https://budget.house.gov/news/press-
releases/chairman-yarmuth-statement-signing-omnibus-inclusion-power-purse-reforms. See also U.S. Congress, House
Committee on the Budget,
Hearing on Congress’ Power of the Purse and the Rule of Law, hearings, 116th Cong., 2nd
sess., March 11, 2020, H.Hrg. 116-25, p. 78.
65 P.L. 117-103 (March 15, 2022), Division E, Title II, §204(a), https://www.congress.gov/bill/117th-congress/house-
bill/2471/text. In a hearing before the Senate Committee on the Budget, OMB Director Shalanda Young stated that
OMB has complied with this provision by providing the House and Senate Appropriations and Budget Committees
with access to a system containing the required apportionment documentation. See U.S. Congress, Senate Committee
on the Budget,
Hearing on the President’s Fiscal Year 2023 Budget Proposal, hearings, 117th Cong., 2nd Sess., March
30, 2022. A video of the hearing is available at https://www.budget.senate.gov/hearings/the-presidents-fiscal-year-
2023-budget-proposal. A transcript of the hearing is available at https://plus.cq.com/doc/congressionaltranscripts-
6498323?0 (link available with subscription).
66 P.L. 117-103, Division E, Title II, §204(b)-(c).
67 P.L. 117-103, Division E, Title II, §204(d).
68 P.L. 117-103, Division E, Title VII, §748.
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In the FY2023 omnibus appropriations bil , Congress included language requiring that OMB maintain the publicly
accessible website containing apportionment documents “in fiscal year 2023 and each fiscal year thereafter.”69
Entering into Obligations
Agencies enter into obligations when they incur legal liability for the payment of goods and
services.70 Examples of obligations include awarding contracts for the provision of goods or
services and hiring personnel. Agencies are required to implement a system of administrative
controls to restrict obligations from exceeding the apportionment or reapportionment of a given
appropriation.71
Budget authority provided by Congress to agencies typically takes the form of “lump-sum”
appropriations that cover one or more specific purposes and related programs.72 Once funds are
apportioned by OMB, executive agencies determine how to allocate, sub-allocate, reallocate, and
eventually obligate those funds among the programs, projects, and activities that fall within the
scope of each apportionment. (For discussion of processes regarding reallocation, see
“Reallocation of Budget Authority During Budget Execution.”)
Public Reporting of Obligations
Congress has passed into law numerous provisions that require public reporting of obligated
funds.73 This budgetary reporting may help inform Congress, agencies, the President, and
nonfederal stakeholders about federal government operations. Additionally, this reporting may
help Congress, the President, and agency executives to make better-informed decisions about the
allocation and use of government resources. Agencies have additional internal budgetary
reporting responsibilities that may also be publicly available. OMB may also direct agencies to
report data within the executive branch as a result of ad hoc budget data requests.
OMB SF-133 Reports
OMB established the
SF-133 Report on Budget Execution and Budgetary Resources to fulfill a
statutory requirement under the Antideficiency Act for the President to review the pace of
obligations or expenditures at least four times annually.74 These
SF-133 reports have historically
provided quarterly snapshots of appropriations and obligations at the account level. These reports
are posted on OMB’s MAX.gov website and are populated using data submitted by agencies to
the Treasury’s Government-wide Treasury Account Symbol Adjusted Trial Balance System.75
69 P.L. 117-328 (December 29, 2023), Division E, Title II. §204.
70 GAO,
Glossary, p. 74.
71 31 U.S.C. §1514(a)(1).
72 GAO,
Principles of Federal Appropriations Law, 3rd ed., Vol. II, GAO-06-382SP, February 2006, p. 19,
https://www.gao.gov/assets/210/202819.pdf#page=19.
73 For additional information about various types of budgetary reporting, see CRS In Focus IF11610,
Federal Financial
and Budgetary Reporting: A Primer, by Dominick A. Fiorentino.
74 31 U.S.C. §1512(d). For electronic versions of the reports, see OMB, “MAX Information and Reports (Executive,
Legislative, and Judicial Users): SF 133 Report on Budget Execution and Budgetary Resources,”
https://portal.max.gov/portal/document/SF133/Budget/FACTS%20II%20-
%20SF%20133%20Report%20on%20Budget%20Execution%20and%20Budgetary%20Resources.html.
75 U.S. Department of the Treasury, “Government-wide Treasury Account Symbol Adjusted Trial Balance System,”
https://fiscal.treasury.gov/gtas/.
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USASpending.gov Website
Congress has also passed statutory provisions resulting in reporting on budget execution at the
account level.76 The USASpending.gov website started with a singular focus on federal awards
(i.e., grants and contracts), but following the passage of the Digital Accountability and
Transparency Act of 2014, the website evolved into a broader portal on budgetary and financial
reporting.77 Specifically, Congress mandated account-level reporting on appropriated amounts
and obligations.78 This account-level view of budget execution is made publicly available at the
Spending Explorer portal on USAspending.gov.79
Budget Appendix
Certain account-level information about actual and proposed spending is included in the budget
submission’s
Appendix.80 This volume contains prior year appropriations and obligations, current
year appropriations, and proposed appropriations for each account. Proposed appropriations bill
text, transfer authorities, and general provisions are included among other budgetary details.
Outlay of Funds
Outlays occur when an agency disburses funds to liquidate an obligation. In a given fiscal year,
outlays may pay for obligations incurred within the same fiscal year or during prior fiscal years.81
Outlays within a given year may contribute to the annual deficit—when outlays surpass
receipts—as well as the overall federal debt level.82 The
Historical Tables volume of the
President’s budget submission provide a summary of receipts, outlays, surpluses, and deficits.83
Expiration and Cancellation of Unobligated Funds
An appropriation account usually provides funds with a defined period of availability (e.g., one
fiscal year). When that period of availability ends, any remaining budget authority in the
appropriation account expires. Expired funds are no longer available for incurring new
obligations. For five fiscal years following the expiration of appropriated funds, the funds may
still be available for the payment of obligations properly incurred during the period of
availability.84 On September 30 of the fifth fiscal year after the period of availability for an
appropriation account ends, “the account shall be closed and any remaining balance (whether
76 After the enactment of appropriations and other legislation corresponding to expenditures and receipts, the
Department of the Treasury establishes multiple kinds of
accounts to track multiple aspects of federal fiscal activity for
budgetary, management, and accounting purposes. GAO,
Glossary, pp. 2-7.
77 For more information about the tracking of federal awards using the USAspending.gov website, see CRS Report
R44027,
Tracking Federal Awards: USAspending.gov and Other Data Sources, by Jennifer Teefy.
78 Federal Funding Accountability and Transparency Act of 2006, as amended by the Digital Accountability and
Transparency Act of 2014; see 31 U.S.C. §6101 note.
79 The USASpending.gov “Spending Explorer” portal can be found at https://www.usaspending.gov/#/federal_account.
80 OMB,
Budget of the United States Government Appendix, FY1996-Present,
https://www.govinfo.gov/app/collection/budget.
81 GAO,
Glossary, p. 73.
82
Receipts is defined as “[c]ollections from the public based on the government’s exercise of its sovereign powers,
including individual and corporate income taxes and social insurance taxes, excise taxes, duties, court fines,
compulsory licenses, and deposits of earnings by the Federal Reserve System.” See GAO,
Glossary, p. 29.
83 OMB,
Budget of the United States Government Historical Tables, FY1996-Present,
https://www.govinfo.gov/app/collection/budget.
84 31 U.S.C. §§1552-1553.
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obligated or unobligated) in the account shall be canceled and thereafter shall not be available for
obligation or expenditure for any purpose.”85 For an illustrative example of how funding proceeds
through these three steps, see
Figure 3.
Appropriations accounts with an indefinite period of availability (e.g., no-year funds), by
contrast, may be closed and any remaining balance canceled under a different process. This
closure and cancellation process occurs if “(1) the head of an agency concerned or the President
determines that the purposes for which the appropriation was made have been carried out; and (2)
no disbursement has been made against the appropriation for two consecutive fiscal years.”86
85 31 U.S.C. §1552.
86 31 U.S.C. §1555.
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Figure 3. Expiration and Cancellation of Unobligated Funds
Appropriated Funds with a Definite Period of Availability
Source: CRS analysis.
Notes: This graphic serves as an il ustrative example and does not represent a particular appropriations account
or appropriated amount. It depicts the process for appropriated funds with a definite period of availability.
Appropriated funds with an indefinite period of availability fol ow a different process under Title 31, Section
1555, of the
U.S. Code.
Reallocation of Budget Authority During
Budget Execution
While executing their budgets, agencies may face cost changes or re-prioritization of their
missions due to external events (e.g., a military conflict, natural disaster, or recession) or
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decisions by an agency or the current Administration. To account for such events, including
circumstances unforeseen by Congress, agencies have been granted some discretion to reallocate
their budget authority. Congress has established multiple statutory and informal practices to
engage with and monitor agencies in many of these activities.
The basic unit of regular appropriations acts is the unnumbered paragraph, which during budget
execution corresponds to an “account.”87 Funding for each department and independent agency is
organized in one or more accounts. Each account may generally include one or more related
“programs, projects, or activities” (PPAs), which are typically specified in congressional
documents.88 Agency funding reallocations fall within the following three categories:
1.
Use of discretion within a particular account without advance congressional
notification: An agency may consider reallocating funds within a particular PPA
in a given budget account among allowable purposes (as authorized by law) and
objects (e.g., salaries, rent, programmatic expenses).
2.
Reallocating funds within an account: Reprogramming is the shifting of funds
within an appropriations account to "use them for purposes other than those
contemplated at the time of appropriation; it is the shifting of funds from one
object class to another within an appropriation or from one program activity to
another." The reprogramming of funds is generally permitted unless it is
restricted by statute. Statutory provisions may also prohibit reprogramming funds
without advance congressional notification.
3.
Moving funds from one account to another: Transfers—that is, the shifting of
budgetary resources from one appropriations or fund account to another—
typically involve movement of funds between accounts either within an agency
or across agency boundaries. Transfers are prohibited unless an agency has
specific statutory authorization to do so. This prohibition prevents agencies from
transferring funds from one account to another in ways that may be inconsistent
with the purposes for which Congress originally provided the funding.89
Transfer and reprogramming authorities provide guidelines by which agencies can exercise some
of this discreti
on. Figure 4 provides an example of how an agency, or several agencies, can
allocate and reallocate funds. Moving from the top of the figure to the bottom, the types of
discretion depicted are as follows:
•
Intra-agency transfer (purple arrow): Congress may grant
Agency X the
authority to move funds from appropriations
Account 1 to appropriations
Account
2 within the agency.
87 Unlike most authorizing legislation, regular appropriations legislation is drafted as unnumbered paragraphs that
provide a lump-sum amount for each appropriations account.
88 The House and Senate Committees on Appropriations may specify PPAs in report language to provide more detailed
expectations or directions to agencies on the allocation of funding among various activities funded within their
accounts. The term
report language refers to information provided in reports accompanying committee-reported
legislation as well as joint explanatory statements included in conference reports. Specifically, a report may include
tables that break down each lump-sum appropriation into smaller sub-allocations for distinct PPAs. Appropriators may
use these tables to establish expectations for agencies’ allocations of funds. Oftentimes, the report language reacts to
what agencies provided to the Appropriations Committees in their budget justification documents.
89 For additional information about appropriations law and Congress’s authority over appropriations, see CRS Report
R46417,
Congress’s Power Over Appropriations: Constitutional and Statutory Provisions, by Sean M. Stiff; and CRS
In Focus IF11577,
Congress’s Power Over Appropriations: A Primer, by Sean M. Stiff.
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•
Inter-agency transfer (blue arrow): Congress may grant
Agency X the authority
to move funds from appropriations
Account 2 to appropriations
Account 1 in
Agency Y.
•
Reprogramming (green arrow): Agency X, absent any statutory restrictions
from Congress, may reallocate funds from
PPA a to
PPA b within appropriations
Account 1.
•
Agency discretion to obligate within PPA (orange arrow): Agency X may
allocate funds among
Allocation i and
Allocation ii within
PPA a in order to best
support the purpose of
PPA a and
Account 1.
Figure 4. Example of Transfers, Reprogramming, and Other Forms of Budgetary
Discretion Within and Among Agencies
Source: CRS analysis.
Notes: This figure provides an il ustrative example and is not meant to depict any particular agency or
appropriations account. Additionally, transfer authorities may not be account-specific and may be agency-wide.
Use of Obligation Discretion
The House and Senate Appropriations Committees may use an agency’s budget justification as a
basis for how funds will be allocated within a given account, PPA, or agency component. An
agency may, unless otherwise prohibited or directed by law, exercise some discretion in how to
allocate and reallocate funding among certain organizational subunits, objects (e.g., salaries, rent,
contracts), and policy priorities within the contours of the agency’s statutory authorities and
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obligations. After enactment of a particular appropriation into law, agencies may obligate and
expend funds, subject to several conditions addressed by appropriations statutes.90
These conditions on the availability of appropriations include
• the
purpose(s) for which particular funds are appropriated, which may be
expressed in statute in more or less detail and, in some cases, with certain
restrictions;91
• the
time period during which funds are available for obligation and expenditure,
sometimes referred to as the
period of availability or
duration of
appropriations;92 and
• the
amount of appropriated funds that may be obligated and expended.93
While executive agencies may have legal discretion to determine how to allocate and obligate the
funds available to them, they are also legally required to execute spending legislation as
enacted.94
Reprogramming: Moving Funds Among an Account’s PPAs
Reprogramming is the shifting of funds within
an appropriations account to “use them for
purposes other than those contemplated at the time of appropriation; it is the shifting of funds
from one object class to another within an appropriation or from one program activity to
another.”95 The reprogramming of funds is generally permitted unless it is restricted by statute.96
Statutory provisions may also prohibit reprogramming funds without congressional notification.
Prior congressional notification might be required for reprogrammings that
• shift funds among PPAs above a threshold level;
• create or eliminate a program;
• relocate or reorganize offices and employees; or
• contract out certain functions or activities.
90 Authorizing statutes may also prescribe how funds can be spent, especially with respect to the appropriation’s
purpose.
91 GAO,
Principles of Federal Appropriations Law, 4th ed., “Chapter 3, Availability of Appropriations: Purpose,” 2017
Revision, GAO-17-797SP, 2017, https://www.gao.gov/assets/690/687162.pdf. Some appropriations paragraphs refer to
separate authorizing statutes as defining purposes for which appropriations are provided.
92 GAO,
Principles of Federal Appropriations Law, 3rd ed., Vol. I, GAO-04-261SP, January 2004, p. 558,
https://www.gao.gov/assets/210/202437.pdf#page=558. For a discussion about duration of funds availability, see CRS
Report R46417,
Congress’s Power Over Appropriations: Constitutional and Statutory Provisions, by Sean M. Stiff.
93 GAO,
Principles of Federal Appropriations Law, 3rd ed., Vol. II, p. 18.
94 Title 31, Section 1301(a), of the
U.S. Code, which is often referred to as the “purpose statute,” states,
“Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise
provided by law.”
95 GAO,
Glossary, p. 85. According to OMB, object classes are “categories in a classification system that presents
obligations by the items or services purchased by the Federal Government,” such as personnel compensation,
acquisition of assets, and grants. See OMB,
Circular No. A-11, §83. This section draws in part from CRS Report
R47600,
Transfer and Reprogramming of Appropriations: An Overview, by Taylor N. Riccard and Dominick A.
Fiorentino. The Department of Defense uses the term
reprogramming to encompass both transfers and reprogramming
actions. See Under Secretary of Defense (Comptroller), “Budget Execution,” https://comptroller.defense.gov/Budget-
Execution/ReprogrammingFY2021/.
96 GAO,
Principles of Federal Appropriations Law, 3rd ed., Vol. I, p. 98.
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Notification provisions establish a venue where appropriations or other committees may approve
reprogrammings prior to agency action. According to the Government Accountability Office
(GAO), reprogramming “is implicit in an agency’s responsibility to manage its funds.”97
Nevertheless, an agency’s ability to reprogram may be restricted by provisions within its annual
appropriations acts or other statutes.98
Example of Provisions Restricting Reprogramming
Provisions in the Consolidated Appropriations Act, 2023, established the fol owing limitations and notification
requirements on reprogramming actions by the Department of Homeland Security:99
(a) None of the funds provided by this Act … shall be available for obligation or expenditure through a
reprogramming of funds that:
(1) creates or eliminates a program, project, or activity, or increases funds for any program, project, or
activity for which funds have been denied or restricted by the Congress; (2) contracts out any function or
activity presently performed by Federal employees or any new function or activity proposed to be performed
by Federal employees in the President’s budget proposal for fiscal year 2023 for the Department of
Homeland Security; (3) augments funding for existing programs, projects, or activities in excess of $5,000,000
or 10%, whichever is less; (4) reduces funding for any program, project, or activity, or numbers of personnel,
by 10% or more; or (5) results from any general savings from a reduction in personnel that would result in a
change in funding levels for programs, projects, or activities as approved by the Congress.
(b) Subsection (a) shall not apply if the Committees on Appropriations of the Senate and the House of
Representatives are notified at least 15 days in advance of such reprogramming.
Transfers: Moving Funds from One Account to Another
Transfers—that is, the shifting of budgetary resources from one appropriations or fund account to
another—typically involve movement of funds between accounts, either within an agency or
across agency boundaries.100 Transfers are prohibited unless an agency has specific statutory
authorization to make transfers.101 This prohibition prevents agencies from transferring funds
from one account to another in ways that may be inconsistent with the purposes for which
Congress originally provided the funding.
There are statutory exceptions to this general restriction, and Congress may provide agencies with
“transfer authority” either in authorizing statutes or appropriations measures. For example, an
97 GAO,
Principles of Federal Appropriations Law, 3rd ed., Vol. I, pp. 91-97. Also see
In re LTV Aerospace Corp., 55
Comp. Gen. 307 (B-183851), October 1, 1975, http://www.gao.gov/products/428015#mt=e-report. The 1975 decision
by the Comptroller General was later quoted in Supreme Court opinions, including
Lincoln v. Vigil, 508 U.S. 182, 192
(1993) and
Hein v. Freedom from Religion Found., Inc., 511 U.S. 587, 608 n.7 (2007) (Alito, J.) (plurality op.).
98 For examples of additional limitations on reprogrammings, see CRS Report R47600,
Transfer and Reprogramming
of Appropriations: An Overview, by Taylor N. Riccard and Dominick A. Fiorentino
99 P.L. 117-328, Division F §503(a) at 136 Stat. 4748.
100 This section draws in part from CRS Report R47600,
Transfer and Reprogramming of Appropriations: An
Overview, by Taylor N. Riccard and Dominick A. Fiorentino. Transfers come in two general types. According to GAO,
an
expenditure transfer refers to a transaction between appropriation and fund accounts that represents payments,
repayments, or receipts for goods or services furnished or to be furnished (e.g., if an agency pays for a good or service
from another agency). A
nonexpenditure transfer, by contrast, refers to a transaction between appropriation and fund
accounts that adjusts the amounts available in the accounts for making subsequent payments. This CRS report focuses
on
nonexpenditure transfers. For further discussion of transfers, see GAO,
Glossary, pp. 95-96. Many expenditure
transfers are conducted under the Economy Act (31 U.S.C. §1535), which established guidelines and procedures
allowing agencies to perform work and provide goods and services to one another. Transfers to and from federal funds
(e.g., revolving, trust, or other special funds) are also considered expenditure transfers, as are transfers between budget
accounts and off-budget deposit accounts.
101 “An amount available under law may be withdrawn from one appropriation account and credited to another or to a
working fund only when authorized by law” (31 U.S.C. §1532).
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agency’s movement of budget authority from a salaries and expenses account to a research and
development account would be a transfer.
Appropriations or authorizing statutes that provide agencies with transfer authority often include
limitations on that authority. For example, transfers may be limited to a specific dollar amount or
to a certain percentage of the total amount appropriated for the transferring account, the receiving
account, or both. In addition, statutes may limit the use of the transferred funds to specific
purposes. Agencies that exercise transfer authority are often required to notify Congress, either
prior to the transfer or within a certain time period following the transfer.
Examples of Transfer Authority
The Consolidated Appropriations Act, 2023, provided the authority to transfer up to $368 mil ion of certain funds
appropriated to the Environmental Protection Agency:102
The Administrator is authorized to transfer up to $368,000,000 of the funds appropriated for the Great
Lakes Restoration Initiative under the heading “Environmental Programs and Management” to the head of any
Federal department or agency … to carry out activities that would support the Great Lakes Restoration
Initiative and Great Lakes Water Quality Agreement programs, projects, or activities.
Congressional Notification and Holds
Congress may exercise oversight over agency budget execution by requiring congressional
notification before certain expenditures take place. Following receipt of a notification, one or
more of the notified congressional committees may issue a hold instructing agencies not to
obligate the specified funds until the hold is released by the issuing committee. While the
congressional notification requirement is statutory, there is no statutory basis for the hold itself. If
an agency complies with the hold on the obligation or expenditure of funds, its action reflects a
practical accommodation between congressional committees and the agencies under their
jurisdiction.103
Impoundment of Budget Authority:
Rescissions and Deferrals
The concept of an impoundment generally refers to an action or inaction by the President or a
federal officer or employee that delays or withholds the obligation or expenditure of budget
authority provided in law.104 The Impoundment Control Act of 1974 (ICA), as amended,
establishes procedures that govern when impoundments are allowed, when they are prohibited,
and how impoundments may be proposed and considered under expedited legislative
procedures.105
Impoundment is a process by which budgetary authority is reduced—either permanently or
temporarily—subsequent to the enactment of annual appropriations and other budgetary
legislation. Under the procedures established by the ICA, the President has limited authority to
102 P.L. 117-328, Division G at 136 Stat. 4799.
103 Agencies maintain the authority to obligate funds despite a congressional hold. For further discussion of
nonstatutory understandings, see CRS Report R45442,
Congress’s Authority to Influence and Control Executive
Branch Agencies, by Todd Garvey and Daniel J. Sheffner.
104 GAO,
Glossary, p. 61.
105 Title X of P.L. 93-344; 2 U.S.C. §681 et seq.
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withhold budget authority from obligation or expenditure. (
See Appendix A for additional
information about the ICA.)
The ICA distinguishes between two types of impoundments that must be reported to Congress via
a special message: proposed rescissions, which, if enacted by Congress, permanently cancel
budget authority, and deferrals, a term that describes agency action to withhold funds from
obligation or expenditure for reasons authorized by the ICA.
Rescissions
When enacted by Congress, rescissions permanently cancel a specified portion of the budget
authority available to an agency. The President may propose a rescission by a special message to
Congress.106
Under the ICA, if the President determines that the total amount of budget authority is no longer
required to carry out the objectives for which it was provided, he or she may transmit a special
message to Congress. If Congress enacts the proposal, the funds are no longer available for
obligation and expenditure. However, if Congress does not enact the rescission within 45 calendar
days of continuous session after the special message’s receipt, any withheld funds must be
reapportioned and made available for obligation and expenditure.
Deferrals
Deferrals are the temporary delay in the obligation or expenditure of appropriated funds.
Deferrals allow agencies to adjust the timing of their obligations and expenditures in response to
changing circumstances, such as a reduction or delay in expenses.
Under the ICA, funds may be deferred only (1) to provide for contingencies, (2) to achieve
savings made possible by changes in requirements or greater efficiency of operations, or (3) as
specifically provided by law. The President and executive branch officials may not defer funds for
any other purpose, including policy reasons (e.g., to curtail overall federal spending or because
the President opposes a particular program).107 Funds may be deferred without prior approval of
Congress. However, the President must inform Congress and the Comptroller General of all
deferrals by transmitting a special message to Congress.108 While there is no statutorily
established deadline for transmitting a special message, the President is required to submit a
cumulative report of proposed deferrals on a monthly basis.109 If the President fails to submit a
special message, the Comptroller General shall provide a report on this deferral to Congress.110
Occasional Procedures During Budget Execution
The previous section provided an overview of the budget execution procedures that the President,
OMB, and agencies utilize under normal conditions. Under existing law, there are additional
106 Congress may also initiate rescissions by cancelling previously enacted budget authority. Congressionally imposed
rescissions are legislative actions rather than executive branch proposals or uses of discretion and therefore are not
covered by the ICA.
107 Title X of P.L. 93-944, §1013(b); 2 U.S.C. §684(b).
108 2 U.S.C. §684(a).
109 2 U.S.C. §685(e).
110 2 U.S.C. §686(a).
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executive budgetary procedures that are triggered under specific, less common circumstances,
such as shutdowns and sequestration.
Budget Execution During Federal Funding Gaps and Government
Shutdowns
Under the Antideficiency Act, agencies are generally prohibited from obligating or spending
funds prior to the enactment of their appropriations. A funding gap occurs when full-year or
interim appropriations are not enacted by the start of the fiscal year.111 A funding gap may also
occur if an agency’s interim appropriations (i.e., a CR) expire and an additional CR is not
subsequently enacted.112 When a funding gap begins and appears likely to continue a full calendar
day or longer, the federal government generally begins a “shutdown” of the affected activities.113
During a shutdown, the only budgetary resources that may be obligated for affected activities are
those that will be used to provide for excepted activities, such as those involving “the safety of
human life or the protection of property.”114
During a period when enactment of full-year or interim appropriations seems uncertain, OMB
may instruct executive agencies to prepare for a funding gap and government shutdown.115
Circular No. A-11 provides general guidance on how executive agencies should proceed if their
regular appropriations or CRs are not enacted or if their existing CRs have expired.116 For
example,
Circular No. A-11 instructs agencies to develop shutdown plans that identify “excepted”
activities that will continue and “non-excepted” activities that will be terminated in the event of a
funding gap.117 In addition, the circular instructs agencies to determine which of their employees
will be subject to furlough and which will be retained.118 If a funding gap is imminent, OMB may
issue additional guidance to agency heads.119
Budget Execution in the Event of Sequestration
Sequestration involves the cancellation of budgetary resources under a statutorily prescribed
presidential sequester order. A sequester order identifies the specific budgetary resources that can
111 31 U.S.C. §1341(a)(1)(A).
112 For historical information on previous federal funding gaps, see CRS Report RS20348,
Federal Funding Gaps: A
Brief Overview, by James V. Saturno. For discussion of the potential impact of CRs, see CRS Report RL34700,
Interim
Continuing Resolutions (CRs): Potential Impacts on Agency Operations, by Clinton T. Brass.
113 See CRS Report RL34680,
Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by
Clinton T. Brass; and CRS Report R47845,
FY2024 Appropriations: Potential Effects of a Government Shutdown on
Illustrative Agencies, Programs, and Activities, coordinated by Clinton T. Brass, Taylor N. Riccard, and Dominick A.
Fiorentino.
114 31 U.S.C §1342. An agency may, however, continue to obligate and expend funds for activities funded with annual
or permanent appropriations of budget authority that have not expired.
115 See CRS Report RL34680,
Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by
Clinton T. Brass.
116 OMB,
Circular No. A-11, §124.
117 OMB, “Agency Contingency Plans,” https://www.whitehouse.gov/omb/information-for-agencies/agency-
contingency-plans/.
118 For more information on federal employee furloughs, please see CRS In Focus IF11703,
Federal Employee
Furloughs: Types and Implications, by Taylor N. Riccard.
119 For example, OMB Director Mick Mulvaney issued a memorandum instructing agencies on how to prepare for
operations in the event of a funding gap and subsequent shutdown of the federal government. OMB, Memorandum M-
18-05, “Planning for Agency Operations During a Potential Lapse in Appropriations,” January 19, 2019,
https://www.whitehouse.gov/wp-content/uploads/2017/11/m-18-05-REVISED.pdf.
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no longer be obligated or expended despite being enacted into law. Under the provisions of the
Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA),120 as amended by the
Statutory Pay-As-You-Go Act of 2010 (PAYGO),121 a sequestration of nonexempt direct spending
may be triggered if the new revenue and new direct spending legislation enacted during a
congressional session are not “deficit neutral.”122 Congress may exempt legislation from
sequestration that would otherwise be triggered under the provisions of PAYGO.
The Budget Control Act of 2011 (BCA), among other things, established a mechanism to
automatically reduce spending in response to concerns with deficit and debt levels.123 The BCA
established limits on discretionary spending for FY2012-FY2021, with these limits enforced by
sequestration. The Fiscal Responsibility Act of 2023 (FRA) reinstituted enforceable discretionary
spending limits for FY2024 and FY2025.124 The BCA also required an annual sequester of
nonexempt mandatory spending programs through FY2021, but this sequester was subsequently
extended multiple times, most recently through FY2023.125 Several programs are exempted from
the annual mandatory spending sequesters, including Social Security and Medicaid. In addition,
special rules govern the sequestration of certain programs, such as Medicare, which is limited to a
2% reduction.126
OMB is responsible for tracking the cumulative deficit impact of enacted budgetary legislation. If
a sequestration is triggered, OMB is responsible for calculating the uniform percentage by which
the budgetary resources of nonexempt programs will be reduced. Under both the BCA and the
BBEDCA, once issued, the implementation of a sequestration and execution of the resulting
spending cuts are the responsibility of OMB and each agency, respectively.127
120 P.L. 99-177, Balanced Budget and Emergency Deficit Control Act of 1985, December 12, 1985 (99 Stat. 1038),
located at 2 U.S.C. §900 note.
121 P.L. 111-139, Statutory Pay-As-You-Go Act of 2010, February 12, 2021 (124 Stat. 8), codified at 2 U.S.C. §§931-
939.
122 For additional information on sequestration under the BBEDCA and the Statutory PAYGO Act, see CRS Report
R41157,
The Statutory Pay-As-You-Go Act of 2010: Summary and Legislative History, by Bill Heniff Jr. In addition,
see CRS Report R42972,
Sequestration as a Budget Enforcement Process: Frequently Asked Questions, by Megan S.
Lynch.
123 See CRS Report R44874,
The Budget Control Act: Frequently Asked Questions, by Grant A. Driessen and Megan S.
Lynch.
124 P.L. 118-5, Fiscal Responsibility Act of 2023, June 3, 2023 (137 Stat. 10). For more information about the
discretionary spending caps within the FRA, see CRS Insight IN12183,
The FRA’s Discretionary Spending Caps
Under a CR: FAQs, by Drew C. Aherne and Megan S. Lynch.
125 The Bipartisan Budget Act (BBA) of 2013 (P.L. 113-67) extended the mandatory spending sequester by two years
to FY2023. Soon after the enactment of BBA 2013, P.L. 113-82 extended the mandatory spending sequester by one
year to FY2024. BBA 2015 (P.L. 114-74) extended the mandatory spending sequester by one year to FY2025. BBA
2018 (P.L. 115-123) further extended the mandatory spending sequester by an additional two years through FY2027,
and BBA 2019 (P.L. 116-37) extended the mandatory sequester by another two years through FY2029. See CRS
Report R44874,
The Budget Control Act: Frequently Asked Questions, by Grant A. Driessen and Megan S. Lynch. The
Coronavirus Aid, Relief, and Economic Security Act extended sequestration for mandatory spending through FY2030.
See CRS Report R45106,
Medicare and Budget Sequestration, by Ryan J. Rosso.
126 These exemptions and special rules are found in Sections 255 and 256 of the BBEDCA (Title II of P.L. 99-177),
commonly known as the Gramm-Rudman-Hollings Act. For more information, see CRS Report R42050,
Budget
“Sequestration” and Selected Program Exemptions and Special Rules, coordinated by Karen Spar.
127 According to GAO, under the BCA “the execution and impact of any spending reductions will depend on the legal
interpretations and actions taken by the Office of Management and Budget, which is vested with implementing the
Budget Control Act.” See GAO,
The Budget Control Act and the Department of Veterans Affairs’ Programs, B-
323157, May 21, 2012, pp. 4-5, http://gao.gov/assets/600/591052.pdf.
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Potential Issues for Congress
Although the Constitution vests the power of the purse with Congress, the President, agencies,
and OMB exercise numerous budgetary responsibilities. Furthermore, under the Constitution’s
separation of powers with checks and balances, Congress and the President may cooperate or
compete for influence over the manner in which agencies pursue their statutory missions and
duties. In this context, the budget process has been shaped by a series of laws, passed by
Congress, that have
• centralized aspects of the executive budget process by creating explicit statutory
roles for the President;
• created OMB within the Executive Office of the President;
• vested agencies with authority to pursue their statutory missions using
appropriated funds under a body of authorizing statutes and appropriations-
related law;
• established budget execution processes, including apportionment;
• limited the President’s authority to withhold appropriated funds;
• provided for some transparency regarding budget activities and decisions; and
• created the current budget timeline.
The federal budget sustains government functions and shapes policy decisions. Given the
importance of the budget process, Congress may consider the balance of budgetary
responsibilities among Congress, agencies, the President, and OMB. Additionally, Congress may
consider how agencies exercise discretion in allocating their budget authority, as well as the
appropriate level of transparency in their activities. In this light, the following budget-related
issues may be of interest to Congress.
Length of Time Between Budget Formulation and Enactment of
Full-Year Appropriated Funds: Implications for Information
Technology
Congress might face challenges in exercising control and conducting oversight over agencies’
information technology (IT) investments if substantial discretion were granted to agencies in how
to allocate and spend funds for IT projects. In this light, Congress might explore potential
strategies and tools to preserve congressional prerogatives while allowing for modern IT
investment practices.
Agencies typically begin their budget formulation processes in the spring—approximately 18
months prior to the beginning of the fiscal year on October 1—upon receipt of OMB’s spring
guidance. Consequently, agencies may experience a gap of at least a year-and-a-half between
budget planning and the receipt of appropriated funds, with an even longer gap in the case of a
CR. This lag may complicate the ability of agencies to undertake programs and activities that
benefit from more iterative planning, budgeting, and development.
Software development is one example of an activity that may benefit from a more iterative
approach. Iterative development approaches frequently fall under the term
agile, which GAO has
defined as “an approach to software development that encourages collaboration across an
organization and allows requirements to evolve as a program progresses. Agile software
development emphasizes iterative delivery; that is, the development of software in short,
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incremental stages.”128 According to the General Services Administration’s 18F office, which
focuses on digital services, the lead time under the current executive budget process often fails to
align with the shorter timelines associated with iterative or incremental software development.129
A 2019 Department of Defense study found that long development cycles could result in software
becoming outdated before it is implemented.130
Effect of Transfer and Reprogramming Authorities on
Congressional Oversight and Agency Actions
Agencies are granted a certain amount of discretion over the allocation of funds appropriated by
Congress. These flexibilities may allow agencies to respond to changing circumstances and better
fulfill their missions.131 In exercising this discretion, however, agencies may allocate funding in
ways that deviate from congressional intent. Congress may consider the appropriate balance of
agency discretion and congressional oversight in the context of transfer and reprogramming
authorities.
Agencies that exercise transfer or reprogramming authority are often required to notify particular
congressional committees before the authority is exercised and obtain committee approval for the
proposed exercise (prior approval requirements). The 1983 U.S. Supreme Court case
Immigration
and Naturalization Service (INS) v. Chadha may constrain Congress’s ability to make prior
approval requirements legally binding.132 Specifically, the Supreme Court ruled that a type of
legislative veto—a one-house veto provision—then included in the Immigration and Nationality
Act was unconstitutional.133 Prior approval requirements may be considered a type of legislative
veto, and therefore agencies may not view them as legally binding.134 In practice, however,
agencies may treat prior approval requirements as practically binding, because Congress could
reduce an agency’s future appropriations if an agency chooses not to comply with such
expectations.
Transfers and reprogramming of appropriated funds may have ramifications for congressional
oversight of agency execution of enacted appropriations throughout the fiscal year. Many transfer
and reprogramming authorities grant substantial discretion to agencies based on norms and
understandings regarding how discretion will be used in practice. When transfers and
reprogramming actions deviate from the norms and understandings, however, it is possible that
funds may be used in ways contrary to congressional intent.135
128 GAO,
Science and Tech Spotlight: Agile Software Development, GAO-20-713SP, September 2020, p. 1,
https://www.gao.gov/assets/gao-20-713sp.pdf.
129 U.S. General Services Administration, 18F, “De-Risking Guide,” https://derisking-guide.18f.gov/federal-field-
guide/planning/#invest-in-technology-incrementally-and-budget-for-risk-mitigation-prototyping.
130 Department of Defense, “Software Acquisition and Practices (SWAP) Study,” May 2019,
https://innovation.defense.gov/software/.
131 See CRS Report R47600,
Transfer and Reprogramming of Appropriations: An Overview, by Taylor N. Riccard and
Dominick A. Fiorentino.
132 See CRS Report RL33151,
Committee Controls of Agency Decisions, by Louis Fisher; and CRS Report R46417,
Congress’s Power Over Appropriations: Constitutional and Statutory Provisions, by Sean M. Stiff.
133 For further discussion, see CRS Report R46421,
DOD Transfer and Reprogramming Authorities: Background,
Status, and Issues for Congress, by Brendan W. McGarry.
134 See CRS Report R46417,
Congress’s Power Over Appropriations: Constitutional and Statutory Provisions, by Sean
M. Stiff at 37-38 (discussing Department of Justice and GAO assessments of prior approval requirements).
135 For example, see discussion under the heading “Border Wall and Related Matters” in CRS Report R46812,
FY2021
Defense Appropriations Act: Context and Selected Issues for Congress, by Brendan W. McGarry.
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Transparency of OMB’s Apportionment Processes
Congress has expressed concern that OMB may use its apportionment authority to implement the
policy preferences of the President without seeking congressional approval. In light of these
concerns, Congress included provisions in the FY2023 omnibus appropriations bill, enacted in
December 2022, making permanent the requirement that OMB to make all apportionment
decisions, including associated footnotes, publicly available in a timely manner.136 Additionally,
the legislation requires executive agencies to notify Congress if an apportionment is made
conditional on further action.137 Going forward, Congress may wish to consider oversight options
related to the implementation of this legislation.
Until these statutory changes were enacted in 2022, current law did not require apportionment
decisions to be made publicly available as a matter of course.138 The withholding of funds
appropriated to the Defense Department for security assistance to Ukraine raised the salience of
this issue.139 In summer 2019, OMB issued apportionments with footnotes that made certain
unobligated balances unavailable for obligation. In issuing its ruling that these actions violated
the ICA, GAO noted, “Faithful execution of the law does not permit the President to substitute his
own policy priorities for those that Congress has enacted into law.”140 In a report to accompany
the FY2021 Financial Services and General Government appropriations bill, the House
Committee on Appropriations noted that apportionments are legally binding only to the extent
that they are compliant with the law.141
Congress might consider options for exercising oversight over the implementation of provisions
contained within the FY2023 omnibus appropriations act. In particular, Congress may wish to
monitor the timeliness of reporting by OMB and agencies as well as whether the information
included with OMB’s apportionment decisions, including footnotes and their documented
rationale, contain sufficient detail for the purposes of congressional oversight. Additionally,
implementation of this legislation depends, in part, on agencies notifying congressional
committees if their apportionments have been made conditional on further agency action.142
Congress may wish to determine whether this agency reporting aligns with reporting from OMB.
Current law states that apportionment decisions must be in writing.143 In practice, OMB uses an
electronic, Excel-based application for reviewing and approving agency apportionments.144
Circular No. A-11 says, “OMB may also choose to indicate its approval of an apportionment in
other ways, including by letter, telephone, hard copy, or other method that is appropriate to the
particular circumstance.”145 OMB elaborates an example where under “rare circumstances” an
136 P.L. 117-328, Division E, Title II, §204.
137 P.L. 117-328, Division E, Title VII, §748.
138 In the Consolidated Appropriations Act, 2022, however, Congress passed several new transparency requirements
(Division E of P.L. 117-103).
139 See section titled “Ukraine Aid and the 2019 U.S. Presidential Impeachment” in CRS Report R45008,
Ukraine:
Background, Conflict with Russia, and U.S. Policy, by Cory Welt.
140 GAO,
Office of Management and Budget—Withholding of Ukraine Security, B-331564, January 16, 2020, p. 1,
https://www.gao.gov/assets/b-331564.pdf.
141 U.S. Congress, House Committee on Appropriations, Subcommittee on Financial Services and General
Government,
Financial Services and General Government Appropriations Bill, 2021, 116th Cong., 2nd sess., July 17,
2020, H.Rept. 116-456, p. 10, https://www.congress.gov/116/crpt/hrpt456/CRPT-116hrpt456.pdf#page=10.
142 P.L. 117-328, Division E, Title VII, §748.
143 31 U.S.C. §1513(b)(1).
144 OMB,
Circular No. A-11, §120.39.
145 OMB,
Circular No. A-11, §120.39.
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agency would need to obligate funds as soon as possible and not have to wait for a signed
apportionment before obligating funds. In this particular scenario, there may be a time lag
between apportionment decisions taking place within and outside of the electronic system.
Congress may also consider which action, or both, triggers the statutory reporting requirement.
Furthermore,
Circular No. A-11 describes only one example where an apportionment may be
approved through alternate means. This may leave ambiguity about other scenarios in which
apportionment communications may take place outside the electronic system, including approvals
and any conditions placed on them. Congress may wish to speak with agencies about their
experience in receiving apportionment communications outside the electronic system and assess
whether these apportionment approvals are eventually documented in the electronic system.
Effects of Funding Gaps, Shutdowns, and Sequestration on Agency
Budget Planning
During a shutdown, an agency may lack authority to obligate and spend certain funds due to a
lapse in annual appropriations or the expiration of an authorizing act.146 Under sequestration,
certain percentage reductions are applied to specific PPAs across major categories of spending.
Both situations may present potential issues for Congress.147 Congress may consider legislative
options that would increase oversight of agency planning in the event of a shutdown or
sequestration.
For example, given the often-unexpected nature of a government shutdown, there may be
concerns surrounding the quality of agency planning, including the distinctions between excepted
and nonexcepted activities and employees. Thus, Congress may have an interest in increasing
oversight activities related to agency shutdown planning. In recent years, OMB has required
agencies to update their shutdown plans whenever there is a change in the source of funding for
an agency program or “any significant modification, expansion, or reduction in agency program
activities.”148 Congress could consider establishing a statutory structure for updating of agency
shutdown plans and their availability to Congress and other relevant stakeholders. In the context
of sequestration, Congress might consider options for requiring greater transparency into the
programmatic effects of reductions.149
146 For more information about shutdowns associated with a lapse in appropriations, see CRS Report RL34680,
Shutdown of the Federal Government: Causes, Processes, and Effects, by Clinton T. Brass.
147 For more information, see CRS Report RL34680,
Shutdown of the Federal Government: Causes, Processes, and
Effects, coordinated by Clinton T. Brass.
148 See CRS Report RL34680,
Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by
Clinton T. Brass.
149 For discussion of the effects of sequestration in 2013, see GAO,
2013 Sequestration: Agencies Reduced Some
Services and Investments, While Taking Certain Actions to Mitigate Effects, GAO-14-244, March 2014,
https://www.gao.gov/products/gao-14-244.
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Appendix A. Selected Statutes Relevant to the
Executive Budget Process
The executive budget process, as currently constituted, exists primarily due to statutes passed by
Congress and enacted into law. Subsequently, many provisions were modified in light of new
developments and evolving perspectives on how to properly fulfill Congress’s constitutional
responsibilities. This appendix includes brief summaries of three key statutes from this history.150
Antideficiency Act
What is commonly referred to as the Antideficiency Act consists of a series of provisions and
revisions incorporated into appropriations laws over the years relating to matters such as
prohibited activities, the apportionment system, and budgetary reserves.151 These provisions, now
codified in several locations in Title 31 of the
United States Code,152 continue to play a pivotal
role in the execution phase of the executive budget process, when agencies spend the funds
provided in appropriations laws.
The origins of the Antideficiency Act date back to 1870, where legislation provided
[t]hat it shall not be lawful for any department of the government to expend in any one
fiscal year any sum in excess of appropriations made by Congress for that fiscal year, or to
involve the government in any contract for the future payment of money in excess of such
appropriations.153
Changes to the 1870 version of the act made in 1905 and 1906 strengthened the prohibitions of
the 1870 law by expanding the coverage of its provisions, adding restrictions on voluntary
services for the government, and imposing criminal penalties for violations.154 Notably, the laws
established a new administrative process for budget execution. This process, which remains in
use today, is termed “apportionment.” Apportionment may result in the distribution of the budget
authority provided in appropriations law to the agencies in installments, rather than all at once,
and more granular levels of disaggregation within an appropriated amount.155
Under current law, the Antideficiency Act also includes four types of prohibitions: (1) making or
authorizing expenditures in excess of the amount available in an appropriation or fund; (2)
150 These summaries draw in part on CRS Report RL30795,
General Management Laws: A Compendium (available to
congressional clients upon request) and other CRS research.
151 GAO,
Principles of Federal Appropriations Law, 3rd ed., Vol II, p. 48.
152 The collection of statutes commonly referred to as the Antideficiency Act have been codified in multiple sections of
Title 31 of the
U.S. Code (31 U.S.C. §§1341-1342, 1349-1350, 1511-1519). Selected government entities are exempted
from the apportionment requirements of the Antideficiency Act, including the Senate, the House of Representatives,
congressional committees, and the Office of the Architect of the Capitol (31 U.S.C. §1511(b)(3)).
153 An Act making Appropriations for the legislative, executive, and judicial Expenses of the Government for the Year
ending the thirtieth of June, eighteen hundred and seventy-one (41st Congress; 16 Stat. 230, at 251; July 12, 1870).
154 For the 1905 version, see P.L. 58-217, An Act making appropriations to supply deficiencies in the appropriations for
the fiscal year ending June thirtieth, nineteen hundred and five, and for prior years, and for other purposes, Chapter
1484, Section 4 (33 Stat. 1214, at 1257; March 3, 1905), at https://www.loc.gov/collections/united-states-statutes-at-
large/. For the 1906 version, see P.L. 59-28, An Act Making appropriations to supply urgent deficiencies in the
appropriations for the fiscal year ending June thirtieth, nineteen hundred and six, and for prior years, and for other
purposes, Chapter 510, Section 3 (34 Stat. 27, at 48; February 27, 1906), at https://www.loc.gov/collections/united-
states-statutes-at-large/. Additional changes were forthcoming in subsequent decades, but the changes are not
summarized here.
155 31 U.S.C. §1512(a).
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The Executive Budget Process: An Overview
involving the government in a contract or obligation for payment in advance of an appropriation;
(3) accepting voluntary services for the government, except in certain cases of emergency; and (4)
making or authorizing obligations or expenditures in excess of an apportionment or in excess of
the amount permitted by agency regulations for administrative control of funds.156
Budget and Accounting Act of 1921
In the 20th century, the Budget and Accounting Act of 1921 created an explicit statutory role for
the President. Specifically, the law required executive agencies to submit their budget requests to
the President for potential modification and, in turn, for the President to submit a consolidated
request to Congress.157 The law also had the effect of centralizing many executive branch budget
processes in a new institution. Among other things, it established the Bureau of the Budget in the
Department of the Treasury, which functioned under supervision of the President. In 1939, the
bureau was transferred to the Executive Office of the President and, in 1970, re-designated as
OMB.158 Finally, the law established the General Accounting Office, which was in 2004 renamed
the Government Accountability Office (GAO).
Congressional Budget and Impoundment Control Act of 1974
The concept of an “impoundment” generally refers to an action or inaction by the President or a
federal officer or employee that delays or withholds the obligation or expenditure of budget
authority provided in law.159 The ICA, as amended, establishes procedures that govern when
impoundments are allowed, when they are prohibited, and how impoundments may be proposed
and considered under expedited legislative procedures.160 The ICA established a framework for
Congress to decide whether to approve impoundment proposals. The act divides impoundments
into two categories, rescissions and deferrals, and establishes distinct procedures for each.161
156 For discussion and related statutory citations, see GAO, “Antideficiency Act Resources,” https://www.gao.gov/
legal/appropriations-law/resources.
157 P.L. 67-13, Budget and Accounting Act, 1921, June 10, 1921 (42 Stat. 20, at 22), codified in part at 31 U.S.C. §501.
158 See CRS Report RS21665,
Office of Management and Budget (OMB): An Overview, coordinated by Taylor N.
Riccard.
159 GAO,
Glossary, p. 61.
160 31 U.S.C. §1512(c)(2). The ICA is Title X of P.L. 93-344 (88 Stat. 332), as subsequently amended (see 2 U.S.C.
§§601-688). The Office of the Legislative Counsel of the House of Representatives maintains an unofficial, compiled
(i.e., current) version of the law at http://legcoun.house.gov/members/HOLC/Resources/comps_alpha.html#C.
161 For further discussion, see CRS Report R46417,
Congress’s Power Over Appropriations: Constitutional and
Statutory Provisions, by Sean M. Stiff.
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Appendix B. Executive Budget Process Timelines
This appendix presents more detailed graphical representations of how the executive budget process overlaps with the congressional budget
process, as well as how agencies concurrently plan and execute budgets for multiple fiscal years.
Figure B-1 provides a timeline of the FY2025 budget process compared to the 2023, 2024 and 2025 calendar years as well as the executive
budget process milestones. FY2025 will begin on October 1, 2024, but executive agency budget planning for FY2025 began 18 months prior in
the spring of 2023. By statute, the President was required to submit the consolidated FY2025 budget to Congress no later than the first Monday
in February 2024. As of February 6, 2024, President Biden has not submitted the FY2025 budget request to Congress.
Figure B-1. Executive Budget Process and the Congressional Budget Process for FY2025
Sources: CRS analysis of
U.S. Code, OMB guidance documents, and President’s budget submissions.
Notes: In practice, budgetary submission and milestone dates for FY2025 may differ from statutory deadlines. Congressional action on the FY2025 budget may extend
beyond September 30, 2024.
While Congress deliberates on the FY2025 budget, the President is to submit the MSR. By statute, this must be submitted before July 16 each
year, but many such submissions are provided later than this date.
FY2025 will begin on October 1, 2024, and end on September 30, 2025. Obligations incurred during FY2025 may not result in outlays until
after the end of the fiscal year. Additionally, budgetary and financial reporting associated with FY2025 will continue after September 30, 2025.
As Congress begins action on appropriations bills and other budgetary legislation for FY2025, OMB and agencies have already begun planning
for subsequent fiscal year
s. Figure B-2 shows that budget-related activities for FY2025, FY2026, and FY2027 may occur simultaneously for
agencies at a given point in time (e.g., during May 2025) and may provide opportunities for Congress to engage with agencies, OMB, and the
President for all three of these fiscal years within the 118th and 119th Congresses.
CRS-32
Figure B-2. Concurrent Budget Planning for Multiple Fiscal Years
Sources: CRS analysis of OMB guidance documents, President’s budget submissions, and
U.S. Code.
Notes: In practice, budgetary submission and milestone dates for FY2025, FY2026, and FY2027 may differ from statutory deadlines.
CRS-33
The Executive Budget Process: An Overview
Author Information
Dominick A. Fiorentino
Taylor N. Riccard
Analyst in Government Organization and
Analyst in Government Organization and
Management
Management
Acknowledgments
This report supersedes CRS Report R42633, which was originally written by Michelle D. Christensen,
Analyst in Government Organization and Management.
Mari Y. Lee, Visual Information Specialist, and Brion A. Long, Visual Information Specialist, collaborated
on the report’s figures.
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.
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