Contents

• Introduction
• Agency Information Included in the Annual Budget Appendix
• CBJ Documents
• Agency Testimony Before Appropriations Subcommittees
• Issues for Congress

Introduction

The Constitution vests Congress with the power of the purse, with provisions that refer to congressional authority to levy taxes, authorize the issuance of debt, and make appropriations to fund the federal government.¹ The Constitution does not address the role of the President in the budget process in similarly specific terms. Rather, the executive budget process exists primarily due to statutes enacted by Congress, and it specifies roles for the President, the Office of Management and Budget (OMB), and executive agencies.

The executive budget process is a complex set of activities that includes (1) development of the President's budget proposal, (2) submission and justification of the President's budget proposal, and (3) execution of enacted appropriations and other budgetary legislation. While some of the activities must be completed by specific dates, many follow a more flexible schedule established by formal and informal rules and procedures.

After the submission of the President's budget request, each executive agency bears the responsibility for justifying its budget request to gain approval from Congress. Executive agencies typically justify their budget requests in three main ways:

• 1. Budget Appendix. Each agency provides the supporting materials for the account and program detail in the budget Appendix volume.
• 2. Congressional budget justification (CBJ) documents. An agency's budget justification builds upon the information included in the Appendix and generally consists of a detailed description of agency budgetary accounts.
• 3. Agency testimony before Congress. Hearings before appropriations subcommittees provide a venue where agency officials can justify and explain their budget requests to Congress. These hearings often focus on the information included in agency budget justification documents.

This report focuses on the justification of requests for spending provided through the annual appropriations process (i.e., discretionary spending). For a more detailed overview of the development, submission, and justification of the President's budget proposal, see CRS Report R47019, The Executive Budget Process: An Overview, by Dominick A. Fiorentino and Taylor N. Riccard. CRS has also published a suite of "In Brief" products covering components of the executive budget process, including:

• 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 (this report); and
• CRS Report R47088, The Executive Budget Process Timeline: In Brief, by Dominick A. Fiorentino.

Agency Information Included in the Annual Budget Appendix

The President is statutorily required to provide certain information in the budget submission to Congress, which is typically included in the following volumes: the Budget of the U.S. Government, Analytical Perspectives, Historical Tables, and the Appendix.²

The Appendix 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 appropriations that are not included in other volumes of the President's budget proposal.³

Agencies play a significant role in developing material to be included in the Appendix. OMB Circular A-11 contains detailed instructions on their preparation to ensure they adhere to standardized conventions and formats.⁴ These materials in the Appendix are prepared in support of an agency's initial budget submission to OMB and then, if necessary, revised to conform to the decisions made by OMB and the President. For a timeline of the executive budget process milestones after the President's budget submission, see Figure 1.

The major elements of these Appendix materials for each account include:

• proposed appropriations language for the upcoming fiscal year⁵;
• a program and financing schedule, which includes the obligations for specific activities and programs and the sources of budget authority⁶;
• an object classification schedule, which reflects the nature of things or services purchased⁷;
• an employment summary⁸; and
• a narrative statement of the program and its performance.⁹

Both the program and financing schedules and the object classification schedules state the dollar amounts of appropriations and other sources of budgetary resources. They show actual dollar amounts for the previous fiscal year, enacted amounts for the current fiscal year, and proposed amounts for the upcoming fiscal year, reflecting the President's requests.

Figure 1. Executive Budget Process Milestones 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 relevant U.S. Code citations.

CBJ Documents

Executive agencies submit written justifications of their budget requests to the appropriations committees and subcommittees of jurisdiction in each chamber. An agency's budget justification generally consists of a detailed description of each program activity and its purpose. The budget justifications' descriptions of budgetary accounts are much more detailed than the President's budget submission and provide the appropriations subcommittees with information about how agencies are using the funds within each account. Agencies also include explanations of proposed changes for the next fiscal year, often concentrating on the increase or decrease in spending. This additional information helps the appropriations committees better evaluate the budgetary resources that have been requested for the upcoming fiscal year.

Appropriations committee and subcommittee norms and practices have shaped the form and content of agency budget justifications (also referred to as congressional budget justifications, or CBJs). Instructions from the appropriations committees as to the content of budget justifications for future fiscal years are often included in report language. These instructions may specify to agencies the level of detail that should be provided for each account, as well as specific directions for certain programs or activities.¹⁰

OMB also provides guidance for the creation of CBJs in Circular A-11.¹¹ The written justifications vary in form and content with each agency and appropriations subcommittee, reflecting the ongoing relationships between them. CBJs may be divided into multiple volumes by agency component or by subject area.¹²

Agency Testimony Before Appropriations Subcommittees

Soon after the President's budget has been transmitted to Congress, the appropriations subcommittees hold hearings on the individual agency budget requests.¹⁸ Agency officials are often called before the relevant appropriations subcommittees to justify and explain their budget requests to Congress. A central element of this testimony is the detailed written budget justifications prepared by an agency and submitted to the applicable subcommittee. The testimony and written justifications are usually published as part of the subcommittee's hearings.¹⁹ The hearings may also be supplemented by meetings and communications between the subcommittee staff and agency officials.²⁰ Agency testimony and written justification materials facilitate dialogue and information sharing between federal agencies and congressional committees. Appropriations committees and subcommittees generally provide public access to video recordings of budget hearings as well as witnesses' written testimony on their websites.²¹

To help 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. Circular 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.²² In particular, most agencies must submit all budget-related materials, including the budget justifications, to OMB for clearance prior to transmittal to Congress.²³

Issues for Congress

Although the President's budget is a set of recommendations, which Congress is not required to adopt, it creates a starting point for congressional revenue and spending actions. The budget process has been shaped by a series of laws that have centralized aspects of the executive budget process by creating explicit statutory roles for the President and OMB. In evaluating the existing budget process, Congress may consider the following issues:

• OMB modification of agency budget requests. Congress may desire greater insight into agency views of their budgetary needs in contrast with the views of OMB. Hearings and other discussions with an agency may provide Congress with additional information. Congress may also consider providing bypass authority to agencies so that Congress may review agency budget requests before they are modified by OMB.
• Information included in agency budget justification documents. Congress could legislate to require the inclusion of certain information in agency's budget justifications. Such items could include more detail about certain programs, projects, or activities and a discussion of potential trade-offs among policy options.

This report supersedes CRS Report RS20268, which was originally written by Bill Heniff Jr., Analyst on Congress and the Legislative Process at CRS, and updated by Michelle D. Christensen, Analyst in Government Organization and Management.

Mari Y. Lee, Visual Information Specialist, collaborated on the report's figure.

Footnotes