When agencies begin work on the budget for a fiscal year, they already are implementing the budget for the fiscal year in progress and awaiting final appropriations actions and other legislative decisions for the fiscal year after that. Preparation of the President’s budget typically begins in the spring or early summer each year, at least 6 months before the budget is submitted to Congress, about 15 months before the start of the fiscal year to which it pertains, and about 26 months before the close of that fiscal year. Federal agencies must deal concurrently with 3 fiscal years at any one time – implementing the budget for the current fiscal year, seeking funds from Congress for the next fiscal year, and planning for the fiscal year after that. For any one fiscal year (beginning October 1 and ending the following September 30), these phases take place over the course of 2-1/2 years (sometimes more, depending on how long funds are available for obligation at the Federal level). The Federal budget process can be broken down into four phases: budget formulation, the congressional budget process, budget execution and control, and audit and evaluation. Each appropriations law creates legally binding spending ceilings for the Federal programs it covers, and each law setting up an entitlement program, such as Medicare, establishes and mandates the reasons for and extent of Government spending.

It is the appropriations laws and the laws establishing entitlement programs that provide the legal authority for the Federal Government and its agencies to obligate and spend funds. Congress reviews the President's plan and then adopts a budget resolution, setting forth its own guidelines for spending and revenues that it plans to follow when passing appropriations laws, tax laws and authorizations. Then, no later than the first Monday in February, by law, the President submits his budget to Congress. The Federal budget process is initiated in the Executive Branch with budget formulation. These laws establish the processes by which Congress enacts and the President signs into law spending and revenue measures and have come to be known, collectively, as the Federal budget process. In 1974, Congress enacted the Congressional Budget and Impoundment Control Act, which provides for the annual adoption of a budget resolution and established the House and Senate Budget Committees and the Congressional Budget Office (CBO). The Budget and Accounting Act of 1921, as amended, requires the President to submit an annual budget proposal to Congress, established the Office of Management and Budget (OMB), and the Government Accountability Office (GAO) (formerly, the General Accounting Office). The Federal budget process provides the means for the executive and legislative branch to make informed decisions between competing national needs and policies, to determine priorities, to allocate resources to those priorities, and to ensure the laws are executed according to those priorities. The President’s budget is submitted to Congress early each calendar year in accordance with the Budget and Accounting Act of 1921, as amended, and represents proposals for congressional consideration. Each year, the budget includes a record of actual receipts and spending for the fiscal year that was just completed, an estimate of current-year receipts and spending, and estimates of receipts and spending for the upcoming fiscal year and the 9 succeeding fiscal years.įor the Federal Government, the term “budget” often refers to the President’s budget submission, officially, the Budget of the United States Government. The Federal budget sets forth priorities and levels of spending, ways of financing the spending and a plan for managing the funds. The budget is a detailed statement of anticipated revenues and expenditures during an accounting period.

Federal spending by year