Stages in the Budgetary Process

Stages in the Budgetary Process

In the United States，the federal budgetary process can be divided into five stages.State government budget processes more or less follow this process as well:1.formulation of individual agencies'budgets;2.preparation of the executive budget by the central budget agency—the Office of Management and Budget(OMB)，in consultation with the president and/or his advisers;3.presentation of the budget to the legislature;4.legislative action on the proposed budget and enactment of legislation appropriating funds;and 5.execution of the budget by the executive branch.There is much about what goes on in each stage that is highly technical，but they can be described in broad terms as follows.

Agency Budgets．In July of each year，the OMB calls upon the agencies to submit their budget proposals by September.In practice，agencies may begin preparing their budgets much earlier.Those responsible for formulating each agency's budget requests typically ask bureau chiefs and other agency officials to supply dollar figures and the policy and administrative assumptions behind them.The agency's budget office analyzes and coordinates these responses in formulating a tentative budget in response to OMB's directives.The budget should reflect the OMB's instructions and policy guidelines.

Preparing the Executive Budget．After receiving the agencies initial budget proposals，the OMB thoroughly analyzes them.Generally，the OMB seeks to cut spending requests，but it can also recommend increases.In the process，the OMB holds hearings with the agencies'budget officers.The OMB submits a tentative executive budget to the president and then finalizes it in accordance with his recommendations.The director of OMB，usually viewed as the president's chief budget officer，generally wields great influence in the formulation of the final executive budget proposal.

Presenting the Budget to Congress．The president is required to present the budget to Congress by the first Monday in February.Because the budget is a statement of governmental priorities，affects everyone in the nation(and many throughout the world)，and has important implications for the economy，the budget message is sometimes a major political event.It should be remembered，though，that constitutionally speaking，only Congress can appropriate money from the Treasury.Therefore，despite its influence，the budget prepared by the executive and transmitted to the legislature is nothing more than advisory—it has no legal force or standing.

Congressional Action．The budgetary process in Congress involves three main sets of actors:(https://www.daowen.com)

The Congressional Budget Office(CBO)examines the assumptions of the president's budget and works out alternative projections of revenues and expenditures.It also provides an analysis of the budget's likely impact on the economy.It may engage in discussion of the priorities inherent in the president's budget and how these may be at odds with its sense of Congress'desires.

The House and Senate Committees on the Budget work with the CBO in examining the president's proposal.These committees formulate a budget resolution intended to establish the budget's maximum spending authority.

The Appropriations Committees in the House and Senate develop and bring appropriations bills to the floor of each legislative chamber for consideration by the legislature as a whole.The appropriations committees work within a framework of requirements generated by the budget committees.The annual appropriations bills pertain to discretionary spending and a limited number of mandatory programs(such as food stamps).Less than half of annual federal spending is covered by the annual appropriations process;the rest of federal spending takes place automatically and includes mainly entitlements(e.g.，Medicare，Medicaid，and Social Security).

In its broadest terms，the congressional budgetary process works in the following way.After receiving the president's budget，congressional committees develop spending and revenue plans for the coming fiscal year.^[2]These are transmitted to the budget committees in each house.Working with these plans and information about the economy provided by the CBO，the budget committees prepare the congressional budget resolution.The resolution establishes the level of revenues，budget authority，and projected outlays.If the assumptions behind the resolution are correct and the resolution adhered to，it sets the level of deficit or surplus that the government will have in the coming fiscal year.The congressional budget resolution should be adopted by Congress by April 15，but it is usually later.All appropriations legislation should be passed by both houses by October 1.