How a budget becomes law, from the President's request to the checks

Quick quiz. Who decides how your tax dollars are spent? If you said "the President," you are wrong. If you said "Congress," you are right, but only on the surface, because Congress decides some of it every year and has quietly decided the rest of it decades ago. The answer is more interesting, and less comforting, than the one you got in school.

Very few voters know the steps. That is a problem, because the rules of this process are the rules of the biggest purchase your family makes every year, the one made in your name. If you do not know the steps, you cannot tell when someone is skipping one. So here is the walk-through, in order. I will keep the steps plain and exact. The opinions are saved for the end.

One note before we start. This is the process as the law lays it out. Real life runs late, and most years Congress misses its own deadlines. I will tell you where, and why.

The rule underneath it all

Article I, Section 9 of the Constitution says: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law." That sentence is the whole foundation. The executive branch cannot spend a dollar unless Congress has passed a law saying it can. The framers put the purse in the hands of the branch closest to the voters, and they meant it.

Everything below is the machinery built to make that sentence work for a government of millions of employees and trillions of dollars.

Steps 1 to 4: the request, the blueprint and the committees

Step 1: The President sends a request

Before 1921, federal agencies sent their requests to Congress separately, and nobody in the executive branch looked at the whole picture. The Budget and Accounting Act of 1921, signed by President Warren Harding, changed that. It required the President to submit a single annual budget to Congress, created a Bureau of the Budget to help prepare it (the ancestor of today's Office of Management and Budget), and created the General Accounting Office, now called the Government Accountability Office, as a congressional watchdog.

Under the law, the President's budget goes to Congress on or after the first Monday in January and no later than the first Monday in February. It lays out what the administration wants to spend, on which programs, and what revenue it expects.

What to expect: the request is a proposal, not a law. Congress treats it as a starting point and often as a political document. The people who say "the President's budget is dead on arrival" are describing something that happens a lot, and it is not a scandal. It is the system working as designed. The President proposes. Congress disposes.

Step 2: Congress writes a budget resolution

The Congressional Budget and Impoundment Control Act of 1974 added a layer. Each chamber's Budget Committee drafts a budget resolution, a framework that sets total spending, total revenue and the deficit or surplus for the coming fiscal year and several years beyond. The statute sets an April 15 target for adopting it.

The resolution is a concurrent resolution, which means it passes both chambers but does not go to the President for a signature. It is not a law. It is Congress's own blueprint. In the Senate, debate on a budget resolution is limited to 50 hours, and it passes by a simple majority, a point that matters later when we reach reconciliation.

The resolution divides the total spending number among the committees. The top-line number for discretionary spending is then split among the twelve appropriations subcommittees.

What to expect: Congress often fails to adopt a budget resolution at all, or adopts one late. When that happens, the appropriators fall back on a temporary number agreed by the leadership of both parties. Missing the resolution is common. It does not stop the process, but it makes the next steps messier.

Step 3: The authorizers and the appropriators

Two kinds of committees do two kinds of work, and the difference confuses even seasoned reporters.

• Authorizing committees write the laws that create and shape programs: what a program does, who qualifies, and sometimes how much it may spend.
• Appropriations committees decide how much money is actually provided in a given year.

An authorization says a program may exist. An appropriation provides the cash. A program can be authorized and unfunded, or funded by appropriators even though its authorization has lapsed. Conservatives spend a great deal of time complaining about that second category, and they are right to raise it: a program that runs on an expired authorization has escaped the discipline of being asked, on schedule, whether it should exist.

Step 4: Twelve subcommittees divide the money

In each chamber, the Appropriations Committee has twelve subcommittees, each responsible for one annual spending bill. They cover areas such as defense, agriculture, homeland security, energy and water, the Interior Department, transportation and housing, and labor, health and education. Each subcommittee holds hearings with agency officials, writes its bill, and sends it up.

By long custom, spending bills originate in the House of Representatives. The Constitution requires only that bills for raising revenue begin in the House, but the House has insisted on the privilege for spending as well, and the Senate has gone along with it.

What to expect: hearings are where agencies defend their requests. They are public. If you want to see what a program is asking for and how members question it, the hearings are posted on the committees' websites.

Steps 5 to 8: the floors and the desk

Step 5: Markup and the House floor

Each subcommittee votes on its bill in a session called a markup. Then the full committee marks up the bill and amends it. Then the House Rules Committee sets the terms under which the bill is debated on the floor, including which amendments are allowed. The full House votes.

Amendments are where much of the fight takes place: cuts to specific programs, limits on how money can be used (known as riders), and policy fights that have nothing to do with dollars. A rider is a clause that says "none of the funds in this act may be used to..." and it is among the most powerful tools Congress has, because it controls policy through the power of the purse.

What to expect: the House can pass a bill on a simple majority. The Senate cannot.

Step 6: The Senate and the 60-vote threshold

The Senate's Appropriations Committee does its own markup, and its own bills often differ from the House's. When a bill reaches the Senate floor, the Senate's rules allow unlimited debate unless 60 senators vote to end it. That vote is called cloture, and under Senate Rule XXII it takes three-fifths of the senators, which is 60 of 100, for most legislation.

Sixty is the number that explains why so many spending bills have to be bipartisan. A majority party with fewer than 60 seats needs at least some members of the other party to move a spending bill. That is why the minority has leverage, and why Why the Filibuster Is the Best Friend a Minority Party Ever Had is an argument worth making when your own party is in the minority, and why how a minority party fights a spending bill when it does not have the votes is worth reading before you cheer for the opposite rule.

What to expect: the 60-vote requirement shapes everything. Bills are drafted to attract a few votes from the other side. Controversial riders get dropped. Individual senators can slow the process further by refusing to agree to time limits.

Step 7: Reconciling the two chambers

If the House and Senate pass different versions of a bill, they must agree on one text. They can do it in a conference committee, with members from both chambers, or by one chamber amending the other's version and sending it back until they agree, a process often called ping-pong. In recent decades, leaders have often combined several spending bills into one large package. A package of a few bills is sometimes called a "minibus," and one covering most or all of them is an "omnibus."

I have my views about omnibus bills, and you probably do too. A single thousand-page bill, released days before the vote, is the opposite of the careful, bill-by-bill process the structure above is supposed to produce. A member who has not read it cannot honestly say what is in it. That is a legitimate conservative complaint, and it applies to both parties.

What to expect: the final text is often negotiated by a handful of leaders and appropriators, then voted up or down with little time to read it.

Step 8: The President signs or vetoes

Under Article I, Section 7, the President has ten days, not counting Sundays, to sign a bill or return it with objections. A veto can be overridden by a two-thirds vote in each chamber. A spending bill that the President vetoes and Congress cannot override leaves the money unspent until a new bill passes.

What to expect: the possibility of a veto affects what goes into the bill long before the President touches it. Negotiators ask what the White House will accept.

Steps 9 and 10: the deadline and the check

Step 9: The deadline and the stopgap

The federal fiscal year begins on October 1. That date was set by the 1974 Act, which moved the start from July 1. If Congress has not enacted the twelve bills by then, agencies cannot legally spend money that has not been appropriated. The usual remedy is a continuing resolution, or CR, a short-term law that funds agencies, typically at last year's rates, until a set date.

A CR is a pause button, not a plan. It freezes existing priorities in place, blocks new programs, and gives agencies little certainty. If Congress cannot pass a CR, then funding lapses and a shutdown follows. What a shutdown does, and what it does not, is explained in what a government shutdown really shuts down and who gets paid.

What to expect: CRs are routine. Congress has rarely finished all its work on time since the 1974 deadlines were put in place. That failure is bipartisan, and no party has a clean record.

Step 10: From law to the check

Passing the law does not move any money. After enactment, the Office of Management and Budget apportions funds to each agency, dividing them over time. The agency then obligates the money, which means signing a contract, issuing a grant, or hiring a worker. Finally the Treasury Department makes the payment, by direct deposit or paper check.

Every step has a statute behind it, and the Government Accountability Office audits whether the executive branch followed Congress's instructions. If the President refuses to spend money Congress appropriated, that is called impoundment, and the 1974 Act sets limits on it, as explained in Nixon Impounded the Money, Congress Fought Back, and the 1974 Law Still Rules.

The part of the budget that skips all of this

Here is the twist that makes a mockery of the neat picture above. Everything in steps 1 through 10 covers discretionary spending, the money Congress decides on every year. But most federal spending is not discretionary. Mandatory spending, which includes Social Security, Medicare, Medicaid and similar programs, runs on formulas written into permanent law. Anyone who meets the eligibility rules gets the benefit, and the amount depends on how many qualify, not on a yearly vote. Add interest on the debt, which is also paid automatically, and mandatory spending plus interest has made up more than half of federal outlays for decades.

That is why a battle over twelve appropriations bills is a fight over the smaller part of the budget. It is also why How Social Security works and the promise built into its 1935 design matters: those programs change only when Congress rewrites the underlying law, not when it votes on the yearly bills. Congress can change mandatory spending through the reconciliation process, which allows a simple-majority vote in the Senate under rules limiting what can be included. But reconciliation is used rarely and only when a budget resolution calls for it.

Another way to say it: the budget most politicians fight about is not the budget that is growing. A reader who wants to see these categories laid out line by line can use How to Read a Federal Budget With a Kitchen-Table Worksheet.

A short worked example

Take a hypothetical program, a federal grant to help rural counties repair bridges. For the program to exist, an authorizing law must create it. Each year, the transportation subcommittee decides how much to put in its bill, say a figure of its choosing. The House passes the bill. The Senate needs 60 votes to end debate on it. The two chambers work out a final text. The President signs. The Office of Management and Budget apportions the money. The Transportation Department awards grants. The Treasury pays the contractor. If any step breaks, the county waits.

Now compare a hypothetical retiree. Her Social Security check does not depend on a yearly vote. It depends on the law that sets her benefit. That is the difference between the two kinds of spending in one picture.

The bottom line

• Congress holds the purse, and the Constitution says no money leaves the Treasury without an appropriation by law. If an official spends or withholds money contrary to the law, that is your business.
• The President proposes in January or February. Congress writes twelve bills, the Senate needs 60 votes to end debate, and the fiscal year starts October 1.
• A continuing resolution means a failure to finish on time. A shutdown means a failure to pass even that.
• Most federal spending runs outside the yearly process. To control it, you have to change the underlying law, not just the yearly bill.
• Call your representative and senator during appropriations season and ask two things: will you vote for a bill you have read, and what is it doing about programs whose authorizations have expired?