Who Creates the Federal Budget?

The federal budget is proposed by the President of the United States, but all bills associated with the budget must originate in the House of Representatives and be approved by the U. S. Senate. In essence, each budget is a joint project between the executive and legislative branches.

Ideally, the federal budget process beings with the executive office preparing the President's Budget Proposal, a document containing an overview of the President's fiscal vision for the budgetary year. It includes figures on proposed expenditures broken down by department and program, taxation and revenue proposals, and the overall deficit or surplus remaining. The House and the Senate pick this document apart and create budget resolutions, documents that must be reconciled so that they can pass both legislative bodies, that must then be signed by the president. Finally, the House and Senate appropriations committees craft appropriations bills funding all programs and operations. These bills must again be reconciled before anyone votes on them.

Appropriations bills only fund a portion of the government, however. About two-thirds of all annual budgeted money is referred to as "mandatory spending." This money funds entitlements, including Social Security and Medicare, which are not affected by annual budgeting, but rather are controlled by legal regulations.

While this process is supposed to be completed by October 1 of every year, in modern times that usually isn't that case. When budget approval is late, Congress can vote on a continuing resolution, which is essentially an agreement to extend the budget already in place with minimal changes.