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Understanding the U.S. Federal Budget Process

Understanding the U.S. Federal Budget Process

The U.S. Federal Budget Process

The United States Federal Budget Process is a framework employed to create the U.S federal budget. The setting up of this process was done through the 1974 Budget Control Act. The Act integrated and centralized budget authority, delegated to the House to initiate spending bills and the Senate to revise them.

The Budget Control Act

The Budget Control Act emboldened Congress with three essential capabilities. It allowed the establishment of standalone budget committees for the Senate and the House of Representatives, empowering them to formulate exclusive budgets for negotiating the final bill of appropriation. The Act was instrumental in creating the Congressional Budget Office, responsible for providing impartial analysis to help Congress's budget review. The start of the fiscal year moved from July 1 to Oct. 1, providing new officers ample time for budget review.

The Federal Budget Process's Primary Objective

In line with Article 1, Section 7 of the U.S. Constitution, Congress is granted the power to generate income and make expenditures. Politicians must come to a consensus on tax allocation and distribution of spending benefits. The budget process ensures every voice within Congress is heard and debated thoroughly for seamless government operations.

Federal Budget Process Steps

The budget process commences a complete year prior to the fiscal year. The fiscal year kicks off on October 1 of the year before the commencement of the calendar year. All federal agencies submit their budget requirements to the Office of Management and Budget (OMB) in early fall. The OMB reviews and manages the president's budget.

Role of the U.S. Treasury

Upon effectuation of the budget, the Treasury Department's Financial Management Services execute it. The agency makes payments, compiles revenues and delinquent debts, and produces reports, including Treasury Statements.

Default in Following the Budget Process

The budget process has been strictly observed just twice since FY 2010. Two camps argue that the process is inherently infeasible because it shifts budgetary leadership to Congress and then demands high coordination, often under unrealistic deadlines.


Despite the risks of a government shutdown, the federal budget process remains an essential part of U.S. governance.