The President's Budget

Each year the president submits his Executive Budget to Congress the first Monday in January. This budget is usually broken down into 13 general areas, along the same lines as the 13 appropriation bills. Three of these areas are of significant interest to AFA: Defense, Military Construction, and Veterans Affairs. As the budget works its way through Congress, it passes through three basic phases.

The Congressional Budget Resolution

The first phase is passage of the budget resolution, which sets top line budget figures for major government spending, such as defense activities. The House and Senate Budget Committees (HBC & SBC) approve the top line figures for the coming fiscal year, as well as develop a five and 10 year budget outlook. Figures for the coming year are binding, and can only be altered by a two-thirds vote of both chambers. Funding in the five and 10 year plans are merely guidelines, and are superseded in the budget process of each successive fiscal year. The Budget Committees may also outline specific spending priorities and note these in the budget. Once the budget is written, it serves as a framework for the authorization and appropriation committees in their work in the second and third phases. The budget is a highly political process that outlines the priorities of the president and Congress for the coming year.

There are two distinct types of government spending: mandatory and discretionary. Mandatory spending is money that by law must be spent in specific amounts. For example, Social Security and Medicare are entitlements that must be paid each year, and their cost is based not on political priorities, but the number of people enrolled and the benefits to which they are entitled. Discretionary spending is money that the government is not legally obligated to spend, or to spend in specific amounts. Defense spending is discretionary; meaning that the amount spent year-to-year is up for discussion and dependent on the priorities of the president and the Congress in a given year. Mandatory spending makes up nearly 60% of all federal spending, leaving only a third of the federal budget to be divided up among the various operating agencies; this is why the budget process is exceptionally important. The federal budget includes both of these types of money; however, the remainder of this article and the process pertains exclusively to discretionary spending.

Authorization

The second phase involves passage of an authorization bill, which authorizes specific expenditures on programs. In the Senate, the Senate Armed Services Committee (SASC) has jurisdiction over defense spending, programs, and oversight. On the House side the relevant committee is the House Armed Services Committee (HASC). Each year these committees hold hearings, hear testimony, and conduct research to write at least one bill, the National Defense Authorization Act (NDAA). Then the committee will "mark up" or amend that bill to ensure passage on the chamber floor, and give each committee member a chance to propose his or her ideas.

The Department of Veterans Affairs bill goes to the House and Senate Veteran's Affairs Committees for authorizing hearings, research, and markup. Authorizations may also contain non-budgetary legislative provisions, for example, procurement reform or reporting requirements.

Appropriations

Passage of the defense appropriations bill - the final phase - provides the money that the authorization bill spends. The House and Senate Appropriations Committees (HAC-D & SAC-D) and their defense subcommittees are responsible for the defense appropriations bill. These bills do not usually contain non-appropriatory provisions, but it is possible. Military construction projects and funds are contained in a second bill, the Military Construction Appropriations bill; and the VA-HUD Appropriations bill funds the Department of Veterans' Affairs.

The three-part process described herein is quite idealized. Frequently, the phases are completed out of order, late, or in the midst of great controversy. The HAC and SAC sometimes fund programs at less than the levels authorized, or in some cases appropriate more money than is authorized to be spent. The appropriation or budget committees may also include legislative provisions in their bills, an act that the HASC or SASC view as an invasion on their "turf."

As the diagram of the committee flow shows, legislation can be influenced and amended at any time during the process; and actions approved by one chamber can be disagreed to or directly contradicted by the other - thus forcing a conference committee hearing.

Conference Committee

Once each chamber has passed their version of a bill, assuming there is even the slightest difference between the bills, each chamber will appoint members to represent it in a Conference Committee. The purpose of this committee is to iron out the differences and eventually present a unified bill to the president for his approval. The conference is an extremely important part of the process as important issues can be added or removed from the bill, and at the end of the conference each chamber must vote up or down and may not offer further amendments.

The President

After each chamber has passed identical legislation, the bill is presented to the President in accordance with Article 1 Section 7 of the Constitution. The Constitution does not require that the President sign a bill for it to become enacted; however, it is traditional for the President to sign a bill with which he agrees. A bill may also become law without the President's signature if he does not return the bill with objections within ten days.

Alternatively, the President may object to a bill by vetoing it, and returning it to the Congress. In this situation, each chamber of Congress may attempt to override the President's veto with a 2/3's vote; or the bill may be altered to meet the President's approval.

A final option known as the "pocket veto" allows the President to object to legislation without formally vetoing the measure. This situation is created when Congress prevents a formal veto by adjourning within the 10 day time frame for Presidential approval, and thus being unable to receive the President's veto message or to act upon it.

A bill becomes law on the date of approval or passage over the President's veto, unless it expressly provides a different effective date.

Additional Committee Information

Budget Committees

Senate Budget Committee, Sen. Don Nickles (R-OK), Chairman
     (no subcommittees)

House Budget Committee, Rep. Jim Nussle, (R-IA), Chairman
     (no subcommittees)

Relevant Authorization Committees

Senate Veterans' Affairs Committee, Sen. Arlen Specter (R-PA)
     (no subcommittees)

Appropriations Committees

Additional Links

The Library of Congress's THOMAS Legislative Information Service

General Accounting Office

Congressional Budget Office

General Printing Office

U.S. Senate

U.S. House

The White House

Office of Management and Budget


For more information or questions, email AFA's Government Relations Department at grl@afa.org or visit the Library of Congress's THOMAS site for their "How our Laws are Made" document by clicking here.