The Presidential budget is the request that the President submits to Congress for legal authority to spend federal funds. Fourteen days after the Monday on which Congress convenes each January, the President is required by the Budget and Accounting Act of 1921 to submit to Congress the budget of the U.S. government, along with a message outlining his budget priorities. The budget covers the fiscal, or business, year (from October 1 to September 30) and is named for the calendar year in which it ends. The FY 2000 budget, for example, covers the period from October 1, 1999, through September 30, 2000. (Prior to passage of this law, departments submitted requests for funds directly to Congress, bypassing the President entirely.)
Presidential budget requests are prepared by the Office of Management and Budget (OMB), based in part on spending justifications submitted to it by each executive branch department and independent agency of government. The OMB evaluates all agency spending requests according to White House priorities.
The Budget of the United States provides data on past expenditures and current spending authority for each agency, but it is only a set of recommendations to Congress for future spending. The Constitution (Article 1, Section 9) provides that “no Money shall be drawn from the Treasury but in Consequence of Appropriations made by law.” This provision gives Congress the final word on spending money. Presidents have at times asserted a power to impound funds, or to refuse to spend money appropriated by Congress.
According to provisions of the Budget and Impoundment Control Act of 1974, the House and Senate Budget Committees set overall spending targets and guidelines in 13 categories (such as defense, natural reSources, and the environment) by passing a concurrent budget resolution. (A concurrent resolution is a motion passed simultaneously by both houses of the Congress.) Congressional appropriations committees (and some other standing committees that are permitted by congressional rules to authorize spending) modify each Presidential spending request according to their own priorities. They then convert them into budget authority—permission to withdraw funds from the Treasury—in the form of an appropriation or other law, which they report to each chamber of Congress. These appropriations and other spending bills must be passed in identical form by both chambers of Congress. The Treasury uses these appropriations laws to set limits on the “checking accounts” maintained by each agency. The OMB monitors the spending by each agency to see that it does not exceed the allowable limits.
Since the 1930s the Presidential budget has usually projected a deficit, or an excess of expenditures over revenue. In 1986 Congress passed the Gramm-Rudman-Hollings Act, which required the President to pare the projected deficits in his budget from $180 billion to zero by fiscal year 1991 or face mandatory “sequesters” (or holdbacks by the OMB) of funds to meet the targets. In 1988, the zero-deficit deadline was pushed back to fiscal year 1993.
In 1990, with a projected deficit of $318 billion, there was no way to make the sequesters required by the law without making deep cuts in the defense budget and in social welfare programs. Instead, President George Bush and congressional leaders agreed at a “budget summit” meeting held at Andrews Air Force Base in October 1990 to scrap the Gramm-Rudman-Hollings deficit targets. They decided instead to try to limit overall spending, with the assumption that within a few years increases in revenues would produce a balanced budget.
To implement their agreement, Congress passed the Budget Enforcement Act of 1990, which provided for caps on government spending. The law provided that any tax cuts in the President's budget would have to be accompanied by an equal amount of spending reductions. Similarly, any spending increases would have to be offset by equivalent tax increases. In 1995, a Republican-dominated Congress failed to pass a balanced-budget amendment to the Constitution or a measure allowing the President to veto individual items in appropriations bills.
See also Impoundment of funds; Office of Management and Budget
Sources
- Richard J. Carroll, An Economic Record of Presidential Performance: From Truman to Bush (Westport, Conn.: Praeger, 1995).
- James D. Savage, Balanced Budgets & American Politics (Ithaca, N.Y.: Cornell University Press, 1988).
- Aaron Wildavsky, The Politics of the Budgetary Process,
5th ed. (Boston: Little, Brown, 1992)
