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Though it depends on the branch of government, (Executive, Judicial, Legislative), each of them figures out what they want, what they need, and what they think they can get approved, then submits a figure for approval. At least that's true for the Executive and Judicial Branches - Congress just votes themselves whatever figure they like.
It's a long, drawn out process (trust me), but essentially what happens is that every year, each agency of the government asks each of its departments for their estimate of what they need for a budget for the coming fiscal year (which starts October 1). Everyone submits a figure based on their projections for the next year based on trends and projected needs, with a little padding to be safe. Those figures are sent to the Agency heads, is pared down a bit and sent back, until a figure is reached that the boss feels is a viable one that will be accepted. It's then forwarded to the next level in the chain, reviewed, pared down, sent back, reviewed and pared down some more, etc.
Eventually, a compromise figure is reached, and it's forwarded to the branch head (in the Executive Branch, the President), and from there to Congress, where they pick it apart some more. After about 4 months of haggling, the budgets are finally approved and go to Congress for final vote and authorization.
Agencies typically ask for a lot more than they think they can get, and always more than they asked for the previous year. By asking for more, they usually wind up with a figure they wanted anyway. President Reagan was a master at the budget game - he always asked for more than he knew Congress would approve, and always wound up getting exactly what he wanted to begin with.
Eulalia Mraz
Government agencies typically receive their funding through the annual budgeting process. They submit a budget proposal to the legislative body, which reviews and approves it. The funding is then allocated to the agency from tax revenues, fees, fines, or other sources as specified in the approved budget. Additionally, agencies may also generate revenue through grants, donations, or other external sources.
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