The budget process: it seems so confusing that you may wonder whether there is any logic to it at all. In fact, Congress goes through certain procedures every year to figure out how much it will spend or receive in taxes. Here's a rough sketch of a complicated process:

The President's Budget

The budget-making season begins each February when the President submits a budget to Congress. This budget has been devised after discussions with cabinet leaders and agencies about their needs in the coming year. One thing that often surprises people is that the Congress may choose to ignore parts of the President's budget. Congress ultimately has "power of the purse," as established in the Constitution, and it is Congress that ultimately makes the budget decisions. Why does the President bother with a budget, then? Because presidential leadership is a way to establish national priorities. The President then works with Congress to try and get those priorities enacted into law.

Congress Takes Over

The first step in developing a budget in Congress is to put together and vote on a budget resolution. The resolution is a set of instructions that guides Congress in spending and taxing decisions. The resolution establishes how much revenue needs to be raised and how much spending should be cut, but leaves it up to congressional committees to determine how they will meet those targets.

Note that the budget resolution is not a law and does not get sent to the president to be signed. Before the 1970s, Congress did not vote on a resolution and the budget was developed by the actions of numerous committees without any consideration of the sum of their decisions. The budget resolution is a way for Congress to survey the entire budget and set priorities, including deficit reduction targets. The budget resolution establishes such things as the total amount to be spent that year, the total amount of revenues, and the total public debt.

Working Out the Nitty Gritty

Because the budget resolution only sets goals for spending and taxes, the next step is for Congress to enact legislation to meet these targets. There are two legislative tracks in the budget process. On one of the tracks are the 13 annual appropriations bills for defense and domestic discretionary spending. These bills cover such areas as crime, environment, education, medical research, and transportation. The House of Representatives begins passing these bills in May or June, after which they must be passed by the Senate.

The other legislative track changes the permanent laws governing taxes and entitlement spending (programs like Social Security, Medicare, and farm supports). This track is where the money is: changes in tax law and entitlement programs are crucial for reducing the deficit. All of these changes are rolled into one reconciliation bill every year. For example, in 1994, President Clinton and the Congress chose not to push for tax increases or entitlement cuts, and so a reconciliation bill was not necessary.

Putting it All Together

The fiscal year begins on October 1. By then, Congress is supposed to have enacted all 13 appropriations bills and the reconciliation bill, if it was necessary. In most years, the deadline is missed. Then, in a flurry of last minute confusion, congressional and administration officials work out the final legislative details in bills that sometimes measure more than a foot high. This is when earmarked pork barrel projects and special exceptions to spending cuts or tax increases can be slipped in.

Vigilantly monitoring the budget season is the only way to make sure that deficit reductions is a top priority. The Concord Coalition is striving to make the process intelligible to its members, so that the American people can follow the process, and demand that deficit reductions stay on the front burner. For more information about the Concord Coalition, call the national office at (703) 894-6222