Running head: The Federal Budget Process

The Federal Budget Process

Abstract
This report focuses on the federal budget process of the United States of America. The annual federal budget begins with a detailed proposal from the President in February. The budget request is developed by the President’s Office of Management and Budget (OMB). Next, Congress creates a blueprint called a budget resolution that sets limits on how much each committee can spend (or reduce revenues) over the course of the year. The terms of the budget resolution are then enforced against individual appropriations, entitlement bills, and tax bills on the House and Senate floors. In addition, Congress sometimes uses a special procedure called …show more content…

Furthermore, the President does have to ask for funding each year for discretionary or appropriated programs, which fall under the jurisdiction of the House and Senate Appropriations Committees. In order to prevent discretionary programs from not operating, the program must have their funding renewed each year. Most defense expenditure is discretionary, as are budgets for K-12 education, health research, and housing, etc. Discretionary programs make up about one-third of all federal spending. The President’s budget provides details of how much fund he recommends for each discretionary program (Policy Basics, 2011).
The President’s budget can also include changes to mandatory or entitlement programs such as Social Security, Medicare, Medicaid, and certain other programs (including but not limited to food stamps, federal civilian and military retirement benefits, veterans' disability benefits, and unemployment insurance) that are not controlled by annual appropriations (Policy Basics, 2011). For example, when President Bush proposed adding a prescription drug benefit to Medicare, he had to show a corresponding increase in Medicare costs in his budget, relative to what Medicare would otherwise be projected to cost. Similarly, if the President were to propose a reduction in Medicaid payments to states, his budget would show lower Medicaid costs than projected under current law. (Policy Basics, 2011). In addition,