Key Terms in the Budget and Appropriations Process

Budget Committees: The House and Senate Budget Committees are each tasked with preparing a “budget resolution”, which sets out guidelines for the revenue and spending that is expected to occur in the upcoming fiscal year.

Appropriations Committees:  There is also an Appropriations Committee in each chamber. These Appropriations Committees are comprised of 12 Subcommittees, such as the “Interior, Environment, and Related Agencies Subcommittee” or the “Defense Subcommittee”.  Each of the subcommittees produces a bill specifying how much will be spent on the programs that fall into their policy area. The level of appropriations in each chamber is constrained by each budget resolution.

Discretionary Spending:  The entire budget and appropriations process  covers only discretionary spending, or the “optional” parts of government spending,  such as national defense, transportation, national parks, etc. “Optional” means that although the programs may be authorized, their funding levels aren’t guaranteed and must be reconsidered every year.

Mandatory Spending: Mandatory spending, on the other hand, is set by a specific formula established under previous laws, such as Medicare, Social Security, or Medicaid. In other words, these funding levels are guaranteed unless Congress overhauls the underlying law, a process that is not controlled by the Appropriations Committees.

Fiscal Year (FY): The federal government appropriates funds in fiscal years, which run from October 1^st to September 30^th in the following calendar year. The process of preparing budget requests for a fiscal year often begins a little over a year and a half before that fiscal year starts. Planning for FY2019, which will begin on Oct. 1, 2018, began in the spring of 2017.

Office of Management and Budget (OMB): OMB produces the President’s Budget by considering how agency budget requests align with the President’s policy and budget priorities. 

- Jared Payne