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How government works

Authorization vs. appropriation

Why a program can exist in law and still get no money.

Authorization vs. appropriationTwo separate kinds of laws: one creates or allows a program, the other provides the money. Steps: Authorization law; Appropriation law; Obligation; Outlay1Authorization lawCreates or continues a program or agency and says what it may do. It may suggest a funding level.2Appropriation lawActually provides money for a fiscal year, up to a limit.3ObligationThe agency commits the money, for example by signing a contract or awarding a grant.4OutlayThe Treasury pays out the money.
Authorization vs. appropriation
  1. Authorization law: Creates or continues a program or agency and says what it may do. It may suggest a funding level.
  2. Appropriation law: Actually provides money for a fiscal year, up to a limit.
  3. Obligation: The agency commits the money, for example by signing a contract or awarding a grant.
  4. Outlay: The Treasury pays out the money.

A news story that says a bill “provides \$10 billion” may mean an authorization (permission) and not an appropriation (money). Check which committee handled it: authorizing committees (for example Agriculture, Armed Services) or the Appropriations Committees.

Words used here

Authorization
A law that creates or continues a government program and says what it may do, often with a suggested spending ceiling. An authorization alone does not provide money; a separate appropriation does.
Appropriation
Money a legislature sets aside by law for a specific purpose. Government agencies may spend public money only as it has been appropriated.
Obligation
A binding promise by a government agency to pay money, for example by signing a contract or awarding a grant. Spending data such as USAspending.gov counts money when it is obligated, which can be before it is actually paid out.

Official sources

A simplified overview written by PSI Sci editors from the sources above. Details vary, and exceptions exist. Other guides: How a federal bill becomes law · How a state bill becomes law · The federal budget process · Rulemaking and the Federal Register · Ballot measures and propositions · Levels of government · How to contact officials effectively