Authorization vs. appropriation
Why a program can exist in law and still get no money.
- Authorization law: Creates or continues a program or agency and says what it may do. It may suggest a funding level.
- Appropriation law: Actually provides money for a fiscal year, up to a limit.
- Obligation: The agency commits the money, for example by signing a contract or awarding a grant.
- 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