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How government works

The federal budget process

How the President, Congress and agencies decide what the government spends each year.

The federal budget processThe annual cycle for discretionary spending. Programs like Social Security and Medicare are mandatory spending and continue under existing law. Steps: President's budget; Budget resolution; Appropriations bills; Pass and sign; Stopgap if late; Agencies spend1President's budgetThe White House (Office of Management and Budget) proposes a budget, usually in February.2Budget resolutionCongress may adopt an overall plan setting spending totals. It is not a law.3Appropriations billsTwelve subcommittee bills set agency funding for the fiscal year.4Pass and signBoth chambers pass them and the President signs, by October 1.5Stopgap if lateIf not done, a continuing resolution keeps funding going; otherwise a shutdown.6Agencies spendAgencies obligate the money through contracts, grants and loans, published on USAspending.gov.
The federal budget process
  1. President's budget: The White House (Office of Management and Budget) proposes a budget, usually in February.
  2. Budget resolution: Congress may adopt an overall plan setting spending totals. It is not a law.
  3. Appropriations bills: Twelve subcommittee bills set agency funding for the fiscal year.
  4. Pass and sign: Both chambers pass them and the President signs, by October 1.
  5. Stopgap if late: If not done, a continuing resolution keeps funding going; otherwise a shutdown.
  6. Agencies spend: Agencies obligate the money through contracts, grants and loans, published on USAspending.gov.

The federal fiscal year runs October 1 to September 30. You can see where awarded money ends up on the Money page and on every state and county page.

What you can do

Words used here

Appropriation
Money a legislature sets aside by law for a specific purpose. Government agencies may spend public money only as it has been appropriated.
Continuing resolution
A temporary law that keeps government agencies funded, usually at the previous year's levels, when the regular yearly spending bills are not finished by the start of the fiscal year.
Fiscal year
The 12-month period a government uses for its budget. The federal fiscal year runs from October 1 to September 30 and is named for the calendar year in which it ends. Most states use July 1 to June 30.
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.
CBO cost estimate
The Congressional Budget Office's estimate of how a federal bill would change government spending and revenue. CBO is nonpartisan.

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 · Authorization vs. appropriation · Rulemaking and the Federal Register · Ballot measures and propositions · Levels of government · How to contact officials effectively