Unlike the budget resolution and authorization steps, the third step in the enactment process, appropriations, is required by the U.S. Constitution. Article I, Section 9 states: "No money shall be drawn from the Treasury, but in consequence of Appropriations made by law." During this phase of the budget enactment process, Congress produces several appropriations acts that provide budget authority. This budget authority allows the various Federal agencies to incur obligations for specified purposes, up to the amounts defined in the legislation.
The House Appropriation Committee and Senate Appropriation Committee conduct hearings beginning in February with the House ending in May and the Senate ending in June. Markups occur from May to June for the House and from June to July for the Senate. The Appropriations committees send their versions of the Appropriations bills to their chamber floor for debate and approval; June for the House and August for the Senate. A conference is convened in September to resolve differences between the House and Senate versions. The common versions of each appropriations bill passed by both chambers in September are known as the Appropriations Acts. The target date for completion of all budget enactment actions is October 1.
Appropriations Process
Congress generally produces 12 appropriations acts each year to fund the operations of the Federal government. The 12 appropriations acts are:
In addition to providing the bulk of budget authority, the Appropriations Acts contain language governing the use of the funds appropriated. Some of this language is general in nature (for example, rules concerning the use of expired appropriations) and some is very specific (such as language prohibiting funds from being spent on a particular program until a report is submitted).
The HAC, SAC and their subcommittees hold hearings that begin after the submission of the President's Budget. Initial "posture" hearings are conducted with the most senior members of the executive branch and Federal agencies who discuss and defend the programs in the President's Budget. Follow-on hearings over the next several months delve into a variety of issues of particular interest to the committees (for example, particular acquisition programs, military personnel quality of life issues, etc.).
During mark-up sessions, subcommittee members (and staffers) conduct a line-by-line review of the President's Budget, making adjustments as desired. Each subcommittee creates an appropriations bill covering the matters under its purview. Some legislative language pertaining to policy may also be incorporated into an appropriations bill, although most policy matters pertaining to DoD are included in the National Defense Authorization bill. Each subcommittee also generates a report containing further explanation of its intent. Each appropriations bill produced by a subcommittee is considered by the full Appropriations Committee (HAC or SAC), then reported out to the floor of the House or Senate as appropriate. On the floor, the proposed bill will be debated, possibly amended, and finally approved. Both the House and Senate aim to complete the work on their appropriations bills before the annual August recess each year.
Once both the House and Senate have passed their bills, a conference is convened to discuss and resolve the differences between the two versions. A single revised version of the appropriations bill, accompanied by a conference report, is sent to the full House and Senate for consideration. Once passed by both chambers, it becomes an Act and is sent to the President for signature into law, hopefully before the start of the new fiscal year on October 1.
When the Authorization and Appropriations Acts do not agree on the dollar amount for a particular program, the Appropriations Act generally prevails. This is certainly the case when the amount authorized exceeds the amount appropriated, since the program cannot exceed the budget authority it receives in the Appropriations Act. When the amount appropriated exceeds the amount authorized, the Comptroller General has ruled that agency may spend the entire appropriated amount. However, to maintain good relations with Congress, agency does not do so immediately. Instead, agency will seek the agreement of the legislative committees to spend the "excess" appropriated funds, which is generally granted.