Once the President's Budget is submitted to Congress by the first Monday in February, it must be enacted into law. The Congressional budget enactment process consists of three phases: Budget Resolution; Authorization; and Appropriation
The first step in the budget enactment process provides an overall blueprint for the Congressional budget process. During Budget Resolution Phase, the House Budget Committee and Senate Budget Committee Hearings begin in February, with markups made by both committees in March. Each committee refers its version of the budget resolution for approval by a floor vote of its chamber (House or Senate). A conference is convened in April to resolve differences. This phase culminates with the Concurrent Budget Resolution.
The annual budget resolution is an agreement between the House and Senate on a budget plan for the upcoming fiscal year and at least the following four fiscal years. The budget resolution is in the form of a concurrent resolution, so it is not sent to the president for his signature and thus does not become law, but it does provide a framework for subsequent legislative action on the appropriations bills.
Section 301(a) of the 1974 Budget Act, as amended, requires that the budget resolution include the following matters for the upcoming fiscal year and at least the ensuing four fiscal years:
The Concurrent Budget Resolution (CBR) provides guidance for revenue and spending legislation to be enacted by Congress. The CBR specifies the amounts of revenue, budget authority, and outlays that are authorized for the coming fiscal year and as many as nine years following. In effect, the CBR establishes budget authority and outlay "spending ceilings" for each of 21 major government functions.
Major Government Functions
• 050 - National Defense • 150 - International Affairs • 250 - General Science, Space, and Technology • 270 - Energy • 300 - Natural Resources and Environment • 350 - Agriculture • 370 - Commerce and Housing Credit • 400 - Transportation • 450 - Community and Regional Development • 500 - Education, Training, Employment and Social Services • 550 – Health 570 - Medicare • 600 - Income Security • 650 - Social Security • 700 - Veterans Benefits and Services • 750 - Administration of Justice • 800 - General Government • 900 - Net Interest • 920 - Allowances • 950 - Undistributed Offsetting Receipts • 970 - Overseas Deployments and Other Activities
The House and Senate Budget Committees are responsible for developing and reporting the budget resolution. The Budget Committees hold hearings and receive testimony from Members of Congress and representatives from federal departments and agencies, the general public, and national organizations. Three regular hearings include separate testimony from the director of the Office of Management and Budget (OMB), the director of the Congressional Budget Office (CBO), and the chair of the Federal Reserve Board. The OMB director provides an explanation of the President’s budget submission; the CBO director presents an analysis of the President’s budget proposals and independent baseline budget projections; and the Federal Reserve chair provides an assessment of the state of the national economy.
Another source of input comes from the “views and estimates” of congressional committees with jurisdiction over spending and revenues.
Congressional Budget Office (CBO) analysis goes to both the House Budget Committee (HBC) and the Senate Budget Committee (SBC) in February. While the President's Budget estimates are based on economic assumptions of the Office of Management and Budget, CBO makes its own economic projections to estimate revenues and outlays that would result from the President's Budget request. These views and estimates, frequently submitted in the form of a letter to the chair and ranking member of the budget committee, typically include comments on the President’s budget proposals and estimates of the budgetary impact of any legislation likely to be considered during the current session of Congress. The budget committees are not bound by these recommendations. The views and estimates often are printed in the committee report accompanying the budget resolution or compiled as a separate committee print.
Each Budget Committee then presents its version of the budget resolution for review, debate and ultimate passage by their respective chambers. The HBC sends the House Budget Resolution to the House floor, while the SBC sends the Senate Budget Resolution to the Senate floor. Both of these documents are amended in the full House and Senate, respectively. Once the House and Senate have each approved their version of the budget, the HBC and SBC hold a joint conference to craft a Concurrent Budget Resolution, which goes to the floors of both the House and Senate for vote. Once the House and Senate have both passed their own versions of the budget resolution, a conference is convened to resolve the differences between the two versions and craft a single common resolution, which, when passed by both chambers, becomes the Concurrent Budget Resolution. The CBR is not a law since it is not signed by the President. However, if a bill is proposed in either chamber that would exceed a spending ceiling set in the resolution, it may be challenged by raising a point of order. In that case, 60 percent of the membership must vote to pass the measure.
The budget resolution process is not required by the Constitution, but rather is rooted in the Congressional Budget and Impoundment Control Act of 1974. This act also created the CBO. Technically, no appropriation or authorization bill can be considered until the CBR is passed, so Congress aims to pass a CBR no later than April 15 each year. If a CBR has not been passed by May 15, however, appropriations and authorizations bills may be considered, using the spending limits established by the previous year's CBR.
The outlay amounts specified in the CBR represent the maximum amounts that Congress should allow as a result of its appropriations legislation for a particular fiscal year. Also, the CBR provides budget guidance for the upcoming fiscal year as well as several years beyond. However, the budget authority amounts specified in the CBR do not represent the minimum amounts that Congress should provide in its appropriations legislation for a particular fiscal year, they represent the maximum amounts.
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