The second step in the budget enactment process, authorization, originated in 1946 as a means of providing assistance to the Appropriations Committees in considering the increasingly complex defense budget request. The authorization process also allows more members to become involved in the review of the President's Budget request. Most authorization bills today are for multiple years, with the exception of defense and intelligence agency authorizations, which happen annually. The defense authorization bills are referred to as the National Defense Authorization Act.
An authorization act is "A law that establishes or continues one or more Federal agencies or programs, establishes the terms and conditions under which they operate, authorizes the enactment of appropriations, and specifies how appropriated funds are to be used. Authorizations acts sometimes provide permanent appropriations."
During Authorization Phase, the House legislative committees and Senate legislative committees conduct hearings between February and April. Both committees make markups between April and May, and then refer their versions of the Authorization bill to the floor for debate and approval beginning in May. A conference is convened in July to resolve differences between the House and Senate bills. The common version of the bill passed by both chambers in September is known as the Authorization Act. The Act becomes law when signed by the President.
Authorizing Legislation is an authorizing measure can establish, continue, or modify an agency, program, or activity for a fixed or indefinite period of time. It also may set forth the duties and functions of an agency or program, its organizational structure, and the responsibilities of agency or program officials. Authorizing legislation also authorizes, implicitly or explicitly, the enactment of appropriations for an agency or program. If explicit, the amount authorized to be appropriated may be specified for each fiscal year or may be indefinite (providing “such sums as may be necessary”). The authorization of appropriations is intended to provide guidance regarding the appropriate amount of funds to carry out the authorized activities of an agency. Authorizing bills fall under the jurisdiction of most of the other standing committees of the House and Senate. Almost all of the standing House committees and Senate committees have authorizing responsibilities. The topics, agencies, or programs that a bill deals with determines to which committee or committees it is referred.
Legislative committees committee have several subcommittees that concentrate on various aspects of the President's Budget proposal, and 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, DoD and the Services 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, committee members (and staffers) conduct a line-by-line review of the President's Budget, making adjustments as desired. After adding appropriate legislative language pertaining to policy, the HASC and SASC will each send their own versions of the authorization bill to the floor of their respective chambers. On the floor, the proposed bill will be debated, possibly amended, and finally approved. Each authorization bill has a report associated with it providing additional explanation of its intent. Both the House and Senate aim to complete the work on their authorization bills by the end of June each year.
During mark-up sessions, committee members (and staffers) conduct a line-by-line review of the President's Budget, making adjustments as desired. After adding appropriate legislative language pertaining to policy, the HASC and SASC will each send their own versions of the authorization bill to the floor of their respective chambers. On the floor, the proposed bill will be debated, possibly amended, and finally approved. Each authorization bill has a report associated with it providing additional explanation of its intent. Both the House and Senate aim to complete the work on their authorization bills by the end of June each year.
Once both the House and Senate have passed their bills, a Defense Authorization Conference Committee is convened to discuss and resolve the differences between the two versions. A single revised version of the Authorization 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.
House and Senate rules do not permit Congress to appropriate funds for any unauthorized program or activity. Moreover, funds should not be appropriated for a program or activity in excess of the recommended funding level in the Authorization Act. In practice, however, appropriations often differ from authorized amounts. The report accompanying the Authorization Act is not a law. It is a document that describes the congressional intent behind the Authorization Act's provisions, contains information often referred to as "congressional language".
While the power over appropriations is granted to Congress by the U.S. Constitution, the authorization appropriation process is derived from House and Senate rules. The formal process consists of two sequential steps:
Legislative committees, such as the House Committee on Armed Services and the Senate Committee on Commerce, Science, and Transportation, are responsible for authorizing legislation related to the agencies and programs under their jurisdiction; most standing committees have authorizing responsibilities.
Authorizations bills can recommend funding levels for the agencies and programs they authorize, but their recommendations are non-binding. Congress can place recommended funding levels for the agencies and programs they authorize in an authorization bill, but their recommendations are non-binding. The recommendations can be for specific amounts in specific years for specific purposes, or it can be an unlimited amount ("such sums as may be necessary") in a particular time period or indefinitely. It is the appropriations bills that determine how much funding those agencies and programs will get.
The Appropriations Committees of the House and Senate have jurisdiction over appropriations measures. As discussed below, House and Senate rules generally prohibit the encroachment of these committee responsibilities by the authorizers and appropriators. Agencies and programs funded through the annual appropriations process, referred to as discretionary spending, generally follow this two-step process. Not all federal agencies and programs, however, are funded through this authorization-appropriations process. Funding for some agencies and programs is provided by the authorizing legislation, bypassing this two-step process. Such spending, referred to as direct (or mandatory) spending, currently constitutes about 55% of all federal spending. Some direct spending, mostly entitlement programs, is funded by permanent appropriations in the authorizing law. Other direct spending (referred to as appropriated entitlements), such as Medicaid, is funded in appropriations acts, but the amount appropriated is controlled by the existing authorizing statute.
Enforcing the Authorization-Appropriations Process Longstanding rules of the House and Senate attempt to retain the separation between the authorization and appropriations tasks within this process, and these rules may be enforced through points of order. The application of these rules can be complicated, and the following merely summarizes their main provisions. First, the House and Senate place restrictions on appropriations for agencies and activities not authorized by law. The House (Rule XXI, clause 2) prohibits any appropriation, whether in a reported appropriations bill or offered as an amendment, for an expenditure not authorized by law. The Senate (Rule XVI, paragraph 1) prohibits floor amendments proposing appropriations for an agency or activity not authorized by law, with certain exceptions. In contrast to the House, the Senate does not prohibit committee amendments or measures reported by the Appropriations Committee from including an appropriation for an agency or activity not authorized by law. Second, the House (Rule XXI, clause 2) and Senate (Rule XVI, paragraphs 2 and 4) prohibit the inclusion of legislative language (such as an authorization) in an appropriations measure. Third, the House (Rule XXI, clause 4), but not the Senate, prohibits appropriations in authorizing legislation. While the rules are intended to encourage the adherence to this process, a point of order must be raised to enforce the rules. In addition, the rules may be waived by suspension of the rules, by unanimous consent, or, in the House, by a special rule. Further, the Senate, in some cases, may allow legislative language in an appropriations act if it determines, by an affirmative vote, that such language is germane to legislative language already in the act as passed by the House.3 Unauthorized appropriations or legislative provision in an appropriations act signed into law would have, in most cases, full force and effect (e.g., an agency may spend the entire amount of an unauthorized appropriation), regardless of these congressional restrictions.