On Monday February 3, 2003 President George Bush announced his proposed spending plan for next year. He has proposed a growth of $30.5 billion in spending for appropriations for a total of $2.23 trillion. Of the $30.5 billion, he proposes that the military receive $15 billion and Homeland Security $4 billion.[1] But what does this proposal really mean? This announcement is the first step of the long process to pass the annual federal budget.
The process, which begins in February and extends until July, applies to discretionary spending, which accounts for one-third of the federal budget. “Discretionary spending is what the President and the Congress decide to spend through annual appropriations bills. Examples include money for such activities as the FBI, the Coast Guard, housing and education, space exploration, highway construction, defense, and foreign aid.”[2] In addition to discretionary spending, the government spends money on items for mandatory spending. Mandatory spending is provided by permanent laws, and includes such things as funding for major entitlement programs, for example, Social Security, Food Stamps, Medicare and Medicaid. The federal government is legally obligated to make payments to these entitlement programs and these payments account for two-thirds of the federal budget. The federal government also spends a portion of the budget to pay interest on federal debt.[3]
“Although the Constitution does not require the President to present an annual budget, in 1921 the Budget and Accounting Act became law and lay the foundation for the modern budget process, which includes the President’s budget.”[4] The President must present his budget to Congress on or before the first Monday in February. “While Congress is not bound to adhere to the President’s budget, normally the President’s request is considered as a starting point for the Congressional budget process.”[5] The President’s budget is only a request to Congress.
Once Congress receives the Presidential budget, it must pass a Congressional Budget Resolution which lays down a framework within which Congress makes decisions on revenues, spending and other budget issues. In order to pass the Congressional Budget Resolution, the Budget Committees of both the House of Representatives and the Senate work on the text of the resolution. The Senate Budget Committee must report their version of the budget resolution to Congress by April 1. The House Budget Committee reports their version soon after the Senate one. The resolution covers the upcoming fiscal year (A fiscal year is 12 months in length and begins on October 1 preceding the calendar year for which the fiscal year is named.(e.g. fiscal year 2004 begins on October 1, 2003 and ends September 30, 2004)) and at least five ensuing years. Once the House and Senate pass their versions of the resolution, a Conference is held to work out the differences between the two versions and to form a single version of the budget resolution. The resolution that is decided on by the Conference is then sent to the House and Senate for vote. Congress must pass the Conference version of the resolution by a majority of votes. This process must be completed by April 15.
Once the budget resolution is passed, the Appropriations Committees of both the House and the Senate receive the totals for spending from the budget resolution. This is the point in the process where Congress decides how much to give to government agencies for spending. The Appropriations Committees divide the totals into subtotals for their 13 Appropriations Subcommittees.* Once the Appropriations Subcommittees receive their allocations, each subcommittee begins work on their annual spending bills for the areas of government operations they cover. The subcommittees submit their spending bills to the full Appropriations Committee for approval. The Appropriations Committees must complete all of their work by June 10. After all the work is completed, the spending bills are sent to the House and Senate floors for vote. The bills must be passed with a majority of votes.
After the bills are passed, a Conference is held between the House and Senate to work out the differences between the two versions on all 13 Appropriations bills. Then the Conference agreement is sent to the House and Senate floor for a final vote. It must pass both the House and Senate by a majority vote. This process must be completed by June 30.
The Congress then presents the Appropriations Bills to the President for his signature or veto. “The President has ten days in which to decide: (1) to sign the bill, thereby making it law; (2) to veto the bill, thereby sending it back to Congress and requiring much of the process to begin with respect the programs covered by that bill; or (3) to allow the bill to become law without his signature, thereby making it law but doing so without his express approval.”[6]
Although the President presents a budget to Congress, the budget provided is only a guideline. The Constitution of the United States gives Congress the power to make the decision on how to spend the budget; how to appropriate funds; and how much to tax.
The following chart is from the National Priorities Project (www.nationalpriorities.org). It provides information on how the budget for discretionary spending was divided under the proposed Bush administration budget for FY2003.
*List of 13 Appropriations Bills for Discretionary Spending:
Numbers in parenthesis are the percent and dollar increase or decrease President Bush requested in his proposed FY2004 budget.[7]
1.) Agriculture (1.9% increase) 8.) Labor, Health and Human Services and Education
(HHS - 7.0% increase) (Education – 5.6%)
2.) Commerce (5.2% increase) 9.) Legislative **
3.) Defense (4.0% increase) 10.) Military Construction (Managed by Dept. of Defense)
4.) District of Columbia ** 11.) Transportation **
5.) Energy & Water (6.0% increase) 12.) Treasury and Postal (33% decrease)
6.) Foreign Operations (20.0% increase) 13.) Veterans Affairs (7.7% increase) and Housing and
7.) Interior ** Urban Development (HUD) (1.3% increase)
**No significant increase or decrease.
ACTION
Monitor media coverage of the budget. How much did the President propose for programs that you care about (prescription drugs, children’s health, welfare, housing, aid to Africa?
Did funding go up or down?
Write your Congressional Representatives to let them know how you want our government to spend your taxes.
[1] Mike Allen and Jonathan Weisman, Bush’s Budget to Favor Military, Education, Washington Post, 02/03/03.
[2] From the White House Webpage: Budget of the United States Government: Fiscal Year 2004, http://www.whitehouse.gov/omb/budget
[3] Ibid.
[4] From the House of Representatives Webpage: http://www.house.gov/rules_bud/annual.htm
[5] Ibid.
[6] Ibid.
[7] Bush’s Budget: Department By Department, Washington Post, 02/04/03. 02/2003