Want to Understand The Appropriations Process? This 101 Will Tell You Everything You Need to Know

May 19, 2014 | Other Spending| Budget Process

Appropriations season is in full swing. The House has already passed the Legislative Branch and Military Construction-Veterans Affairs bills, while the Senate Appropriations Commitee is scheduled to officially set 302(b) allocations and mark up the Military Construction-VA and Agriculture bills this Thursday.

Today, CRFB published "Appropriations 101," a Q&A designed to answer some basic questions about the appropriations process. Below are a few of the questions we answered. To read the full report, click here.

What are appropriations?

Appropriations are annual decisions made by Congress about how the federal government spends some of its money. In general, the appropriations process addresses the discretionary portion of the budget – spending ranging from national defense to food safety to education to federal employee salaries, but excludes mandatory spending, such as Medicare and Social Security, which is spent automatically according to formulas.

How does Congress determine the total level of appropriations?

Under current law, after the President submits the Administration’s budget proposal to Congress, the House and Senate Budget Committees are each directed to report a budget resolution, which if passed by their respective houses, would then be reconciled in a budget conference (see Q&A: Everything You Need to Know About a Budget Conference). The resulting budget resolution, which is a concurrent resolution and therefore not signed by the President, includes what is known as a 302(a) allocation that sets a total amount of money for the Appropriations Committees to spend.

If a concurrent budget resolution does not pass both chambers, each house then may adopt legislation “deeming” 302(a) allocations – a practice which has become increasingly common in recent years. For example, the recent Bipartisan Budget Act directed the Budget Committee Chairs in the House and Senate to set the 302(a) limit for FY2015 at $1.014 trillion.

In addition, discretionary spending is currently subject to statutory spending caps.  The Budget Control Act of 2011 set discretionary caps through 2021, which were modified for 2013, 2014, and 2015 by the American Taxpayer Relief Act of 2012 and Bipartisan Budget Act of 2013. Beyond 2015, the statutory caps set by the Budget Control Act are reduced by about $90 billion annually through an enforcement mechanism known as “sequestration” (see Understanding the Sequester) implemented after the failure of the Joint Select Committee on Deficit Reduction to produce legislation to reduce the debt.

In addition to those questions, the pieces answers many others, including:

  • How does Congress allocate appropriations?
  • How are appropriations levels enforced?
  • What happens if funds are needed outside of the appropriations process?
  • What role does the President play in the appropriations process?
  • What is the timeline for appropriations?
  • What happens if appropriations bills do not pass by October 1?
  • What happens during a government shutdown?
  • Do agencies have any discretion in how they use funds from appropriators?
  • What is the difference between appropriations and authorizations?
  • Where are the House and Senate in the current appropriations process?

To find the answers to to all of the questions above, read the full Q&A here.