Congress must create and pass numerous funding bills each fiscal year to keep the federal government open. This infographic explains the process.
Each year, Congress works on a federal budget for the next fiscal year. The government’s fiscal year runs from October 1 of one year to September 30 of the next. The budget includes a detailed spending plan.
The Constitution puts Congress in charge of the budget, granting it the power to collect taxes, borrow money, and approve spending.
How does the government get money? Where does it go?
Most government money comes from:
Collecting taxes, or revenue, from people and businesses
Borrowing it by selling Treasury securities (savings bonds, notes, and Treasury bills)
The government spends money on:
Social Security, Medicare, and other mandatory spending required by law
Interest on the debt--the total the government owes on all past borrowing
Discretionary spending, the amount Congress sets annually for all other programs and agencies.
Creating the budget, step by step
Departments and agencies submit proposals
About 1 ½ years before a budget goes into effect, agencies start work on their proposals. These go to the White House to help create the President’s budget request.
The President submits his plan
Typically by the first Monday in February, the President gives Congress his budget proposal for the next fiscal year.
The House of Representatives and the Senate create budget resolutions
Each chamber of Congress analyzes the President’s budget proposal and drafts a budget resolution setting overall spending levels. A conference committee of House and Senate members resolves differences between the two plans to create a final version that each chamber votes on.
Appropriations committees distribute funding
House and Senate appropriations committees divide the discretionary spending portion of the budget resolution among 12 subcommittees. Each subcommittee oversees a different group of agencies, like Interior and Environment or Transportation and Housing. The subcommittees draft appropriations bills setting the funding for each agency.
Chambers vote on appropriations bills
The full House and Senate vote on their bills. Both versions of each bill go to a conference committee to merge the two. Both chambers vote on the same version of each bill. If approved, it goes to the President.
The President signs the bills into law.
If any appropriations bill is not signed by September 30, the government will not have a budget for the new fiscal year.
Without a budget, many government services stop
With no budget, Congress must pass a continuing resolution to fund the government temporarily. Otherwise, the government will shut down, and many functions will stop.
If Congress can’t agree on 12 separate appropriations bills, it can pass an Omnibus bill that includes multiple funding areas. If the President signs that, the budget becomes law and goes into effect.