[Published originally in the January 2003 edition of Computing Research News, Vol. 15/No. 1, pp. 7, 10.]
The Federal Budget Cycle--A Primer
By Peter Harsha
This is the second of a two-part series explaining the Federal budget process. Part 1 appeared in the November 2002 issue of CRN.
Part Two--The President Proposes, Congress Disposes
The President's role, and the role of his administration, in the annual budget process hits its apex each year on the first Monday in February with the release of the President's budget request, his plan for spending trillions of dollars in federal funding over the coming fiscal year (nearly $2 trillion in FY 2003).
All over D.C.--on Capitol Hill and in the headquarters of nearly every federal agency--members of the administration fan out to brief congressional staffers, members of the press, and concerned outside groups like CRA on the President's proposal, presenting a unified, administration-approved view of its merits. (For more on how the President assembles his budget request, see "The Federal Budget Cycle-A Primer" in CRN, Volume 14, issue 5, November 2002.)
In the weeks that follow, great attention will be paid to programs the President requested be cut, or to initiatives the President requested be undertaken. The budget request is the primary document expressing the President's priorities for the coming year, so much effort is expended in analyzing it for its economic, and more importantly political, implications. But ultimately the budget is simply a suggestion--a request of Congress for a particular amount of funding or organization at all of the various federal agencies--to be heeded or ignored by Congress, based on its reading of the political wind.
The President's budget serves as the starting point in a year-long process in Congress that will ultimately lead to appropriated funding for each federal agency. It is a process fraught with politics and gamesmanship. With 435 individual opinions in the House and 100 individual opinions in the Senate, crafting a final funding arrangement that satisfies the priorities of a majority (and the President) will take the better part of a year--in the case of FY 2003, more than a year--and require a bewildering amount of deal-making. Fortunately, Congress has established a formal procedural framework to aid in facilitating the budget process.
At the same time the President sends his overall budget request to Congress on that first Monday in February, each agency prepares its own "budget justification" for Congress, detailing work performed by the agency in the previous fiscal year, work it intends to do in the coming year, and an explanation of how that work meshes with the President's overall plan. These justifications are generally provided to the members of the congressional committees with oversight responsibility for each particular agency. The National Science Foundation (NSF) budget justification, for example, is provided in a nice, three-ring binder to members of the House Science Committee; the Senate Committee on Commerce, Science and Transportation; the Senate Committee on Health, Education, Labor and Pensions; and both House and Senate Appropriations Committees. In addition, NSF's Director will brief members and staff of all of these committees, explaining the President's budget request and what her agency intends to do with the provided funding.
The Committees, in turn, will analyze the budget justifications and provide their own budget recommendations. These committee "Views and Estimates" are provided to the House and Senate Budget Committees and will form the basis of a Congressional Budget Resolution produced by the Budget committees. This resolution is usually prepared by the end of March or early April and is sent to the floors of their respective chambers shortly thereafter. The budget resolution establishes the overall funding levels for a series of budget function categories that define the different types of federal spending--such as "General Science, Space and Technology" or "National Defense"-- not by agency. More importantly, the budget resolution forms the basis of the total amount allocated to appropriators to use in funding the 13 appropriations bills necessary to fund government operations each year.
Because the budget resolution is the first significant step Congress takes in the annual budget process, it is generally regarded as a bellwether for the sense of Congress in the coming year. In past years (as with FY 2003), support for an increase to the "General Science, Space and Technology" function has translated into increased funding for NSF at appropriations time. Similarly, the fact that the House and Senate Budget committees this year could not come to an agreement on a budget resolution does not bode well for easy passage of FY 2003 appropriations bills. This observation is borne out in Congress's failure at this point to complete work on 11 of 13 appropriations bills for FY 2003, despite the fiscal year having begun on October 1, 2002. The lack of a budget resolution does not procedurally hinder Congress from continuing with the budget process; it does, however, make it a bit messier.
In addition to the Budget Committee, the House and Senate each have a number of authorizing committees and appropriating committees. The authorizing committees have the responsibility of overseeing particular agencies, setting policy where appropriate, and "authorizing" the appropriations committees to designate funding to those agencies up to an approved level. The House Science Committee, which has oversight responsibility for NSF, is an authorizing committee, for example. While authorizing committees like House Science might review NSF's operations on an annual basis, they tend to write bills granting funding authority to the appropriators for well beyond 12 months. In NSF's case, the House Science Committee authored, and Congress passed last month, NSF's most recent authorization through FY 2007, authorizing a doubling of the foundation's research budget over the course of five years. This authorization does not guarantee that the Appropriations Committees will fund NSF at that level each year--there might be competing priorities that affect the total funding level--but without the authorization, the appropriators are procedurally prohibited from increasing funding beyond a level previously approved by the Science Committee.
At least, that is how the process is supposed to work. However, authorizing committees are notoriously bad at passing authorizing bills in a timely manner. Prior to this year's enactment of NSF's authorization bill, NSF had actually been operating without a specific authorization since FY 2000, yet the appropriators were still able to fund--indeed, increase funding--at the agency for FY 2001 and 2002. How? In NSF's case, it was a simple matter of looking to the NSF "Organic" act, the legislation that created NSF back in 1950. The original language provided a blanket authorization for the new foundation, essentially authorizing NSF to make use of whatever funds were provided to pursue research related to its mission. But even lacking such a clear-cut authorization, appropriators are able to fund programs and agencies they desire by employing a procedural maneuver that waives all "points of order"--an objection to the bill on the grounds that it violates House or Senate rules--against an appropriations bill. But why would a majority of members agree to such a procedural maneuver?
The Appropriations committees have just one job: pass their bills. Each year, the Appropriations committees must pass all 13 of their appropriations bills by the start of the new fiscal year or the government must cease some (or all) of its operations. So, while other committees can let their legislation get bogged down in ideological disputes between parties and individual members, the appropriators must find ways of convincing a majority of the members in their chamber to vote affirmatively for their bill (and hopefully craft a bill that the President will still sign, otherwise it is back to square one).
The time-tested technique for insuring broad support of appropriations bills is to add provisions to the bills favorable to those you hope will support it. More often than not, these provisions take the form of earmarks--special programs targeted at specific member districts funded at the request of Congress and not requested by the Administration in its budget. If a House member knows that the VA-HUD-Independent Agencies Appropriations bill contains a $10 million federal infrastructure improvement project for his district, chances are he will support the bill for final passage, and will therefore support any procedural measure that insures it gets to the floor with his provision safely included. Appropriators receive literally thousands of requests from members for earmarks in their districts--some worthy, some dubious. A significant percentage will find their way into an appropriations bill, and that percentage increases every year.
In the end, appropriators hope to have crafted bills that a majority of both chambers find acceptable and that the President is willing to sign. [At press time, this is a task that remains unfinished for FY 2003. Congress and the President have been unable to settle on an overall spending number for the year, leaving appropriations at a standstill. The Republican takeover of the Senate effectively removed the negotiating pressure for Republicans this Congress, so they are content to wait until the next Congress to hash out a final deal. In the interim, the federal government continues to operate under a "Continuing Resolution," as it has since October 1, 2002, keeping agencies running and funded at their FY 2002 levels.] Meanwhile, the Administration is busy putting the finishing touches on the President's budget for the next fiscal year, and come the first Monday in February, the whole process begins again.
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