Fiscal Policy

How the Federal Budget Process Works: From Presidential Request to Spending Law

The federal budget is not a single document that the president signs once a year. It is the outcome of an elaborate, months-long legislative cycle involving the White House, the Office of Management and Budget, and both chambers of Congress. Most years, the process does not finish on time — which is why continuing resolutions and government shutdowns have become routine features of American governance.

Published June 30, 2026

The federal fiscal year runs from October 1 through September 30. That means work on the next year’s budget begins well before the current year’s budget has even been enacted. The full calendar, from early agency planning to a signed appropriations law, spans roughly 18 months. Here are the major stages in sequence:

1. Agency requests to OMB (spring–summer, year prior): Each federal department and agency submits its funding requests to the Office of Management and Budget, which coordinates the administration’s overall fiscal plan.
2. OMB review and passback (fall, year prior): OMB negotiates with agencies over their requests, issuing formal guidance — known as a “passback” — that tells each agency what it will be allowed to request.
3. President’s budget submission (first Monday in February): The president submits a formal budget proposal to Congress. This document runs thousands of pages and covers every federal program.
4. Congressional budget resolution (spring): The House and Senate Budget Committees develop a concurrent budget resolution that sets overall spending and revenue targets. This resolution does not go to the president for signature and does not appropriate funds.
5. Appropriations subcommittee markups (spring–summer): Twelve subcommittees in each chamber draft the actual spending bills that fund the government. Each bill covers a specific set of agencies.
6. Floor votes, conference, and enactment (ideally by September 30): Both chambers pass their versions of each appropriations bill, differences are resolved in conference, and the final bills go to the president for signature before the fiscal year begins.

The President’s Budget Request

The president’s budget, delivered in early February, is the administration’s opening bid in a lengthy negotiation. It reflects the executive branch’s priorities: which programs to expand, which to cut, and what new initiatives to propose. Congress is under no legal obligation to accept it. In fact, it is common for Congress to largely ignore the president’s numbers and write its own. Nevertheless, the budget request sets the terms of debate, signals the administration’s policy direction, and requires every agency to publicly justify its funding level. The document is produced by the Office of Management and Budget, which also serves as the White House’s central management arm for overseeing how agencies spend what they are given.

The Congressional Budget Resolution

After receiving the president’s budget, Congress is supposed to pass its own framework — the concurrent budget resolution — by April 15. This document does not fund anything directly. Instead, it sets aggregate limits on discretionary spending (the portion of the budget controlled through annual appropriations) and may include instructions to authorizing committees to change mandatory spending programs or tax law through a procedure called reconciliation. The budget resolution requires only a simple majority in the Senate and cannot be filibustered, which is why reconciliation legislation has been used periodically to enact major fiscal changes. Importantly, Congress often fails to pass a budget resolution at all, proceeding instead through informal agreements between the chambers.

The Appropriations Process

Actual funding flows through the twelve annual appropriations bills, each written by one of the twelve Appropriations subcommittees in the House and Senate. These bills fund everything from the Department of Defense to the National Park Service to the federal judiciary. Subcommittees hold hearings at which agency leaders testify about their funding needs. Members then “mark up” draft legislation, debating specific line items and program allocations. After full committee approval, each bill goes to the chamber floor for a vote. Because the House and Senate rarely pass identical bills, the differences must be resolved in a conference or by amendments between the chambers before the final text can go to the president.

The entire appropriations process is supposed to conclude before October 1. In practice, it rarely does. Since the modern budget process was established in 1974, Congress has completed all twelve appropriations bills on time only a handful of times.

What Happens When the Process Fails

When Congress cannot agree on full-year appropriations by September 30, it has two options: pass a continuing resolution or let funding lapse entirely. A continuing resolution — commonly called a CR — is a short-term spending measure that keeps the government funded at roughly its prior-year level while negotiations continue. CRs can last a few days or several months, and the government sometimes operates under a series of them for an entire fiscal year without ever passing a formal appropriations bill.

If Congress fails to pass either a CR or an appropriations bill by the deadline, a government shutdown begins. Under the Antideficiency Act, federal agencies may not spend money that has not been appropriated by Congress. Non-essential workers are furloughed, some services are suspended, and agencies operate on skeleton staffs. Shutdowns have varied in length from a single day to several weeks. Essential services — military operations, law enforcement, air traffic control, emergency medical care through Medicare and Medicaid — generally continue because their funding is either mandatory or covered by other legal authorities. The political and economic costs of prolonged shutdowns, however, create pressure on both branches to reach an agreement.