Budget and Accounting Act of 1921

Before 1921 the United States had no unified federal budget. Each agency sent its spending requests separately to Congress through the Treasury, and many committees appropriated money without an overall plan. Reformers, including President William Howard Taft's Commission on Economy and Efficiency in 1912, urged an executive budget, and soaring debt after World War I added urgency. President Woodrow Wilson vetoed a first version in 1920 because it limited his power to remove the new Comptroller General, and President Warren Harding signed the revised act on June 10, 1921.

The act required the President to submit an annual budget to Congress covering the whole government, which made the President the central figure in fiscal planning. It created the Bureau of the Budget in the Treasury Department to prepare it, with Charles Dawes as its first director. The bureau moved to the new Executive Office of the President in 1939 and became the Office of Management and Budget in 1970. The act also created the General Accounting Office, renamed the Government Accountability Office in 2004, as an independent agency of Congress to audit federal spending.

The Comptroller General, who leads the GAO, serves a 15-year term and can be removed only by joint resolution of Congress or impeachment, a design intended to keep auditing independent of the President. The act's division of roles, with the President proposing and Congress deciding, still shapes budgeting, though the Congressional Budget and Impoundment Control Act of 1974 gave Congress its own budget process and the Congressional Budget Office. Scholars regard the 1921 act as a foundation of the modern presidency.