Authorization vs. Appropriation

Congress generally acts in two stages. An authorization law creates or continues an agency or program, defines what it may do, and often sets a ceiling on how much may be spent, sometimes for a set number of years. An appropriation law then provides budget authority, the legal permission to spend money from the Treasury, usually for one fiscal year. The Constitution requires the second step: no money may be drawn from the Treasury except in consequence of appropriations made by law.

The two steps are handled by different committees. Authorizing committees, such as Armed Services, Agriculture, or Energy and Commerce, write the policy laws, while the House and Senate Appropriations Committees and their 12 subcommittees write the spending bills. House rules generally bar appropriations for programs that are not authorized and bar legislating in appropriations bills, but the House often waives these rules. Some spending is provided directly by authorizing laws, called mandatory or direct spending, which covers entitlement programs and does not require annual appropriations.

Many authorizations have lapsed while Congress keeps funding the programs anyway, and the Congressional Budget Office reports each year that hundreds of billions of dollars are appropriated for programs whose authorizations have expired. The annual defense authorization act, passed every year since 1961, is a notable exception. Supporters of a strong authorizing process say it is how Congress oversees programs and sets policy, while others argue that the two-step system duplicates work and that, in practice, the appropriations bills have become the main place where policy is decided.