The Federal Budget Process

The modern budget process rests on two laws. The Budget and Accounting Act of 1921 required the President to submit a unified budget each year, and the Congressional Budget and Impoundment Control Act of 1974 gave Congress its own process, budget committees, and the Congressional Budget Office. The federal fiscal year runs from October 1 to September 30 and is named for the calendar year in which it ends, so fiscal 2026 began on October 1, 2025.

The cycle begins with the President's budget request, due by law on the first Monday in February and assembled by the Office of Management and Budget from months of negotiation with agencies. Congress is then supposed to adopt a budget resolution by April 15, a concurrent resolution that the President does not sign, setting totals for spending and revenue and, if desired, instructions for reconciliation. The Appropriations Committees divide the discretionary total among their twelve subcommittees, which write the twelve annual spending bills that are supposed to be enacted by October 1.

The timetable is almost never met. Congress has failed to adopt a budget resolution in many recent years and has not enacted all twelve appropriations bills on time since fiscal 1997. Instead it relies on continuing resolutions to keep the government open and on omnibus packages negotiated by leaders under deadline pressure. When it cannot agree, the government shuts down.

The annual process also covers only part of the budget. About three quarters of federal spending, including Social Security, Medicare, Medicaid, and interest on the debt, flows automatically under permanent law and is never voted on in the yearly cycle. Reformers have proposed biennial budgeting, automatic continuing resolutions to prevent shutdowns, and binding fiscal rules, but no comprehensive reform has passed since 1974.