Budget Day (Primer)

It's Budget Day!  If you know all about the budget process, skip the rest of this post and go over to Stan Collender for some fun Budget Day thoughts (or read on and offer corrections or clarifications in comments).  If you want to know what all the fuss is about, continue on for a quick review.  I'm open for questions, if anyone wants to use comments for that.

First, the president by law must submit a budget -- that's today's news.  Next, the House and Senate are supposed to draft a budget.  It has to be approved by both chambers in identical form, just like a regular law, but in fact the budget that Congress passes is only a guideline for further Congressional action later in the year.  It is, basically, instructions to Congress for what Congress is promising itself it will do. 

Then comes the actual business of writing bills.  Appropriations bills are for regular spending, also known as discretionary spending.  Most government programs, when they are created, are authorized to spend a certain amount of money, but in order to actually spend that money they have to be given it by Congress, which does so in yearly appropriations bills.  Sometimes you'll hear about whether a program is "fully funded," which is budget-speak for whether Congress is appropriating all the money that the program is authorized to spend.

Quite a bit of government spending, however, and most government revenues, are from fixed formulas that continue even if Congress does not act (Congress doesn't have to do anything to keep income taxes generating funds, or to keep paying qualified beneficiaries their Medicare and Social Security payments -- such payments are called entitlements because people are entitled by law to the benefits if they qualify, as opposed to appropriated funds, which just stop if they aren't passed every year).  The budget also can direct the committees that have jurisdiction over those formulas (mainly House Ways and Means and Senate Finance) to make permanent changes in the law to adjust the rules. 

If you've just started following politics recently, you've surely heard of reconciliation.  What "reconciliation" bills are supposed to "reconcile" is the differences between what Congress instructed itself to do in the budget, and what they actually do in the subsequent bills they do or don't pass.  In reality, however, reconciliation turns out to be a good vehicle for making the changes discussed above in formulas for things like taxes and entitlement spending.  So if there are to be such changes, then they'll do a reconciliation bill.  As everyone knows by now, there are all kinds of complex rules regarding reconciliation, because the possibility of passing something without needing 60 votes in the Senate is so appealing that Congressional majorities and presidents have wanted to use reconciliation for all sorts of legislation, regardless of whether it's actually part of that year's budget or not.

So, today, the process gets started, as the president unveils his version of the budget.