Submission of the President’s Budget in Transition Years
Released: 2012-05-17T00:00:00

When a new Congress convenes in January, one of its first orders of business is to receive the annual budget submission of the President. Following receipt of the President's budget, Congress begins the consideration of the budget resolution and other budgetary legislation for the upcoming fiscal year, which starts on October 1.

The transition from one presidential administration to another raises special issues regarding the annual budget submission. Which President—the outgoing President or the incoming one—is required to submit the budget, and how will the transition affect the timing and form of the submission? The purpose of this report is to provide background information that addresses these questions.

Is the Outgoing or Incoming President Required to Submit the Budget?

The Budget and Accounting Act of 1921, as amended, requires the President to submit a budget annually to Congress toward the beginning of each regular session (31 U.S.C. §1105a). This requirement first applied to President Warren Harding for FY1923.

The deadline for submission of the budget, first set in 1921 as "on the first day of each regular session," has changed several times over the years:

in 1950, to "during the first 15 days of each regular session"; in 1985, to "on or before the first Monday after January 3 of each year (or on or before February 5 in 1986)"; and in 1990, to "on or after the first Monday in January but not later than the first Monday in February of each year."

The 20 th Amendment to the Constitution, ratified in 1933, requires each new Congress to convene on January 3 (unless the date is changed by the enactment of a law) and provides a January 20 beginning date for a President's four-year term of office. Therefore, under the legal framework for the beginning of a new Congress, the beginning of a new President's term, and the deadline for the submission of the budget, all outgoing Presidents prior to the 1990 change were obligated to submit a budget.

The 1990 change in the deadline made it possible for an outgoing President to leave the annual budget submission to his successor, an option which the three outgoing Presidents since then (George H.W. Bush, Bill Clinton, and George W. Bush) took.

Because President George H.W. Bush chose not to submit a budget for FY1994 (and was not obligated to do so), President Bill Clinton submitted the original budget for FY1994 rather than budget revisions. Similarly, the budget for FY2002 was submitted by the incoming President George W. Bush, rather than by outgoing President Bill Clinton. The Office of Management and Budget (OMB) provided considerable advance notice of the plan for FY2002. President George W. Bush indicated early on that he would not submit a budget for FY2010. In announcing the decision, then-OMB Director Jim Nussle stated:

The FY2010 budget will be submitted by the next President. In order to lay the groundwork for the next Administration, we intend to prepare a budget database that includes a complete current services baseline and to gather information to develop current services program estimates for FY2010 from which the incoming Administration can develop its budget proposals.

President Barack Obama submitted an overview of his budget, "A New Era of Responsibility: Renewing America's Promise" on February 26, 2009, two days after delivering an address on his economic and budget plan to a joint session of Congress. He submitted his Appendix , which contained detailed budget information on May 7, 2009, and additional supplemental volumes, including the Analytical Perspectives and the Terminations, Reductions, and Savings volume, on May 11, 2009.

Incoming Presidents, except for Warren Harding, Bill Clinton, George W. Bush, and Barack Obama, assumed their position with a budget of their predecessor in place. Under the 1921 act, Presidents may submit budget revisions to Congress at any time. Six incoming Presidents chose to modify their predecessor's budget by submitting revisions shortly after taking office: Dwight Eisenhower, John Kennedy, Richard Nixon, Gerald Ford, Jimmy Carter, and Ronald Reagan. Six incoming Presidents chose not to submit revisions: Calvin Coolidge, Herbert Hoover, Franklin Roosevelt, Harry Truman, Lyndon Johnson, and George H. W. Bush.

Transition Budgets in Recent Years

During the period beginning with the full implementation of the congressional budget process (in FY1977), six transitions of presidential administration have occurred. As Table 1 shows, the three outgoing Presidents required to submit a budget during this period (Gerald Ford, Jimmy Carter, and Ronald Reagan) did so on or before the statutory deadline. The three Presidents who were not required to submit an outgoing budget (George H.W. Bush, Bill Clinton, and George W. Bush) each chose to leave the budget submission to his successor.

Once the original budget for a fiscal year has been submitted, a President or his successor may submit revisions at any time. Two incoming Presidents during this period (Jimmy Carter and Ronald Reagan) submitted budget revisions and one (George H.W. Bush) did not. The FY1978 revisions by President Jimmy Carter (a 101-page document) were submitted on February 22 and the FY1982 revisions by President Ronald Reagan (an initial 159-page document and a subsequent 435-page document) were submitted on March 10 and April 7, respectively.

Statutory Deadlines

In past years, Congress authorized the submission of a budget for a fiscal year after the statutory deadline by enacting a deadline extension in law. For example, the deadlines for submission of the budgets for FY1981, FY1984, and FY1986 were extended from mid-January to late-January or early-February by P.L. 96 - 186 , P.L. 97 - 469 , and P.L. 99 - 1 , respectively. Beginning in the late 1980s, however, several original budgets have been submitted late without authorization. For FY1991, the budget was submitted a week after a deadline that already had been extended by law ( P.L. 101 - 228 ). For FY1989, the budget was submitted 45 days after the deadline without the consideration of any measure granting a deadline extension.

The three most recent transition-year budgets (FY1994, FY2002, and FY2010) were submitted 66, 63, and 98 days beyond the deadline, respectively, without the consideration of a measure granting a deadline extension. Presidents Clinton and George W. Bush submitted the original budgets for FY1994 and FY2002 (on April 8, 1993, and April 9, 2001, respectively), and President Obama submitted the FY2010 budget on May 7, 2009.

Special Messages to Congress

Although Presidents Reagan, Clinton, George W. Bush, and Barack Obama did not submit detailed budget proposals until April or May of their first year in office, each of them advised Congress regarding the general contours of their economic and budgetary policies in special messages submitted to Congress in February. Though President George H. W. Bush did not submit an official revision of President Reagan's FY1990 budget, he submitted a message to Congress that contained many of the same elements as budget revisions that had been submitted by previous incoming Presidents. In conjunction, each incoming President since Ronald Reagan has presented his special message on the budget to a joint session of Congress.

Outgoing "Transition" Budgets

Though the three Presidents who were not required to submit an outgoing budget (G.H.W. Bush, Clinton, and G.W. Bush) each chose to leave the budget submission to his successor, Presidents Clinton and George H.W. Bush helped facilitate the development of their successor's budget by providing a "transition budget" volume to Congress.

On January 6, 1993, just prior to the inauguration of President Clinton, President George H. W. Bush submitted to Congress a 573-page, single-volume budgetary document, Budget Baselines, Historical Data, and Alternatives for the Future . Instead of constituting a budget in the usual sense, this document provided historical data, baseline budget projections under the status quo, and illustrations of budget projections using alternative economic assumptions and different broad policy outlines.

Similarly, on January 16, 2001, President Clinton prepared a "transition budget" for incoming President George W. Bush, FY2002 Economic Outlook, Highlights From FY1994 To FY2001, FY2002 Baseline Projections . The volume was comparable in scope to the one issued for FY1994 by President George H. W. Bush just before he left office, providing revised budget projections and an economic and programmatic update.