The budget has become a central issue in American politics because it reflects decisionsconcerning how big the federal government should be and priorities for what the government shoulddo. How those decisions should be made, by whom and under what constraints has also become apart of the modern political dialog. Although the basic framework for budgeting has remainedrelatively stable in recent years, there has been a recurring reexamination of the budget process todetermine if it works to meet the changing demands of government. (1) In an earlier era of government reform, William F. Willoughby, the director of the Institutefor Government Research, wrote that: Among the specific problems of public administrationnone exceeds in importance that of the establishment of an orderly and efficient system for thehandling of the financial affairs of the government. (2) Arguably, this is no less true today than it was then, and its salience is illustrated by thenumber and variety of proposals made to change one or more aspects of the budget process in recentyears. This report includes five reform issues on which Congress has consistently demonstrated ahigh level of interest, focused on specifically defined reform proposals. Some of these issues, suchas biennial budgeting, have extensive legislative histories. These proposals represent just a part ofthe total spectrum of proposals that have been discussed, both inside and outside of Congress. Thisreport does not include those reform issues that are primarily conceptual in nature. Such issuesreflect a level of dissatisfaction with the current process, but they generally are not focused on aspecific single reform option. Examples of these include: authorization/appropriations issues , which concern the relationship betweenauthorizations and appropriations, including timing and sequencing issues; reconciliation process issues , which concern the amount of time available forconsidering reconciliation bills, the specificity allowed for reconciliation instructions, whetherreconciliation may be used only to create budgetary savings, and the application of the Byrd Ruleprohibiting extraneous provisions in reconciliation bills in the Senate; impoundment reform issues , which concern amended deferral rules or anexpedited rescission process; and budget presentation and structure issues , which concern separate presentationsfor regulatory, capital, or tax expenditure budgets, as well as other issues related to the timing orcontents of the President's budget or mid-session review. This report also does not include proposals to reform the budgetary mechanisms for specificprograms, such as instituting off-budget status for trust funds or establishing a lock-box mechanismas part of Social Security and Medicare reform proposals. Finally, this report does not include reform proposals based on amending the U.S.Constitution, such as presidential item veto authority, a limitation on the authority of the federalgovernment to raise taxes, or a balanced budget requirement. (3) For a more comprehensive accounting of current budget process reform measures and theirlegislative history, see CRS Report RL31479(pdf) , Federal Budget Process Reform: Proposals andLegislative Actions in the 107th Congress , by [author name scrubbed] Although the Constitution requires that "All Bills for raising Revenue shall originate in theHouse of Representatives," it is otherwise silent regarding specific guidelines for the considerationof revenue or spending legislation. (4) The Constitution, however, does provide Congress authority "Tolay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the commonDefence and general Welfare of the United States" (5) and requires that "No Money shall be drawn from the Treasury, butin Consequence of Appropriations made by Law." (6) Through these provisions, the Constitution grants Congress the"power of the purse." This general authority has been subsequently fleshed out through a numberof laws and congressional rules that underpin the federal budget process. (7) Two statutes in particularprovide much of the basic legal framework. The first key statute is the Budget and Accounting Act of 1921 (P.L. 13, 67th Congress, 42Stat. 20-27). Now codified in title 31 of the United States Code , this Act established the statutorybasis for an executive budget process. It gives the President responsibility for submitting toCongress a proposed budget for the entire federal government at the beginning of each year. It alsocreated the Bureau of the Budget (reorganized as the Office of Management and Budget (OMB) in1970) to assist him in carrying out his responsibilities, and the General Accounting Office (GAO)to assist Congress as the principal auditing agency of the federal government. The second key statute is the Congressional Budget and Impoundment Control Act of 1974( P.L. 93-344 , 88 Stat. 297-339). The provisions of this Act have been modified on a number ofoccasions, but it remains the statutory basis for the congressional budget process. The Act providesfor the annual adoption of a concurrent resolution on the budget as a mechanism for coordinatingand facilitating congressional budgetary decision making. It also established the House and SenateBudget Committees with jurisdiction over the annual budget resolution, and created theCongressional Budget Office (CBO) to provide budgetary information and analysis to Congressindependent of the executive branch. In addition, the Balanced Budget and Emergency Deficit Control Act of 1985, as amended(Title II of P.L. 99-177 , 99 Stat. 1038-1101), has had significant impact on budgetary procedures andoutcomes by creating additional control mechanisms. This Act established the sequester mechanismas a means to enforce statutory budget requirements. Currently, there are separate mechanisms tocontrol direct spending and revenues (the pay-as-you-go, or PAYGO, process) and discretionaryspending (spending caps). (8) The budgetary impact of all legislation is scored by OMB, and reported three times each year (apreview with the President's budget submission, an update with the mid-session review of thebudget, and a final report within 15 days after Congress adjourns). If the final report for either thePAYGO or spending caps indicates that the statutory requirements of that mechanism have beenbreached, the President is required to issue an order making across-the-board cuts of nonexemptspending programs subject to that control mechanism. The President is required to submit to Congress a proposed budget by the first Monday inFebruary. Although this budget does not have the force of law, it is a comprehensive examinationof federal revenues and spending, including any initiatives recommended by the President, and is thestart of extensive interaction with Congress. The President's budget submission is itself the result of a process that typically began 10months earlier. During this stage, federal agencies prepare budget requests under a variety of internalprocedures. OMB plays a coordinating role in this process through communications, circulars, andbulletins providing instructions, schedules, and other materials to ensure that budget requests adhereto standardized conventions and formats. Agency budget requests are subsequently reviewed by OMB, and the agencies notified of theOMB director's recommendations for changes through a "passback" in the fall prior to the President'ssubmission. Agencies may appeal these recommendations to the director, and in some cases, directlyto the President. Once final decisions on the budget requests are made, agencies revise their requestsaccordingly, and prepare supporting materials for inclusion in the President's budget submission. The President's budget submission does not complete administration action. Agency officialstestify at congressional hearings and provide written budget justifications. In addition, the Presidentis required to submit a formal mid-session review of the budget by July 15 of each year, (9) and may also submit additionalbudgetary requests during the year. Within 6 weeks of the President's budget submission, congressional committees are requiredto submit their "views and estimates" of spending and revenues within their respective jurisdictionsto the House and Senate Budget Committees. These views and estimates, along with informationgleaned from hearings testimony, CBO reports, and other sources, are then used by each BudgetCommittee in drafting and reporting a concurrent resolution on the budget to its respective house. Although it does not have the force of law, the budget resolution is a central part of thebudget process in Congress. As a concurrent resolution, if adopted in the same form by each house,it represents an agreement between the House and Senate that establishes congressional budgetpriorities, and defines the parameters for all subsequent budgetary actions. (10) The spending, revenue,and public debt limit laws necessary to implement decisions agreed to in the budget resolutionsubsequently are enacted separately. Discretionary spending, which is enacted through theappropriations process, involves annual actions that must be completed before the beginning of anew fiscal year on October 1. The reconciliation process may be used to change laws affecting directspending or revenues. Reconciliation typically follows a timetable established in the budgetresolution for that year. Other budgetary legislation, such as changes in direct spending or revenuelaws separate from the reconciliation process, changes in the public debt limit, or authorizinglegislation, are not tied directly to the annual budget cycle. However, such legislation could be anecessary part of budgetary actions in any given year. After appropriations and other budgetary legislation become law, the executive branch againbecomes the focus of the budget process. After the end of the congressional session, the Presidentis required to determine if a sequester is necessary to remedy any breach of the limits establishedunder the Balanced Budget and Emergency Deficit Control Act. The executive branch is also responsible for the execution of spending laws. Funds providedin statutes are apportioned to the appropriate agencies and programs in accordance with theAntideficiency Acts (31 U.S.C. 1341-42; 1511-1519), which prohibit agencies from obligating fundsin excess of levels provided in law.