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                                                                Order Code RS20175
                                                                Updated July 28, 2003



 CRS Report for Congress

               Received through the CRS Web



   Overview of the Executive Budget Process

                               Bill Heniff Jr.
                Analyst in American National Government
                    Government and Finance Division

    The executive budget process consists of three main phases: development of the
President's budget; interaction with Congress; and execution of the budget. This fact
sheet provides a brief overview of each of these phases. For more information on budget
process, see [http://www.crs.gov/products/guides/guidehome.shtml].

Development of the President's Budget

    The legal framework originally established by the Budget and Accounting Act of
1921 requires the President to submit annually a comprehensive budget to Congress that
covers the full range of federal activities. Current law requires the President to submit his
budget proposal no later than the first Monday in February (31 U.S.C. 1105(a)).

    The formulation of the budget usually begins approximately 10 months before the
President submits his budget to Congress (about 18 months before the start of the fiscal
year). During the early stages of the budget's formulation, federal agencies prepare their
budget requests following their own procedures. OMB plays a coordinating role in this
process and provides policy guidelines through circulars, bulletins, and other detailed
communications. In particular, OMB Circular No. A- 11, available on OMB' s Web site
at [http://www.whitehouse.gov/omb/index.html], contains detailed instructions and
schedules for submission of agency budget requests and other material to ensure that
budget requests adhere to standardized conventions and formats.

    Agency budget requests are submitted to OMB in early fall, often in September.
These requests then are reviewed by OMB staff, with the agencies notified of the OMB
director's decisions through a passback. Agencies may appeal these recommendations
to the director, and in some cases, directly to the President. Once final decisions on the
budget requests are made by the President, agencies revise their budget requests
accordingly, and prepare supporting material for inclusion in the President's budget
submission. The President's budget then is compiled and submitted to Congress.

Interaction with Congress

    The President's budget does not have any legally binding effect, but rather initiates
the congressional budget process and provides a statement of the budgetary goals of the
President. After the President submits his budget proposal, OMB and other
administration officials testify before congressional committees. Individual federal

       Congressional Research Service **** The Library of Congress

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