Budget Series #1: Federal Budget Basics

The federal budget, developed annually by the Executive and Legislative branches, has a huge impact on the programs, services and infrastructure that impact all communities. An understanding of the budget process and language can help programs advocate for needed funds effectively.What follows is a summary of the budget process, using Promise Neighborhoods and Fiscal Year 2012 to illustrate how this process applies to an example program.

1. The President’s Office of Management and Budget (OMB) submits a detailed budget request to Congress by the first Monday in February (if the budget request is for Fiscal Year 2012, it is submitted to Congress in February, 2011). This document is important because it demonstrates the President’s priorities.

President Obama’s commitment to the Promise Neighborhoods program was shown by his proposed allocation of $150 million for Promise Neighborhoods in Fiscal Year 2012.

2. Congress reviews and responds to the President’s budget request in 3 stages:

a. To inform their final product, which is called the Congressional budget resolution, the House and Senate’s respective Budget Committees hold hearings to question Administration officials about relevant aspects of the President’s budget request.

Department of Education Secretary Arne Duncan and Department of Health and Human Services Secretary Kathleen Sebelius might have each been questioned about the $150 million requested for Promise Neighborhoods, among other programs and services that they oversee.

b. The two budget resolutions (one for the House and one for the Senate) are brought to their respective floors where they are debated, amended and eventually passed. The resolutions need only a simple majority to pass and cannot be held up by the Senate filibuster.

The Senate resolution allocated $60 million to Promise Neighborhoods for Fiscal Year 2012, while the House resolution zeroed out the program.

c. A House-Senate conference reconciles the two resolutions into a final conference report. Both chambers vote on this final budget resolution, which also requires a simple majority to pass and cannot be held up by a Senate filibuster. The passed budget resolution is law; it does not go to the President for his signature or veto.

Congress’ final resolution funds Promise Neighborhoods at $60 million for Fiscal Year 2012.

Step 2 is supposed to be completed every year by April 15^th in preparation for the Fiscal Year’s start in October, however, the budget resolution is often delayed.

The Fiscal Year 2012 budget resolution should have been passed by April15, 2011 so that the 2012 Fiscal Year could go into effect October 2011. Since Congress had not agreed on a final resolution by October 2011, the 2012 Fiscal Year started with a continuing resolution based on the Fiscal Year 2011 budget.

Steps 2b and 2c provide a vital opportunity for community members and organizations to use qualitative and quantitative research, including researcher’s data and powerful stories presented by residents, to inform policymakers of their program’s value.

Promise Neighborhoods Institute, in partnership with Promise Neighborhood grantees across the country,organized a Congressional Briefing, conducted Capitol Hill site visits, and wrote a Policy Brief requested by Congressional staff.

3. Federal agencies, such as the Department of Education, carefully determine how they will spend their allocated funds and begin to act by, for example, releasing Request for Proposals (RFPs) for states or community agencies to apply for resources. Congress enforces the budget throughout the fiscal year.

The Department of Education has not yet released information on how they will spend the $60 million in Promise Neighborhoods’ Fiscal Year 2012 budget,so it is impossible to know application guidelines for prospective Promise Neighborhoods, how many projects will be funded or what level of funding Promise Neighborhoods will receive.

For Fiscal Year 2011, the Department of Education used the $30 million allocated to Promise Neighborhoods to fund 5 Implementation grants and 15 Planning grants. These 20 grantees will receive funds beginning January 2012.

2012 Federal Budget Resources

• Introduction to the Federal Budget Process by the Center on Budget and Policy Priorities
• Budget Vocabulary by Policy for Results
• OMB Budget Homepage

We understand that the federal budget process is confusing and welcome your questions! Post your questions in the comments section.