The U.S. Constitution (Article I, section 7, clause 1) states that “All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.” In addition, the U.S. Constitution (Article I, section 9, clause 7) states that “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of Receipts and Expenditures of all public Money shall be published from time to time.”
As such, Congress—-and in particular, the House of Representatives—-is invested with the “power of the purse”: the ability to tax and spend public money for the national government.
The budget system of the United States Government provides the means for the President and the Congress to decide how much money to spend, what to spend it on, and how to raise the money they have decided to spend. The Congressional Budget and Impoundment Control Act of 1974 is the federal law that governs the role of the Congress in the United States budget process. Under this Act, Congress established the Congressional Budget Office (CBO) to provide objective, nonpartisan information to support the budget process and to help the Congress make effective budget and economic policy.
Within the executive branch, the Office of Management and Budget–which is part of the Executive Office of the President–is the lead agency in formulating the executive's budget proposal. The executive budget formulation process is guided by OMB Circular A-11 (December 2019).
During the budget execution phase, the U.S. Treasury Department–working closely with OMB–manages federal finances by collecting taxes and paying bills and by managing currency, government accounts and public debt.
The accounting period for the federal government –its Fiscal Year– begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2021 (FY 2021) begins on October 1, 2020 and ends on September 30, 2021.
Policy Basics: Introduction to the Federal Budget Process. This backgrounder by the nonpartisan Center on Budget and Policy Priorities (CBPP) describes the laws and procedures under which Congress decides how much money to spend each year, what to spend it on, and how to raise the money to cover some or all of that spending.
Budget system and concepts and glossary. A description of the federal budget system and concepts is included as part of the annual budget documents.
Analytical Perspectives. The Analytical Perspectives volume is part of the annual budget document, presenting analyses that highlight specific subject areas or provide other significant data that place the President’s 2021 Budget in context and assist the public, policymakers, the media, and researchers in better understanding the Budget. This volume complements the main Budget volume, which presents the President’s Budget policies and priorities, and the Budget Appendix volume, which provides appropriations language, schedules for budget expenditure accounts, and schedules for selected receipt accounts.