The Three-Tier Legislative Process: Authorizations; Appropriations & Revenues; Budget Process
Congress has a three-tier legislative process: (1) authorizations controlled by 17 authorizing committees in the House and Senate, respectively; (2) annual appropriations and revenue-raising controlled by House and Senate Appropriations Committees and the two tax-writing committees; and (3) the newest tier—the congressional budget process—which focuses on broad fiscal priorities and the effects of total spending and revenues on the U.S. economy.
Tier I: Authorizations
Congress’ authorization process establishes federal programs in response to national needs. The House and Senate each have 17 authorizing committees, respectively, (see Table 1)8F28F although the number of committees has varied over the years.
Authorizing committees have several legislative functions. They assess national, regional, and international needs and determine if a federal response is necessary and appropriate through establishment of a federal program, project, or activity, assistance to state and local governments or international organizations, or providing incentives to, or regulating, private sector activities.
Authorizing legislation frequently authorizes the appropriations committees to provide funding up to specified levels for authorized programs. Authorization language typically provides, “There are authorized to be appropriated for programs in this (bill, title, or section) up to (specified sum) for (specified fiscal years).” Authorization of appropriations language does not provide actual funding; rather, it establishes a desirable level of funding for a particular program. The appropriations committees ultimately determine if funding is available, within overall priorities and constraints, and at what levels funding is to be provided for a particular fiscal year.
Authorizing committees conduct ongoing oversight of federal programs to determine if program objectives are being fulfilled or if changes, adjustments, or elimination are appropriate. (However, detailed agency and program oversight is also conducted by the appropriations subcommittees during annual funding hearings; the annual appropriations hearing is often the most detailed oversight an agency receives.)
Authorizing committees are also responsible for evaluating the ongoing costs and effectiveness of entitlements and other direct spending programs, where federal expenditures result directly from authorizing statutes. For example, expenditures from the Social Security, Medicare, and Medicaid programs—the largest entitlement programs—result from benefit and payment formulas in the Social Security Act which is under the jurisdiction of the Senate Finance, House Ways & Means, and House Energy and Commerce Committees.
Tier II. Appropriations and Revenue Raising
The second tier of the legislative process is appropriations and revenue-raising. The two Appropriations Committees—one in the Senate and one in the House—allocate available funds among agencies and programs established by the authorizing committees. Most of the detailed work of the House and Senate Appropriations committees are conducted at the subcommittee level, by 12 subcommittees with jurisdiction over the various departments, agencies, and programs of the federal government.
On the revenue side of the federal budget, the Senate Committee on Finance and House Committee on Ways and Means have jurisdiction over raising revenues through individual, corporate, estate and gift, and excise taxes; customs duties; and various miscellaneous revenues.
Tier III. Congressional Budget Process and the Budget Resolution
The congressional budget process is the third, and most recent, tier of the legislative process. Under the 1974 Budget Act, the Congress establishes overall fiscal policy by adopting a Concurrent Resolution on the Budget (“budget resolution”).66F[1]
The budget resolution is not a law; it is an internal congressional framework to guide the work of the appropriations, authorizing, and tax committees. It establishes, for the upcoming fiscal year, a spending ceiling and revenue floor, a total amount for discretionary appropriations and, in some years, the amount by which entitlement spending or tax revenues should be adjusted by a filibuster-proof budget reconciliation bill. In the last decade, Congress has several times chosen to enact statutory “Bipartisan Budget Agreements” instead of a budget resolution.
A frequent misconception about the congressional budget process is that the budget resolution contains program-by-program detail; it does not. The budget resolution establishes a non-statutory, internal congressional framework for total spending and revenues, committee spending allocations, and enforcement mechanisms, but does not set funding levels for any individual programs.
A second misconception is that the budget resolution is the product of negotiations with the President. The budget resolution is a “concurrent resolution” that Congress, alone, uses as an internal mechanism to guide subsequent congressional action on spending and revenue bills. As a concurrent resolution of the House and Senate, it is not presented to the President for signature.