Explainer: Annual Appropriations Process for the Executive Branch Budget

The federal budget consists of both mandatory and discretionary spending. Mandatory spending, such as the annual costs of programs like Social Security, Medicare, and Medicaid, is determined by formulas and program eligibility criteria outlined in existing laws. Discretionary spending, by comparison, is determined through an annual appropriations process involving both the executive and legislative branches. That process begins when the President submits a budget proposal to Congress. This explainer provides a brief overview of how the federal government determines its budget for discretionary funding each year. 

On May 2, 2025, the Trump Administration released its high-level federal budget proposal, referred to as its topline or “Skinny Budget” for fiscal year 2026. This annual proposal outlines the Administration’s policy priorities and provides recommendations on how discretionary funds should be allocated among federal agencies. Agencies submit their own budget requests to the President which then inform the President’s proposal. Importantly, however, the President’s budget request does not carry the legal authority to authorize an annual budget for the executive branch by itself. Instead, the Constitution requires discretionary spending to be authorized through the legislative process. 

An appropriation is a “statutory provision that provides budget authority,” authorizing the U.S. Treasury to make payments, or outlays, to a federal agency. Budget authority permits an agency to enter into an obligation, or a legally binding financial commitment, and the outlays themselves are used to satisfy obligations. Once enacted, appropriations establish a specified dollar amount that an agency is directed to spend for a specific purpose and within a determined period. 

After the President provides Congress with a topline budget request, it may enact a concurrent budget resolution. A concurrent resolution is an agreement between the House of Representatives and the Senate. Its purpose in the appropriations context is to establish general budget policies and priorities, as well as recommended spending levels for the following five fiscal years. While not binding law itself, a budget resolution serves as guidance to the House and Senate as individual appropriations are grouped together in appropriations acts through the legislative process. Congress passed its most recent concurrent budget resolution in April. 

The House and the Senate each have their own appropriations committee, which are tasked with developing appropriations legislation. Currently, Representative Tom Cole (R-OK-04), a citizen of the Chickasaw Nation, serves as the Chairman of the House Appropriations Committee, and Senator Susan Collins (R-ME) is the Chair of the Senate Appropriations Committee. These committees are divided into 12 subcommittees, each based on a specific jurisdiction.

Federal agencies must also provide the appropriations committees with a more detailed budget justification after the President submits the high-level budget proposal. The subcommittees then review the budget requests from agencies that fall within their assigned jurisdiction, solicit input from appropriations committee members and other members of Congress, and then draft a corresponding appropriations act. 

Members of Congress have the authority to submit formal appropriations requests to the committees, including funding requests for specific projects, organizations, or communities within their constituencies. These member-made requests provide an opportunity for constituents to participate in the appropriations process through advocacy. 

The appropriations committees may also hold hearings, during which agency leaders provide testimony and answer questions about their budget requests. These hearings are concurrently ongoing in the House. After the subcommittees analyze individual agency budget justifications and review input from congressional members, the subcommittee creates a draft appropriations bill, which is refined during markups. That draft is then sent to the full appropriations committee, whose members vote on whether to report the bill to the full House or Senate. The appropriations committees also draft written reports that provide guidance and insight into congressional intent for how agencies should use the appropriated funds. 

Once an appropriations bill is reported to the full chamber, the House of Representatives and the Senate follow different rules for moving the bill forward. This part of the appropriations process usually begins in the House. Generally, representatives have the opportunity to offer amendments or to debate certain provisions within the bill. Once all amendments have been offered and considered, representatives vote to pass the bill, at which point it is sent to the Senate for consideration. The House passed this year’s budget bill on May 22, 2025. The Senate conducts a similar process, after which it too votes on final passage. A favorable vote sends the appropriations bill to the final step in the legislative process: resolving differences between the House and Senate bills. 

The Constitution requires that the House and Senate pass the same version of a bill. When there are differences between each chamber’s version of an appropriations bill, Congress may resolve those differences through negotiations or by exchanging amendments between the two chambers. When both chambers agree on a finalized version of the bill, it is enacted into law and accompanied by the appropriations committee’s written reports. Once passed into law, federal agencies may then begin to execute their budgets.