By the first Monday in February, the president gives Congress a proposed budget for the fiscal year to begin the next October 1. The proposed budget includes requested amounts of spending and taxation for the year and any recommended policy changes.

Congressional Action: Key Points

The Budget Framework
Congress establishes overarching budget frameworks before filling in the details. This budget blueprint adheres to two concepts: mandatory spending and receipts, and discretionary spending.

• Mandatory spending and receipts: Mandatory spending and receipts are permanently authorized by laws. They include entitlement spending, such as Social Security, unemployment compensation, welfare, Medicaid, child welfare, and the tax laws that determine revenues, also known as receipts. Mandatory spending accounts for about two-thirds of all federal spending.
• Discretionary spending: Discretionary spending must be decided each year through 13 appropriations bills. The 13 bills cover 19 major areas of spending, also known as budget functions. Discretionary spending accounts for the other one-third of federal spending.

Committees
Six key committees, three in each chamber, oversee the process:

• The House and Senate Budget committees have jurisdiction over the initial framework. Their sole function is producing the budget resolution.
• The House Ways and Means and the Senate Finance committees oversee entitlement programs and taxes.
• The House and Senate Appropriations committees oversee discretionary spending. Most children's programs go through these committees.

The Budget Resolution
According to the Congressional Budget Act of 1974, Congress should annually adopt its budget resolution framework by April 15. Included in the budget resolution are total revenues, total spending limits and tax cuts, and amounts for the 13 appropriations bills.

Along with the Budget Act, the House and Senate must abide with a rule known as PAYGO that governs the amount of entitlement spending and tax changes. PAYGO requires that tax cuts and entitlement increases be fully offset unless the changes in the combined dollar amount fit within the amounts determined in the budget resolution.

Appropriations
By June 30, the House should have completed action on appropriations bills. Then the Senate takes up the bills. However, deadlines for completion of the appropriations bills and the final budget are often missed.