The Legislative Branch and Public Policy · Weeks 10-18

The Budgetary Process

Evaluating how the government prioritizes spending and the ethics of fiscal policy.

About This Topic

The federal budget is the most consequential policy document the US government produces each year. It determines which programs receive funding, sets national priorities, and reflects fundamental choices about the role of government in American life. The formal budget process is defined by the Congressional Budget Act of 1974, which established the budget resolution, reconciliation, and appropriations procedures that govern how Congress and the president negotiate spending.

The process begins with the president's proposed budget, submitted to Congress in February, which serves as a statement of administration priorities rather than binding law. Congressional budget committees then produce a concurrent resolution setting overall spending and revenue targets. Appropriations subcommittees draft 12 separate spending bills covering each area of government. The gap between what the president requests, what Congress appropriates, and what actually gets spent reflects the political tensions built into the system. When the process breaks down, the government operates on continuing resolutions or faces shutdown.

Active learning makes the budget tangible. When students must allocate a finite pot of money across competing priorities, the trade-offs become immediate rather than theoretical. Budgeting simulations reveal how every dollar spent on one program is a dollar not available for another.

Learning Objectives

• Analyze the key stages of the US federal budgetary process, from presidential proposal to congressional appropriation.
• Evaluate the ethical implications of specific spending choices and revenue-generating policies within a hypothetical budget.
• Design a detailed federal budget for a specific government agency, justifying resource allocation based on stated priorities.
• Compare the budgetary priorities of different presidential administrations or congressional factions using historical data.
• Critique the effectiveness of the current budgetary process in addressing national needs and deficits.

Before You Start

Branches of the US Government

Why: Students need to understand the distinct roles of the President and Congress to follow the budgetary process.

Principles of Economics: Supply and Demand

Why: Understanding basic economic principles helps students grasp the impact of government spending and taxation on the broader economy.

Introduction to Public Policy

Why: Students should have a foundational understanding of how government addresses societal issues to appreciate the purpose of the budget.

Key Vocabulary

Budget Resolution	A concurrent resolution passed by Congress that sets overall spending and revenue targets for the upcoming fiscal year, guiding subsequent appropriations bills.
Appropriations Bill	Legislation passed by Congress that provides funding for specific government programs and agencies, often broken down into 12 distinct bills.
Continuing Resolution	A temporary funding measure passed by Congress to allow government operations to continue when a new budget has not been enacted by the start of the fiscal year.
Fiscal Policy	The use of government spending and taxation to influence the economy, including decisions about how public funds are raised and allocated.
Mandatory Spending	Spending required by existing laws, such as Social Security and Medicare benefits, which does not require annual appropriation by Congress.
Discretionary Spending	Spending that Congress can adjust annually through appropriations bills, covering areas like defense, education, and transportation.

Active Learning Ideas

Simulation Game: Budget Allocation Challenge

Each student group receives a simplified federal budget framework with current spending levels and a deficit reduction or reallocation target. Groups decide where to cut or reallocate funds, defend their choices to the class, and respond to critiques. The debrief surfaces the value judgments embedded in any budget decision.

⏱ 60 min·Small Groups

Generate mission

Research: Where Does the Money Go?

Students use the USASpending.gov database to explore one federal agency's budget in depth: total appropriation, breakdown by program, year-over-year changes, and largest contracts or grants. Each student presents findings on a budget map and the class assembles a picture of the full federal budget.

⏱ 50 min·Individual

Generate mission

Structured Analysis: Ethics of Federal Spending

Present students with three philosophical frameworks for evaluating government spending: utilitarian maximization of welfare, Rawlsian justice focused on the worst-off, and libertarian minimal government. Students apply each framework to evaluate a specific budget allocation and discuss which framework they find most defensible.

⏱ 45 min·Small Groups

Generate mission

Real-World Connections

The Congressional Budget Office (CBO) provides non-partisan analysis of budgetary and economic issues to support the budget process, influencing debates on national debt and spending priorities for lawmakers in Washington D.C.

Local government finance officers in cities like Chicago or Houston must balance competing demands for services, such as police, fire, and infrastructure, within their municipal budgets, mirroring federal challenges on a smaller scale.

Economists working for think tanks like the Brookings Institution or the Heritage Foundation publish reports analyzing the impact of proposed tax cuts or spending increases, directly informing public discourse and legislative decisions on fiscal policy.

Watch Out for These Misconceptions

Common Misconception

The president controls the federal budget.

What to Teach Instead

The Constitution gives Congress the power of the purse. The president proposes a budget and can veto appropriations bills, but Congress writes and passes the spending legislation. In practice, the budget is the product of negotiation between the two branches, and the president often receives less than requested.

Common Misconception

Mandatory spending is the same as discretionary spending.

What to Teach Instead

Mandatory spending, such as Social Security, Medicare, and Medicaid, is governed by formula-based laws and does not require annual appropriations. Discretionary spending is appropriated each year and is what budget negotiations typically focus on. Most of the federal budget is mandatory, leaving less room for annual negotiation than many people assume.

Assessment Ideas

Exit Ticket

On an index card, have students list two mandatory spending items and two discretionary spending items. Then, ask them to write one sentence explaining the primary difference in how these two types of spending are approved by Congress.

Discussion Prompt

Pose the following question to small groups: 'If you were tasked with reducing the national deficit by 10%, which two areas of the federal budget would you prioritize for cuts and why? Consider the ethical implications of your choices.'

Quick Check

Provide students with a simplified flowchart of the federal budget process. Ask them to label three key stages and briefly describe the main action that occurs at each stage, such as 'President submits proposal' or 'Congress passes appropriations bills'.

Frequently Asked Questions

What is the difference between mandatory and discretionary spending?

Mandatory spending is determined by formulas written into law. Programs like Social Security and Medicare pay benefits to anyone who qualifies regardless of annual appropriations. Discretionary spending is set each year through appropriations and covers most federal agencies. About two-thirds of federal spending is mandatory; one-third is discretionary.

What is a continuing resolution?

A continuing resolution is a temporary measure that allows the government to continue operating at current funding levels when Congress has not passed regular appropriations bills by the start of the fiscal year on October 1. CRs have become increasingly common as the regular appropriations process has broken down.

What causes government shutdowns?

Shutdowns occur when Congress fails to pass appropriations legislation and the president does not sign what Congress sends. This triggers the Antideficiency Act, which prohibits agencies from spending money without an appropriation. Essential services continue; non-essential personnel are furloughed without pay until funding is restored.

How does active learning help students understand the federal budgetary process?

Budget simulations force students to confront trade-offs that abstract descriptions never capture. When a group must decide whether to cut defense, social programs, or infrastructure to meet a deficit target, they quickly discover that budget decisions are fundamentally about competing values, not just numbers. This experience makes real political battles over the budget much more comprehensible.