Budget Process

The budgetary process, in theory, culminates the policy objectives that government intends to pursue in a given year. While we might think in such broad terms as pursuing the national interest, providing an adequate defense, producing housing for the poor, etc., the budget is actually much more specific. Attention must be paid to thousands of line items, each representing the precise program and estimates of cost to pursue each policy objective. How does government compile a budget? The overall process sounds simple: Review cost estimates of all government programs, cut those which are unnecessary or unproductive, and raise revenue for those which work. There are three sets of institutional stages in budget formulation:

Budget requests are submitted from the operating agencies. These may be padded with wish lists or driven by dire necessity.
Budget requests originate with the agencies of the government bureaucracy and go to a centralized office of Management and Budget (OMB) within the executive branch. OMB is the nerve center of the process.
The appropriations are recommended by OMB to committees in both houses of Congress, which have the final say. In the American system, the legislature authorizes funding, a Practice which extends to state government.

We should understand budgets in the policy cycle framework we are familiar with. we recognize that authorizing a policy is one thing, getting it funded is quite another. The scrutiny of a program's budget forces a judgment of its worth. When budgets are reauthorized, they may be subject to a renewal of political issues which may have been temporarily resolved during the policy formulation stage. The setting of the annual appropriation for a Program is not normally as decisive as the policy formulation stage. Legislation is a very different process from budget authorization. Yet, the budget is an ongoing process: never ending, interrelated, and complex.

Competition and politics runs through every stage of the policy cycle. Getting attention for an issue on the agenda involves a struggle among many eligible policy matters. Policy formulation includes the assessment of alternative strategies and the building of majorities, so the competition is among different ways of addressing what is perceived as a public problem placed on the agenda. In the political environment of deficit spending and resistance to tax increases, each program must actively compete against all others. New initiatives are rare. Increases in the price tag of a policy becomes acutely contentious. Many potential issues will never be seriously considered due to paucity of financial mean in the richest country in history.

A good way to understand the budget is to go to the official explanation of the budget process and a citizen's guide to the budget.

An example of this is the lack of financial support for Poland and the former Soviet Union, both undergoing historical transformation. If the budgetary resources were available, a more assertive response might be forthcoming from Washington. Deficit reduction targets make it much harder to muster the resources for such foreign aid. AIDS research has been pitted against cancer research, a Hobson's choice.

The Budgetary Process