In Government Spending, Congress Has the Power of the Purse

By Sheeva Azma

Congress’s Constitutional authority of the “power of the purse” means that it funds all of government each year, including the executive and judicial branches.

To understand the process by which the United States’ government gets funded every year, you need to know a little bit about how a bill goes from being an idea to becoming a law. We’ll get into that later in this post.

Appropriations has to happen every year for the government to be funded, and in this case, Congress has the “power of the purse” to fund the entire government. By contrast, for science laws that are not annual appropriations bills, the process of going from an idea to a law can range from a year to over a decade: just check out the timelines for the Chips and Science Act (2021-2022) and the Genetic Information Nondiscrimination Act (1995-2008).

Congress passes appropriations bills each year to provide budget authority to federal agencies — in other words, Congress gives money to federal agencies so they can perform their tasks. The money Congress allocates in appropriations bills comes out of the US Treasury and goes, as specified, to the purposes delineated in the appropriations bill. According to the US House of Representatives, there are 12 annual appropriations acts, as well as supplemental appropriations, that are passed every year.

While there are many different kinds of appropriations bills, but the ones you are most familiar with are most likely the annual appropriations (also known as single-year or fiscal appropriations). The annual budget bill in Congress is essential because it enables the federal government to allocate funding for its operations, programs, and services for the upcoming fiscal year. Without this bill, Congress would lack the authority to spend money on discretionary activities such as national defense, education, and transportation, as mandated by Article I, Section 9, Clause 7 of the Constitution, which states that money can only be drawn from the Treasury as appropriated by law. Congress’s budget bill also sets overall spending limits and priorities, ensuring that taxpayer dollars are allocated according to national needs and policy goals.

By passing the annual budget, Congress exercises oversight over federal agencies, maintains fiscal discipline, and provides transparency and accountability in government spending. Therefore, Congress’s annual appropriations activity is critical for government to function and for the US economy’s stability, as appropriations guides fiscal decision-making and helps prevent government shutdowns due to lapses in funding.

So how does appropriations work? Keep reading for a quick overview of the steps involved in appropriating funds each year.

How does the appropriations process work?

Every year, Congress follows a structured process to appropriate funds for federal government operations. At the National Science Foundation website, you can read an ideal timeline of how it’s all supposed to work, but it doesn’t always happen in the ideal timeframe. Ideally, the president submits their detailed budget request to Congress in February, and then Congress gets to work on hammering out the details through June, and pass a funding bill for the next fiscal year before it starts in October.

• Presidential Budget Submission: The process begins with the president submitting a detailed budget request to Congress, usually by the first Monday in February. Because Congress has the power of the purse, as delineated in the Constitution, the president’s budget is more of a suggestion of funding priorities for the upcoming fiscal year, which goes from October 1 of one year to September 30 of the next.
• Congressional Budget Resolution: The next step is for Congress to get to work coming up with an actual appropriations bill. The House and Senate Budget Committees draft and vote on budget resolutions, which set overall spending limits for the year. These are not the hard-and-fast numbers that are funded, but rather, serve as guides for the appropriations process.
• Appropriations Subcommittee Work: Both the House and Senate Appropriations Committees have 12 subcommittees, thanks to a 2007 reorganization that made them have identical structures across chambers. Each year, the House and Senate Appropriations Committees divide responsibility for drafting the annual appropriations bills among each’s 12 specialized subcommittees. Each subcommittee oversees funding for a specific segment of the federal government, reviewing the president’s budget request and holding hearings to gather information to help them draft their relevant portion of the annual appropriations legislation, which can include “marking up” or amending the presidential budget request. If you’d like to learn more about how committees work compared to member offices, check out this explainer we wrote that covers both member and committee staffers in Congress.
• Drafting Appropriations Bills: The subcommittees come up with the appropriations levels relevant to their specific subject area, which then is subject to approval by the entire House (for House appropriations subcommittees) or the entire Senate (for Senate appropriations subcommittees). The 12 subcommittee appropriations bills are then approved by the full Appropriations Committee. The House and Senate Appropriations subcommittees generally work separately to draft their respective versions of each appropriations bill. However, collaboration between the two chambers does occur, particularly after each has passed its own version of a bill. The most direct and formal cooperation happens in the conference committee stage, where members from both the House and Senate Appropriations Committees (including relevant subcommittee leaders) meet to resolve differences and produce a final, unified version of the appropriations bill for both chambers to approve.
• House and Senate Consideration: The full House and Senate debate, amend, and vote on the appropriations bill. If the two chambers pass different versions, a conference committee reconciles the differences so that it can go back to all of Congress (both the House and Senate) for a vote.
• Final Approval and Presidential Signature: The reconciled appropriations bills are sent back to both chambers for final approval and then to the president for signature or veto. Once signed, funds are allocated to federal agencies to carry out their programs.

How Continuing Resolutions Differ

A continuing resolution (CR) is used when Congress fails to pass one or more of the regular appropriations bills before the start of the fiscal year on October 1. Unlike the full appropriations process, a CR provides temporary funding—usually at the previous year’s levels—to keep the government operating while lawmakers continue to negotiate and finalize appropriations. CRs are stopgap measures and do not set new funding priorities or make significant changes to programs; they simply extend existing funding to prevent a government shutdown until regular appropriations can be completed.

The Bottom Line

In summary, the annual appropriations process is a slow, deliberative, multi-step procedure in which Congress sets funding levels for government operations, while continuing resolutions are temporary fixes that maintain funding at current levels when the regular process is delayed.