The government appropriations process is the sequence by which Congress turns a spending idea into legal authority for a federal agency to draw money from the Treasury. It rests on a constitutional rule that only Congress can approve federal spending, and it runs on an annual cycle that begins with a presidential budget request and ends, ideally, with twelve signed appropriation bills before the fiscal year starts on October 1. When that cycle breaks down, a separate set of laws governs what the President can withhold, what agency employees can spend, and what happens to workers when the money runs out.
Why Congress Controls the Money
Article I, Section 9 of the Constitution says no money can be drawn from the Treasury unless Congress has passed a law allowing it.1Cornell Law Institute. U.S. Constitution Annotated – Appropriations Clause The Supreme Court has read this Appropriations Clause to mean, in practical terms, that “no money can be paid out of the Treasury unless it has been appropriated by an act of Congress.” The same clause requires a regular public accounting of receipts and expenditures.
The effect is that no agency funds itself, no president directs Treasury payments on his own signature, and no military branch buys equipment without a legislative green light first. Every dollar traces back to a statute.
Mandatory Spending Skips the Annual Process
Before following the process, it helps to know what actually goes through it. The federal budget splits in two.
Mandatory spending covers programs funded by permanent laws that don’t need yearly renewal. Social Security draws from dedicated trust funds under a permanent appropriation: amounts equivalent to payroll taxes collected each year are automatically credited to the funds, with no annual vote.2Office of the Law Revision Counsel. 42 USC 401 – Trust Funds Medicare’s hospital insurance and supplementary medical insurance trust funds work the same way.3Social Security Administration. Social Security Act Title XVIII – Health Insurance for the Aged and Disabled Medicaid, federal retirement benefits, and various safety-net programs also sit in this category. Mandatory programs together account for nearly two-thirds of federal spending.4U.S. Treasury. Federal Spending
Discretionary spending is the roughly one-third Congress must actively fund each year. Defense, education, transportation, scientific research, federal law enforcement, and the operating budgets of most federal agencies all fall here. When people say “the appropriations process,” they mean this slice. Miss the deadline on these bills and the affected agencies lose their legal authority to spend.
Authorization First, Appropriation Second
Discretionary funding involves two separate steps. An authorization act creates or continues a program, sets its policy goals, and typically states a ceiling on how much can be spent. An appropriation act then provides the actual money, specifying the dollar amounts an agency can obligate during a given fiscal year. The authorization is the blueprint; the appropriation is the construction loan.
That separation lets lawmakers debate whether a program should exist independently of how much to spend on it. A program authorized at $500 million can receive $300 million in appropriations. The authorization is a cap, not a guarantee.
In theory, a program needs a current authorization before it receives appropriations. In practice, Congress routinely funds programs whose authorizations expired years ago. The Congressional Budget Office identified 1,326 expired authorizations before fiscal year 2025, with $500 billion in appropriations attached to 457 of them. Nearly two-thirds of that $500 billion went to programs whose authorizations expired more than a decade earlier, and just 23 laws accounted for $450 billion of the total.5Congressional Budget Office. Expired and Expiring Authorizations of Appropriations: 2025 Final Report Both chambers have rules that can block appropriations for unauthorized programs, but those rules are frequently waived.
The Annual Cycle
The federal fiscal year runs October 1 through September 30.6Office of the Law Revision Counsel. 31 USC 1102 – Fiscal Year The path from proposal to signed law follows a roughly predictable sequence, though delays are common.
The President’s Budget Request
Federal law requires the President to submit a budget proposal to Congress no later than the first Monday in February each year.7Office of the Law Revision Counsel. 31 USC 1105 – Budget Contents and Submission to Congress The document is a detailed wishlist, not binding legislation. It lays out the administration’s priorities across every department and gives Congress a starting point. Presidents frequently miss the deadline, and the proposal often arrives weeks late, but the statutory target remains the first Monday in February.8U.S. House Committee on the Budget. Time Table of the Budget Process
Subcommittee Drafting and Floor Votes
Each chamber has an Appropriations Committee that divides its work among twelve subcommittees, each responsible for a different slice of the government.9House Committee on Appropriations. Subcommittees The subcommittees cover areas such as defense, homeland security, agriculture, transportation, and labor and health. Each holds hearings, reviews agency performance, and drafts its own spending bill. Members propose changes during a markup session before the bill moves to the full committee and then to the chamber floor.
The House and Senate almost always pass different versions of the same bill. The two chambers must reconcile the differences, either through a conference committee or by trading amendments back and forth, until both approve identical text. Then it goes to the President for a signature or veto.
Community Project Funding
After a long moratorium, Congress has resumed letting individual lawmakers request funding for specific local projects within appropriation bills. These requests, formally called congressionally directed spending, run through a transparency process. Senators submitting requests for fiscal year 2026 must certify that neither they nor their immediate family members have a financial interest in the project, and the Appropriations Committee publishes all requests and certifications on its website.10United States Senate Committee on Appropriations. FY 2026 Appropriations Requests and Congressionally Directed Spending
Reconciliation: A Different Track
Reconciliation is a fast-track tool that lets Congress adjust spending and revenue through a bill that cannot be filibustered in the Senate, meaning it needs only a simple majority. The tradeoff is tight restrictions on what the bill can include. Under the Byrd Rule, any provision that doesn’t produce a change in federal spending or revenue is considered “extraneous” and can be stripped out on a point of order.11Office of the Law Revision Counsel. 2 USC 644 – Extraneous Matter in Reconciliation Legislation Provisions that increase the deficit beyond the bill’s budget window are also barred unless offset by savings elsewhere. Reconciliation bills cannot change Social Security spending or its dedicated revenue. Sixty votes can override a Byrd Rule objection, but that defeats the purpose of using reconciliation at all.
Before a reconciliation bill reaches the floor, lawmakers typically review its provisions with the Senate Parliamentarian to identify potential Byrd Rule problems, a vetting sometimes called the “Byrd Bath.”
The Four Kinds of Appropriation Bills
- Regular appropriation acts. The twelve individual bills that fund the government for the full fiscal year, each aligned with one of the twelve Appropriations subcommittees. The goal is passage before October 1, though Congress rarely meets it.
- Continuing resolutions. When regular bills aren’t finalized on time, a temporary funding measure keeps the government operating. A typical continuing resolution funds agencies at prior-year levels and prohibits new projects or activities not already approved. Specific adjustments, called anomalies, can raise or lower funding for particular accounts.
- Supplemental appropriation acts. Unforeseen needs like natural disasters, military operations, or public health crises can require additional funding mid-year. Supplemental bills let the government respond without raiding the budgets of other programs.
- Omnibus spending packages. When a session’s end approaches with several regular bills unfinished, Congress sometimes bundles them into one massive bill labeled “consolidated” or “omnibus.” These packages can run thousands of pages and limit lawmakers’ ability to debate and amend individual bills, since everything is rolled into a single vote.
What the President Can and Can’t Do After Appropriation
Once Congress appropriates money, the President generally cannot refuse to spend it. The Impoundment Control Act of 1974 was enacted to prevent the executive branch from unilaterally withholding funds Congress approved. It creates two categories of presidential action.
Rescissions
A rescission is a proposal to permanently cancel budget authority. The President can propose one for policy reasons or because funds are no longer needed, but the money can only be withheld for 45 days of continuous congressional session while Congress considers the proposal.12Office of the Law Revision Counsel. 2 USC 683 – Rescission of Budget Authority If Congress doesn’t pass a rescission bill within that window, the funds must be released. Once released under this procedure, the same money cannot be proposed for rescission again.
Deferrals
A deferral is a temporary delay in spending. The law allows deferrals only for three reasons: to provide for contingencies, to capture savings from improved efficiency or changed requirements, or when another statute specifically permits it.13Office of the Law Revision Counsel. 2 USC 684 – Proposed Deferrals of Budget Authority Policy disagreements with Congress are not a valid basis. No deferral can extend past the end of the fiscal year in which it’s proposed. The Government Accountability Office reviews each impoundment message and reports to Congress when the President fails to disclose one.14U.S. Government Accountability Office. Impoundment Control Act
What Agency Employees Can and Can’t Spend
The Anti-Deficiency Act works from the other direction, preventing federal employees from spending money they don’t have. It imposes three core prohibitions on every government officer and employee.15Office of the Law Revision Counsel. 31 USC 1341 – Limitations on Expending and Obligating Amounts You cannot authorize or make an expenditure that exceeds the amount available in the relevant appropriation. You cannot commit the government to a contract or financial obligation before Congress has appropriated the funds, unless another law specifically authorizes it. And you cannot obligate money that has been sequestered under the Balanced Budget and Emergency Deficit Control Act.
The consequences for knowingly and willfully breaking these rules are personal. An employee who violates the spending limits faces a fine of up to $5,000, imprisonment for up to two years, or both.16Office of the Law Revision Counsel. 31 USC 1350 – Coercive Deficiency Unintentional violations that don’t rise to the criminal level can still result in administrative discipline, including suspension or termination. When a violation occurs, the head of the responsible agency must report all relevant facts to the President, Congress, and the Comptroller General.17Office of the Law Revision Counsel. 31 USC 1351 – Reports on Violations
When the Process Fails: Shutdowns
When Congress fails to pass appropriation bills or a continuing resolution before the fiscal year begins, the government enters a funding gap. The most recent shutdown began on October 1, 2025, and lasted 42 days, the longest in history.18Congress.gov. Past Government Shutdowns: Key Resources Other notable gaps include 34 days spanning late 2018 into 2019 and a 21-day shutdown in 1995–1996.
During a lapse, agencies can only continue operations classified as “excepted.” An activity may continue if a separate statute authorizes it independently of annual appropriations, if suspending the function would pose an imminent threat to human life or property, if the activity is necessary for the President to carry out constitutional duties, or if it directly supports another excepted function.19The White House. Frequently Asked Questions During a Lapse in Appropriations The threat-to-life-or-property standard requires more than a general connection: agencies must show a reasonable likelihood that safety would be compromised in a significant way without immediate action. Everyone else gets furloughed.
Since 2019, federal law has guaranteed that all employees affected by a shutdown will eventually be paid. Both furloughed workers and excepted employees who continued working must receive their standard pay for the lapse period as soon as possible after funding resumes.20Office of the Law Revision Counsel. 31 USC 1341 – Limitations on Expending and Obligating Amounts – Section: Subsection (c) Excepted employees are also entitled to use their regular leave benefits, with compensation following once appropriations are enacted.21U.S. Office of Personnel Management. Employee Pay, Leave, Benefits, and Other Human Resources Programs Affected by the Lapse in Appropriations The back-pay guarantee doesn’t eliminate the hardship. Many federal workers go weeks without a paycheck, and federal contractors typically receive nothing for the lost time.