The executive budget is the budget for the executive branch of the United States government. It was established as one of the reforms during the Progressive Era

Progressive Era

The Progressive Era in the United States was a period of social activism and political reform that flourished from the 1890s to the 1920s. One main goal of the Progressive movement was purification of government, as Progressives tried to eliminate corruption by exposing and undercutting political...

 and became a federal policy in 1921 under the Woodrow Wilson Administration

Woodrow Wilson

Thomas Woodrow Wilson was the 28th President of the United States, from 1913 to 1921. A leader of the Progressive Movement, he served as President of Princeton University from 1902 to 1910, and then as the Governor of New Jersey from 1911 to 1913...

. The process of creating the executive budget consists of three phases. The first stage is the development of the president's budget. In this stage, the president submits a comprehensive budget to congress

Congress

A congress is a formal meeting of the representatives of different nations, constituent states, independent organizations , or groups....

 that covers the full range of federal activities. Next, the budget proposal is edited and revised by congress

Congress

A congress is a formal meeting of the representatives of different nations, constituent states, independent organizations , or groups....

. Last, the budget is finalized and executed. It is then given a budget bill from the legislature

Legislature

A legislature is a kind of deliberative assembly with the power to pass, amend, and repeal laws. The law created by a legislature is called legislation or statutory law. In addition to enacting laws, legislatures usually have exclusive authority to raise or lower taxes and adopt the budget and...

 for designated public projects that provide benefits to an interest group. The legislature

Legislature

A legislature is a kind of deliberative assembly with the power to pass, amend, and repeal laws. The law created by a legislature is called legislation or statutory law. In addition to enacting laws, legislatures usually have exclusive authority to raise or lower taxes and adopt the budget and...

 composes the budget bill while an executive agency

Executive agency

An executive agency, also known as a next-step agency, is a part of a government department that is treated as managerially and budgetarily separate in order to carry out some part of the executive functions of the United Kingdom government, Scottish Government, Welsh Assembly or Northern Ireland...

 implements the bill by choosing which projects to take on within the limitations imposed.

History

One of the reforms of the Progressive Era

Progressive Era

The Progressive Era in the United States was a period of social activism and political reform that flourished from the 1890s to the 1920s. One main goal of the Progressive movement was purification of government, as Progressives tried to eliminate corruption by exposing and undercutting political...

 in the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 was the executive budget system which had its first application for municipal government. The federal government conducted an important study of the executive budget system during the administration of President William Howard Taft

William Howard Taft

William Howard Taft was the 27th President of the United States and later the tenth Chief Justice of the United States...

 (See Sec. VI: The Taft Commission’s Federal Budget Study, pp. 26–31).

The executive budget system was adapted from the longstanding British parliamentary practice that forbade the House of Commons

British House of Commons

The House of Commons is the lower house of the Parliament of the United Kingdom, which also comprises the Sovereign and the House of Lords . Both Commons and Lords meet in the Palace of Westminster. The Commons is a democratically elected body, consisting of 650 members , who are known as Members...

 to increase requests for supply (appropriations) from the governing ministry (prime minister and cabinet) without the approval of the responsible government minister (cabinet member.)(See Sec. VI: Taft)

It became federal policy in 1921 based on actions of the Wilson Administration that were enacted during the administration of Warren G. Harding

Warren G. Harding

Warren Gamaliel Harding was the 29th President of the United States . A Republican from Ohio, Harding was an influential self-made newspaper publisher. He served in the Ohio Senate , as the 28th Lieutenant Governor of Ohio and as a U.S. Senator...

.

Process

The executive budget process consists of three main phases: development of the president’s budget, interaction with congress

Congress

A congress is a formal meeting of the representatives of different nations, constituent states, independent organizations , or groups....

, and execution of the budget.

Development of The president's budget

The legal framework originally established by the Budget and Accounting Act of 1921 requires the president to annually submit a comprehensive budget to [congress]] that
covers the full range of federal activities. Current law requires the president to submit his budget proposal no later than the first Monday in February. The creation of the budget usually begins approximately 10 months before the president submits his budget to congress

Congress

A congress is a formal meeting of the representatives of different nations, constituent states, independent organizations , or groups....

 (about 18 months before the start of the fiscal year). During the early stages of the budget’s formulation, federal agencies prepare their budget requests following their own procedures.

Interaction with congress

The president’s budget does not have any legally binding effect, but rather initiates
the congressional budget process and provides a statement of the budgetary goals of the
president. After the president submits his budget proposal, Office of Management and Budget and other administration officials testify before the congressional committees. Individual federal agencies also justify and explain their specific budget requests at congressional hearings as budgetary legislation is formulated. Agencies submit extensive written justifications, usually focusing on the proposed increase or decrease in spending, to the responsible appropriations subcommittees of each chamber. The Office of Management and Budget ensures that agency budget justifications, testimony, and other submissions are consistent with the president’s policies by requiring agencies to clear any material through The Office of Management and Budget before providing it to congress

Congress

A congress is a formal meeting of the representatives of different nations, constituent states, independent organizations , or groups....

. The president is required to submit a mid-session review by July 15 of each year. This budget update must reflect changes in economic conditions, any legislative actions taken by congress

Congress

A congress is a formal meeting of the representatives of different nations, constituent states, independent organizations , or groups....

, and other factors affecting the president’s initial budget submission.

Execution of the budget

Once appropriation acts and any other budgetary legislation, such as revenue or reconciliation measures, become law, they are executed by the appropriate federal
agencies. However, funds provided in statutes are not automatically available to agencies for obligation. Appropriated funds first must be apportioned by fiscal quarter or by
activity as appropriate. The Office of Management and Budget is responsible for reviewing apportionment requests and making funds available to agencies.

Projects

The legislature

Legislature

A legislature is a kind of deliberative assembly with the power to pass, amend, and repeal laws. The law created by a legislature is called legislation or statutory law. In addition to enacting laws, legislatures usually have exclusive authority to raise or lower taxes and adopt the budget and...

 proposes a budget bill for the executive agency that includes a cap on total spending and earmarked allocations to designated public projects. Each of these projects offers benefits to an interest group. In deciding which project to fund, the executive agency

Executive agency

An executive agency, also known as a next-step agency, is a part of a government department that is treated as managerially and budgetarily separate in order to carry out some part of the executive functions of the United Kingdom government, Scottish Government, Welsh Assembly or Northern Ireland...

 is able to observe the productivity of each of the projects before their decision. Earmarks occur when the executive

Executive (government)

Executive branch of Government is the part of government that has sole authority and responsibility for the daily administration of the state bureaucracy. The division of power into separate branches of government is central to the idea of the separation of powers.In many countries, the term...

 serves a wide variety of interests, and a cap on spending occurs when the executive’s constituency is not as broad as that of the powerful legislators. There is a separation of power between the legislative and executive branches of the government. The legislature

Legislature

A legislature is a kind of deliberative assembly with the power to pass, amend, and repeal laws. The law created by a legislature is called legislation or statutory law. In addition to enacting laws, legislatures usually have exclusive authority to raise or lower taxes and adopt the budget and...

 composes the budget bill, which may or may not include a cap on total spending and earmark

Earmark (politics)

In United States politics, an earmark is a legislative provision that directs approved funds to be spent on specific projects, or that directs specific exemptions from taxes or mandated fees...

ed allocations to designated projects, while an executive agency

Executive agency

An executive agency, also known as a next-step agency, is a part of a government department that is treated as managerially and budgetarily separate in order to carry out some part of the executive functions of the United Kingdom government, Scottish Government, Welsh Assembly or Northern Ireland...

implements the bill by choosing which projects to take on within the limitations imposed by the law.