There are many steps in the budgeting process, and as the budget season begins, there will be references to the different stages in the complex procedure. There are three terms that are the most important in understanding the budgeting process:

  • Budgets
  • Authorizations
  • Appropriations

Budgets are proposed blueprints for spending, and the President, House of Representatives, and Senate each put together different ones. Budgets are not binding and are not signed into law. Rather, they give guidance on actions policymakers need to take to increase or reduce spending. Budgets also signal which programs will be important to each body when it comes down to end game negotiations.

The guidance that comes out of the budget process takes two forms. First, it helps policymaking committees — the authorizers — figure out what programs need to be changed and/or eliminated to meet the budget's goals. Second, it tells the appropriations committees how much money will be allocated to the programs they oversee.

The following is a breakdown of bill types:

  • Authorizations: This type of bill allows programs to exist, structures how those programs will operate, and sometimes establishes spending minimums or maximums. Just because a program is authorized, however, that doesn't mean it has the money to do anything. That's where appropriations come into play.
  • Appropriations: This type of bill provides the cold, hard cash, and is put together by the 12 subcommittees of the Appropriations Committee.