Scott Liddicoat

When was the current federal budget process created?  It was created by Congress in 1974 with the passage of the Congressional Budget Act (CBA).  The Act set up an advance planning process that is intended to proceed in an orderly, scheduled way.  It is supposed to be completed annually by October 1^st, when the new federal fiscal year begins.

How is the federal budget process designed to work?  As you read this, keep in mind “the budget” is meant to be completed for the next fiscal year while spending is taking place during the current fiscal year.  The President is supposed to send Congress a budget each year in February (for the following year, beginning October 1^st).  Congress is then expected to adopt a Budget Resolution by April 15^th.  This Resolution, which is not signed by the President, provides a broad taxing and spending plan for the (next) fiscal year. The House and Senate follow that plan, negotiating among themselves and with the President. The required product is twelve, detailed individual “regular appropriations” bills. Congress and the President are supposed to sign all twelve before October 1^st (the start of the new federal fiscal year). The required appropriations bills fall into these categories:

  ● Agriculture                                        

  ● Interior / Environment

  ● Commerce/Justice/Science  

  ● Labor / HHS / Education

  ● Defense                                            

  ● Legislative Branch

  ● Energy / Water                                 

  ● Military

  ● Financial Services                           

  ● State / Foreign Operations

  ● Homeland Security              

  ● Transportation / HUD

How often is the budget process followed properly?  The last time the budget process was followed properly was in 1996.

What happens when the CBA process isn’t completed by October 1st?  The lack of funding authorization forces a “government shutdown,” which everyone knows isn’t really a shutdown.  The IRS continues to collect our taxes, after all.  But many non-essential government services are temporarily reduced or closed.  Until resolved, some federal employees are furloughed or laid off, while other “essential” employees are required to work without pay.  As indispensable workers, the politicians continue at full pay and benefits during any and all shutdown periods.

How is a government shutdown resolved?  There are three ways.

1.  Congress passes and the president signs all twelve required, regular appropriations bills. 

2.  Congress passes and the president signs a Continuing Resolution.  A CR provides funding at levels from the previous fiscal year for a defined period of time.  One or more CR’s have been used to extend funding to avoid a shutdown every year since 1996.  In theory, this gives Congress and the President more time to negotiate passage of all twelve regular appropriations bills.

3.  Use a CR (or several of them) to get through the fiscal year without a budget, starting the next budget year under a CR.

What are the consequences of going through a substantial portion or all of the budget year under a CR?  Our government goes into (or through) the fiscal year without the required advance revenue and spending plans.  The President and Congress fall further behind in (or never perform) the preparation desperately needed for the next budget year.  Spending decisions are made up by the politicians as they go along, often without regard to revenue limitations. 

Following a non-process like this, it should be no surprise that the result has become continuous deficit spending.  Yet federal politicians still have the audacity to call it all “the budget process.”

What is the take home message?  We now have an entire generation of politicians and bureaucrats in power that have no understanding of the need for advance financial planning and budgeting.  Alternatively, it may be that they have no respect for it.

Meanwhile, the politicians have run deficits in all but two of 28 years since 1996.  For this reason, it may be said the procedure they follow virtually demands deficit spending every year.  The “father” of deficit spending, John Maynard Keynes, promoted it as a way to stimulate the economy during an economic recession.  Deficits would be repaid with surpluses in the good and boom years.  Plainly, Keynes’ model has nothing to do with our current pattern of nonstop deficit spending.

Whether intended or not, this process also results in a confused, convulsed, and angry public.  A public that understands little of what has been written above and may not even care.  A public whose confusion and anger can be manipulated for political ends.

Those who found what’s written here to be acceptable stopped reading this a while ago.  But if you found it to be disagreeable, doing what’s within your power to bring about an improvement in government leadership becomes your obligation as a citizen.  Founder and President Three, Thomas Jefferson, got it right when he wrote, “…wherever the people are well informed they can be trusted with their own government; that whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights.”      

saltwatertea.org 10/27/25