Budget and Appropriations

Congressional Climate Camp 2023

Find out more about the briefings in this series below:

Implementing the Inflation Reduction Act and Infrastructure Investment and Jobs Act

Ready to make a difference in climate policy? But not sure where to start? We have you covered. The Environmental and Energy Study Institute (EESI) invites you to watch our briefing series, Climate Camp. We went go over the basics of the legislative process, highlighting key areas and opportunities for climate mitigation and adaptation policy.

Our first session in EESI’s Congressional Climate Camp series will bring you up to speed on the budget and appropriations process already underway for fiscal year 2024. Panelists drew on examples of funding for climate, energy, and environment programs to bring the process to life and show how it plays out in practice. Panelists also described how annual appropriations have been impacted by the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

Highlights

KEY TAKEAWAYS

The appropriations process is the distribution of all non-mandatory (i.e., discretionary) funding by Congress. The annual process begins when the president submits the budget to Congress.
Federal agencies are each assigned to one of 12 Appropriations subcommittees.
When members of Congress submit requests to the Appropriations committees, they can make a funding request, a report language request, or a bill language request. Members of Congress can make individual requests or sign on to multi-member letters.
Earmarks on the House side are called “Community Project Funding,” and, on the Senate side, they are called “Congressionally Directed Spending.” Earmarks allow members of Congress to support specific projects within their state or district. Earmarking was reinstated during the 117^th Congress, following a 10-year moratorium.
Fights over discretionary spending may get linked to a fight over the debt limit, as seen in 2011 and 2013, but the debt limit is fundamentally about past spending choices, not future choices. There are times when appropriations and the debt limit have been linked politically and by the calendar, but conceptually they are not linked.

Angela Jones, Analyst in Environmental Policy, Congressional Research Service

The appropriations process is the distribution of all non-mandatory (i.e., discretionary) funding by Congress. The annual process begins when the president submits the budget to Congress. This is technically required to take place the first week of February but has been delayed the last several years. For example, President Biden submitted the fiscal year 2023 budget proposal to Congress on March 28, 2022.
In the budget, the president recommends spending levels for federal programs and agencies in the form of budget authority. Budget authority is the authority provided by federal law to enter into contracts or financial obligations. Budget authority is obligated within the period authorized in statute, and could be one-year, multiple years, or “no year” and available until whenever it is used. Outlays, which are financial expenditures, can occur over time.
Federal agencies follow up on the budget proposal by sharing additional detailed justification materials to the Senate and House Appropriations committees.
Then Congress adopts a budget resolution, which is a response to the president’s budget. This concurrent resolution is not a law, but rather an agreement between the House and Senate to establish the overall budgetary and fiscal policy that will be carried out by subsequent legislation. The budget resolution covers the upcoming fiscal year, referred to as the “budget year,” as well as recommendations for four subsequent fiscal years. The budget resolution also allocates federal spending among 20 functional categories such as national defense, agriculture, and transportation. This process also determines the budget authority for the Appropriations committees and the 12 subcommittees.
Federal agencies are each assigned to one of 12 Appropriations subcommittees, each of which has a “spending ceiling” given by the full House and Senate Appropriations committees. There, agencies and their staff can be called upon to further justify their proposed budgets in hearings. The House and Senate Appropriations subcommittees will then report their sector-based sub-allocations back to their respective full-chamber Appropriations committees.
In this process, oversight reports can provide specific direction on how agencies ought to spend the funding being appropriated for them.
Officially, April 15 is the deadline for Congressional adoption of the budget resolution, but there is no penalty for missing this deadline (which frequently occurs). If that deadline is not met, each house of Congress can use a mechanism called a continuing resolution to circumvent the procedural prohibitions on allocating funding before the adoption of a budget resolution.
In order to go into effect, a Congressional appropriations bill must be passed by the start of the next fiscal year, on October 1. To meet this deadline, separate appropriations often get combined into a single “omnibus” measure. If this deadline is missed, Congress may need to employ a joint continuing resolution to allow specific agencies to continue spending funds at the rate of the previous fiscal year. Continuing resolutions must specify a period of time, which can range from a single day to an entire fiscal year.
When the House and Senate approve different appropriations measures, as is often the case, they trigger a joint-session process called “conferencing” (although agreement can also happen via the exchange of amendments). Once those measures are synchronized, it is up to the president to either sign or veto the final budget measure.
As an example, the fiscal year 2022 budget for the Environmental Protection Agency (EPA) was housed under the Appropriations Subcommittees for the Interior, Environment, and Related Agencies. The fiscal year 2022 budget from this committee totaled $40.45 billion, which provided funding for the EPA, as well as the Bureau of Land Management, the National Park Service, and the U.S. Geological Survey.
The fiscal year 2022 discretionary and supplemental appropriations for the EPA are an outlier due to the additional $14 billion in emergency supplemental appropriations provided by the Infrastructure Investment and Jobs Act (P.L. 117-58).
For fiscal year 2023, Congress appropriated $10.14 billion in regular annual appropriations for the EPA, plus $1.67 billion in supplemental appropriations.
Some EPA issue areas from the fiscal year 2023 process will likely remain of interest to the 118th Congress during the fiscal year 2024 process, including PFAS [manufactured chemicals of concern], site remediation and clean up, and EPA’s environmental justice program.

Franz Wuerfmannsdobler, Senior Advisor, Bipartisan Policy Center

Most of the systems in place governing the appropriations process today began in the Budget and Impoundment Control Act of 1974 (P.L. 93-344) as a post-Watergate reform of Congressional operations. This law created the Congressional Budget Office and the system of committees in place today.
The debates about budget authority and overall Congressional spending are about 50 years old.
Once the president’s budget makes its way to Capitol Hill, it gets immediately divided: the mandatory spending will go to multiple authorizing committees and the discretionary part of the budget goes to the Appropriations committees.
Unlike with authorizing committees, the House and Senate Appropriations committees are set up in parallel with the same 12 subcommittees and each pair having the same jurisdiction.
The defense side of discretionary spending refers to the defense and military construction appropriations, and all other categories are the non-defense side of discretionary spending.
The legislative branch gets about half of a percent of the federal budget; the judiciary and “general government” portion also gets about half a percent, and the other 99 percent is allocated to the executive branch.
Because of the difficulty in making the September 30 deadline, Congress has moved away from passing individual appropriations bills or small, packaged “minibus” bills. Instead, Congress packages nearly all discretionary funding together to pass as an “omnibus” bill—often at the end of the year.
When submitting requests to the Appropriations committees, there are three types of requests, a funding request, a report language request, and a bill language request. Members of Congress can make individual requests or sign on to multi-member letters.
Congress also conducts oversight over the budget process by bringing federal agency leaders to testify at hearings.

Molly Reynolds, Senior Fellow - Governance Studies, Brookings

The divided government, debt limit, and changes in Congress over time are forces shaping this year’s budget and appropriations process.
The combination of small majorities and polarized parties makes it difficult to adopt individual appropriations bills, especially in the Senate. Building coalitions is not easy.
This Congress, the Republican-controlled House, Democrat-controlled Senate, and a Democratic president result in different spending priorities.
Past divided governments in 2011 and 2013 have shaped recent spending bills and budget agreements, including by enacting the Budget Control Act of 2011 (P.L. 112-25).
Federal debt has been subject to limits since 1939, and as the level of debt approaches the ceiling limit, the Treasury Department prepares extraordinary measures to delay, for some time but not indefinitely, the need for Congressional action.
Defaulting on the federal debt would trigger more consequences than an “ordinary” government shutdown because more payments than those to federal employees and grantees would be in danger of not being paid.
Fights over discretionary spending may get linked to a fight over the debt limit, as seen in 2011 and 2013, but the debt limit is fundamentally about past spending choices, not future choices. There have been times when appropriations and the debt limit have been linked politically and by the calendar, but conceptually they are not linked.
The significant changeover in members of Congress impacts how lessons learned from past Congresses feed into current dynamics. In the House, only 30 percent of current Democrats and 22 percent of Republicans were in Congress in 2011. In the Senate, about 50 percent of Democrats and 35 percent of Republicans were in office at that time. All told, relatively few current members were there to learn first-hand the hard lessons of what can happen when the debt limit is taken hostage.

Q&A

Q: How might the return of earmarks affect the budget process?

Wuerfmannsdobler

Earmarks on the House side are called “Community Project Funding,” and, on the Senate side, they are called “Congressionally Directed Spending.” Earmarks allow members of Congress to support specific projects within their state or district.
Earmarking was reinstated during the 117^th Congress, following a 10-year moratorium.
Earmarks are about Congressional authority over the President’s budget request.
This is not additional funding on top of the 302(a), the allocation that sets the total money the Appropriations committees can spend, but rather about one percent of what is already going to the executive branch.
Criticisms of earmarking have been addressed by reforms to the process of earmarking, and additional reforms will continue in the 118th Congress.

Jones

During the fiscal year 2022 appropriations cycle, there were over 100 different line items for the EPA that were passed as earmarks, amounting to millions of dollars.
Earmarks help to understand Congressional priorities. In the case of EPA, about 95 percent of these line items were for wastewater and drinking water infrastructure projects in specific districts.

Reynolds

One question that people often have about earmarks is, to what degree do they grease the wheels for the overall appropriations process? Historically, they were moderately helpful, but the abolition of earmarking was not a cause of the breakdown in the appropriations process.
There are some interesting questions to be asked about the role of earmarks in trying to create a functional appropriations process in the current political climate.

Q: When a continuing resolution is passed, how does that affect federal agency spending?

Jones

The language of the continuing resolution will specify the spending rate.
A continuing resolution can specify that there is an exception for an agency, account, or program, but generally, agencies can spend out at the same rate under which they currently operate.

Wuerfmannsdobler

It is hard to do long-term planning until an agency knows its new budget.
Anomalies, often included in a continuing resolution, are minor adjustments as needed for federal agencies that would not be spending at the previous fiscal year’s rate.

Reynolds

Continuing resolutions create uncertainty about what is likely to happen for federal agencies.
When dealing with a series of short-term continuing resolutions and then experiencing conflict about whether another continuing resolution will be adopted to avoid a partial government shutdown, agencies have to devote resources to planning for potential shutdowns that they would not otherwise have to spend on that task.

Q: Are funding and appropriations at all tied to how much the government makes from tax revenue or is that a separate calculation?

Wuerfmannsdobler

The president determines what the budget looks like when it is submitted to Congress, and Congress calculates what the revenues are versus the outlays.
The unified budget includes the mandatory side, which is two-thirds of the total budget, and appropriations, which is one-third of the budget.

Reynolds

The annual budget deficit is the gap between how much money the government takes in and how much it spends in a year—which is a result of the discretionary appropriations process and mandatory spending.
To address a budget deficit, the Treasury Department has to borrow to make up the difference, which then becomes the national debt over time.

Q: How often do authorizations and appropriations actually line up, particularly when you talk about a multi-year authorization and annual appropriations?

Wuerfmannsdobler

A challenge in Congress is determining what is the connection and also the disconnect between authorizing and appropriations.
For example, there have been four major energy authorizing bills:1992, 2005, 2007, and 2020. They do not directly align with the appropriations process, but they can influence it.
In many cases, the amount that was intended for an idea on the authorizing side cannot be fulfilled in appropriations.

Q: How can an administrative rule be affected by appropriations? If Congress does not want something to happen in the executive branch, can they use the appropriations process to squash it?

Reynolds

Limitation riders, which can forbid a federal agency from using funds, are one way that administrative rules can be affected by appropriations.
Limitation riders are a source of conflict during the appropriations process, particularly between the parties.
2018 was one of the most productive appropriations years in more than a decade, and this is due to the Senate making a commitment across the aisle to not advocate for new riders.

Wuerfmannsdobler

A clean bill means that the bill focuses on appropriations to federal agencies.
Appropriations bills have carried policy-related language, usually in general provisions, and this is a form of rider that has been accepted.
A no-funds provision prohibits funds from being spent on selected topics.
Riders can get stripped out in the negotiating process when the White House and leadership say that the bill cannot be voted on until they are removed.

Jones

In the last several appropriations acts, there has been a rider that prohibits the EPA from spending money on collecting certain greenhouse gas reporting on a certain kind of agricultural facility. The federal agency cannot issue regulations or collect information, which can leave gaps in data.

Q: How can people outside of Congressional offices engage with the appropriations process?

Wuerfmannsdobler:

It is important to know submission requirements and deadlines, which are determined by the Appropriations subcommittees.
All 12 Appropriations subcommittees are different, so it is important to approach subcommittee staff with ideas in a considerate and context-informed manner.

Q: What are some of the changes in funding that Congressional staff should be aware of that the Infrastructure Investment and Jobs Act and Inflation Reduction Act are making possible?

Reynolds

The Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) (P.L. 117-169) contain significant additional discretionary funding for a number of federal agencies.
In the context of the IRA, the budget reconciliation bill passed in August 2022, so mandatory funding is included that would have otherwise been handled through the discretionary appropriations process.
There are ways to take funding that would generally be addressed through the discretionary appropriations process and dress it up as mandatory spending in order to make it permissible in a reconciliation bill.
Reconciliation, which cannot be filibustered in the Senate, was used by Democrats to get spending passed when they had narrow majorities in both chambers and a Democratic president in 2021 and 2022.

Q: Does providing funding through the reconciliation process versus regular appropriations impact how the money can be spent?

Reynolds

Using reconciliation to allocate spending has not been used often historically, so there is not a lot of past information.
Now, in a period of divided government, anything that gets agreed on will have to have bipartisan support.
As long as the filibuster exists, it will be interesting to see under what circumstances Senate majorities under unified party control use the reconciliation process.

Compiled by Tyler Burkhardt and Lynlee Derrick and edited for clarity and length. This is not a transcript.

Briefing Series: Congressional Climate Camp

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