Understanding the Budget and Appropriations Process

The Environmental and Energy Study Institute (EESI) held a briefing about the latest presidential budget proposal and the outlook for Congressional appropriations for fiscal year 2025. The briefing described the different stages of the appropriations process and how it interfaces with other legislative activity on the Hill. The briefing also shed light on the role of the 12 appropriations subcommittees and highlighted ways Congressional staff, working both on and off the appropriations committees, can engage with the process. Panelists showcased examples of investments in climate, energy, and environment research and innovation that bring the process to life.

Highlights

KEY TAKEAWAYS

The President begins the annual budget cycle by submitting a budget proposal to Congress. In response, the House and the Senate adopt a budget resolution, which is a short overview of agreed-upon fiscal policy. This resolution gives each chamber a procedural limit on the total amount of spending for the upcoming year that the Appropriations Committees are responsible for allocating among their subcommittees. The House and Senate Appropriations Committees, and their 12 subcommittees, have the exact same jurisdictions, unlike many of the House and Senate authorizing committees. Appropriations acts provide budget authority, defined as agencies' authority to enter into financial obligations, as well as direction to agencies. The term appropriations refers to provisions of law that grant both budget authority and the authority to make payments from the Treasury. One tool available to better understand the budget and appropriations process is the Environmental Defense Fund’s Climate Innovation Funding Tracker, which showcases climate innovation funding across multiple agencies. The tracker also breaks down tax credits on an annual basis and lists them side by side with annual appropriations numbers.

 

Angela Jones, Analyst in Environmental Policy, Congressional Research Service (CRS)

• The President begins the annual budget cycle by submitting a budget proposal to Congress. In response, the House and the Senate adopt a budget resolution, which is a short overview of agreed-upon fiscal policy. This resolution gives each chamber a procedural limit on the total amount of spending for the upcoming year that the Appropriations Committees are responsible for allocating among their subcommittees.
• Traditionally, Congress considered each subcommittee’s appropriations measures separately, but when the process is delayed, measures may be considered in an omnibus or consolidated appropriations measure.
• The House and the Senate must approve the same measure in the same form before a final bill is presented to the President to be signed or vetoed.
• If the appropriations are not agreed upon by October 1, Congress may need to enact a temporary funding authority such as a continuing resolution.
• Appropriations acts provide budget authority, defined as agencies' authority to enter into financial obligations, as well as direction to agencies. The term appropriations refers to provisions of law that grant both budget authority and the authority to make payments from the Treasury.
• Congress funds the Environmental Protection Agency (EPA) through the Interior, Environmental, and Related Agencies Appropriations Subcommittee.
• The language of a given appropriations act dictates overall budget authority for broad categories of agency spending, and explanatory language may go into more detail about funding for specific programs.
• The Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58) provided the EPA emergency supplemental appropriations on top of regular appropriations, which caused a spike in funding in fiscal year (FY) 2022 and FY 2023.
• For FY 2023, Congress appropriated $11.81 billion in regular and supplemental appropriations for EPA. President Biden requested $12.08 billion for the EPA for FY 2024. Recent continuing resolutions have funded the EPA at the 2023 funding amount.
• Discretionary spending is appropriated among 10 accounts within the EPA. The account for state and tribal assistance grants and the account for environmental programs and management receive the most funding annually, followed by the Superfund and science and technology accounts.
• Through the Inflation Reduction Act (IRA) (P.L. 117-169), the EPA receives more funding beyond annual appropriations, which goes towards competitive and noncompetitive grants for implementing climate action plans and reducing greenhouse gas emissions.

  

Natasha Vidangos, Associate Vice President of Innovation and Technology Policy, Environmental Defense Fund

• Climate innovation is essential to reach net-zero carbon emissions by 2050. According to the International Energy Agency, only 65% of necessary emission reductions can be achieved with existing technology.
• The carbon emissions of strategic sectors like iron and steel, shipping, and heavy industry cannot be easily abated with existing technology, but it is essential to reduce these emissions.
• Innovation is generally funded by the public sector at the earliest stages of development, but that funding often ends before the technology can be scaled up and become profitable. This creates a funding gap that often prevents otherwise viable technologies from reaching the market.
• Recent legislation like the IIJA has changed how innovation is funded, but funding is difficult to track. The different subcommittees involved in the federal appropriations process use different definitions and terminology, which can make it difficult to understand the larger picture.
• The Environmental Defense Fund (EDF) has put together a Climate Innovation Funding Tracker, which showcases climate innovation funding across multiple agencies. EDF also breaks down tax credits on an annual basis and lists them side by side with annual numbers for appropriations.
• The EDF tracker defines climate innovation as the creation and application of new or enhanced climate solutions through technology, public policy, and investment models.
• EDF’s tracker allows users to select agencies like the Department of Energy (DOE) or EPA; sectors like power or transportation; solutions like carbon management or clean electricity; the innovation stages of research and development, piloting and demonstration, or deployment; funding types like appropriations and tax credits; and funding sources like annual appropriations or the IRA, along with different fiscal years.
• Users can then look at these filters two at a time to see how funding flows to and from agencies to support innovation in different areas. This can answer questions like which agencies are providing the most to solar energy, or what sectors are receiving the most IRA funding.

 

Franz Wuerfmannsdobler, Advisory Board Member, Environmental and Energy Study Institute, formerly Congressional staffer for U.S. Senators Chris Coons (D-Del.), Byron Dorgan (D-N.D.), and Robert Byrd (D-W.Va.); Professional Staff, Senate Appropriations Committee

• The most recent major update to the federal budget process was the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344).
• Unlike many of the House and Senate authorizing committees, the Appropriations Committees in the House and the Senate have the exact same jurisdictions. All 12 Appropriations Subcommittees also mirror each other, covering the same exact areas.
• 302(a) allocation is the approved funding amount allowed by the annual budget resolution. 302(b) allocations are amounts provided to subcommittees to enact funding within their jurisdictions.
• For FY 2023, less than 1% of funding went to the legislative and judicial branches, and the remaining 99% was allocated to federal agencies in the executive branch.
• Federal agencies are always working ahead and are already considering the next fiscal year's budget.
• Congressional staff can get involved in the appropriations process by supporting their bosses in making appropriations requests. There are three main types of requests: funding, bill language, and report language. Members of Congress can also ask questions at hearings and can submit questions for the record. There are also usually opportunities for members to offer amendments in committee and on the floor.
• Outside groups and members of Congress can also connect with federal agencies to share their priorities at the agency-level budget development phase.
• Since FY 2021, member requests, known as “earmarks,” are part of the process again after having been prohibited for the decade prior. The Senate calls earmarks Congressionally Directed Spending and the House says Community Project Funding.
• For FY 2023, 84% of House members and 66% of Senators made at least one earmark request.
• Under the new rules for earmarks, only 1% of discretionary funding can go to these requests.
• To be successful through the appropriations process, an office should understand its internal allocations process, meet with stakeholders, know deadlines, understand programmatic and individual member requests, keep constituents updated, and be in communication with appropriations subcommittees.

 

 Q&A

 

Q: How do the processes for developing bills differ between the 12 appropriations subcommittees?

Jones

• Looking at past enacted legislation and report language for the committees and agencies of interest can provide an idea of what has been previously discussed. Multiple different agencies or subcommittees might be involved in a given issue so it is important to understand their individual roles.

Vidangos

• The budget justifications and bill language are important. There can be inconsistency in recommended funding levels, and sometimes multiple important programs are receiving very similar funding, which can lead to shifts in program funding levels at the federal agencies.
• Clear report language describing what programs are for can help to preserve their function in future rounds of appropriations.

Wuerfmannsdobler

• Understanding appropriations is a learning process, so newer staff should know that it takes time.
• Outside agencies like CRS are available to help.

 

Q: What are some differences between a report language request and a programmatic request and how can they help further Congressional priorities?

Wuerfmannsdobler

• Programmatic requests could be about funding levels, report language, or bill language. When requesting funding, members are looking to increase or decrease a budget. Report language provides direction on how funding should and can be spent, and if there is anything the agencies should look out for.

 

Q: Does EDF plan to update the Climate Innovation Tracker throughout the appropriations process to include how different versions of the budget would affect program funding, or add Department of Defense funding?

Vidangos

• At this time, EDF is only doing annual updates to the tracker. EDF blogs regularly on what the tracker is showing, and the tracker website has an insights section. EDF plans to share major changes from the President’s FY 2025 budget through these avenues, when the budget is released.
• Adding the Department of Defense is unlikely to be possible due to capacity constraints.

 

Q: Why do some senators choose not to make earmark requests?

Wuerfmannsdobler

• The Senate Republican Caucus has a rule against making earmark requests. Republicans that do make earmark requests are on the Appropriations Committee. Two Democrats did not make any requests in FY 2023.
• It is each member’s decision to make requests or not.

 

Q: What can people do now to understand what is happening in the appropriations process and set themselves up for the next cycle?

Jones

• Comparing past federal agency budget justifications can show what agency priorities are and how things have changed over time. Agencies start preparing justifications almost a year in advance.
• CRS has an appropriations status table available on its website with past and upcoming reports and summaries.

Vidangos

• The next fiscal year will be a tight budget year, so this is a good time to think strategically about where the greatest needs are and to focus there.

Wuerfmannsdobler

• The next appropriations cycle for FY 2025 is currently beginning while the results from the current cycle for FY 2024 are coming in.
• Reading this year’s appropriations bills can help one understand how legislative priorities will be affected.

 

Q: What are some ways the appropriations process might look different for majority members of Congress versus minority members?

Wuerfmannsdobler

• Always talk to the subcommittee staff of your party as they are the experts on their issues.
• The majority party writes the bill, but the appropriations process is a consensus-based approach.
• The subcommittee chair and ranking member are aiming to get as much support for the bill as possible, so both parties will express their interests and priorities.

 

Q: What are some of the different ways the appropriations process has gone in recent years?

Jones

• In some years, the appropriations process has followed the typical process, with no continuing resolution, and a new budget starting on October 1, which makes it easier to track funding. In other years, there have been continuing resolutions, which generally follow the previous year’s funding but can have exceptions, making them harder to track.

 

Q: What is EDF’s vision for the Climate Innovation Tracker in the upcoming fiscal year?

Vidangos

• The IIJA and IRA were transformative opportunities for climate innovation. These laws only provide funding for a certain number of years though, so there must be ways for programs established now to continue after the laws have run their course.
• The Environmental Defense Fund’s hope is that the Climate Innovation Tracker will give users a sense of where the greatest need for environmental investment is.

 

Q: What are some of the essential resources to rely on in this process?

Jones

• CRS provides objective, nonpartisan information rather than recommendations or judgements. The CRS staff includes experts on the appropriations process who can answer detailed legal and procedural questions.
• EPA has resources on their website that track the investments and programs of the IIJA and IRA.

Vidangos

• The Information Technology and Innovation Foundation has a tracker that looks at Department of Energy appropriations under more traditional definitions of innovation, which works well in tandem with EDF’s tracker.
• The Rhodium Group and Massachusetts Institute of Technology (MIT) have developed a tracker that follows where investments go after agencies are funded.

Wuerfmannsdobler

• The Center on Budget and Policy Priorities looks at the big picture, history, and technical details of the process and their website is helpful for understanding general budget issues.

 

Compiled by Emily Phillips and Kylie Tugend and edited for clarity and length. This is not a transcript.

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