the business of health care – Page 7 – watercress words by Dr Aletha

How the Federal Budget is Created: A Step-by-Step Guide

To help us understand what goes on in Washington, this post outlines the federal government budget creation. It explains processes involving the Congressional Budget Office, budget resolutions by House and Senate, appropriations bills, and the concept of reconciliation, highlighting deadlines and potential government shutdowns if not adhered to.

In this post we’re learning how the federal government budget is created with the help of Julie Rovner at KFF.

I have gently edited the text for length and readability, added headings, and added notes in parentheses to clarify terms.

The cover image for this post was generated by JetpackAI, available on WordPress. (affiliate link)

The Federal Budget Process

Under Article 1 of the U.S. Constitution, Congress is granted the exclusive power to

“lay and collect Taxes, Duties, Imposts (tax or duty) and Excises,
and to pay the Debts and provide for the common Defense and General Welfare of the United States.”  
the U.S. Constitution

Magnus, Charles, Publisher. Civil War envelope showing Columbia with shield and American flag and White House
. United States, 1862. N.Y.: C. Magnus, 12 Frankfort St. Photograph. https://www.loc.gov/item/2010648441/.

The 1974 Budget Act

In 1974, lawmakers passed the Congressional Budget and Impoundment Control Act to

standardize the annual process for deciding tax and spending policy for each federal fiscal year (October 1 to September 30) and
to prevent the executive branch from making spending policy reserved for Congress.

It created the House and Senate Budget Committees and set timetables for each step of the budget process.  

CBO-Congressional Budget Office

The 1974 Budget Act also created the Congressional Budget Office (CBO). This non-partisan agency has plays a pivotal role in both the budget and the lawmaking processes.

The CBO issues economic forecasts, policy options, and other analytical reports, but most significantly estimates how much individual legislation would cost or save the federal government. Those estimates can and do often determine if legislation passes or fails.

President’s Proposed Budget

The annual budget process is supposed to begin the first Monday in February, when the President presents his proposed budget for the fiscal year beginning the following Oct. 1. This is one of the few deadlines in the Budget Act that is usually met. 

Little Red School House
. [New Orleans, Louisiana:publisher not transcribed] Photograph. Retrieved from the Library of Congress, <www.loc.gov/item/2018756464/>.

Congress’ Spending Blueprint

The House and Senate Budget Committees each write their own “Budget Resolution,” a spending blueprint for the year that includes annual totals for mandatory and discretionary spending.

(Mandatory spending , required by law is also known as entitlement spending. Examples are Social Security, Medicare, veterans benefits, and interest on debt.)

Mandatory spending (roughly two-thirds of the budget) is automatic unless changed by Congress.

The budget resolution may also include “reconciliation instructions” to the authorizing committees overseeing those programs to make changes to lower the cost of the mandatory programs in line with the terms of the budget resolution.

(Discretionary spending is approved by Congress each year.)

The discretionary total will eventually be divided by the House and Senate Appropriations Committees between the 12 subcommittees, each responsible for a single annual spending (appropriations) bill.

Refer to this previous post for lists of the Congressional Committees and what they oversee.

Most of those bills cover multiple agencies – the appropriations bill for the Department of Health and Human Services, for example, also includes funding for the Departments of Labor and Education.  

After the budget resolution is approved by each chamber’s Budget Committee, it goes to the House and Senate floors for debate.

Assuming the resolutions are approved, a “conference committee” comprised of members from each chamber is tasked with working out the differences between the respective versions. A final compromise budget resolution is supposed to be approved by both chambers by April 15 but rarely happens.

Because the final product is a resolution rather than a bill, the budget does not go to the President to sign or veto.  

The Appropriations Process

The annual appropriations process kicks off May 15, when the House starts considering the 12 annual spending bills for the fiscal year that begins Oct. 1. By tradition, spending bills originate in the House, although if the House is delayed, the Senate will take up its version of an appropriation first.

The House completes action on all 12 spending bills by June 30, to provide enough time for the Senate to act, and for a conference committee to negotiate a final version that each chamber can approve by October 1, the only deadline with consequences if it is not met.

Avoiding a government shut-down

Unless an appropriations bill for each federal agency is passed by Congress and signed by the President by the start of the fiscal year, that agency must shut down all “non-essential” activities funded by discretionary spending until funding is approved. (The so-called government “shut-down” that we hear about.)

A CR (Continuing Resolution) can last the full fiscal year and may cover all of the federal government or just the departments for the unfinished bills.

Congress may pass multiple CRs while it works to complete the appropriations process. 

An Omnibus Measure

While each appropriations bill is usually considered individually, to save time (and sometimes to win needed votes), a few, several, or all the bills may be packaged into a single “omnibus” measure. Bills that package only a handful of appropriations bills are cheekily known as “minibuses.”  

Reconciliation

Meanwhile, if the budget resolution includes reconciliation instructions, that process proceeds separately. The committees in charge of the programs requiring alterations vote on and report their proposals to the respective budget committees, which assemble all changes into a single bill. (which the budget committees may not change.)  

Reconciliation legislation is frequently the vehicle for significant health policy changes.
Reconciliation bills are subject to special rules, especially in the Senate including debate time limitations (no filibusters) and restrictions on amendments.
Reconciliation bills may not contain provisions that do not pertain directly to taxing or spending.

Unlike the appropriations bills, nothing happens if Congress does not meet the Budget Act’s deadline to finish the reconciliation process, June 15. In fact, in more than a few cases, Congress has not completed work on reconciliation bills until the calendar year AFTER they were begun.   

Rovner, J., Congress, the Executive Branch, and Health Policy. In Altman, Drew (Editor), Health Policy 101, (KFF, January 2025) https://www.kff.org/health-policy-101-congress-and-the-executive-branch-and-health-policy/ (February 14, 2025).

Zimmerman, Edw. M., Lyricist, and Anna Howard Shaw. Votes for Women: Suffrage Rallying Song
. comp by Zimmerman, Marie, Active 1915 [Philadelphia, Pa.: E.M. Zimmerman, ©, 1915] Notated Music. Retrieved from the Library of Congress, <www.loc.gov/item/2017562229/>.

Exploring the HEART of Health

If you made it this far, congratulations! This is not easy to absorb so I thank you for choosing to inform yourself about what happens after we vote.

The illustrations on this post are from the Library of Congress, Free to Use and Reuse site, believed to be in the public domain.

I’d love for you to follow this blog. I share information and inspiration to help you transform challenges into opportunities for learning and growth.

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Dr. Aletha

How Congress Regulates the U.S. Healthcare System

Here we look at how Congress oversees the federal healthcare system through two dozen committees in the House and Senate. Key committees include the House Ways and Means and Energy and Commerce, alongside the Senate Finance and Health, Education, Labor and Pensions Committees. They manage Medicare, Medicaid, and health policy funding.

How Congress oversees the federal health care-industrial complex is almost as byzantine as the U.S. health system itself.
Julie Kovner, KFF

This is the third in a series about the Federal government’s role in healthcare in the United States. Some of the content comes from an article at KFF by Julie Kovner, Congress, the Executive Branch, and Health Policy.

This post outlines how Congress-the House of Representatives and the Senate-oversee and fund healthcare.

More than two dozen committees in the House and Senate have jurisdiction and responsibility for various health agencies and policies (see Tables 1 and 2 below). 

The seal of the United States Congress — PRINTABLE AVAILABLE AT VISITTHECAPITOL.GOV

Three major committees in each deal with most health issues.  

The House of Representatives

(See Table 2 below)

The Ways and Means Committee, which sets

tax policy,
oversees Part A of Medicare (because it is funded by the Social Security payroll tax) and
shares jurisdiction over other parts of the Medicare program with the Energy and Commerce Committee.
oversees tax subsidies and credits for the Affordable Care Act and
tax policy for most employer-provided insurance.

The Energy and Commerce Committee has

sole jurisdiction over the Medicaid program in the House and
shares jurisdiction over Medicare Parts B, C, and D with Ways and Means.
oversees the U.S. Public Health Service, including the Food and Drug Administration, the National Institutes of Health, and the Centers for Disease Control and Prevention.

The amounts allocated for many of those programs are determined by the House Appropriations Committee through the annual Labor-Health and Human Services-Education and Related Agencies spending bill.  

The Senate

(See Table 1 below)

In the Senate, responsibility for health programs is divided somewhat differently.

The Senate Finance Committee, which, like House Ways and Means, is in charge of tax policy, oversees all of Medicare and Medicaid and most of the ACA. (Affordable Care Act). 

The Senate counterpart to the House Energy and Commerce Committee is the Senate Health, Education, Labor and Pensions Committee, which has jurisdiction over the Public Health Service (but not Medicare or Medicaid).  

The Senate Appropriations Committee, like the one in the House, sets actual spending for discretionary programs as part of its annual Labor-HHS-Education spending bill. 

Executive vs Legislative Branches

We’ve looked at the multiple agencies in the Executive branch of government that are concerned with healthcare. Similarly, multiple committees of Congress oversee these agencies and the policies that govern them.

In a later post, I’ll outline the process for developing policies and a budget to pay for them.

About the Capitol

The cover photo for this post is the U.S. Capitol, the home of the Senate and House of Representatives. I took this photo while touring Washington, DC in August 2022.

“On January 6, 2021, a crowd stormed the 16-acre United States Capitol Building complex in Washington, D.C., hoping to overturn the results of the 2020 presidential election. Rioters scaled the walls and smashed the windows of the U.S. Capitol as Congress voted to certify the state-by-state results, halting the count until January 7.

The final figures for the material repair of the U.S. icon, including mental health counseling for traumatized staffers, members of Congress, and Capitol employees, came in at $30 million.

Antique period-appropriate mahogany kept by the U.S. Forest Service for 100 year was required to repair the damaged window and door frames, while another $25,000 was needed to restore six damaged sculptures and two paintings from the House’s collection.

The damages would have been much worse, notes Smithsonian Magazine, had quick-thinking staffers not worked to reverse the HVAC system and blow out the tear gas and fire extinguisher residue filling the halls of the building, while others worked to hide the House’s ceremonial silver mace from 1841 and silver inkstand from 1819.

According to (Architect of the Capitol) Blanton, the AOC had received a $300 million appropriation from Congress solely for new windows and a camera system on top of the $30 million for repairs.

Although the reinforced windows are still being designed, Blanton did point out that a number of security upgrades have already been implemented. Both interior and exterior doors have been reinforced, damaged windows have been repaired, and security kiosks and lighting around the Capitol have been upgraded, all outside of the $300 million.”

(This is quoted and edited for length from an article at The Architect’s Newspaper, January 6, 2022)

Exploring the HEART of Health

I’d love for you to follow this blog. I share information and inspiration to help you transform challenges into opportunities for learning and growth.

Add your name to the subscribe box to be notified of new posts by email. Click the link to read the post and browse other content. It’s that simple. No spam.

I enjoy seeing who is new to Watercress Words. When you subscribe, I will visit your blog or website. Thanks and see you next time.