Authorization of Appropriations

The Three-Tier Legislative Process

Congress has a three-tier legislative process: (1) authorizations, (2) appropriations and revenue raising, and (3) the congressional budget process.

Authorizations Process. First, Congress has an authorizations process that creates Federal programs in response to national needs. The Senate and House each have seventeen authorizing committees, although the number of committees has varied over the years. Generally, most of the congressional hearings that you see reported in the media involve fact finding on the wide range of issues facing the nation. The task of the authorizing committees is to determine if a Federal response is needed—in the form of creating or reconfiguring Federal programs, providing assistance to state and local governments, or providing incentives to  — or regulating — the private sector.

Appropriations and Revenue Raising. The second tier of the legislative process is appropriations and revenue raising. The Senate Finance and House Ways and Means committees
raise revenues (through taxes, customs duties, fees, and borrowing) to finance authorized programs.  The two Appropriations Committees—one in the Senate and one in the House—allocate available funds among the authorized programs.

Congressional Budget Process.  The congressional budget process is the third tier of the legislative process. Under the congressional budget process, the Congress annually
establishes overall fiscal policy on how much total spending and revenues will be for the entire government, how much discretionary funding will be available to the Appropriations Committees (although in recent years this has been determined by Bipartisan Budget Act legislation), and whether the tax or authorizing committees of Congress will be directed to make
budgetary changes to spending or revenue programs under their jurisdiction.

However, the three-tier process is often misunderstood.

A frequent misconception is that the Budget Resolution contains program-by-program detail. It does not. The Budget Resolution establishes a general framework of budgetary totals, committee allocations and enforcement mechanisms, but does not set funding levels for individual programs.

A second misconception is that the Budget Resolution is the product of negotiations with the President. The Budget Resolution is actually a “concurrent resolution” that Congress uses as
an internal mechanism to guide subsequent action on spending and revenue bills. It is not a law and is not presented to the President for signature.

A third misconception is that legislation “authorizing appropriations” for a project provides funding. Authorizing bills quite often include dollar amounts. For example, an authorizing bill might establish a program and include language stating: “There are authorized to be appropriated $100 million to carry out this Act in fiscal year 2018.” Even if that language is eventually passed by Congress and signed into law by the President, no money has actually been appropriated. The “authorization” of $100 million is, in effect, simply a recommendation by the authorizing committees to the Appropriations Committees, that funds in that amount ought to be appropriated in order for the program to fulfill its intended purposes.

The Blurring of Authorizations and Appropriations.   The distinction between Congress’ authorizing and appropriations committees has been significantly blurred in recent decades. While the appropriators historically made all of the funding decisions, authorizing committees in recent decades have been spending money directly (hence the term direct spending), in effect bypassing the appropriators and enacting into law programs that legally entitle jurisdictions or individuals to specified benefits. These are the “entitlement programs” (also called mandatory spending programs because the government is legally required to pay specified benefits to eligible individuals).  More total spending results each year from entitlements under the jurisdiction of authorizing committees than from the annual discretionary decisions of the Appropriations Committees.

CBO:  Expired and Expiring Authorizations of Appropriations:  July 3, 2018 Report

CRS: Authorization of Appropriations: Procedural and Legal Issues (Nov 2016)