Appropriations vs. Authorizations

Congressional Budget Office:  Annual Report on Expired and Expiring Authorization

The Three-Tier Legislative Process

Overview:

Congress has a three-tier legislative process: (1) authorizations controlled by 17 authorizing committees in the House and Senate, respectively; (2) annual appropriations and revenue-raising controlled by House and Senate Appropriations Committees and the two tax-writing committees;^[1] and (3) the newest tier—the congressional budget process—which focuses on broad fiscal priorities and the effects of total spending and revenues on the U.S. economy.

Tier I: Authorizations

Congress’ authorization process establishes federal programs in response to national needs. The House and Senate each have 17 authorizing committees, respectively, (see Table 1)8F28F although the number of committees has varied over the years.

Authorizing committees have several legislative functions. They assess national, regional, and international needs and determine if a federal response is necessary and appropriate through establishment of a federal program, project, or activity, assistance to state and local governments or international organizations, or providing incentives to, or regulating, private sector activities.

Authorizing legislation frequently authorizes the appropriations committees to provide funding up to specified levels for authorized programs. Authorization language typically provides, “There are authorized to be appropriated for programs in this (bill, title, or section) up to (specified sum) for (specified fiscal years).”  Authorization of appropriations language does not provide actual funding; rather, it establishes a desirable level of funding for a particular program. The appropriations committees ultimately determine if funding is available, within overall priorities and constraints, and at what levels funding is to be provided for a particular fiscal year.

Authorizing committees conduct ongoing oversight of federal programs to determine if program objectives are being fulfilled or if changes, adjustments, or elimination are appropriate. (However, detailed agency and program oversight is also conducted by the appropriations subcommittees during annual funding hearings; the annual appropriations hearing is often the most detailed oversight an agency receives.)

Authorizing committees are also responsible for evaluating the ongoing costs and effectiveness of entitlements and other direct spending programs, where federal expenditures result directly from authorizing statutes. For example, expenditures from the Social Security, Medicare, and Medicaid programs—the largest entitlement programs—result from benefit and payment formulas in the Social Security Act which is under the jurisdiction of the Senate Finance, House Ways & Means, and House Energy and Commerce Committees.[2]

*The House Committee on Ways and Means is also an authorizing committee with jurisdiction over the Social Security Act, Medicare, parts of Medicaid, income security programs, and certain international trade functions.

**The Senate Committee on Finance is also an authorizing committee with jurisdiction over the Social Security Act, Medicare, all of Medicaid, income security programs, and certain international trade functions.

The Blurring of Authorizations and Appropriations

A frequent misconception about Congress’ authorizing and appropriations bills is that language “authorizing appropriations” for a program, project, or activity provides funding. It does not.

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 2023.”  However, that language, if signed into law, would not provide funding. Rather, the “authorization” of $100 million is simply a recommendation by the authorizing committee, to the Appropriations Committees, that funds in that amount should be appropriated for the program’s intended purposes to be fully achieved; the authorized amount is often referred to as “full funding.” It remains for the appropriators to determine what amount of funding, if any, can be provided for the budget year, when prioritizing all programs within the total amount of funds made available by the budget resolution (or alternative budget agreement) for discretionary spending.

Despite this key historical distinction between the roles of the authorizing and appropriations committees, in recent decades the distinction has been significantly blurred. While the appropriators historically made most of the funding decisions, authorizing committees in recent decades have increasingly spent money directly, in effect bypassing the appropriators and enacting into law programs that legally entitle jurisdictions or individuals to specified benefits that are not subject to appropriations funding decisions.

As explained above, most of these “direct spending programs” are called entitlements because the government is legally required to pay specified benefits to eligible (entitled) beneficiaries. In recent years, more than twice as much federal spending has flowed from direct spending under the jurisdiction of House and Senate authorizing committees than from the annual discretionary decisions of the appropriations committees.

[1] Revenue-raising is assigned to the Committee on Ways and Means in the House and the Committee on Finance in the Senate. In addition to revenue-raising, both committees have broad spending authority jurisdiction over Social Security, Medicare, Medicaid, and other programs set forth in the Social Security Act.

[2] The House Ways & Means, and Energy & Commerce Committees share jurisdiction over Medicaid. Social Security and Medicare are under the sole jurisdiction of the Ways & Means Committee. The Senate Finance Committee has sole jurisdiction over all three programs, giving it the broadest jurisdiction of any committee in Congress.