The budget development process can begin more than three years in advance of the enactment of the relevant appropriations bill.
Each year, the Office of Management and Budget (OMB) provides general guidance to inform the development of each agency’s budget justification. Agencies develop their budget justification based on overarching OMB guidance, ongoing agency activities, and new proposals.
Agencies work collaboratively with OMB to finalize their budget justifications for the upcoming fiscal year prior to submitting to Congress.
OMB publishes the President’s Budget Request, which includes high-level information on all government agencies, along with tax and spending projections, while agencies publish detailed requests for Congress.
The Legislative Branch
Congress appropriates funding through 12 appropriations bills each fiscal year.
Appropriations subcommittees produce 12 appropriations bills that fund the operations and programs of the USG.
Currently, foreign assistance funding comes from three different appropriations bills: The State and Foreign Operations (SFOPs) Bill; the Agriculture Appropriations Bill; and the Labor, Health, and Human Services Bill.
The Congressional Budget Process
The Congressional Appropriations Process begins after the President submits their budget to Congress on the first Monday in February. Congress then holds hearings on agency budget requests and any other topics of interest.
The federal fiscal year begins on October 1. Ideally, all 12 appropriations bills will have been enacted and can be implemented at that time. However, the government has been unable to enact appropriations bills on time and had to rely on continuing resolutions (C.R.), which continue the terms and conditions of the current appropriations bill. Sometimes C.R.s run into February or March of the year for which they are appropriating funds.
Foreign Assistance Allocation Process
After enactment, the Foreign Assistance Act and the SFOPs bill require DoS and USAID to develop and submit certain plans and notifications to Congress for some programs and countries.
The agencies present plans and notifications to Congress.
Upon completion, funds then undergo procurement and grant processes that identify ways for the agencies to disburse and spend money.
This entire process, from enactment to spending, can take up more than two years.
Funding Challenges for U.S. Foreign Assistance
Growing need. U.S. foreign assistance resources have not kept pace with the growing global need.
The uncertain process. The long and complex funding processes prevent beneficiaries from obtaining the best development and humanitarian assistance available.
The threat of rescissions. The threat of rescissions for humanitarian and development funds limits or reduces the scale and scope of beneficiaries that depend on the U.S.’ assistance to survive.