Appropriation

How It Works

Appropriations are how Congress exercises the "power of the purse" granted by Article I, Section 9 of the Constitution ("No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law"). The annual appropriations process begins with the President's budget request, typically submitted to Congress in February, followed by Congressional hearings, committee markups in the House and Senate Appropriations Committees, and floor votes on each of the 12 regular appropriations bills: Agriculture; Commerce-Justice-Science; Defense; Energy and Water; Financial Services; Homeland Security; Interior; Labor-HHS-Education; Legislative Branch; Military Construction and Veterans Affairs; State-Foreign Operations; and Transportation-HUD. When Congress cannot pass all 12 bills by the start of the fiscal year on October 1, which has happened every year since FY1997, it passes a Continuing Resolution (CR) to fund agencies at prior-year levels temporarily. Total discretionary appropriations in FY2024 were capped by the Fiscal Responsibility Act of 2023 at roughly $1.7 trillion ($886 billion defense, $704 billion non-defense), plus adjustments for disasters and emergency spending outside the caps. Appropriations are distinct from authorizations (which create programs and set maximum spending levels) and from mandatory spending (Social Security, Medicare) which flows from permanent authorizing statutes and does not require annual appropriations action. The Antideficiency Act (31 U.S.C. 1341, 1342, and 1517) prohibits agencies from spending in advance of or in excess of appropriations, with violations triggering mandatory reporting to the President and Congress and potential criminal penalties. Appropriations can be annual (must be obligated by September 30 of the fiscal year), multi-year (available for obligation over 2-5 years, common for procurement and RDT&E), or "no-year" (available until expended, common for working capital funds and some trust funds). The "color of money" on each appropriation determines what it can fund and when, a structural constraint that shapes how agencies schedule contract awards across the fiscal year.

Related Terms

• Obligation, A legally binding commitment by the government to spend money, the point at which funds are formally committed to a contract, grant, or other agreement.
• Continuing Resolution (CR), A temporary funding measure passed by Congress when it fails to complete the annual appropriations process, keeping the government funded at prior-year levels.
• Discretionary Spending, Federal spending that Congress controls through annual appropriations, covering defense, education, transportation, and other agency budgets.
• Omnibus Appropriation, A single massive spending bill that combines multiple regular appropriations bills, passed late in the budget cycle to avoid a government shutdown.
• Supplemental Appropriation, Additional funding enacted outside the regular annual appropriations process to address emergencies, disasters, wars, or unforeseen needs.