Crafting the Federal Budget

The United States’ federal fiscal year begins October 1 and runs through September 30. For each fiscal year, a budget takes two years to formulate.

In October 2023, each executive branch agency in the federal government began identifying new and continuing programs and projects with estimated budgets for the federal fiscal year beginning October 1, 2025. These budgets would have been submitted to the Office of Management and Budget (OMB) by September 30, 2024. By February 2025, the OMB should have evaluated and compiled agency budgets to write a President’s Budget Formulation (PBF).

From March through September 2025, twelve subcommittees in each house of Congress having jurisdiction over the agencies should have been reviewing sections of the PBF to formulate a bill to fund them. These bills must be agreed to by the U.S. House of Representatives and Senate, with each of the twelve resulting bills requiring a two-thirds majority vote to pass. Finally, the twelve bills would be sent to the President for signature and become the new budget on October 1 (1)(2).

This past September, Congress had no budget to present to the President so two other legislative processes came into play. A Continuing Resolution (CR) is a bill that extends the provisions of the previous year’s budget for a fixed period of time. The House and Senate must pass identical versions of a CR. While the House can pass it with a simple majority, the Senate requires a vote of 60 senators to end any filibuster before it can be brought for a vote.

While crafting a budget for the fiscal year beginning October 1, 2024, differences left Congress unable to agree. Congress instead enacted a year-long Continuing Resolution that essentially extended the October 2023 budget another year, from October 1, 2024 through September 30, 2025. In July 2025, this extended budget was amended by a Budget Reconciliation (BR) known as the One Big Beautiful Bill Act (3)(4).

Budget reconciliation is a process to change the terms of the budget currently in effect. The reconciliation process is subject to limited debate, so these bills pass through Congress with a simple majority in each house.

The process of crafting a budget for October 1, 2025, never got off the ground. Congress is currently deadlocked over a Republican proposal to extend last year’s budget, including the provisions of the OBBBA, through a “clean” CR to give Republicans more time to come up with a PBF. Because Democrats insist on renegotiating OBBBA provisions threatening health care coverage and affordability for millions of Americans, the Senate cannot, at this writing, gather the required 60 votes to approve the CR. And so, with no budget in place, we have entered a shutdown of the federal government (5).

NOTES

1. Alessandra Zimmerman, “The Federal Budget Process 101,” American Association for the Advancement of Science, December 14, 2022.
2. Mike Simpson, “What are the 12 Appropriations Subcommittees?”
3. Sonya Bahal, Andrew Lautz, Arianna Fano, Caleb Quakenbush, Rachel Snyderman, “What to Know about Continuing Resolutions,” Bipartisan Policy Center, September 3, 2025.
4. “2025 United States federal budget,” Wikipedia, October 3, 2025.
5. “Budget Reconciliation Explainer,” House Committee on the Budget, January 10, 2025.