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What is a Budget Authority?

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  • Written By: Jason C. Chavis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 31 August 2016
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A budget authority is the mandate issued to certain sections of a government in regards to the control of the financial responsibilities and income of a nation or state. The concept requires certain obligations be met with the budget as well as an ability to require payments into the coffers of the country. Federal funds are managed by these government agencies, with which they determine the best way to collect taxes and spend the money. In many nations, the budget authority has certain provisions that require expenditures on programs such as entitlements. Determining the budget can be accomplished by a group of representatives or an individual depending on the type of government the nation uses.

In the United States, the budget authority is given to both the Congress and President. The process involves a number of agencies establishing what the necessary expenditures for the following year will be and how they intend to accumulate the revenue needed for these costs. This includes analysis and data accumulated from the US Treasury Department, the Office of Management and Budget, the Congressional Budget Office and the Government Accountability Office. It also uses a variety of committees to debate the costs and means by which the nation will fund the proposals.

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Every year, the executive branch sends a budget suggestion to Congress, which then debates the measures in committees. Using projections, the government finds the areas in which it must continue funding or establishes new spending, while conducting program eliminations and cutbacks to create the budget. The House of Representatives and Senate both vote on the budget and the President has the right to sign it into law. If the President chooses not to do this, he or she vetoes the bill and sends it back to Congress. The legislative body must then either pass a new bill or override the veto with a two-thirds majority vote.

Governments often run their budgets in a deficit. While, in the short time, this is not a major problem for the well-being of the nation, long-term use of this process eventually creates high levels of debt. In addition, certain special budgets not present in the larger budget often are used to keep spending separate. An example of this is the special funding programs of the Iraq War in the US during the 2000s.

Another challenge that many governments deal with is the existence of entitlement programs. These require the budget authority to fund these programs for the populations due to mandate, impacting the budget with expenses that cannot be cut. For example, in the US, the Social Security and Medicare programs are guaranteed by law for certain citizens. In the UK, a single-payer health care system is provided for all citizens by the government. Both of these require expenses in the budget even before new spending programs are considered.

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