The President's Budget is basically a series of goals with price tags attached. It allows the President to provide a suggested spending framework to Congress for use in deciding (1) how much money to spend, (2) what to spend it on, and (3) how to raise the money they have decided to spend. According to the Budget and Accounting Act of 1921, the President must annually submit a budget to Congress by the first Monday in February. In addition to the proposed spending plan, the President's Budget must show:

• The condition of the Treasury at the end of the last completed fiscal year.
  
• The estimated condition of the Treasury at the end of the current fiscal year.
  
• The estimated condition of the Treasury at the end of the next fiscal year if the budget proposals are carried out.

The Office of Management and Budget (OMB) assists the President in the creation of the President's Budget by gathering data from agencies and compiling it into the final plan to be approved by the President. As part of this process, OMB also studies Government services in detail and then recommends changes to the President intended to increase the economy and efficiency of Government operations.

The process of creating the President's Budget starts about a year before it is due to be submitted to Congress. It begins with the development of the President's an overall budget strategy in the spring and by summer Federal agencies submit their budget estimates based on that strategy. During the fall, the estimates provided by the agencies are reviewed by OMB and by the winter, the President's budget is reviewed, finalized, and submitted to Congress as required.

Congress and the Budget

According to the Constitution, all Federal appropriations must be authorized by Congress. This is a source of great power for Congress known as the "power of the purse". Once the President's Budget is received by Congress, the House of Representatives works to create a budget resolution, which sets the base line level of spending for the Federal Government as required by the Congressional Budget and Impoundment Control Act of 1974. Once this bottom line is established, Congress acts to decide how this level of funding will be dispersed among Federal activities.