1938: Budget

With the passage of the Budget and Accounting Act of 1921, the United States at last joined the other first-rank governments of the world in the utilization of a budget as the central instrument of financial control. The act directs the President to submit to Congress on the first day of each regular session a budget which shall set forth the estimated or actual expenditures and receipts for the ensuing fiscal year, the fiscal year in progress, and the last completed fiscal year. Balanced statements of the condition of the Treasury at the end of each of these periods also are required, as are all essential facts concerning the Government debt and any further data deemed necessary by the President to make known the financial condition of the Government. Finally, the President is called upon to present recommendations for dealing with the surplus or deficit, as the case may be, indicated by the information presented. A Bureau of the Budget was established to aid the President in fulfilling his duties.

In order that the President may prepare his budget before the convening of Congress early in January, the departments and establishments of the Government must submit estimates of their expenditure requirements for the ensuing fiscal year on or before September 15. The estimates of the Legislative Establishment and the Supreme Court are submitted on or before October 15 and are included in the budget without revision. The department requests for funds, however, are subject to scrutiny by the Budget Bureau who take into consideration, at the same time, what is known to be the general policy of the President as well as the estimates of income provided by the Treasury. Intensive hearings are held which afford the departments an opportunity to defend their estimates and which enable the President to adjust these estimates to conform with his own general policy. The final decisions of the President are embodied in the budget document.

Upon submission to Congress, the budget estimates of appropriation are reviewed by the House and Senate Appropriations Committees, are reported to each House for consideration upon the floor, and are enacted with such changes from the budget estimates as Congress may agree upon. The appropriations are made directly to the departments; but their expenditure must be planned, usually on a monthly basis, and the plan is subject to the approval of the Director of the Bureau of the Budget. In addition to this control of the rate of expenditure through what is termed the 'apportionment system,' there is the audit of specific disbursements by the General Accounting Office.

New legislation or other contingencies arising subsequent to the submission of the budget estimates may occasion greater expenditures than originally contemplated. These are provided for through deficiency or supplemental appropriations.

Shortly after the adjournment of each regular session of Congress, it is customary for the President to make a summary statement of the condition of the Budget for the current fiscal year on the basis of revised estimates of revenue and expenditure.