United States House Committee on the Budget

Committee information

• Date created: 1974
• Members: Thirty-seven members in the 119th Congress (2025)
• Subcommittees: None

Role

The United States House Committee on the Budget is made up of representatives tasked with drafting and reviewing the federal budget. Each year, it works with the Senate Committee on the Budget to present a resolution to Congress. It is also designed to review the budget process and recommend changes in policy if its members believe they are necessary.

The committee was created to reinforce congressional control of the budget. The US Constitution grants Congress “power of the purse”—that is, authority over the nation’s finances. However, the Constitution does not give clear directions regarding how Congress should wield that power. Part of the House Budget Committee’s responsibility is helping present each year’s budget in a clear, organized way.

The House Budget Committee has representatives of both Republicans and Democrats. Each party has a leader within the committee. The party that has the most members is led by the committee chair, while the leader of the minority party is called the ranking member. Only a fraction of Representatives can join the committee, and the number of Republicans relative to Democrats matches the ratio of the two parties in the overall House.

Some committees are joint committees, meaning they are made up of both Senators and Representatives. Although the House Budget Committee was formed at the same time as the Senate Budget Committee, and the two work together regularly, they are distinct from each other. The House Budget Committee is one of twenty standing committees in the House of Representatives.

A standing committee is one that exists on a permanent basis. Its status means that Congress believes it will be necessary for the foreseeable future. Even if the United States were to hypothetically obtain far more income than it spends, the Budget Committee would still have the role of overseeing spending to make sure every program, agency, and person received the funding necessary.

Not all committees are standing committees. Sometimes, they are created to address a short-term concern or issue. These are called select committees. The original House Budget Committee was one example of this type of committee. It was created in 1919, then dissolved in 1920, after it helped bring about changes to the government’s budget policy. The Congress of that time believed these changes were enough to stabilize the federal budgeting process for the future, meaning the committee was no longer needed. The modern standing committee of the same name did not form until 1974.

Most committees have subcommittees, which break the committee up into more specialized categories. Congress allows for committees to have up to five subcommittees. The Budget Committee is unusual, lacking subcommittees altogether.

History

Managing the budget has been a concern for the United States since it was first fighting for independence. In 1789, the young nation formed both the Department of the Treasury and the US Constitution. The Treasury conducted business with both state and foreign governments, managing the country’s wealth and debts. The Constitution explicitly gave Congress control of US finances. But it did not elaborate on how Congress was expected to regulate finances. For much of US history, there was a lack of unified policy on the relationship between Congress and the budget.

That changed in the early twentieth century. In 1919, Congress created a select committee: the House Committee on the Budget. It only lasted for a single year, but it was part of a great deal of reform surrounding the federal budget. Several major changes occurred in 1921 that helped shape the modern federal budget. The Budget and Accounting Act of 1921 created a pair of organizations, one in the legislative branch and one in the executive branch. The Government Accountability Office is a congressional agency designed to evaluate the budget with a non-partisan stance, determining where money could be spent more efficiently. The Office of Management and Budget (OMB) is an executive organization that assists the president in determining the coming year’s budget. With the help of the OMB, the president is expected to present an annual budget at the start of each fiscal year.

Following these changes, the United States went through trying financial times. The Great Depression dealt a severe blow to the nation’s economy, and it was immediately followed by World War II, which demanded an increase in defense spending. The United States accumulated large amounts of debt by the end of the war. However, the federal budget stabilized in decades after the war.

During the administration of President Richard M. Nixon in the late 1960s and early 1970s, the executive branch was frequently impounding funds that Congress had appropriated. Congress has the ability to appropriate federal money. This means that Congress can decide that a specific agency must be paid a certain amount. With impoundment, however, the executive branch could refuse to give the money. This power had been used by the executive branch since the start of the 19th century, but under Nixon, many in Congress felt it was an abuse of power. Nixon specifically impounded funds for projects that he had openly opposed. In some cases, he had vetoed the project in question, only for his veto to be overturned by Congress. Congress argued that impoundment was being used as a second veto for cases in which the president’s ordinary veto had failed, rather than as a tool for balancing the budget.

In 1972, Congress approved the creation of the Congressional Joint Study Committee in Budget Control. It was tasked with observing the federal budget process and how both the executive and legislative branches interacted with the budget, to see what actions were necessary. The select committee recommended the creation of standing committees that could oversee the federal budget process. In 1974, Congress passed the Budget and Impoundment Control Act, which reduced the power of the executive branch to make changes to the budget and established both the House and Senate Committees on the Budget.

Jurisdiction & Legislation

According to committee rules, only chairpersons and ranking members may serve on the committee for more than four out of six consecutive Congresses. In addition, Democrats have their own limitations, preventing any of the committee's non-leadership members from sitting on the committee for more than three out of five consecutive Congresses.

This committee works with its Senate counterpart to deliver a plan for each year’s federal budget. This is called a budget resolution. In addition, the committee can propose reconciliations, laws that only require a simple majority to pass through Congress. Their purpose is to allow the committee to introduce changes that will have an immediate impact on the budget. The Budget Committee acts as an enforcer of budget law as well, investigating other committees and agencies to make sure that they are following resolutions and reconciliations.

The Federal Budget

Setting the federal budget is complex and often generates controversy. Before the committee can begin, the president has the opportunity to construct a budget. It is sent to the committee. Because Congress holds power of the purse, the president's vision is not binding, but it allows the president to communicate priorities, concerns, and requests to the committee.

The committee then sets to work on its version of the budget. It has to take into account the different forms of spending the government engages in. Certain programs, such as Social Security and welfare, are considered mandatory, or direct spending. Americans become eligible to receive benefits from these programs based on certain criteria—such as age or income. The committee does not have the power to change the nature of the benefits within the annual budget. These benefits may be changed, but because citizens expect and depend on these programs, changes are more difficult to enact and take effect very slowly. The committee’s main concern with mandatory spending is studying the country’s demographics and estimating how many citizens will be collecting benefits each year. That can help the committee determine how much of the budget will be left for discretionary spending.

Discretionary spending refers to other government projects and agencies, where funding can change more drastically from year to year based on need. For instance, when the United States is actively at war, defense spending rises. The committee analyzes what the government can afford to spend, and determines which programs have the most need.

The budget needs to account for money that the government takes in as well. Most of the federal government’s revenue comes from taxes—either income taxes of private citizens, or taxes on the sale of goods and services. However, for most years since the committee was formed, the government has not taken in enough revenue to cover its costs. This is called running a deficit. The government did make more money than it spent from 1998 to 2001, which is called running a surplus.

Many years of operating at a deficit have led to a substantial national debt. Deficit refers to the government spending more money than it makes during a single year, while the debt is the total amount that the government owes to lenders. Many citizens and politicians have criticized the large debt that the government has accumulated, but a government in debt is not necessarily a sign of an unhealthy economy.

Much of the government’s debt is owed to American citizens and organizations, which the government borrows from in the form of bonds. These bonds gather interest, and the government pays them back at a later date. It also borrows money from the Federal Reserve, an American financial institution independent of the federal government. Active trade and investments between citizens, the government, and the Federal Reserve helped keep the economy flowing. Being able to go into debt also allows the government to fund projects that it could not otherwise afford unless it taxed citizens at considerably higher rates. What worries economists is if deficits continue to increase each year. That is an unsustainable situation, and part of the committee’s job is to attempt to bring the budget under control.

Legislation

Politicians and economists have disagreed over the best method to control the budget, and running deficits has often been necessary for the government to address other concerns. The Gramm-Rudman-Hollings Acts of 1985 and 1987 attempted to set goals over the course of several years, with a slightly smaller projected deficit each time. The Enforcement Act of 1990 contradicted the previous acts and tried to cap discretionary spending. The Statutory Pay-As-You-Go Act of 2010 discouraged changes in budget policy that increased the deficit. By 2011, the national debt had grown large enough to alarm many Americans, and the government was attempting to raise the debt ceiling to allow it to grow even higher. As a compromise, the Budget Control Act of 2011 allowed the ceiling to increase to allow for short-term spending while setting goals to reduce deficits over the following several years.

In 2018, the committee faced criticism that it was ineffective at maintaining authority over the budget. Both parties worked together to introduce the Bipartisan Budget and Appropriations Process Reform Act of 2018, which was designed to bring more transparency and accountability to the budget process. It did not make it out of committee.

That same year, the committee began investigating the feasibility of a new single-payer healthcare system for the United States. Healthcare and its affordability have been a source of controversy for several years. The committee began evaluating whether a new system could be integrated with existing ones or could replace them entirely. In 2023, the committee proposed several pieces of legislation focused on healthcare, including the Preventive Health Savings Act.

Also in 2023, the Committee on the Budget contributed to the Congressional Budget Office Data Sharing Act and the Eliminate Useless Reports Act of 2023. It advanced the Fiscal Commission Act and the Fiscal Responsibility Act. In 2024, the committee unanimously passed the Increasing Baseline Updates Act, which aimed to improve the reliability of budget projections. As the 119th Congress began in 2025, the committee focused on reducing the nation's $36 trillion debt to avoid a fiscal crisis.

Bibliography

“About GAO.” GAO, www.gao.gov/about. Accessed 25 Jan. 2025.

Coppola, Frances. “Everything You’ve Been Told About Government Debt is Wrong,” Forbes, 17 Apr. 2018, www.forbes.com/sites/francescoppola/2018/04/17/everything-youve-been-told-about-government-debt-is-wrong. Accessed 25 Jan. 2025.

"The Federal Budget." USA.gov, 20 Sept. 2024, www.usa.gov/federal-budget-process. Accessed 4 Feb. 2025.

“Hearings.” House Committee on the Budget, budget.house.gov/hearings. Accessed 25 Jan. 2025.

“History.” House Committee on the Budget, budget.house.gov/about/history. Accessed 25 Jan. 2025.

"House Budget Committee Adopts Committee Rules and Membership for 119th Congress." Budget Comittee, 24 Jan. 2025, budget.house.gov/press-release/house-budget-committee-adopts-committee-rules-and-membership-for-119th-congress. Accessed 25 Jan. 2025.

Malinovskaya, Anna, and Louise Sheiner. “The Hutchins Center Explains: Federal Budget Basics.” Brookings, 13 Dec. 2018, www.brookings.edu/blog/up-front/2018/12/13/the-hutchins-center-explains-federal-budget-basics. Accessed 25 Jan. 2025.

“Press Releases.” House Committee on the Budget, budget.house.gov/news/press-releases. Accessed 25 Jan. 2025.

“What Is the History of the Federal Budget Process?” Tax Policy Center, Jan. 2024, www.taxpolicycenter.org/briefing-book/what-history-federal-budget-process. Accessed 25 Jan. 2025.

Yourish, Karen, and Laura Stanton. “A Guide to the Federal Budget Process.” The Washington Post, www.washingtonpost.com/wp-srv/special/politics/federal-budget-process/budgetprocess.pdf. Accessed 25 Jan. 2025.