Appropriations vs. Authorization

Authorization bills create or continue federal programs and set the rules for them. Appropriations bills provide the actual money. The two-step process means a program may be authorized but unfunded, or funded without recent authorization.

The federal budget is built on a two-step distinction that is unfamiliar to most citizens but central to how Congress actually works. Authorization bills create federal programs, agencies, or activities. They establish what the program will do, who is eligible, and what rules apply. Authorization bills may also set a ceiling on how much the program can spend. They do not, however, provide any money. Appropriations bills do that. Twelve annual appropriations bills, each handled by a subcommittee of the House and Senate Appropriations Committees, divide the federal discretionary budget across the agencies. Each bill provides the funding for the programs in its jurisdiction. The President can veto appropriations bills, leading to government shutdowns when Congress fails to enact them on time. The two-track system exists for institutional reasons. Authorizing committees, like Armed Services or Energy and Commerce, are meant to design programs with expertise in their subject areas. Appropriations committees are meant to set overall spending priorities and enforce fiscal discipline across the entire budget. The system breaks down regularly. Many federal programs operate for years on expired authorizations, with appropriations bills providing money for activities the underlying authorization no longer formally covers. Continuing resolutions, which extend prior funding levels for short periods, have become common substitutes for full appropriations bills. Mandatory spending, which includes Social Security, Medicare, and other entitlements, bypasses the annual appropriations process entirely. The complexity makes the federal budget hard to track from the outside. It also gives Congress more tools for shaping policy than the headline numbers suggest.