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The federal budget's tortured path

By Jeanne Sahadi, senior writer


NEW YORK (CNNMoney) -- Here's fodder for a new drinking game: Between now and Sept. 30, lift a glass every time you hear President Obama, members of Congress or TV pundits say "federal budget."

Beware: You might get pretty loopy.

Starting this week, talk about the federal budget for fiscal year 2012 starts in earnest as Congress awaits the release of the president's budget proposal on Monday.

Obama's proposal, however, is only the first step in a convoluted process that involves no less than 40 congressional committees, 24 subcommittees, countless hearings and a number of floor votes in the House and Senate.

"The intent of the congressional budget process is to place Congress on a level-playing field with the president," said Charles Konigsberg, a budget expert at the Bipartisan Policy Center.

At a minimum, the president's budget request lets both parties know what his priorities are.

Congress almost certainly won't adopt Obama's proposal wholesale and may not even agree to large swaths of it. Nevertheless, lawmakers can't dismiss his ideas altogether because they will need him to sign off on the fiscal year 2012 spending and revenue bills that Congress eventually does pass.

But there will be a lot of negotiations and grousing before Congress gets to that point. Here's what to expect.

Budget committees get busy: After the president sends his proposal to the Hill, the House and Senate budget committees each pass their own budget resolution. Those resolutions set caps for spending, and establish revenue targets and generally serve as five- to 10-year blueprints of congressional priorities.

The budget resolutions also allocate how much may be spent on each broad budget function (such as defense and education) but not on individual programs. The House's and Senate's numbers often differ, and the chambers must resolve their differences and pass a single Budget Act.

Spending committees take the baton: Next, the appropriations committees and subcommittees in each chamber debate how to allocate discretionary funds among individual government agencies and programs. Each committee must pass 12 appropriations bills, which then must be passed by their respective chambers.

The House and Senate then resolve their differences on each appropriation bill and send a single version to the president for his signature. In some years, the appropriations bills are bundled into one omnibus bill before being sent to the White House.

Rounding home: If all goes well, a formal federal budget for government agencies will be in place by Oct. 1, the start of the 2012 fiscal year.

If all doesn't go according to plan (which it usually doesn't), Congress will pass a temporary spending measure known as a continuing resolution by 11:59 p.m. on Sept. 30 to continue funding the government as lawmakers continue to duke it out over just what the new fiscal year's federal budget should look like.

Then there's this year

Even when Congress misses the Oct. 1 deadline and resorts to a continuing resolution, the federal budget is usually finalized before the president submits his budget proposal for the next fiscal year. Usually, that is, except this year.

The House and Senate didn't even manage to pass a formal joint budget resolution for 2011. Instead, the government has been running on a series of short-term continuing resolutions, the latest of which expires March 4.

That means between now and then lawmakers will be talking about two federal budgets simultaneously. As if one isn't confusing enough.

Later this week, House Republicans will reveal just where they propose to cut $32 billion from current spending levels for the remaining seven months in the current fiscal year.

And soon after the president puts out his 2012 budget proposal on Monday, the House will vote on its proposed spending plan for the rest of this fiscal year.

The Senate, meanwhile, won't be in session the week of Feb. 21, so likely won't be able to take up the House's 2011 proposal until it returns on Feb. 28, just a few days before the stop-gap spending measure expires.

Given that there is a divided Congress, don't be surprised if lawmakers end up passing a few more short-term continuing resolutions beyond March 4, rather than a one-and-done 7-month spending plan. To top of page

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