The Fundamentals: Annual appropriations are not required by the Constitution but it has been the custom since the First Congress to make appropriations for a single fiscal year. An appropriations law is one that provides federal agencies legal authority to incur obligations and the Treasury Department authority to make payments for designated purposes. (There are other types of laws that provide this same type authority for entitlements such as Social Security). Appropriations are usually used or obligated in the fiscal year for which they are provided, unless a law specifies that they be available for a longer period of time. An appropriation makes funds available for obligation but does not usually require that outlays occur in any particular year. Budget authority is obligated when agencies commit to a spending requirement, but outlays occur as checks are written to pay for the requirement. The rate at which checks or payments are made for a particular program often occur a period of more than one fiscal year. An agency may not spend more than the amount appropriated to it and may only use these funds for the purposes and subject to the conditions provided by Congress. Detailed information on how funds are to be spent, along with other Congressional guidance, is provided in the reports and statements of managers accompanying the various appropriations measures. Agencies ordinarily abide by report language in spending appropriated funds, although the directives in the report are not legally binding. Generally, appropriations reports do not comment on every appropriation.

By precedent, appropriations originate in the House, with the Senate following suit. Congress generally passes three types of appropriation measures. General appropriation bills provide budget authority to multiple agencies for the next fiscal year. Supplemental appropriation bills provide additional budget authority during the current fiscal year. Continuing appropriation bills provide temporary (or full-year) funding for those agencies whose regular appropriation has not yet been enacted by the start of that fiscal year. The fiscal year begins on October 1 of each calendar year.

The Appropriations Committee: In 1865, all of the general appropriation bills were placed within the jurisdiction of the Committee on Appropriations. Since that time this committee has grown in its level of importance in the congressional budget process. Once the aggregate spending levels have been determined by the budget resolution, the Appropriations Committee is given an allocation (known as a section 302(a) allocation) for spending because that is the section of the Budget Act that includes this allocation authority. This allocation serves as an internal Congressional control mechanism, enforceable through points of order and other procedural mechanisms in both the House and Senate. The Appropriations Committees in the House and Senate may not exceed these aggregate totals in the bills they develop in the annual appropriations process.

When the Appropriations Committees receive the aggregate allocation, they divide this into suballocations (known as the section 302(b) suballocations) corresponding to each of the thirteen Appropriations Subcommittees. Once the subcommittees receive their suballocation totals, each subcommittee begins work on its annual spending bill for the relevant areas of government operations. The subcommittees work off the Administration's budget request, as well as previous year's spending bills, incorporating any new priorities Congress may have. The President requests annual appropriations in his budget submission in February which agencies supplement with justification materials sent to the two Appropriations Committees. These justifications contain more detail than the budget request and are used in support of agencies' testimony during annual subcommittee hearings on the President's budget.

In the House, appropriation measures originate in the Appropriations Committee when one of its subcommittees marks up or reports a committee print, rather than its being introduced by a member beforehand. Once a subcommittee completes its work on a chairman's mark, it is reported to the full committee where it is considered, possibly amended and ultimately approved and reported by the full Appropriations Committee consistent with House rules. At this point, the ordered reported bill is normally reported by the appropriate subcommittee chairman. All committee actions are constrained by the overall discretionary spending limits and the allocations in the budget resolution. The target date under the Budget Act for completion of the House Appropriations Committee's action on these general bills is June 10 of each year.

House Floor Consideration: Similar to other bills, a reported appropriations bill and its report (including printed hearings) must be available for three days prior to its floor consideration. In recent Congresses most appropriations bills have been granted special rules for their consideration. Nevertheless, appropriation bills are generally read for amendment, by paragraph, under the five-minute rule in the Committee of the Whole.

There are specific rules of the House including the Budget Act which impact the appropriation process. First, the rules prohibit unauthorized or legislative provisions from being included in or offered as amendments to general appropriation bills. Secondly, the rules prohibit non-emergency designated amendments from being offered to an appropriations bill with an emergency designation. Third, an individual appropriation bill may not exceed the suballocation established for the relevant subcommittee, and all thirteen appropriation bills may not exceed the overall spending allocation set in the budget resolution. These rules, among others, set the parameters for the floor consideration of appropriation bills under the regular order. However, special rules from the Rules Committee are often utilized to protect certain provisions in these bills from points of order, particularly those relating to legislative and unauthorized provisions. Ideally, all funding provided through the appropriations cycle should already have been authorized (established in law) by the Congress through its authorization committees.

Senate Consideration and Conference: Once the House completes action on an appropriation bill, the Senate traditionally begins consideration of that House passed measure. All changes to the bill, whether in the Senate Appropriations Committee or on the Senate floor are considered as Senate amendments to the House passed bill. These amendments may take various forms including a full substitute or individual amendments. These amendments are then the focus of points of disagreement on the bill between the two Houses. These differences can be resolved in a variety of ways including shuttling the bill back and forth between the chambers, or holding a conference committee and devising a conference report with or without amendments in disagreement between the Houses. Each of these approaches carry different procedural ramifications. Congressional action on an appropriation measure is not complete until both the House and Senate have successfully disposed of all amendments between the Houses eventually agreeing on an identical text pursuant to the Constitution - at which point the President acts on the bill.