Authorization Bills and How Federal Programs Are Funded

Authorization Bills and How Federal Programs Are Funded

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Did you ever wonder how a federal program or agency came into being? Or why they there's a battle every year over whether they should receive taxpayer money for their operations?

The answer is in the federal authorization process.

An authorization is defined as a piece of legislation that "establishes or continues one or more federal agencies or programs," according to the government. An authorization bill that become law either creates a new agency or program and then allows for it to be funded by taxpayer money. An authorization bill typically sets how much money those agencies and programs get, and how they should spend the money.

Authorization bills can create both permanent and temporary programs. Examples of permanent programs are Social Security and Medicare, which are often referred to as entitlement programs. Other programs that are not statutorily provided for on a permanent basis are funded annually or every few years as part of the appropriations process.

So the creation of federal programs and agencies happens through the authorization process. And the existence of those programs and agencies is perpetuated through the appropriations process.

Here's a closer look at the authorization process and the appropriation process.

Authorization Definition

Congress and the president establish programs through the authorization process. Congressional committees with jurisdiction over specific subject areas write the legislation. The term “authorization” is used because this type of legislation authorizes the expenditure of funds from the federal budget.

An authorization may specify how much money should be spent on a program, but it does not actually set aside the money. The allocation of taxpayer money happens during the appropriations process.

Many programs are authorized for a specific amount of time. The committees are supposed to review the programs before their expiration to determine how well they are working and whether they should continue to receive funding.

Congress has, on occasion, created programs without funding them. In one of the most high-profile examples, the “No Child Left Behind” education bill passed during the George W. Bush administration was an authorization bill that established a number of programs to improve the nation's schools. It did not, however, say the federal government would definitely spend money on the programs.

"An authorization bill is rather like a necessary 'hunting license' for an appropriation rather than a guarantee," writes Auburn University political scientist Paul Johnson. "No appropriation can be made for an unauthorized program, but even an authorized program may still die or be unable to perform all its assigned functions for lack of a sufficiently large appropriation of funds."

Appropriations Definition

In appropriations bills, Congress and the president state the amount of money that will be spent on federal programs during the next fiscal year.

"In general, the appropriations process addresses the discretionary portion of the budget - spending ranging from national defense to food safety to education to federal employee salaries, but excludes mandatory spending, such as Medicare and Social Security, which is spent automatically according to formulas," says the Committee for a Responsible Federal Budget.

There are 12 appropriations subcommittees in each house of Congress. They are divided among broad subject areas and each writes an annual appropriations measure.

The 12 appropriations subcommittees in the House and Senate are:

  • Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
  • Commerce, Justice, Science, and Related Agencies
  • Defense
  • Energy and Water Development
  • Financial Services and General Government
  • Homeland Security
  • Interior, Environment, and Related Agencies
  • Labor, Health and Human Services, Education, and Related Agencies
  • Legislative Branch
  • Military Construction, Veterans Affairs, and Related Agencies
  • State, Foreign Operations, and Related Programs
  • Transportation, Housing and Urban Development, and Related Agencies

Sometimes programs don't get the necessary funding during the appropriations process even though they've been authorized. In perhaps the most glaring example, critics of the “No Child Left Behind” education law say that while Congress and the Bush administration created the program in the authorization process, they never adequately sought to fund them through the appropriations process.

It is possible for Congress and the president to authorize a program but not to follow through with funding for it.

Problems With the Authorization and Appropriations System

There are a couple of problems with the authorization and appropriations process.

First, Congress has failed to review and reauthorize many programs. But it also has not let those programs expire. The House and Senate simply waive their rules and set aside money for the programs anyway.

Second, the difference between authorizations and appropriations confuses most voters. Most people assume that if a program is created by the federal government it is also funded. That's wrong.

This article was updated in July 2016 by U.S. Politics Expert Tom Murse.


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