Congressional Budget and Impoundment Control Act of 1974

On this date, the Congressional Budget and Impoundment Control Act of 1974 (Public Law 93-344) was signed into law. The bill overhauled the federal government’s annual budget process, empowering Congress to coordinate revenue and spending policies each year. Lawmakers had established the first formal budget procedures in 1921 through the Budget and Accounting Act, which required the President to submit an annual budget plan with spending and revenue estimates in advance of each fiscal year. Fifty years later, President Richard M. Nixon criticized what he considered excessive federal spending and sought to exert greater control by directing executive departments to withhold congressionally appropriated funds through a process known as “impoundment.” In response, Congress passed legislation to affirm its budget authority. In 1972, Congress created the Joint Study Committee on Budget Control to design a new budget process. In early 1973, the panel held hearings and drafted legislation—H.R. 7130, sponsored by Representative Albert Conrad Ullman of Oregon—to establish a new structure and timeline for annual budget procedures. After receiving the President’s budget message, Congress was required to draft and approve a budget resolution setting revenue and spending guidelines for the passage of appropriations bills. The law also shifted the end of the federal government’s fiscal year from July 1 to October 1 and created a procedural tool known as reconciliation that allowed lawmakers to quickly pass legislation to implement the spending and revenue targets in the budget resolution. To assist Congress with these new responsibilities, the law established the House and Senate Budget Committees as well as the nonpartisan Congressional Budget Office (CBO) to evaluate legislative proposals each year. Finally, the law enabled Congress to review or deny any presidential requests to use impoundment to withhold previously appropriated funds. Just weeks after the bill became law, the House Budget Committee was organized as a standing committee and Ullman, a longtime member of the Ways and Means Committee, was selected to lead the new panel. For Chairman Ullman, the Congressional Budget and Impoundment Control Act was designed “to redress a dangerous imbalance that has been developing between the legislative and executive branches of our Federal Government for more than half a century. It served as notice that Congress—the people’s branch—is ready to reassert itself as a coequal partner in the process of making public policy by reclaiming its power of the purse.”