What is an Appropriation? Understanding Congress's Power of the Purse

Before tracking budget execution or making sense of a government shutdown, you need to understand what an appropriation actually is—and what it isn't.

Federal budget tracking starts with appropriations. But what exactly IS an appropriation?

Most people think it's simple: Congress passes a bill, money gets allocated, agencies spend it. Done.

But appropriations are more complex—and more important—than that. They're the constitutional foundation of congressional control over federal spending. They determine not just HOW MUCH money agencies get, but WHEN it's available, HOW LONG it lasts, and WHAT it can be used for.

Understanding appropriations is essential for tracking budget execution. Because until you understand what Congress authorized, you can't tell if OMB is withholding it or if agencies are failing to spend it or exceeding the limits of the law.

The Constitutional Foundation: Article I, Section 9

The Appropriations Clause is sixteen words long:

"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law."^[1]

This single sentence establishes the fundamental principle: Congress controls federal spending. The executive branch—no matter how urgent the need or how strongly the President believes in a policy—cannot spend money without congressional authorization.

The Founders deliberately gave spending power to the legislative branch (the branch closest to the people) as a check on executive authority. Alexander Hamilton explained in Federalist No. 58 that "the power over the purse may, in fact, be regarded as the most complete and effectual weapon... for obtaining a redress of every grievance."^[2]

What this means in practice: Every dollar in the federal budget must be authorized by an appropriations law passed by Congress and signed by the President. Executive agencies cannot:

• Create their own spending authority
• Redirect appropriated funds to unauthorized purposes
• Continue spending after an appropriation expires
• Spend money Congress hasn't appropriated (even if authorized by law)

That last point is crucial: authorization ≠ appropriation.

What is an Appropriation?

Put simply, an appropriation is a law that provides an agency with permission to enter binding commitments that will result in payments from the Treasury. While much attention is focused on the annual appropriations process, an appropriation doesn't need to be in an "appropriations" bill or originate from the Appropriations Committees.

Reconciliation measures often include spending provisions that are considered appropriations. On occasion, authorizing bills will include a small amount of funding in them—that funding is an appropriation.

Regardless of the form, each appropriation has three elements:

• Time: An appropriation can be available for one-year, multiple years, or until expended ("no-year").
• Purpose: Each appropriation has a defined purpose that the funds can be used for and can be broad ("necessary expenses") or specific ("the design and construction to replace Federal dredges").
• Amount: Can be definite ($504,187,977) or indefinite ("such sums").

Authorization vs Appropriation: The Two-Step Process

One of the most misunderstood aspects of federal spending is the difference between authorization and appropriation.

Authorization: Permission to Create a Program

An authorization law establishes a federal program and sets the policy framework:

• Creates the legal authority for an agency to operate a program
• Defines what the program does
• Sets policy objectives and requirements
• Often includes a funding ceiling ("authorized to be appropriated such sums as necessary")

Example: The Head Start Act (42 U.S.C. § 9835) authorizes HHS to operate the Head Start program and specifies how grants must be distributed.^[3]

But: Authorization alone doesn't provide any money. It just gives permission to spend IF appropriations are provided.

Appropriation: Providing the Money

An appropriations law provides the actual funding:

• Grants budget authority to spend
• Specifies the dollar amount
• Defines the period of availability (how long money lasts)
• May include conditions and restrictions

Example: The FY2025 Labor-HHS-Education Appropriations Act provided $12.178 billion for Head Start formula grants.^[4]

The two-step process:

1. Authorization: "HHS may operate Head Start program"
2. Appropriation: "HHS has $12.178 billion for Head Start"

When Authorization and Appropriation Diverge

Programs can be:

• Authorized but not appropriated: Program exists legally, but has no funding (defunct)
• Appropriated at less than authorized level: Program funded, but below authorization ceiling (common)
• Appropriated without authorization: Money provided even though program expired or was never authorized (happens more than you'd think)

Real-world example: The Violence Against Women Act (VAWA) authorization expired in 2019, but Congress continued appropriating funds for VAWA programs through FY2020-2022. The programs operated normally despite expired authorization.^[5]

Why this matters for tracking: You can't assume that because a program is "authorized at $5 billion," it will receive $5 billion in appropriations. Always check the actual appropriations bill.

A Critical Distinction: Mandatory vs. Discretionary Spending

It's important to recognize that not all federal spending follows the annual two-step authorization and appropriation process described above. The federal budget is split into two major types of spending:

Discretionary Spending

This is the funding controlled by the annual appropriations acts (the 12 bills). Congress has the power to decide each year how much to spend on these programs, which include Defense, agency operations, education grants, and most research.

Mandatory Spending

This category includes programs like Social Security, Medicare, and certain veteran benefits. These programs are generally funded by permanent appropriations written into the original authorizing law. Mandatory spending continues automatically until Congress passes a new law to change the eligibility criteria or benefit levels. It is the largest portion of the federal budget, about 70 percent, and essentially bypasses the annual appropriations cycle.

Why this matters for tracking: If you're tracking a program like highway construction, you're dealing with discretionary funds found in a yearly bill. If you're tracking Social Security payments or Medicaid spending, you're tracking mandatory funds from a permanent, separate legal authority. Knowing which type of funding governs the program is the first step in finding the relevant budget data.

The 12 Appropriations Bills (Or the Omnibus Alternative)

Congress is supposed to pass 12 separate discretionary appropriations bills each year, organized by agency clusters:

1. Agriculture, Rural Development, FDA
2. Commerce, Justice, Science (CJS)
3. Defense
4. Energy and Water Development
5. Financial Services and General Government (FSGG)
6. Homeland Security
7. Interior, Environment, and Related Agencies
8. Labor, Health and Human Services, Education (Labor-HHS)
9. Legislative Branch (Leg Branch)
10. Military Construction, Veterans Affairs (MilCon-VA)
11. State, Foreign Operations (State-Foreign Ops)
12. Transportation, Housing and Urban Development (THUD)

Most bills fund multiple agencies. For example:

• THUD: Funds Department of Transportation (DOT) and Department of Housing and Urban Development (HUD)
• Labor-HHS: Funds Department of Labor, HHS, and Department of Education
• Defense, Homeland Security, and Legislative Branch appropriations bills generally deal with a single agency.

The Omnibus Reality

In practice, Congress rarely passes all 12 bills separately. More commonly:

• Omnibus appropriations: All 12 bills combined into one massive package
• Continuing Resolution (CR): Temporary funding at prior year levels when bills aren't passed on time
• "Minibus": Several bills combined (e.g., 4 bills in one package)

FY2024 example: Congress passed two packages:

• March 2024: 6 bills combined (minibus #1)
• March 2024: 6 bills combined (minibus #2)

Why this matters for tracking: When searching for appropriations data, you need to know WHICH bill funds your agency. HUD is always in THUD. Labor is always in Labor-HHS. Defense is always in Defense appropriations.

What's Next

Now that you understand what appropriations ARE—the constitutional foundation, the three elements, and how Congress organizes them—we need to explore the mechanics: how long appropriations last, how money flows from budget authority to actual payments, and what happens when the appropriations process breaks down.

Next post: How Appropriations Work—duration, the budget authority → obligations → outlays timeline, formula vs discretionary grants, and what happens during CRs and shutdowns.

Because understanding what an appropriation IS is just the first step. Understanding how it WORKS—the timing, the flow of funds, the distribution methods—is what allows you to track execution and spot problems.

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