Authorization Bills and How Federal Programs Are Funded

The U.S. Capitol Building, where Congress meets

 Hisham Ibrahim/Getty Images

Every year Congress legislates, creates, and funds federal programs and agencies to address issues throughout the country. But how does a federal program or agency come into being in the first palce? Why is there a battle every year over spending taxpayer money to operate those programs and agencies? The answer lies in understanding the federal authorization process.

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.

Authorization Definition

An authorization act is a piece of legislation that "establishes or continues one or more federal agencies or programs," according to the government. An authorization bill that becomes 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.

An authorization bill is rather like a necessary "hunting license" for an appropriation rather than a guarantee. 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.

(Paul Johnson, Auburn University)

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.

Authorization Process 

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.

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.

(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. They are:

  1. Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
  2. Commerce, Justice, Science, and Related Agencies
  3. Defense
  4. Energy and Water Development
  5. Financial Services and General Government
  6. Homeland Security
  7. Interior, Environment, and Related Agencies
  8. Labor, Health and Human Services, Education, and Related Agencies
  9. Legislative Branch
  10. Military Construction, Veterans Affairs, and Related Agencies
  11. State, Foreign Operations, and Related Programs
  12. 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. As discussed above in perhaps the most glaring example, the “No Child Left Behind” education law received criticism. While Congress and the Bush administration created the program in the authorization process, they never adequately sought to fund them through the appropriations process. 

Resources and Further Reading

  • Appropriations 101.” Budget Process, Committee for a Responsible Federal Budget, 30 May 2018.
  • Glossary Term | Authorizations Act.” U.S. Senate Reference: Glossary, United States Senate, 18 Jan. 2018.
  • Johnson, Paul M. “Authorization Bill.” A Glossary of Political Terms, Auburn University Department of Political Science, 1994-2005.

Updated by Tom Murse

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Baumann, David. "Authorization Bills and How Federal Programs Are Funded." ThoughtCo, Oct. 28, 2021, Baumann, David. (2021, October 28). Authorization Bills and How Federal Programs Are Funded. Retrieved from Baumann, David. "Authorization Bills and How Federal Programs Are Funded." ThoughtCo. (accessed June 3, 2023).