Which Branch Has the Power of the Purse? Congress’s Role in Federal Spending

In the United States, Congress holds the federal government’s “power of the purse”—the authority to raise revenue and approve public spending. The Constitution gives Congress this central role, while the president proposes a budget and federal agencies carry out spending that lawmakers authorize. Understanding how these responsibilities fit together explains why federal budgets require negotiation, why funding can lapse, and how Congress can oversee the use of taxpayer money.

Which Body Has The Power Of The Purse?

The U.S. Congress has the power of the purse. Congress is the legislative branch, made up of the House of Representatives and the Senate. Its authority includes imposing taxes, borrowing money on the credit of the United States, and authorizing federal expenditures. In practice, Congress uses laws to decide how much money the federal government may collect and what purposes public funds may support.

The phrase “power of the purse” describes a major check on executive power. The president leads the executive branch, but cannot generally spend federal money simply because the administration wants to. Spending must have legal authorization, and the Treasury can disburse funds only as permitted by law. Congress’s control over revenue and appropriations gives lawmakers influence over federal policy, agency operations, and national priorities.

The power is not held by just one chamber. The House and Senate must generally pass the same legislation before it can go to the president. The president may sign the bill into law or veto it; Congress can override a veto with a two-thirds vote in both chambers. This shared process means that budget decisions typically require agreement among lawmakers and the executive branch.

What The Constitution Says About Federal Spending

The Constitution establishes the foundation for congressional control of public money. Article I, Section 8 authorizes Congress to lay and collect taxes, duties, imposts, and excises, and to borrow money on the credit of the United States. It also authorizes Congress to provide for the common defense and general welfare. These provisions give the legislative branch broad responsibility for federal revenue and expenditures.

Article I, Section 9 adds a direct restriction: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” In plain language, federal funds cannot be withdrawn from the Treasury without an appropriation enacted through law. This requirement is a key constitutional basis for congressional control of spending.

The Constitution also gives the House of Representatives a special role in revenue legislation. Under Article I, Section 7, bills for raising revenue must originate in the House. The Senate may propose or agree to amendments, as it does with other bills. Therefore, the House has the first-move advantage on revenue bills, but both chambers participate in passing the final legislation.

How Congress Uses The Power Of The Purse

Congress exercises its spending authority through several related steps. Lawmakers consider revenue, set budget priorities, authorize programs, and pass appropriations that provide funding. These stages are connected but legally distinct: authorizing a program does not always provide the money needed to operate it.

Revenue And Taxes

Congress creates or changes federal taxes through legislation. The tax system supplies most federal revenue, including income and payroll taxes. Congress also authorizes borrowing, subject to the statutory debt limit, when spending exceeds revenue. Decisions about taxes and borrowing affect the resources available to the federal government and the distribution of costs across households and businesses.

Budget Resolutions And Spending Plans

Congress may adopt a concurrent budget resolution to set an overall fiscal framework. It can establish targets for revenue, spending, deficits, and debt, and may include instructions to congressional committees. A budget resolution is not a law and does not go to the president. It guides congressional budget decisions but does not itself provide funds to federal agencies.

The president submits a proposed budget to Congress, usually early in the calendar year. The proposal is an administration’s plan and request, not an appropriation. Congress can accept, reject, or revise its recommendations. The Congressional Budget Office (CBO), a nonpartisan legislative agency, provides economic and budgetary estimates that help lawmakers assess proposals and their likely effects.

Authorization And Appropriations

An authorization law establishes, continues, or changes a federal program and may set its terms or maximum funding level. An appropriations law provides budget authority—legal permission for an agency to incur obligations and make payments for specified purposes. Some programs have permanent or mandatory funding provided by other laws, while many agency operations depend on annual appropriations.

Congress typically considers 12 regular appropriations bills, covering areas such as defense, transportation, agriculture, and health-related programs. If lawmakers do not complete those bills before the fiscal year begins on October 1, they may pass a continuing resolution to keep some government operations funded temporarily. If neither appropriations nor a continuing resolution is enacted for an affected activity, a funding gap may result.

What The President And Executive Branch Do

The president plays an important part in the budget process but does not hold the power of the purse. The administration develops a proposed budget, negotiates with lawmakers, and signs or vetoes spending bills. Once Congress has enacted appropriations, executive departments and agencies administer programs and spend funds within legal limits.

Federal agencies cannot treat an appropriation as unrestricted cash. They must follow the purpose, amount, and time limits set by law, along with other applicable statutes and regulations. The Office of Management and Budget (OMB), within the Executive Office of the President, helps coordinate the administration’s budget proposal and oversees aspects of budget execution. Agencies also report on finances and performance, and inspectors general conduct audits and investigations.

The president’s veto is an important part of the process. A spending bill cannot become law over a presidential veto unless two-thirds of the members voting in each chamber support an override. This creates a negotiation point, but it does not transfer Congress’s constitutional authority to appropriate money to the president.

Limits On The Power Of The Purse

Congress’s authority is broad, but it operates within constitutional and statutory boundaries. The president must execute valid laws, and federal spending remains subject to legal requirements. Courts may review disputes about whether government actions comply with statutes or the Constitution. Congressional appropriations also cannot override constitutional protections simply by providing or withholding money.

Congress has enacted laws to govern how appropriated funds are managed. The Antideficiency Act generally bars federal officers from spending or obligating more than the amount available, or from spending for purposes that Congress has not authorized. It also restricts accepting voluntary services in many circumstances. Violations can trigger administrative and legal consequences.

The Impoundment Control Act of 1974 limits the executive branch’s ability to withhold funds Congress has appropriated. The president may propose rescinding certain funds, but Congress must approve a rescission within the law’s process for it to take effect. Temporary deferrals are also subject to statutory rules. These restrictions reinforce that the executive branch generally cannot replace Congress’s spending decisions with its own.

Congress also sets the federal debt limit through statute. The debt limit does not authorize new spending; it restricts the Treasury’s borrowing to finance obligations already established by law. Raising or suspending it allows the government to meet existing commitments, but debates over the limit can become a source of political and financial uncertainty.

What Happens During A Government Shutdown?

A federal government shutdown can occur when funding authority expires for agencies or programs that rely on annual appropriations and Congress has not enacted replacement funding. Some government activities continue under permanent or other available funding. Other operations may pause, and employees whose work is not excepted from a lapse in appropriations may be furloughed.

Essential services and activities necessary to protect life or property may continue under applicable law, as can certain programs with funding that does not depend on annual appropriations. The exact impact varies with the programs affected, the legal basis for their funding, and agency shutdown plans. A shutdown does not necessarily stop every federal service or payment.

Congress can end a funding gap by passing appropriations bills or a temporary continuing resolution, which must become law. The president signs the measure or may veto it, so resolution can require agreement across branches. Shutdowns illustrate the practical consequences of Congress’s funding authority, but they do not mean that lawmakers directly manage day-to-day agency operations.

How Congress Oversees Federal Spending

Congress’s role continues after funds are appropriated. Committees hold hearings, request agency reports, investigate implementation, and review whether spending follows the law. Members can use oversight to examine program performance, identify waste or fraud, and consider whether future appropriations should change.

The Government Accountability Office (GAO), an independent, nonpartisan agency that works for Congress, audits federal programs and evaluates government operations. Its reports can help lawmakers assess whether agencies have used funds properly and achieved intended results. The CBO supports the legislative process with cost estimates and budget analyses, but it does not decide whether bills pass or control agency spending.

These institutions provide information, but they do not replace Congress’s legislative decisions. A GAO finding or CBO estimate can inform debate; lawmakers still must pass legislation to change funding or program rules. Executive agencies, meanwhile, remain responsible for administering funds under the laws Congress enacts.

Power Of The Purse In A Nutshell

The key distinction is that the president proposes and administers, while Congress authorizes and appropriates. The House and Senate must generally agree on spending legislation, and the president must sign it or Congress must override a veto. That system makes federal spending a shared process, but the constitutional power to control withdrawals from the Treasury belongs to Congress.

Reliable Sources For Further Reading

• Constitution Annotated: Article I, Section 9, Clause 7 explains the Appropriations Clause.
• Constitution Annotated: Article I, Section 7, Clause 1 describes the origination of revenue bills.
• U.S. Government Accountability Office: Appropriations Law provides detailed guidance on federal appropriations.
• Congressional Budget Office: Overview explains CBO’s role in the budget process.
• Congressional Research Service: The Congressional Appropriations Process outlines how Congress considers and provides federal funding.