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President Warren G. Harding Addressing the Budget Committee, Memorial Continental Hall, Washington, D.C., photograph by the National Photo Company, August 18, 1923

Prints and Photographs Division, Library of Congress

President Warren G. Harding Addressing the Budget Committee

Managing the Federal Budget

After World War I, the federal government grew exponentially due to its more active role in military and foreign policy. As federal spending rose, Congress sought to rationalize its decision-making process regarding government revenues and expenditures. Congress enacted the Budget and Accounting Act, which established a budget process for the executive branch and shifted many budgetary powers from Congress to the president. The 1921 act, as amended, remains the legislative basis for the nation’s executive budgetary system.