The Budget and Accounting Act of 1921 (enacted June 10, 1921) established the framework for the modern federal budget. The act was approved by President Warren G. Harding to provide a national budget system and an independent audit of government accounts. The official title of this act is “The General Accounting Act of 1921”, but is frequently referred to as “the budget act”, or “the Budget and Accounting Act”. This act required the president to submit an annual budget for the entire federal government to Congress. The object of the budget bill was to consolidate the spending agencies in both the executive and legislative branches of the government.

Significance:

• Centralized Federal budget, before done by Agencies in their silos directly to Congressional Committees
• Greater transparency, and visibility of spending
• Created the Bureau of Budget (now the OMB – Office of Management and Budget) in the Treasury now part of the Whitehouse
• Created the Government Accounting Office, the lead accounting audit agency in the government that provides info to the Whitehouse and reports to Congress.