Supplemental appropriation provides additional funds to appropriations already divided into the fiscal budget in the United States government. They are added while the fiscal year is already in progress, and are generally used for needs that were not anticipated—emergencies like recession, disaster, or defense. They are requested by different governmental agencies and approved by the Office of Management and Budget (OMB) as appropriation bills.
Because of the intricacies involved with budget authority, the OMB only allows a supplemental appropriation if the need is urgent enough that the funds cannot be delayed until the next fiscal year. The agency must prove the urgent nature of the funds, and show what they will be used for. The request is then moved to the president and Congress, where a Congressional subcommittee has the power to approve or reject the request based on order of need. Like a regular appropriation added when the budget is being set, a supplemental appropriation is most often approved.
Supplemental appropriations generally account for less than 20 percent of total appropriations, though the percentages have been high in the later half of the 20th century and beginning of the 21st century. Federal pay raises are one aspect of supplemental appropriation that accounts for one out of every 10 appropriation dollars. Also, unforeseen bills that are passed in the middle of a fiscal year require supplemental appropriation to ensure the success of programs involved in new legislations.
In the 1930s, supplemental appropriation was used to help stimulate the economy, create jobs, and introduce a number of new governmental agencies as a part of the New Deal. In the 1940s, during World War II, appropriations were used to increase production of war machines, and to meet the pay increase demanded by the vast increase in the number of military personnel. In 1970, supplemental appropriation accounted for nearly $6 billion US Dollars (USD) of the budget. By 1980 that number rose to almost $20 billion USD, and in 1991 during the Gulf War, the number skyrocketed to nearly $48 billion USD. In 2008, supplemental appropriation reached $250 billion by Act of Congress.
The Supplemental Appropriation Act of 2008 was signed into law on 30 June 2008. It divided $162 billion USD for military operations in Iraq and Afghanistan for the next year; $63 billion USD for veterans’ education benefits; $12 billion USD for unemployment benefits; $2.7 billion USD for disaster relief for the flooding that ravaged the Midwest United States earlier in that month; $10 billion USD for new Medicaid rules; and $10.1 billion USD in other areas.