In the United States, the president was not required to submit an annual federal budget estimate until the passage (1921) of the Budget and Accounting Act. According to the act, the president must annually submit to Congress a budget that shows the condition of the Treasury at the end of the last completed fiscal year, its estimated condition at the end of the current fiscal year, and its estimated condition at the end of the ensuing year if the budget proposals are carried out; the revenues and expenditures during the last completed year and the estimates thereof for the current year; recommendations of provisions for meeting the revenues and expenditures for the ensuing year; and any other data considered helpful to Congress in its determination of the government's financial policy. No other administrative officer is allowed to make revenue recommendations unless asked to do so by Congress.

To help the president, the Budget and Accounting Act also created the Bureau of the Budget, under the Treasury Dept., to receive, compile, and criticize estimates of expenditure needs submitted by the various governmental services and to study in detail all government services and recommend to the president any changes that will increase their economy and efficiency. The bureau was transferred (1939) to the executive office of the president, and reconstituted (1970) as the Office of Management and Budget (OMB), with additional functions involving the review of organizational structure within the executive branch of the federal government. The national budget is often regarded as one of the major policy statements of a presidential administration.

Since the beginning of World War II the national budget has grown immensely, in part because of increased defense expenditures. Revenues have not kept pace with expenditures, and the federal budget has had annual deficits since 1969. During the 1960s and 70s, the overall economy grew faster than the deficits. In the 1980s, however, annual deficits grew to over $200 billion, reaching a record high of $290 billion in 1992.

Budget reforms passed in 1974 mandated congressional budget resolutions to serve as alternatives to the president's proposed budget, and budget impasses became common. The 1985 Gramm-Rudman-Hollings Act tried to control America's escalating deficits by giving the U.S. comptroller general the right to order spending cuts if the president and Congress did not reduce the deficit, but the bill was ultimately declared unconstitutional. There have been repeated calls for balanced budget and line-item veto amendments to the Constitution, but no such measures have been passed. In 1996 a law establishing a limited presidential line-item veto was passed by Congress, but it was ruled unconstitutional in 1998. In the late 1990s budget-tightening measures—aided by the U.S. economic boom—reduced the deficit and led to two consecutive federal budget surpluses (1998-99); back-to-back surpluses had last occurred in 1956-57. In 1998, President Clinton presented to Congress a balanced federal budget, the first such budget since 1969. A balanced budget was maintained through late 2001, but tax cuts, the cost of President Bush's "war on terrorism," increased defense and other spending, and the effects of an economic recession produced a deficit again beginning with the 2002 budget. The 2004 deficit reached a new record level, $412.6 billion, a figure that did not include tens of billions spent on the occupation and reconstruction of Iraq, but it dropped in subsequent years until a financial crisis and severe recession caused it to rise to $455 billion in 2008 and soar to $1.4 trillion in 2009.