Which of the following is a form of Budget Authority?

• A. Appropriation
• B. Tax Credit
• C. Grant Assistance
• D. Revenue Allocation

Answer: (A)

Budget authority is the legal permission for a federal entity to incur obligations and make payments from the Treasury. The form that provides this authority is an appropriation, enacted by law, which sets the amount, programs, and time period the agency may spend. Without an appropriation, agencies cannot legally commit funds or disburse payments.

Tax credits do not create spending authority; they reduce tax revenue and are tax expenditures, not budget authority. Grant assistance involves disbursing funds that have already been provided by an appropriation, so the spending action depends on prior budget authority rather than being the authority itself. Revenue allocation is simply directing existing funds to programs and does not by itself authorize new obligations. So the form of budget authority described here is appropriation.