Final answer:
The President outlines his budget and presents it to Congress, who can make changes to it. Once both houses of Congress agree on a budget, it is sent back to the President for approval. If the budget is not passed or agreed upon, it can lead to a government shutdown.
Step-by-step explanation:
Once the President has outlined his budget, by law it must be presented to the Congress. The Congress actually "holds the purse strings" and can follow the president's budget or make any changes it sees fit. The House of Representatives examines the discretionary spending by setting targets for how much to spend or cut based on the previous year's spending.
After both the House of Representatives and the Senate have agreed on a budget, it is sent back to the President. The President may not even recognize the bill that he originally sent to the Congress since they have the power to actually create the budget as they see fit. If the budget is too different from the one he sent, he can veto it and send it back to Congress to consider making revisions to the budget.
Once signed by the President, the budget becomes law. If the budget is not correctly anticipated, or if the Congress and the President cannot reach an agreement on the budget, the federal government can run out of money. This would mean that the government would have to furlough federal employees without pay or close non-essential departments.