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In American public finance, discretionary spending is government spending implemented through an appropriations bill. [1] This spending is an optional part of fiscal policy, in contrast to social programs for which funding is mandatory and determined by the number of eligible recipients. [2] Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation.
In the United States, discretionary spending refers to optional spending set by appropriation levels each year, at the discretion of Congress. [3] During the budget process, Congress issues a budget resolution which includes levels of discretionary spending, deficit projections, and instructions for changing entitlement programs and tax policy. [3] After setting discretionary spending levels, both the House Appropriations Committee and Senate Appropriations Committee divide the agreed-upon amount of discretionary spending into twelve suballocations for each of their twelve subcommittees. [3] These subcommittees produce twelve annual appropriation bills for the next fiscal year. [4] While these bills are subject to revision as they move through hearings, markups, Floor consideration, and conference, the level of discretionary spending remains constrained by the budget resolution. [4] Eventually, these twelve bills must be approved by the full Appropriations Committee, followed by both Houses of Congress. Once passed, the president either signs them, vetoes them, or allows them to become law by not signing them within ten days. [3]
In 2016, the U.S. federal government spent $1.2 trillion on U.S. discretionary spending. Of this $1.2 trillion, nearly half ($584 billion) was spent on national defense. The rest of U.S. discretionary spending was allocated for education, training, employment, and social services ($92 billion), as well as transportation ($91 billion), veterans' benefits and services ($68 billion), income security ($66 billion), health ($57 billion), administration of justice ($53 billion), international affairs ($52 billion), and other areas related to natural resources, the environment, science, space, and technology ($122 billion). [5]
In 1962, U.S. discretionary spending made up 47.2% of total U.S. spending, remaining the largest component of federal spending until the mid-1970s. [6] From this time forward, however, discretionary spending levels as a share of total federal spending has decreased significantly. This is largely due to the rapid growth of entitlement spending, also known as mandatory spending. [6] As more participants become eligible for entitlement programs, mandatory spending automatically increases. This trend is projected to continue in the future. In fact, according to the Congressional Research Service, over the next decade, mandatory spending is projected to reach 14% of GDP, while discretionary spending is projected to continue getting smaller, eventually reaching 5% of GDP. [7] By 2022, the Congressional Research Service projects that discretionary spending's share of the economy "will be equal to or less than spending in each of the two largest categories of mandatory programs, Social Security and Major Health Programs." [7]
An appropriation bill, also known as supply bill or spending bill, is a proposed law that authorizes the expenditure of government funds. It is a bill that sets money aside for specific spending. In most democracies, approval of the legislature is necessary for the government to spend money.
The national debt of the United States is the total debt, or unpaid borrowed funds, carried by the federal government of the United States, which is measured as the face value of the currently outstanding Treasury securities that have been issued by the Treasury and other federal government agencies. The terms "national deficit" and "national surplus" usually refer to the federal government budget balance from year to year, not the cumulative amount of debt. A deficit year increases the debt, while a surplus year decreases the debt as more money is received than spent. In general, government debt increases as a result of government spending and decreases from tax or other receipts, both of which fluctuate during the course of a fiscal year. There are two components of gross national debt:
The United States budget process is the framework used by Congress and the President of the United States to formulate and create the United States federal budget. The process was established by the Budget and Accounting Act of 1921, the Congressional Budget and Impoundment Control Act of 1974, and additional budget legislation.
The U.S. Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies is one of twelve subcommittees of the U.S. Senate Committee on Appropriations. It was formerly known as the Subcommittee on Agriculture, Rural Development, and Related Services, but was renamed in 2007 to more accurately reflect the programs under its jurisdiction, and to more closely align the subcommittee with its counterpart on the House Appropriations Committee. The United States Senate Committee on Appropriations has joint jurisdiction with the United States House Committee on Appropriations over all appropriations bills in the United States Congress. Each committee has 12 matching subcommittees, each of which is tasked with working on one of the twelve annual regular appropriations bills. This subcommittee has jurisdiction over the budget for the United States Department of Agriculture, Rural Development, and the Food and Drug Administration.
U.S. Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies, often referred to colloquially as the CJS Subcommittee is one of twelve subcommittees of the U.S. Senate Committee on Appropriations. It was formerly known as the Subcommittee on Commerce, Justice, State, and the Judiciary during the 108th Congress (2003–2005), but responsibility for the State Department and the federal Judiciary are now handled by separate subcommittees. The United States Senate Committee on Appropriations has joint jurisdiction with the United States House Committee on Appropriations over all appropriations bills in the United States Congress. Each committee has 12 matching subcommittees, each of which is tasked with working on one of the twelve annual regular appropriations bills. This subcommittee has jurisdiction over the budget for the United States Department of Commerce, the United States Department of Justice, and Science policy of the United States.
The U.S. Senate Appropriations Subcommittee on Defense is one of twelve subcommittees of the U.S. Senate Committee on Appropriations. Military defense spending is the largest individual component of federal discretionary spending, making the Defense Subcommittee one of the more powerful Appropriations subcommittees. When referring to federal discretionary spending as a whole, many budget analysts make a distinction between defense and non-defense discretionary spending. The United States Senate Committee on Appropriations has joint jurisdiction with the United States House Committee on Appropriations over all appropriations bills in the United States Congress. Each committee has 12 matching subcommittees, each of which is tasked with working on one of the twelve annual regular appropriations bills.
The U.S. Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies is one of twelve subcommittees of the U.S. Senate Committee on Appropriations. It was formerly known as the Subcommittee on Interior and Related Agencies, but was renamed to reflect its jurisdiction over funding for federal environmental programs, and to more closely align the subcommittee with its counterpart on the House Appropriations Committee. The United States Senate Committee on Appropriations has joint jurisdiction with the United States House Committee on Appropriations over all appropriations bills in the United States Congress. Each committee has 12 matching subcommittees, each of which is tasked with working on one of the twelve annual regular appropriations bills. This subcommittee has jurisdiction over the budget for the United States Department of the Interior and the United States Environmental Protection Agency.
PAYGO is the practice in the United States of financing expenditures with funds that are currently available rather than borrowed.
The United States federal budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies. The government primarily spends on healthcare, retirement, and defense programs. The non-partisan Congressional Budget Office provides extensive analysis of the budget and its economic effects. It has reported that large budget deficits over the next 30 years are projected to drive federal debt held by the public to unprecedented levels—from 98 percent of gross domestic product (GDP) in 2020 to 195 percent by 2050.
The United States federal budget is divided into three categories: mandatory spending, discretionary spending, and interest on debt. Also known as entitlement spending, in US fiscal policy, mandatory spending is government spending on certain programs that are required by law. Congress established mandatory programs under authorization laws. Congress legislates spending for mandatory programs outside of the annual appropriations bill process. Congress can only reduce the funding for programs by changing the authorization law itself. This requires a 60-vote majority in the Senate to pass. Discretionary spending on the other hand will not occur unless Congress acts each year to provide the funding through an appropriations bill.
The 2008 United States Federal Budget began as a proposal by President George W. Bush to fund government operations for October 1, 2007 – September 30, 2008. The requested budget was submitted to the 110th Congress on February 5, 2007.
The United States federal budget for fiscal year 2009 began as a spending request submitted by President George W. Bush to the 110th Congress. The final resolution written and submitted by the 110th Congress to be forwarded to the President was approved by the House on June 5, 2008.
An earmark is a provision inserted into a discretionary spending appropriations bill that directs funds to a specific recipient while circumventing the merit-based or competitive funds allocation process. Earmarks feature in American and South African public finance.
In economics, a federal budget is the major plan for a federal government's estimated future revenues and spending for the coming fiscal year. The federal budget is representation of the financial plan for the goals and activities of the government which in turn reflects the debates surrounding the various economical principles and ideas. It is the main means of the redistribution of the national income and gross domestic product to meet the needs necessary in order for economic growth. Primarily, the government spends a significant amount of their financial resources in the areas of healthcare, the old and young and social security programs.
The 2011 United States federal budget was the United States federal budget to fund government operations for the fiscal year 2011. The budget was the subject of a spending request by President Barack Obama. The actual appropriations for Fiscal Year 2011 had to be authorized by the full Congress before it could take effect, according to the U.S. budget process.
The United States federal budget consists of mandatory expenditures, discretionary spending for defense, Cabinet departments and agencies, and interest payments on debt. This is currently over half of U.S. government spending, the remainder coming from state and local governments.
The 2013 United States federal budget is the budget to fund government operations for the fiscal year 2013, which is October 2012–September 2013. The original spending request was issued by President Barack Obama in February 2012.
Deficit reduction in the United States refers to taxation, spending, and economic policy debates and proposals designed to reduce the Federal budget deficit. Government agencies including the Government Accountability Office (GAO), Congressional Budget Office (CBO), the Office of Management and Budget (OMB),and the U.S. Treasury Department have reported that the federal government is facing a series of important long-run financing challenges, mainly driven by an aging population, rising healthcare costs per person, and rising interest payments on the national debt.
The budget sequestration in 2013 refers to the automatic spending cuts to United States federal government spending in particular categories of outlays that were initially set to begin on January 1, 2013, as a fiscal policy as a result of Budget Control Act of 2011 (BCA), and were postponed by two months by the American Taxpayer Relief Act of 2012 until March 1 when this law went into effect.
Government spending in the United States is the spending of the federal government of the United States, and the spending of its state and local governments.
