“Discretionary spending” is the portion of the Federal budget (about 30 percent) that is appropriated each year by Congress and is allocated roughly half to defense and half to non-defense programs.
- Discretionary Spending funds a multitude of government operations and programs including law enforcement, veterans healthcare, homeland security, education, prisons, NASA, disease and epidemic control, highways & bridges, food and drug inspection, disaster relief, airports, health research, housing assistance, international affairs, and many other functions of government. CBO: Discretionary Spending 2018 – 2028 | CBO: Discretionary Spending Infographic
- The other 70% of the budget is called “mandatory spending,” because the amount of outlays flow from legal obligations of the federal government established in law–mostly in the form of “entitlement” programs such as Social Security, Medicare, and Medicaid. Interest payments on the debt — the fastest growing part of the budget — is also mandatory spending.
Discretionary Spending is funded through annual appropriations bills: The House and Senate Appropriations Committees are both organized into 12 subcommittees, with each subcommittee having responsibility for developing one regular annual appropriations bill. The links below will take you to our associated site, Appropriations.com, which provides real-time updates and 20 years of history on each of the appropriations bills:
- Status of this year’s Appropriations Bills
- Agriculture, Rural Development, Food and Drug Administration, and Related Agencies, which oversees funding for the USDA (except the Forest Service) and other agencies;
- Commerce, Justice, Science, and Related Agencies, which oversees funding for the Department of Commerce, the Department of Justice, NASA, and other agencies;
- Defense, which oversees funding for the military, the intelligence community, and other national defense related agencies;
- Energy and Water Development, which oversees funding for the Department of Energy, the U.S. Army Corps of Engineers, and other agencies;
- Financial Services and General Government, which oversees funding for the Department of the Treasury, the Executive Office of the President, and other government functions;
- Homeland Security, which oversees funding for the Department of Homeland Security;
- Interior, Environment, and Related Agencies, which oversees funding for the Department of the Interior, the EPA, the U.S. Forest Service, and a number of independent agencies;
- Labor, Health and Human Services, Education, and Related Agencies, which oversees funding for the Department of Education, the Department of Health and Human Services, the Department of Labor, and other agencies;
- Legislative Branch, which oversees funding for the House of Representatives and Senate, the U.S. Capitol, the Library of Congress, the GAO, and other legislative branch functionsl
- Military Construction, Veterans Affairs, and Related Agencies, which oversees funding for military construction (including military housing), the Department of Veterans Affairs, and related agencies;
- State, Foreign Operations, and Related Programs, which oversees funding for the U.S. State Department, USAID, and related programs; and
- Transportation, Housing and Urban Development, and Related Agencies, which oversees funding for the Department of Transportation, HUD, and related agencies.
Statutory Spending caps on defense and non-defense discretionary spending, for each year through 2021, were put in place in 2011 as part of debt ceiling negotiations.
- However, the caps were lowered further in 2013 (by automatic reductions called “sequestration”) when a special congressional committee failed to achieve deficit reduction from entitlement reforms and new revenues.
Congress quickly backed away from the sequester-level caps on discretionary spending and increased the caps — two years at a time — in Bipartisan Budget Agreements in late 2013 (for FY’14 and ’15), in 2015 (for FY’16 and ’17), and again in 2018 (for FY’18 and FY’19).
The Bipartisan Budget Act of 2018 raised the statutory caps on discretionary spending by a total of $296 billion over FY’18 and FY’19.
- Defense caps:
- FY’18 increased from $549 billion to $629 billion (+$80 billion, 15%)
- FY”19 increased from $562 billion to $647 billion (+$85 billion, 15%)
- Non-Defense caps:
- FY’18 increased from $516 billion to $579 billion (+$63 billion, 12%)
- FY’19 increased from $529 billion to $597 billion (+$68 billion, 13%)