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Discretionary spending

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 26 Apr 2023

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Discretionary Spending

Discretionary spending is a type of government spending that is not mandatory and is determined by the government on an annual basis. It is the portion of the budget that is allocated to departments and agencies for specific purposes. Discretionary spending is typically used for programs and services that are not considered essential, such as defense, education, and infrastructure. Discretionary spending is typically funded through taxes and other revenue sources.

History of Discretionary Spending

Discretionary spending has been around since the early days of government. In the United States, discretionary spending was first established in the Constitution, which gave Congress the power to β€œlay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.” This power was later expanded with the passage of the Budget and Accounting Act of 1921, which established the federal budget process and allowed Congress to set spending levels for each fiscal year.

Since then, discretionary spending has grown significantly. In the 1950s, discretionary spending accounted for about one-third of the federal budget. Today, it accounts for about one-quarter of the budget. Discretionary spending is divided into two categories: defense and non-defense. Defense spending is the largest portion of discretionary spending, accounting for about half of the total.

Comparison of Discretionary Spending

Category Percentage of Total Discretionary Spending
Defense 50%
Non-Defense 50%

Summary

Discretionary spending is a type of government spending that is determined by the government on an annual basis. It is typically used for programs and services that are not considered essential, such as defense, education, and infrastructure. Discretionary spending is typically funded through taxes and other revenue sources. For more information on discretionary spending, visit the websites of the Office of Management and Budget, the Congressional Budget Office, and the Government Accountability Office.

See Also

  • Mandatory Spending
  • Entitlement Programs
  • Federal Budget
  • Taxes
  • Revenue Sources
  • Government Spending
  • Deficit Spending
  • Debt Ceiling
  • Fiscal Policy
  • Monetary Policy

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