Discretionary Spending: Defense and Non-Defense

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“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.

  • 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.

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%)

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.


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