Discretionary spending is the part of the U.S. federal budget that Congress appropriates each year. For Fiscal Year 2021, President Donald Trump requested $1.485 trillion.
The Constitution gave Congress the authority to raise and spend money for the federal government. The budget process traditionally begins with the president's budget. It describes his priorities and what the various agencies need for next year's operations. The discretionary budget and taxes are the two main tools of discretionary fiscal policy.
The discretionary budget does not include Social Security, Medicare, or Medicaid. These are part of the mandatory budget. These programs were authorized by previous Acts of Congress. The mandatory budget estimates how much it will cost to provide these benefits.
- Congress allows the amount of discretional government spending annually.
- The budget process begins when the president presents his budget for the fiscal year to Congress.
- Unlike the fixed nature of mandatory spending, discretionary spending is variable.
- Discretionary spending does not include expenses for Medicare, Medicare, TANF, and other mandatory programs. By law, these are fixed expenses of the government budget.
FY 2021 Budget
The Trump administration released its budget on Feb. 10, 2020. It asked for $1.485 trillion in discretionary spending. Here's Trump's budget request by department:
Trump's FY 2021 Discretionary Budget Request (in Billions)
|Dept of Defense||$636.4|
Discretionary Budget Myth Busters
The media blames the discretionary budget for deficit spending, which has created a huge national debt. That's a big concern, now that the debt-to-gross domestic product ratio is more than 100%. What's the best way to cut the budget deficit? Here are the five biggest myths:
Myth #1: Just stop sending aid to foreign countries.
Fact: The United States only budgeted $1.6 billion on foreign aid for FY 2021. Cutting that wouldn't do much to reduce the $1.083 trillion budget deficit.
Myth #2: Defense spending should be increased, even if other programs must be cut.
Fact: Total U.S. military spending for FY 2021 is $989 billion. It includes more than the Department of Defense budget of $636 billion. You must also count the $69 billion which pays for the War on Terror, including military operations in Iraq, Syria, and the War in Afghanistan. There are five other agencies that support defense that should also be included. They are the FBI and Cybersecurity, under the Justice Department budget; the National Nuclear Security Administration, under the Energy Department budget; Homeland Security; the Department of Veterans Affairs; and the State Department. They add $228 billion to the base budget. This huge expense must be reduced if the deficit is to be cut in any meaningful way.
Myth #3: If we reduce military spending, the world will think we are weak.
Fact: The U.S. military budget is greater than those of the next seven largest spenders combined. The second-biggest spender, China, only spent $250 billion. Russia spent $61 billion. Our allies are enjoying the benefits of a safer world at the U.S. taxpayers' expense. President Trump has asked them to pay more but continues to increase defense spending.
Myth #4: Military spending creates jobs.
Fact: Defense spending is not the best way to create jobs. A UMass/Amherst study found that $1 billion in military spending created 8,600 jobs. The same amount spent on education created 19,100 jobs. The same amount spent on Clean energy or health care would create 12,000 jobs. These are better unemployment solutions.
Myth #5: The best way to balance the budget is to cut entitlement spending.
Fact: Entitlement programs, such as Social Security, Medicare, and unemployment compensation are the biggest portions of the budget. Medicare is growing thanks to higher health care costs. But these mandatory programs were created by Acts of Congress. They can't be cut without another Act of Congress. The majority of Congress would have to agree to change the laws that enabled them. That won't happen. Current Social Security and Medicare recipients would vote those Congressmen out of office at the next election.
Understand the Current Federal Budget:
- Council of Economic Advisers, Its Role, and Its Effect on Economy
- Current Federal Budget Breakdown
- Revenue and Taxes
- Current Deficit
Compare to Past Budgets
- FY 2020
- FY 2019
- FY 2018
- FY 2017
- FY 2016
- FY 2015
- FY 2014
- FY 2013
- FY 2012
- FY 2011
- FY 2010
- FY 2009
- FY 2008
- FY 2007
- FY 2006
The White House. “A Budget for America’s Future: FY 2021,” Table S-4. Accessed Feb. 12, 2020.
The White House. “A Budget for America’s Future: FY 2021,” Table S-8. Accessed Feb. 12, 2020.
U.S. Department of State. "Congressional Budget Justification Department of State, Foreign Operations, and Related Programs," Diplomatic Engagement and Foreign Assistance Request FY 2019-FY2012, Page 2. Accessed Feb. 12, 2020.
The World Bank. "Military Expenditure (Current USD)," Go to Table "All Countries and Economies." Click on "Most Recent Value." Sort by highest value first. Accessed Oct. 14, 2020.
University of Massachusetts, Amherst. “The U.S. Employment Effects of Military and Domestic Spending Priorities,” Table 1, Column 3. Accessed Feb. 13, 2020.