Current U.S. Discretionary Spending

FY 2017 Budget Request

U.S. Soldiers Continue Advisory Role As Election Nears In Afghanistan
Military spending is one of the largest discretionary budget items. Photo: Scott Olson/Getty Images

What Is Discretionary Spending?

Discretionary spending is the part of the U.S. federal budget that Congress appropriates each year. The Constitution gave Congress the authority to raise and spend money for the federal government. The budget process begins with the president's budget. It describes his priorities and what the various agencies need for next year's operations. To find out more, see Discretionary Fiscal Policy.

The discretionary budget does not include Social Security, Medicare or Medicaid. These are within 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.   

FY 2018 Budget

The discretionary budget is $1.151 trillion for FY 2018. It has two components. The largest is the base budget, which pays for standard department operations. That's budgeted at $1.065 trillion for FY 2018. Once appropriated by Congress, it guides spending for the fiscal year, which is October 1, 2017 to September 30, 2018. 

The second is an emergency fund that's outside of the regular budget appropriation process. For FY 2018, Congress authorized $85.9 billion. It pays for wars, disaster relief and wildfire suppression. Here's the breakout by department.

                                                  FY 2018 Discretionary Budget (in Billions)

Department   Budget  Emergency Total
Dept of Defense    $574.0  $64.6   $638.6
HHS      $65.1   $0.4     $65.5
Education      $59.0      $59.0
VA      $78.9      $78.1
Homeland Security      $40.6   $7.4     $48.0
Energy Dept      $28.0      $28.0
    NNSA        $13.9      $13.9
HUD     $31.7      $31.7
Justice Dept     $16.2      $16.2
State Dept      $27.1 $12.0     $39.1
NASA     $19.1      $19.1
All Other Agencies   $122.2   $1.5   $123.7
TOTAL $1,065.4 $85.9$1,151.3

(Source: "2018 Budget, Summary Tables, Table 2," OMB, March 16, 2017.)

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 GDP ratio is more than 100 percent. 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 spends around $22.7 billion on foreign aid. That's only 5 percent of the $441 billion deficit. (Source: "FY 2017 Budget Request," USAID.)

Myth #2: Defense spending should be increased, even if other programs must be cut.

Fact: The Department of Defense budget of $574 billion is more than the $352 billion deficit. And that's just to keep the military in readiness. It doesn't include the cost of wars. Emergency funding adds $64.6 billion to DoD's cost. Five other agencies support Defense: FBI and Cybersecurity (in the Justice Department budget), the National Nuclear Security Administration (in the Energy Department budget), Homeland Security, the Veterans Administration and the State Department. They add $175.9 billion in defense costs. These departments add $19.4 billion to the OCO.

The real cost of U.S. defense is $824.1 billion. To see the details behind this analysis, see U.S. Military Budget: Components, Challenges and GrowthCost of Iraq War and War on Terror Facts.

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 ten largest spenders combined. The second biggest spender, China, only spent $216 billion. Russia spent $84.5 billion. Our greatest ally, the UK, spent $60.5 billion. That's less than 10 percent of what the United States did. Many of our allies are enjoying the benefits of a safer world at our expense. President Trump has asked them to pay more, but continues to increase defense spending. (Source: "Trends in 2014 World Military Expenditure," SPIRI, April 2015.) 

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 8,555 jobs. The same amount spent on public transit created 19,795 construction jobs. For more, see Unemployment Solutions.

Myth #5: The best way to balance the budget is to cut entitlement spending.

Fact: It's true that entitlement programs, such as Social Security, Medicare, Medicaid and welfare programs are the biggest portions of the budget. Medicare and Medicaid are growing thanks to higher healthcare costs. But they were created by Acts of Congress. They can't be cut without another Act of Congress. That means a majority of Congress would have to agree to change the laws that enabled them. That won't happen, because it would be political suicide. Current Social Security and Medicare recipients would vote those Congressmen out of office at the next election. 

Understand the Current Federal Budget:

Compare to Other Discretionary Budgets: