Mandatory Spending

Extracted Attributes

• Nature

  Government spending required by law

• Also known as

  Direct spending

• Legislative process

  Outside of annual appropriations bill process

• Establishment method

  Through authorization laws

• Key Programs Included

  Medicare, Social Security, other payments to people, businesses, and state and local governments

• Share of GDP (FY 1965)

  5.7 percent

• Share of GDP (FY 2016)

  Over 13 percent

• Total Outlays (FY 2023)

  $3.8 trillion

• Total Spending (FY 2016)

  $2.4 trillion out of $3.9 trillion federal spending

• Funding reduction requirement

  Changing the authorization law itself

• Projected Share of GDP (FY 2027)

  About 14 percent

• Share of Federal Budget (FY 2016)

  Approximately 60 percent

• Programs Exempt from Sequestration

  Social Security, Medicaid, Temporary Assistance

• Projected Total Spending (FY 2027)

  $4.3 trillion

• Senate vote requirement for reduction

  Normally 60-vote majority

Timeline

• Mandatory spending accounted for 5.7 percent of Gross Domestic Product (GDP). (Source: Summary, Wikipedia)

  1965-XX-XX

• The Budget Control Act (BCA) was enacted, imposing small reductions to mandatory spending. (Source: Web Search - Wikipedia snippet)

  2011-XX-XX

• Mandatory spending was reduced by $18 billion due to the Budget Control Act (BCA). (Source: Web Search - Wikipedia snippet)

  2015-XX-XX

• Mandatory spending accounted for about 60 percent of the federal budget and over 13 percent of GDP, totaling $2.4 trillion out of $3.9 trillion in federal spending. (Source: Summary, Wikipedia)

  2016-XX-XX

• Mandatory outlays by the federal government totaled $3.8 trillion. (Source: Web Search - CBO)

  2023-XX-XX

• Mandatory spending is projected to increase to about 14 percent of GDP and $4.3 trillion. (Source: Web Search - Wikipedia snippet)

  2027-XX-XX

Mandatory spending

The United States federal budget is divided into three categories: mandatory spending, discretionary spending, and interest on debt. Also known as entitlement spending, in US fiscal policy, mandatory spending is government spending on certain programs that are required by law. Congress established mandatory programs under authorization laws. Congress legislates spending for mandatory programs outside of the annual appropriations bill process. Congress can only reduce the funding for programs by changing the authorization law itself. This normally requires a 60-vote majority in the Senate to pass. Discretionary spending on the other hand will not occur unless Congress acts each year to provide the funding through an appropriations bill. Expenditure is often influenced by Federal Reserve advisory. Mandatory spending has taken up a larger share of the federal budget over time. In fiscal year (FY) 1965, mandatory spending accounted for 5.7 percent of gross domestic product (GDP). In FY 2016, mandatory spending accounted for about 60 percent of the federal budget and over 13 percent of GDP. Mandatory spending received $2.4 trillion of the total $3.9 trillion of federal spending in 2016.

Web Search Results

• Federal Spending | U.S. Treasury Fiscal Data

  Mandatory spending, also known as direct spending, is mandated by existing laws. This type of spending includes funding for entitlement programs like Medicare and Social Security and other payments to people, businesses, and state and local governments. For example, the Social Security Actrequires the government to provide payments to beneficiaries based on the amount of money they’ve earned and other factors. Last amended in 2019, the Social Security Act will determine the level of federal [...] Government spending is broken down into two primary categories: mandatory and discretionary. Mandatory spending represents nearly two-thirds of annual federal spending. This type of spending does not require an annual vote by Congress. The second major category is discretionary spending. The difference between mandatory and discretionary spending relates to whether spending is dictated by prior law or voted on in the annual appropriations process. Another type of appropriation spending is [...] ###### Mandatory Spending

• Discretionary vs. Mandatory Spending: What Are They? - Equifax

  Mandatory spending refers to necessary expenses that your household or business cannot do without. For individuals, this typically includes day-to-day needs like housing, food and medical care. For businesses, mandatory expenses might include rent, payroll and operating costs. [...] In this context, these terms refer to how the U.S. Congress decides how much money to spend on federal, state and local programs. Mandatory government spending isn't subject to the annual congressional budgeting process, meaning it does not need to be debated or negotiated. Instead, this spending is determined by existing budgetary laws. Entitlement programs are categorized as mandatory spending, as are congressional payments made to states, local governments and businesses. [...] In short, mandatory spending, whether business or personal, refers only to essential spending. Consider your own household: What costs must you cover in order to survive? Standard mandatory expenses could include the following: ## What is discretionary spending?

• Mandatory spending - Wikipedia

  The United States federal budget is divided into three categories: mandatory spending, discretionary spending, and interest on debt. Also known as entitlement spending, in US fiscal policy, mandatory spending is government spending on certain programs that are required by law. Congress established mandatory programs under authorization laws. Congress legislates spending for mandatory programs outside of the annual appropriations bill "Appropriations bill (United States)") process. Congress can [...] According to the Congressional Budget Office (CBO), annual mandatory spending will increase from $2.4 trillion in 2016 to $4.3 trillion by 2027. Though averaging about 10 percent of GDP since 1973, mandatory spending is projected to increase to about 14 percent of GDP by 2027. Discretionary spending on the other hand is projected to fall further, to 5 percent of GDP. BY FY2022, discretionary spending's share of the economy is projected to be equal to or less than spending on Social Security and [...] an additional 18 percent of mandatory spending. Mandatory spending levels have and will continue to be affected by the automatic spending reduction process enacted as part of the Budget Control Act of 2011 (BCA). The BCA imposes small reductions to mandatory spending seeking to cut spending by less than $200 billion from FY2012 to FY2021. Mandatory spending was reduced by $18 billion in FY2015. Many programs are exempt from sequestration such as Social Security, Medicaid, Temporary Assistance

• Mandatory Spending in Fiscal Year 2023: An Infographic

  Congressional Budget Office logo Search ## Main menu # Mandatory Spending in Fiscal Year 2023: An Infographic Mandatory outlays by the federal government totaled $3.8 trillion in 2023; more than half was for Social Security and Medicare. The largest increases over the past 20 years have been for the major health care programs. ## Summary ## Related Publications ## Corrections and Updates [...] CBO has corrected this infographic since its original publication. On August 7, 2024, CBO made the following change: In the main graphic, “$4.4 trillion” was changed to “$3.8 trillion.” ## Stay Connected CBO X CBO Threads CBO LinkedIn CBO Slideshare CBO Youtube CBO Github CBO RSS ## Footer Menu ## Footer Menu - Utility

• Mandatory and Discretionary Spending - Education Policy: Topics

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