Non-Discretionary Spending

by Will Wilkinson on July 12, 2008

Tell me again why Social Security, Medicare, and Medicaid are labeled as “non-discretionary” spending. As I understand it, Congress could shut them all down tomorrow if they wanted to. Or they could cut benefits massively. Or change eligibility requirements any way they like. Which makes it discretionary, doesn’t it? Isn’t it basically just a lie to make it out like the government might or might not spend money on highways, but just has to fork over checks for knee replacements? This has always confused me. Is there some principled basis for the discretionary/non-discretionary distinction that I’m obtusely missing?

Post inspired by this Perot Chart:

Spending!

RobB

Mudley and Foom essentially got it.

Discretionary spending is authorized by Congress in appropriations acts, which are typically passed annually. Though supplemental appropriations are pretty common.

Non-discretionary spending doesn't necessarily have anything to do with entitlements or pay roll taxes. Non-discretionary simply means that the enacting law for that program authorized spending without the need for annual appropriations. In other words, the spending keeps happening until the law gets changed.

Discretionary and non-discretionary are just budget law jargon and shouldn't be taken to imply anything about the permanence of any program, because as we know federal programs are damn near immortal.

Fin Fang Foom

There is no such thing as non-discretionary defense spending.

DWAnderson

Except that if you look at the chart, the red line is discretionary defense spending.

John Thacker

Yes, but that doesn't mean that there is any such thing as non-discretionary defense spending. The red line is discretionary defense spending, and it is a all defense spending. It is both, because discretionary defense spending is all there is. All defense spending depends on appropriations in each current bill; no law establishes mandatory defense spending that will be spent each year without a law changing it.

Note that from one perspective, the distinction seems pointless. What's the difference between "only spent if Congress includes it in the budget resolution" and "spent unless Congress changes it in a resolution?" It turns out, a lot, due to how congressional procedure and politics work.

DWAnderson

I see what you are saying. I was thinking that the percentages were of federal spending not of GDP. But now that I see they are percentages of GDP, what you say makes perfect sense. Thanks!

DWAnderson

I have another question: Without being glib, tell me what is the difference between non-discretionary and discretionary defense spending?

Fin Fang Foom

Discretionary spending depends on the budget being passed every year. Non-discretionary spending will be funded out of payroll taxes unless the Congress changes the law. It is perhaps misnamed, even though in truth there won't be any decrease in the non-discretionary spending unless the shit really hits the fan.

Mudley

I think the distinction is that, based on current law, the recipient has a legal right to the money (It is different with Medicaid, which is an entitlement to the state, not an individual one, but the principle is the same). For discretionary spending, appropriations committees can provide less or more funding than Congress originally had in mind when the program was established, but non-discretionary spending is governed by the controlling legislation and must be fully funded. Technically I guess you could say that Congress still has discretion, in that they could change the law, but it is the appropriations committees that do not.

The border fence is a good example of discretionary spending. Congress can "build" one without ever actually appropriating any funds -- funding can be doubled one year and zeroed out the next without any intervening legislation.