What is the difference between mandatory spending and discretionary spending?

Mandatory spending is simply all spending that does not take place through appropriations legislation. Discretionary spending, on the other hand, will not occur unless Congress acts each year to provide the funding through an appropriations bill.

What is the difference between discretionary and mandatory spending quizlet?

Mandatory spending is spending that is required by current law and discretionary spending is spending that must be authorized by the government each year. Other examples of discretionary spending are spending on education, scientific research, and law enforcement.

What is meant by the terms mandatory spending and discretionary spending quizlet?

Appropriation. An appropriation is an act of Congress that enables federal agencies to spend money for specific purposes. Balanced Budget. A balanced budget occurs when total revenues equal total outlays for a fiscal year. Budget Resolution.

What is the difference between discretionary and non discretionary spending?

While non-discretionary expenses are considered mandatory—housing, taxes, debt, and groceries—discretionary expenses are any costs incurred above and beyond what is deemed necessary. These are generally considered wants, while non-discretionary expenses are usually referred to as needs.

What is the meaning of discretionary spending?

Discretionary spending refers to non-essential items, such as recreation and entertainment, that consumers purchase when they have enough income left over after paying the necessary expenses such as the mortgage and utilities.

What is mandatory spending quizlet?

Mandatory spending is defined as those areas of the federal budget that must be enacted each year by law and are not dependent on annual review by committees of congress.

What is the meaning of mandatory spending in economics?

Mandatory—or direct—spending includes spending for entitlement programs and certain other payments to people, businesses, and state and local governments. Mandatory spending is generally governed by statutory criteria; it is not normally set by annual appropriation acts.

What is mandatory spending non-discretionary?

Within the U.S. budget, non-discretionary spending is referred to as mandatory spending and includes spending on social service programs, such as social security, Medicaid and Medicare. Funding for research and defense is considered discretionary spending.

What is one example of mandatory spending an example of discretionary spending?

For example, the administrative expenses associated with running the Social Security Administration generally are funded with discretionary spending, but the benefit checks sent to retirees and disability recipients enrolled in Social Security programs are classified as mandatory spending.

What does mandatory spending mean in economics?

What is discretionary spending us?

Discretionary spending is money formally approved by the President and voted on by Congress during the appropriations process each year. Generally, a majority of the discretionary spending is budgeted towards national defense.

What is the difference between mandatory and discretionary spending?

Mandatory Expenses Definition. Mandatory expenses usually come in the form of bills for about the same amount of money per month.

Discretionary Expenses Definition. A household can eliminate discretionary expenses without having to face major problems such as potential eviction or having no power.

Calculating Expenses.

What percent of federal spending is mandatory?

About 60 percent of all federal spending is considered mandatory, with 34 percent considered discretionary and 6 percent devoted to interest. In other words, the chart, despite referring broadly to “federal spending,” only counts about one-third of federal spending — the discretionary part.

What are some examples of mandatory spending?

An example of mandatory spending is financing for A. INTEREST PAYMENTS ON THE FEDERAL DEBT . Mandatory spending is a federal spending that does not undergo the annual budgeting or appropriation process.

What are some examples of discretionary spending?

Discretionary spending. This spending is an optional part of fiscal policy, in contrast to entitlement programs for which funding is mandatory and determined by the number of eligible recipients. Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation .