Glossary

Discretionary spending

Federal spending that Congress sets each year through appropriations bills, including defense, transportation and many domestic agencies.

Also called: discretionary budget, base discretionary

Discretionary spending is the part of the federal budget that lawmakers must decide on every year through the twelve appropriations bills. It funds most of the operations of federal agencies, including the military, the courts, parks, scientific research, border enforcement and education grants.

It is usually divided into defense and nondefense categories. Congress has at times set caps on each category by law, as in the Budget Control Act of 2011 and a 2023 debt-limit agreement, enforced by automatic cuts known as sequestration. Discretionary spending accounts for under a third of federal outlays, with the rest consisting of mandatory spending and interest.

Debates over the federal budget often focus on discretionary spending because it is the part Congress must act on each year. Conservatives often propose cuts or caps, particularly for nondefense programs, while arguing for higher defense funding or the reverse, depending on the faction. Others point out that cutting it alone cannot balance the budget because it is a smaller share than mandatory programs. Delays in passing it lead to a continuing resolution.

Last reviewed November 8, 2026

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Related terms

Mandatory spending Federal spending set by permanent law rather than annual appropriations, including Social Security, Medicare and Medicaid. Appropriations The laws through which Congress grants federal agencies authority to spend money each year on discretionary programs. Sequestration Automatic, across-the-board cuts to federal spending triggered when budget limits or deficit targets are not met. Continuing resolution A temporary law that keeps federal agencies funded at existing levels when regular appropriations have not been enacted. Earmark A provision in legislation that directs federal money to a specific project, recipient or location, often requested by a member of Congress.