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What is Discretionary Spending?

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  • Edited By: C. Wilborn
  • Last Modified Date: 26 November 2016
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Discretionary spending is government spending determined by legislators and other people involved in the process of developing a budget. This spending is sometimes described as "optional," although it is in fact for very important things. A related term is non-defense discretionary spending, used to describe all discretionary spending that is not related to the defense budget.

When governments set budgets, part of the budget is mandatory. This segment of the budget is established by entitlement programs that have funding mandates. People creating the budget cannot change the amount of funding in this section of the budget without revising the laws that pertain to these entitlement programs. The remainder of the budget consists of discretionary spending, and when people "balance" the budget, they attempt to meet the needs of the government with the available funds.

Lawmakers use a number of means to determine how funds should be allocated. Some turn to organizations that benefit from government funds to find out how much money these organizations need or want. Studies may be conducted to discuss potential areas where spending could be cut or adjusted. Budget makers also discuss proposed projects and mechanisms for funding them. This can include committee hearings with people involved in such projects to give them an opportunity to explain their projects, demonstrate their benefits, and petition for funds.

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The topic of discretionary spending can become quite contentious. Some critics argue that most government programs are overfunded, and that funding should be cut or frozen, especially during periods of economic uncertainty. Lawmakers tend to argue while setting the budget as everyone involved attempts to secure money for constituents at home. As budget negotiations proceed, the people involved work to come to arrangements that will allow the budget to balance while still satisfying funding requests and keeping constituents and supporters happy. This can include calculated decisions to take on debt during the budget cycle.

Defense spending is part of the discretionary spending budget, but it is often exempted from discussions about freezing or cutting spending. Especially if a country is at war, lawmakers argue that interfering with the defense budget could result in security shortfalls. This could expose a nation to unreasonable security risks that might threaten the stability of the government and safety of members of the armed forces. Since defense spending can make a sizable portion of the budget, refusal to consider cuts to defense spending can limit options for cutting spending overall.

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drtroubles
Post 5

@oasis11 - I am starting to think that the US should just face bankruptcy and maybe it would actually prompt a huge overhaul of a clearly defunct system. Discretionary spending is poorly allocated and the defense budget is ridiculous. I really believe the US has their nose in way to many places.

I think bankruptcy would in some ways create economic chaos, but really when you are trillions and trillions in debt I am not sure we should be allowed to have a AAA credit score. We're clearly addicted to spending and have bitten off more than we can chew.

I wonder what would happen if the world just let us go under?

lonelygod
Post 4

You hear a lot about government discretionary spending, especially during rough economic times like we are facing these days. Everyone wants to know exactly where our money is going and who is responsible for our numerous economic shortfalls.

I think that the US needs a huge overhaul of their discretionary spending to tackle the massive debt the country has wracked up. It never ceases to amaze me how much debt one country is allowed to have and still be considered a functioning entity.

I still believe that funds from the military should be yanked and given to more important things like supporting agriculture and education.

surfNturf
Post 3

@Subway11 - I know what you mean. I know that I live by a budget and even account for my discretionary income ahead of time so that I don’t resort to impulse spending.

I think that our government should do the same. I think that there has to be deep cuts and an elimination of some entitlement programs because we cannot afford it any longer.

It is just like saying that that house that you can no longer afford is not something that you can get rid of and you will face whatever consequences come your way.

The problem is that the consequences of not downsizing can result in a foreclosure and leave you homeless. Denial of the

lack of discretionary funds are also dire when you are talking about the government, the difference is that instead of a foreclosure we will have sky high interest rates because that is the only way that we will be able to get countries to buy our debt.

We will also have high inflation rates along with high levels of unemployment. This is not exactly a situation that I would like us be in.

subway11
Post 2

@Oasis11 - I agree, it is like a person that has maxed out their credit cards and paying 20% interest on those charges and wants another credit card.

I think that there are a lot of people that can relate to this scenario because spending money is fun. Congress also has fun spending our money but it is time that we hold them accountable because they are gambling with our future.

Many people have said for example, that in about twenty years there might not be anything left in the Social Security fund to pay out retirees if we don’t do something now. I think that these are difficult times that we are living in and no one want

to be the one to go on record of making these drastic changes.

I think that now is the time to consider all options. For example, years ago there was a movement to privatize a portion of the Social Security fund and invest in the stock market. Over twenty years or so the stock market offers the highest historical gains, and it would not cut anyone’s benefit or cause us to have to raise the retirement age, yet this idea was shot down and deemed too controversial.

oasis11
Post 1

I think that now more than ever there is an important focus on discretionary spending. The United States has to cut their discretionary spending and even consider moving entitlement programs that were once safe into this category.

When there is a budget surplus then there is no problem with discretionary spending, but we can’t afford it right now. The problem is that no one wants to cut any of these entitlement programs or make adjustments to the benefits that they can pay out, but I am afraid that everything has to be looked at because when you spend more money than you have you really have to make adjustments or you will face bankruptcy and as a nation we can’t go there.

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