April 26, 2016

The Threat of Mandatory Spending


  • While Congress should cut spending wherever possible, the emphasis should be on cutting mandatory spending.

  • Mandatory spending currently makes up nearly three-quarters of the federal budget, and this share is growing.


Before the enactment of the Budget Control Act, most of the discussion in Congress on budget savings centered on mandatory spending. This made sense. Mandatory spending, combined with the aging of the population, was driving large spending increases in future decades. After the 2011 deficit-reduction talks between President Obama and then-Speaker Boehner collapsed over the president’s demand for more tax revenue, the budget discussion has been diverted away from this important segment of federal spending.

DISCRETIONARY SPENDING TAKES CENTER STAGE

Since the passage of the Budget Control Act in 2011, much of Congress’ attention has been directed toward discretionary spending and the “sequester.” After fiscal year 2012, this took the form of lowered discretionary spending caps. Congress should focus on whatever spending cuts it can get while President Obama remains in office. Still, mandatory spending is where America’s future spending growth lies, and that is where our overspending problem must be solved.

Congress has given up budgetary control

Mandatory vs discretionary spending charts

Source: CBO

Issue Tag: Economy