ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In American public finance, discretionary spending is government spending implemented through an appropriations bill. This spending is an optional part of fiscal policy, in contrast to social programs for which funding is mandatory and determined by the number of eligible recipients.

Detailed explanation-2: -The difference between mandatory and discretionary spending relates to whether spending is dictated by prior law or voted on in the annual appropriations process.

Detailed explanation-3: -There are two types of spending in the federal budget process: discretionary and mandatory. Discretionary spending is spending that is subject to the appropriations process, whereby Congress sets a new funding level each fiscal year (which begins October 1st) for programs covered in an appropriations bill.

Detailed explanation-4: -A discretionary expense is a non-essential expense that is incurred by an individual, household, or business. Another way to think of discretionary expenses is to classify them as “wants” instead of “needs.” A common example is when an individual purchases a new smartphone whenever the latest edition comes out.

Detailed explanation-5: -Simply put, there are two main types of government spending: mandatory vs discretionary spending. Mandatory spending is determined by pre-determined laws or regulations. It cannot be changed without an act of Congress. Discretionary spending, on the other hand, is set by Congress and can be changed at any time.