What is mandatory spending?

Photograph source: National Priorities

What is Mandatory Spending?

Falling under the umbrella of federal spending, there’s a philosophical simplicity behind mandatory spending and that’s why it’s important citizens understand why it exists because it can easily be misconstrued. Mandatory spending is a federal mandate where Congress has authorization laws that determine specific programs to be enacted based on permanent programs. Such programs cannot be removed and appropriations must be allocated to ensure they continue without interruption. Under mandatory spending requirements, there are subsidiaries that are reviewed periodically and can be reformed based on Congressional decision. Unlike discretionary spending (which will be covered in a future blog), mandatory spending programs are a slice of the U.S. budget pie in which the Office of Management and Budget (OMB) provides estimated costs to support these programs outlined under authorization laws.

What Programs fall under Mandatory Spending?

According to Mindy R. Levit, D. Andrew Austin, and Jeffrey M. Stupak of the Congressional Research Service or CRS, “entitlement programs such as Social Security and Medicare make up the bulk of mandatory spending.” The specialists in policy and research also stated, “other mandatory programs include Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), unemployment insurance, some veterans’ benefits, federal employee retirement and disability, and Supplemental Nutrition Assistance Program (SNAP).” (Click here for additional mandatory spending program information). Essentially, mandatory spending programs are Congressionally mandated and therefore shouldn’t be touched.

How It Works

Mandatory spending is a governmental concept where Congress legislates specific actions outside of the fiscal year. The processes are based on eligibility limitations and not necessarily spending levels. For example, veterans’ benefits are about 4% of the total mandatory spending (as of 2015). Congress sets specific criteria for veterans’ benefits and in return, military members must meet those requirements in order to be eligible. Every year veterans’ benefits are reviewed to determine if eligibility requirements should be reformed. In essence, spending levels are not affected, but eligibility requirements and changes determine the amount of spending each year.

Changes

Over the past 50 years, mandatory spending has increased by almost 40 percent and it will continue to increase as long as there are economic downfalls and emergency intercessions (i.e. government shutdown and sequestration). In addition, mandatory spending will continue to change as long as total federal spending changes in terms of a recovering economy. According to CRS, “outlays for Social Security will remain flat at 24% and 26% of total spending for the next decade and outlays for income security programs are projected to fall form 8.9% of total federal spending in FY2014 to 5.8% by FY2025.” Additionally, spending controlled by the Budget Control of 2011 will affect mandatory in terms of the deficit and discretionary spending.

Issues & Parting Words

In order to know the issues of mandatory spending, which is a fraction of the nation’s total federal government spending, you have to understand the Congressional budget. Comprehending the national budget and how the cycle repeats itself each year (another blog in the making), you will know that mandatory spending, as stated by Congressman Todd Young of the 9th District of Indiana, is “roughly 60% of all federal spending, and is the spending that occurs each year automatically, not subject to debate, and part of the overall appropriations process, such as Social Security, Medicare, and Medicaid.”

Simple practices such as what Congressman Young mentioned on his site I entirely agree with will get the budget in the right direction. Congress really needs to make the budget a priority. There needs to be discussion of the nation’s deficit and how it will be paid. Along with “talks,” there needs to be “action.” Working in the Pentagon for three years, I have had a clear view of the budgetary issues and realize the past three years have not been any permanent solutions to the problem—only temporary fixes that are addressed every fiscal year. We continue to face emergency issues such as government shutdowns if Congress does not come up with a solution to get the budget under control. Continuing resolutions are not the “solution” and it is up legislators to formulate plans to balance mandatory and discretionary spending before we see another economic downfall.