Discretionary vs. Mandatory Spending

This video breaks down the three major categories of U.S. federal government spending and explains the difference between spending the government is required to make and spending it decides on each year. Key terms covered:

• Mandatory spending — The amount the government is required to spend under existing law, without an annual vote. The largest examples are Medicare and Social Security, entitlement programs based on age.
• Discretionary spending — The amount the government chooses to spend each year through the annual budget process. Defense is the largest category within discretionary spending.
• Interest on the national debt — Interest payments the government makes on money it has previously borrowed.
• Total federal government spending — The sum of mandatory spending, discretionary spending, and interest on the debt; in 2025, this totaled $7 trillion.