Discretionary vs. Mandatory Spending: What the Annual Appropriations Process Actually Controls

The annual appropriations fight gets most of the headlines: the deadlines, the stopgaps, the shutdown threats. Yet the twelve bills at the center of it decide only about a quarter of what the federal government spends. The rest runs on autopilot under laws that do not need a yearly vote. Knowing which is which is the single most useful thing to understand before reading a spending bill, a budget headline, or the data on this site.

How much of the federal budget is decided through appropriations?

About a quarter. In fiscal year 2025, according to the Congressional Budget Office, the federal government spent $7.01 trillion. The annual appropriations process controlled the discretionary share of that, $1.87 trillion.

Inside those totals:

• Mandatory, $4.17 trillion: Social Security $1.58 trillion; Medicare $988 billion; Medicaid, CHIP, and marketplace subsidies $832 billion; everything else $773 billion.
• Discretionary, $1.87 trillion: defense $893 billion; nondefense $980 billion.
• Net interest on the debt: $970 billion, more than the entire defense discretionary budget.

The balance has flipped over two generations. In 1962, before Medicare and Medicaid existed, mandatory spending was less than 30 percent of all federal spending, according to the Congressional Research Service. Today it is about 60 percent, and interest takes another 14 percent.

What is discretionary vs. mandatory spending?

Discretionary does not mean optional. It means the amount is left to Congress's discretion each year. If Congress does nothing, the money stops.

Mandatory, also called direct spending, means the money is required by an existing law. If a person meets the eligibility rules, the government owes the benefit, whether that costs more or less than last year. CRS describes these payments as "legal obligations of the federal government."

Does the appropriations process fund Social Security or Medicare?

Not in the way it funds discretionary programs. Social Security benefits are paid from trust funds under permanent appropriations written into the Social Security Act, and Medicare's hospital insurance trust fund works the same way. CRS explains that such spending "becomes available automatically each year, without legislative action by Congress." Part of Medicare's financing, the general fund money that supports Parts B and D, does pass through the annual Labor-HHS-Education bill as a mandatory payment to the Medicare trust funds, but the amount is set by Medicare law, not chosen by the appropriators. Either way, no appropriations vote decides what a beneficiary receives, which is why benefits keep flowing during a shutdown.

But the agencies that run them are funded through the bills. The Social Security Administration's operating budget, which pays for field offices, phone lines, and staff, is set each year in the Labor, Health and Human Services, and Education bill. So is most of the administrative budget of the Centers for Medicare and Medicaid Services. A shutdown can therefore slow some services even while the checks go out.

Medicaid is a special case. It is an appropriated entitlement: its money is written into the annual Labor-HHS-Education bill, but the amount is driven by the Medicaid law and enrollment, not by the appropriators. CRS puts it this way: the spending level "is not controlled through the annual appropriations process," and "the amount provided in appropriations acts is based on meeting this projected level." SNAP in the Agriculture bill, Supplemental Security Income in Labor-HHS-Education, and veterans' disability compensation in the MilCon-VA bill work the same way.

Why the Labor-HHS bill looks so big

This is where appropriated entitlements distort the headlines. The FY2026 Labor-HHS-Education appropriations act provided about $1.74 trillion in total, as CRS counts it. Only $226.1 billion of that was discretionary money the appropriators actually chose. The other $1.51 trillion, about 87 percent of the bill, was mandatory funding the law required them to provide.

When a headline calls Labor-HHS "a $1.7 trillion spending bill," it is counting both. When the committees argue over the bill, they are arguing over the $226 billion.

Why the twelve regular appropriations bills focus on discretionary accounts

The budget rules are built that way. Under the Congressional Budget Act of 1974, Congress sets one overall discretionary total for the year, the 302(a) allocation, and the Appropriations Committees divide it among their twelve subcommittees as 302(b) allocations. Those ceilings apply to discretionary budget authority. Mandatory programs sit with the authorizing committees, and the appropriators cannot rewrite a benefit formula in a spending bill without running into the rules against legislating on appropriations. When appropriators do touch mandatory programs, the changes are scored separately as changes in mandatory program spending, which Washington calls CHIMPs.

In FY2026, those twelve bills provided about $1.63 trillion in base discretionary budget authority, a little over $900 billion of it for defense and about $727 billion for nondefense programs, according to CBO's appropriations tally. Another $32.6 billion went to specially designated categories (disaster relief, wildfire suppression, and program integrity). CBO also counts about $66 billion in FY2026 emergency money that is not new: advance appropriations enacted back in 2021 by the Infrastructure Investment and Jobs Act, scored outside the base. The Defense bill alone, at $838.6 billion, is roughly half of the base total.

Budget authority and outlays are not the same number. Budget authority is what Congress provides in a given year; outlays are what the Treasury actually pays out, which can lag by years for things like ships and construction. That is why the FY2026 discretionary appropriations total and CBO's FY2025 discretionary outlay figure measure slightly different things.

How mandatory programs are funded differently

Mandatory spending changes only when Congress changes the underlying law. The amount any year equals the number of people who qualify times the benefit the law promises, so it rises with enrollment, wages, prices, and health care costs on its own. CBO projects it; Congress does not vote on it.

When Congress does want to change it, the usual tool is budget reconciliation, a fast track procedure that needs only a simple majority in the Senate. Regular appropriations bills, by contrast, generally need 60 votes to move past a Senate filibuster. The most recent example is the One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, which was passed through reconciliation and, among other changes, added work requirements to Medicaid and expanded them in SNAP. None of that went through the appropriations process.

Net interest is the third category. It is paid under a permanent, indefinite appropriation, so the bill comes due automatically. It grows with the debt and with interest rates, and in FY2025 it was larger than the entire defense discretionary budget.

What this means for reading the bills and data on Approps

• Ask "discretionary or total?" before comparing numbers. Committee press releases usually quote discretionary totals. Bill text and some news stories quote totals that include appropriated entitlements. The Labor-HHS example above is the extreme case.
• A cut in an appropriations bill is not a cut to Social Security or Medicare benefits. Those are set by permanent law. It can, however, affect the staff and offices that administer them.
• Shutdowns are an appropriations story. Only programs funded through the twelve bills, including appropriated entitlements like SNAP, lose money in a lapse. During the fall 2025 lapse, November SNAP benefits were only partly paid. The shutdown page answers whether one is possible at the next deadline.
• Every earmark is discretionary money. Community Project Funding and Congressionally Directed Spending are carved out of discretionary accounts and capped at 1 percent of discretionary spending. The projects on the earmark map and in each bill's project ledger, like Labor-HHS-Education, all come out of that pool.
• The tracker tracks the discretionary budget. The tracker follows the twelve bills that make up the discretionary budget. Changes to mandatory programs happen in authorizing bills and reconciliation, which the tracker does not follow.
• Authorization is a separate question. Whether a program is authorized has nothing to do with whether it is discretionary or mandatory. That split is explained in authorization vs. appropriation, and the yearly funding vehicles are compared in regular bills vs. CRs vs. supplementals.