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Sagot :
(a) New interstate highway is an example discretionary component of budget.
(b) Medicare & international aid is an example of mandatory component of budget.
What are discretionary and mandatory component of budget?
Discretionary component: Spending that is subject to the appropriations process, in which Congress sets a new funding level each fiscal year (which starts on October 1st), is referred to as discretionary spending.
Roughly one-third, or roughly $1 trillion, of the federal government's activities are funded through appropriations legislation.
Mandatory component: All spending that does not occur through appropriations legislation is referred to as mandatory spending. Spending that is necessary includes contributions to entitlement systems like Social Security and Medicare as well as required interest payments on the national debt. About two-thirds of all federal spending is accounted for through mandatory spending. Mandatory expenditure typically, but not always, is ongoing; it happens every year absent a change in the underlying law that supplies the cash.
(a) Spending that is discretionary is spending that must go via the appropriations process.
- The construction of a new interstate is an optional component.
- Mandatory component of Medicare
- The optional component of international aid.
Spending that is mandated by laws other than yearly appropriation acts is referred to as mandatory spending.
Medicare was introduced in 1965.
(b) Mandatory expenditures
Explanation-Due to new entitlements like Medicare and Medicaid, the earn income tax credits, and the child tax credit, the United States spends up to 61% of its annual budget.
Learn more about discretionary and mandatory components here:
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