"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law" (Article I, Section 9). That sentence, with the taxing power, makes Congress the keeper of the purse: one of the strongest checks it has. Spending bills follow the path of any bill.
| Part of the budget (fiscal year 2024) | How it is set | Share of about \$6.8 trillion |
|---|---|---|
| Mandatory spending (Social Security, Medicare, Medicaid and others) | by existing laws: anyone who qualifies gets paid, until Congress changes the law | about 60% (\$4.1 trillion) |
| Discretionary spending (defense, education, highways, agencies) | each year, in 12 appropriations bills | about 27% (\$1.8 trillion) |
| Net interest on the debt | owed on past borrowing | about 13% (\$0.88 trillion) |
Why it works
The yearly process runs on a calendar. The President proposes a budget early in the year; the Budget Committees write a budget resolution (under the Congressional Budget Act of 1974, which also created the Congressional Budget Office); the Appropriations Committees' 12 subcommittees write the spending bills, due before the fiscal year starts on October 1. When they are late, Congress passes a continuing resolution to keep money flowing; if neither passes, unfunded agencies shut down. Notice what the yearly fight is about: only the discretionary part. Mandatory spending and interest run on automatically. Congress also watches how money is spent: that is oversight, through hearings, investigations, subpoenas, audits and the threat of cutting funds. Pork barrel spending (projects aimed at one district, called earmarks) and logrolling ("vote for my project and I'll vote for yours") describe the trading that helps bills pass; defenders call it representing constituents, critics call it waste.
Key idea
Congress controls spending: discretionary spending is set each year by appropriations; mandatory spending (Social Security, Medicare, interest) runs under existing laws. Congress oversees agencies through hearings, investigations and funding.
Worked example: Mandatory or discretionary?
Next year more people turn 65 and claim Social Security. Does Congress have to pass a new law for them to be paid?
- Social Security benefits are set by existing law for everyone who qualifies.
- That is mandatory spending: it grows automatically unless Congress changes the law.
Answer: No. It is mandatory spending.
Worked example: Reading the shares
Using the fiscal 2024 figures, about what share of federal spending was decided in that year's appropriations bills?
- Appropriations cover discretionary spending: about \$1.8 of \$6.8 trillion.
- 1.8 / 6.8 ≈ 0.26, about a quarter.
Answer: About a quarter (roughly 27%).
Common mistake
Thinking most federal spending is decided fresh each year. Mandatory spending and interest make up roughly three-quarters of the budget and run under existing laws. Check: if a program pays everyone who qualifies, it is mandatory.