What is Mandatory Spending? What is Entitlement Spending?
By David Henderson
Discussions of government spending are carried on as if there’s a clearcut difference between “discretionary spending” on the one hand and “mandatory” or “entitlement” spending on the other. What do the words mean?
Discretionary spending is spending that politicians have to vote for in order for it to take place. Mandatory spending is spending that doesn’t have to be approved by Congress: it happens automatically even if Congress doesn’t vote for it. Social Security is an example. Entitlement spending is a subset of mandatory spending. Interest payments on the federal debt are usually thought of as mandatory but are not usually thought of as entitlements. Social Security is also an example of entitlement spending.
The words “mandatory” and “entitlement” are not accurate. Why?
Start with mandatory spending. Maybe you could make a case that spending on interest is mandatory. But spending on Social Security and Medicare is not. Congress could vote to end them. If Congress can vote to end them, they are not mandatory; they are discretionary. The spending does occur automatically unless Congress votes not to spend. So most of what is called mandatory spending should be called automatic discretionary spending.
What about entitlement spending? The term is a non-starter because you shouldn’t start by using value-laden terms. If someone is entitled, then he’s entitled. And don’t underestimate the hold such terms have on the public, most of whom think about these things way less than the usual blog reader. I would bet that many people think Congress should not cut entitlement spending because people are entitled. I think, by the way, that David Stockman introduced this term in 1981 when he was director of the Office of Management and Budget.