Discretionary Budget Authority by Subfunction: An Overview

March 29, 2011 – March 21, 2024 R41726

Discretionary Budget Authority by
March 21, 2024
Subfunction: An Overview
D. Andrew Austin
This report provides a graphical overview of historical trends in discretionary budget authority
Analyst in Economic Policy
(BA) from FY1977 through FY2023, preliminary estimates for FY2024 spending, and the levels

reflecting the President’s proposals for FY2024 through FY2029 using data from the FY2025
budget submission released in March 2024. This report, by illustrating trends in broad budgetary

categories, provides a starting point for discussions about fiscal priorities. As the 118th Congress
considers funding for the rest of FY2024 and the upcoming FY2025 budget, past spending trends may help frame policy
discussions. Other CRS products analyze funding for specific agencies, program areas, or appropriations bills.
Functional categories (e.g., national defense, agriculture, etc.) provide a means to compare federal funding for activities
within broad policy areas that often cut across several federal agencies. Subfunction categories provide a finer division of
funding levels within narrower policy areas. Budget function categories are used within the budget resolution and for other
purposes, such as estimates of tax expenditures. Spending in this report is measured and illustrated in terms of discretionary
budget authority as a percentage of gross domestic product (GDP). Measuring spending as a percentage of GDP in effect
controls for inflation and population increases. A flat line on such graphs indicates that spending has increased at the same
rate as overall economic growth. In some cases, rescissions, offsetting receipts, or budgetary scorekeeping adjustments can
result in negative budget authority.
Discretionary spending is provided and controlled through appropriations acts, which provide budget authority to federal
agencies to fund federal government functions such as running executive branch agencies, congressional offices and
agencies, and international operations of the government. Essentially all spending on federal wages and salaries is
discretionary. Administrative costs for entitlement programs such as Social Security are generally funded by discretionary
spending, while mandatory spending—not shown in this report’s figures—generally funds the program benefits. The division
of funding into discretionary and mandatory categories for surface transportation, however, is complex.
Statutory caps on discretionary spending were originally set in the Budget Enforcement Act of 1990 (BEA; P.L. 101-508),
which also limited mandatory spending and revenue reductions. Those caps were extended through the 1990s, but expired
shortly after the attacks of September 11, 2001. Both defense and nondefense discretionary spending grew more rapidly in
the following decade compared to the 1990s. The Budget Control Act of 2011 (P.L. 112-25; BCA) reimposed caps on
discretionary spending. Most BCA caps were divided between defense and nondefense funding. Congress modified BCA
caps several times to avoid decreasing discretionary funding levels. The BCA caps expired at the end of FY2021. In June
2023, the Fiscal Responsibility Act (FRA; P.L. 118-5) suspended the federal debt limit and reestablished statutory caps on
discretionary spending for FY2024 and FY2025, which were again divided between defense and nondefense categories.
Two separate crises strongly affected public sector spending in the United States, as elsewhere. The financial crisis of 2007-
2009 and the subsequent Great Recession prompted large fiscal policy responses, including spending increases and tax
(revenue) reductions aimed at supporting economic activity. The COVID-19 pandemic starting in 2020 presented
governments around the world, including the U.S. government, with extreme fiscal challenges. The bulk of the fiscal
responses to the 2007-2009 Great Recession came through mandatory spending or automatic stabilizers, which result in high
income support outlays and lower tax revenues during economic downturns, as well as through tax reductions. Fiscal
responses to the COVID-19 pandemic also increased discretionary spending, although changes in mandatory spending were
larger.
Across the broadest functional categories, OMB projects a decline in future discretionary spending as a share of the GDP.
After a buildup in the early 1980s, National Defense funding fell, especially after the collapse of the Soviet Union and its
allied Warsaw Pact. National Defense funding then rose after the attacks of September 11, 2001, and the wars in Afghanistan
and Iraq, but has been falling as a share of GDP since FY2010. Human Resources funding as a share of GDP fell sharply in
the late 1970s and early 1980s, but rose significantly during the Great Recession and the COVID-19 pandemic. Funding for
Physical Resources also rose during the Great Recession and the COVID-19 pandemic, as well as after major disasters.
Funding for Other Functions—comprising Agriculture; Administration of Justice; General Science, Space, and Technology;
and General Government—has been falling as a share of GDP since FY2010. Other CRS reports discuss funding of specific
programs and policy areas in more detail.
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Discretionary Budget Authority by Subfunction: An Overview

Introduction
This report presents figures showing trends in discretionary budget authority as a percentage of
gross domestic product (GDP) by subfunction within each of 17 budget function categories, using
data from President Joseph R. Biden’s FY2025 budget submission.1 This report provides a
graphical overview of historical trends in discretionary budget authority from FY1977 through
FY2023, estimates for FY2024 spending, and the levels consistent with the President’s proposals
for FY2024 through FY2029.2 Spending in this report is shown as a percentage of GDP to control
for the effects of inflation, population growth, and growth in per capita income.3 Past spending
trends may prove useful in framing policy discussions as the 118th Congress prepares to confront
a new set of challenges while it considers how to fund the federal budget for the remainder of
FY2024 and starts deliberations on funding for FY2025.
Budget Concepts and Discretionary Spending
Appropriations acts provide and control discretionary spending,4 which funds many of the
activities commonly associated with federal government functions, such as running executive
branch agencies, congressional offices and agencies, and international operations of the
government.5 Mandatory spending, which is provided by other kinds of acts, supports the much
larger expenditures on various program benefits. For some program areas, such as highway and
mass transportation funding, the division of spending into discretionary and mandatory categories
is more complex.
Discretionary spending in this report is measured in terms of budget authority (BA). An agency
head with BA can obligate the federal government to make payments, subject to congressional
restrictions, for contractors, employees, or grantees to carry out the goals set in legislation.
Outlays occur when the U.S. Treasury disburses funds to honor those obligations. Thus, outlays
follow BA with a lag. Outlays for personnel costs mostly occur in the same year that BA is
provided, but for large and complex projects, outlays may be spread over several years. Nearly all
BA eventually results in outlays. In some cases, BA expires without being used. For instance, an
agency might have difficulty in hiring personnel with the right qualifications or in finding a
contractor with appropriate capabilities or a contract might cost less than anticipated. In a few
cases, major federal initiatives were later curtailed or cancelled, resulting in the rescission of BA.
For instance, most funding for the Carter Administration’s synthetic fuels program and the Obama
Administration’s plans for high-speed rail did not result in outlays.

1 The President’s FY2025 budget (http://www.whitehouse.gov/omb/budget/) was released on March 11, 2024. Because
final appropriations for FY2024 had not been enacted at that date, FY2024 spending levels included in the budget
reflect those in an earlier continuing resolution as well as certain Administration proposals.
2 The start of the federal fiscal year was changed from July 1 to October 1 in 1976 to accommodate changes in the
congressional budget process. The figures omit data for the transition quarter (July 1 to September 30, 1976).
3 The Bureau of Economic Analysis (BEA) released a major revision to national income accounts in July 2013, which
showed somewhat higher levels of national income and thus slightly reduced government spending as a share of GDP.
See Stephanie H. McCulla, Alyssa E. Holdren, and Shelly Smith, “Improved Estimates of the National Income and
Product Accounts: Results of the 2013 Comprehensive Revision,” Survey of Current Business, September 2013, pp. 14-
45, http://bea.gov/scb/pdf/2013/09%20September/0913_comprehensive_nipa_revision.pdf.
4 In some cases, Congress has specified that some funding provided in a measure that is not an appropriations act be
classified as discretionary. Section 23008 of the CARES Act of 2020 (P.L. 116-136) specified that certain funding in
Title B be designated as discretionary, although that measure was an authorizing act.
5 For a broader analysis of discretionary spending, see CRS Report RL34424, The Budget Control Act and Trends in
Discretionary Spending, by D. Andrew Austin.
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Discretionary Budget Authority by Subfunction: An Overview

In some cases, changes in funding levels recorded in historical budget data reflect changes in
budgetary concepts or the budgetary treatment of some types of spending. For example, the
Federal Credit Reform Act of 1990 (P.L. 101-508) changed the budgetary treatment of federal
loan and other credit programs starting in FY1992.
Budget Policy and Discretionary Spending
Discussions about the appropriate levels of spending for various policy objectives of the federal
government always have played an important role in congressional deliberations over funding
measures. For example, concerns about the trajectory of fiscal policy after the financial crisis of
2007-2009 led to the reestablishment of enforceable statutory caps on discretionary funding in the
2011 Budget Control Act (P.L. 112-25) and again with enactment of the Fiscal Responsibility Act
(FRA; P.L. 118-5) in 2023.
More recently, the scale of fiscal responses to the COVID-19 pandemic as well as post-pandemic
funding for infrastructure, industrial subsidies, and climate change initiatives prompted renewed
discussions over federal fiscal policy. Rising debt levels, a post-pandemic quickening of inflation,
and persistent deficits have also heightened fiscal policy concerns.
Some recent authorizing measures contained substantial discretionary appropriations. The
CARES Act of 2020 (§23008; P.L. 116-136), enacted in March 2020 shortly after COVID-19 was
declared a pandemic, appropriated funds for various federal initiatives. The Infrastructure
Investment and Jobs Act (IIJA; P.L. 117-58) provided $163 billion in discretionary funding for
FY2022 and an estimated $283 billion in funding for the following decade. Most of those funds
support transportation programs, pollution control and abatement, broadband deployment, and
energy programs.6
The growth of social insurance and health program spending, mostly funded through mandatory
spending, has also been an issue of concern because those programs comprise the majority of
federal outlays.7
Funding for FY2023
Funding for FY2023 was first provided by a continuing resolution (P.L. 117-180) that included
supplemental appropriations to support Ukraine’s defense against the Russian invasion. After two
one-week continuing resolutions (P.L. 117-229 and P.L. 117-264) were enacted in December
2022, a final appropriations measure (P.L. 117-328) for FY2023 was enacted on December 29,
2022. According to Congressional Budget Office (CBO) estimates, the act provided $1,715
billion in discretionary BA.8
The enactment of final FY2023 appropriations at the end of December 2022, rather than before
the start of the fiscal year on October 1, 2022, hindered OMB’s ability to estimate current budget
year amounts in the Administration’s FY2024 budget submission.9

6 CBO, The Budget and Economic Outlook: 2022 to 2032, May 2022, https://www.cbo.gov/publication/
58147#_idTextAnchor143.
7 CRS Report R44641, Trends in Mandatory Spending, by D. Andrew Austin.
8 CBO, CBO Estimate for Divisions A through N of H.R. 2617 (as modified by S.A. 6552), the Consolidated
Appropriations Act, 2023, December 21, 2022, https://www.cbo.gov/publication/58872. For estimates of mandatory
(direct) spending, see CBO Estimate for Divisions O Through MM of H.R. 2617, the Consolidated Appropriations Act,
2023, Enacted as P.L. 117-328 on December 29, 2022, January 12, 2023, https://www.cbo.gov/publication/58872.
9 OMB, FY2024 Budget, Analytical Perspectives, ch. 4, Budget Process, p. 44, https://www.whitehouse.gov/wp-
content/uploads/2023/03/ap_4_process_fy2024.pdf.
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Funding in FY2024 and FY2025
In June 2023, the Fiscal Responsibility Act (FRA; P.L. 118-5) suspended the federal debt limit
and set new statutory caps on discretionary spending for FY2024 and FY2025.10 CBO estimated
that those caps and other provisions would reduce discretionary spending over the coming decade
by $1.3 trillion, relative to baseline spending levels. The caps are backed by the prospect of
sequestration—that is, across-the-board cuts in nonexempt accounts—administered by OMB.11 In
the past, Congress has almost always passed measures that comply with budgetary limits,
avoiding an OMB-administered sequester.
A series of continuing resolutions have provided funding for the federal government’s operations.
At this writing, final annual appropriations for FY2025 have not been enacted.
The Biden Administration submitted its budget plans for FY2025 on March 11, 2024.12
Administration budget data were used to compute this report’s figures. Administration budgets
typically use information available in late November to compile the following year’s budget
submission.
Overview of Recent Discretionary Spending
Federal fiscal policy in the past two decades has been shaped by two severe shocks, as noted
above and discussed in more detail below.
First, the 2007-2009 financial crisis and the ensuing Great Recession was the most serious
economic downturn since the Great Depression of the 1930s.13 Government deficits and debt
typically rise after serious financial crises and economic downturns for two main reasons. First,
tax revenues typically drop during economic downturns. Second, as recession reduces incomes
for many households, spending increases due to the effect of “automatic stabilizers”—that is,
programs that provide benefits linked to income levels or unemployment. In addition, Congress
passed the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5), which
combined a package of increased federal funding for education, energy, and other areas; greater
support for state and local governments; and tax reductions.
Second, the COVID-19 pandemic, the most serious global health emergency in the past century,
had profound effects on economic activity, health systems, and finances of households and
governments.14
The direct and indirect effects of the 2007-2009 financial crisis and the COVID-19 pandemic
both resulted in large increases in federal deficit spending. While federal deficit spending

10 CBO, CBO’s Estimate of the Budgetary Effects of H.R. 3746, the Fiscal Responsibility Act of 2023, May 30, 2023,
https://www.cbo.gov/publication/59225.
11 CBO, An Update About Implementing the Statutory Limits on Discretionary Funding for FY2024, March 13, 2024,
https://www.cbo.gov/publication/60081.
12 OMB, FY2025 Budget of the U.S. Government, March 11, 2024, https://www.whitehouse.gov/omb/budget/.
13 National Bureau of Economic Research, Business Cycle Dating Committee, “June 2009 Business Cycle Trough/End
of Last Recession,” September 20, 2010, https://www.nber.org/news/business-cycle-dating-committee-announcement-
september-20-2010.
14 The John Hopkins Coronavirus Resource Center (https://coronavirus.jhu.edu/region/united-states), when it stopped
updating its data, estimated that 1.1 million people had died from COVID-19 in the United States. The Centers for
Disease Control (CDC) estimates that about 675,000 people died from the Spanish flu in 1918-1919. See CDC,
“History of 1918 Flu Epidemic,” web page, March 21, 2018, https://www.cdc.gov/flu/pandemic-resources/1918-
commemoration/1918-pandemic-history.htm.
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Discretionary Budget Authority by Subfunction: An Overview

supports economic activity and household incomes, the sharp increases in federal debt levels
raised concerns about the sustainability of public finances.
The Budget Control Act of 2011
Fiscal policy became a central concern of Congress in the wake of the 2007-2009 Great
Recession. In early 2011, prompted by those concerns, some in Congress sought to constrain
discretionary spending in the final FY2011 appropriations measure.15 In August 2011,
negotiations over fiscal policy and the debt limit led to the reimposition of spending caps and
associated budget enforcement mechanisms that had lapsed after FY2001 through the enactment
of the Budget Control Act of 2011 (BCA; P.L. 112-25).
The BCA set statutory caps on discretionary spending, similar to those that had lapsed in 2002,
and set up budget enforcement mechanisms designed to achieve $2.1 trillion in savings over the
period FY2012-FY2021.16 An initial set of discretionary caps was estimated to save about $900
billion over 10 years. A bipartisan Joint Select Committee on Deficit Reduction, often known as
the “Super Committee,” was tasked with developing a plan to reduce deficits by $1.2 trillion or
more.
When that committee reported no plan by a November 2011 deadline, backup budget
enforcement measures were triggered, including a January 2013 sequester (a cancellation of
budgetary resources by OMB), and a revised set of discretionary caps on funding for defense
(defined as the national defense budget function 050) and nondefense programs (all other) for
FY2013-FY2021.17 Those revised caps were to be lowered in each year by an amount calculated
by the Office of Management and Budget (OMB) according to a formula designed to achieve a
prorated share of the $1.2 trillion deficit reduction that a Joint Select Committee plan did not
achieve. An annual sequester of nonexempt mandatory spending accounts also contributes to
those savings.
The spending trajectory implied by those backup enforcement measures implied discretionary
base defense spending would have reverted to a level slightly above its FY2007 level in real
dollar terms (i.e., adjusting for inflation but not for growth in population or the economy), while
nondefense discretionary spending would have reverted to a level near its FY2003 level.18
Discretionary spending as a share of GDP, had unmodified BCA caps remained in place, would
have declined to levels well below those seen in recent decades. CBO baseline projections

15 See CRS Report R41771, FY2011 Appropriations in Budgetary Context, by D. Andrew Austin and Amy Belasco.
16 For more information on the BCA, see CRS Report R41965, The Budget Control Act of 2011, by Bill Heniff Jr.,
Elizabeth Rybicki, and Shannon M. Mahan.
17 Section 302 of the BCA set out procedures for lowering those revised caps by adding §251A to the Balanced Budget
and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177). In FY2013, the lowering of the BCA caps was
implemented through sequestration. See CBO, Sequestration Update Report, August 2012, p. 3, available at
http://www.cbo.gov/sites/default/files/cbofiles/attachments/08-09-12_SequestrationUpdate.pdf; and OMB,
Sequestration Update Report to the President and Congress for Fiscal Year 2013, August 20, 2012, p. 13, available at
http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/sequestration/
sequestration_update_august2012.pdf.
18 For details, see CRS congressional distribution memorandum, “The Budget Control Act and Alternate Defense and
Nondefense Spending Paths, FY2012-FY2021,” by Amy Belasco and Andrew Austin, November 16, 2012, available to
congressional clients upon request. This comparison is made in terms of budget authority. Before passage of ATRA,
BCA provisions were slated to bring discretionary base defense spending to its FY2007 level and nondefense spending
to near its level in FY2003 or FY2004. Inflation adjustments made using GDP price index.
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suggested that discretionary spending would have accounted for 5.3% of GDP in FY2026, two
percentage points below its level in FY2007 (7.3%), just before the start of the Great Recession.19
BCA caps were adjusted to accommodate certain types of spending, such as war spending
(designated as “overseas contingency operations”), emergency appropriations, disaster relief, and
program integrity initiatives.20 In particular, war-designated funding has been seen as a “relief
valve” that has taken budgetary pressure off priority military and international programs.21 Some
Members of Congress have argued that war spending cap adjustments weakened fiscal
discipline.22
Congress Modified BCA Caps to Mitigate Fiscal Stringency
The stringency of BCA discretionary spending caps and backup enforcement measures prompted
Congress and the President to adjust those limits several times to avoid dislocations of federal
operations.23 Some journalists and others have referred to sequestration as a reversion to tighter
caps on spending after a lapse of a Bipartisan Budget Act provision allowing higher levels of
discretionary spending—something unrelated to the formal definition of sequestration.
The American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240) delayed the slated FY2013
sequester and reduced its size from $109 billion to $85 billion. ATRA, which also extended
certain tax reductions, addressed concerns that the expiration of certain tax cuts and imposition of
spending cuts could hinder economic recovery from the Great Recession, avoiding what had been
called a “fiscal cliff.”24
The Bipartisan Budget Act of 2013 (BBA 2013; H.J.Res. 59; P.L. 113-67), enacted in December
2013 and popularly known as the Murray-Ryan budget agreement, set a pattern for adjusting BCA
caps. The BBA 2013 raised BCA FY2014 limits for defense and nondefense by $22.4 billion each
and raised FY2015 limits by $9.3 billion each. The Bipartisan Budget Act of 2015 (BBA 2015;
P.L. 114-74) raised the FY2016 cap levels on both categories by $25 billion and the FY2017 cap
levels by $15 billion.
The Bipartisan Budget Act of 2018 (BBA 2018; H.R. 1892, P.L. 115-123), enacted February 9,
2018, raised the defense cap by about $80 billion for FY2018 and $85 billion for FY2019 and the

19 CBO, Budget and Economic Outlook: 2017 to 2027, January 24, 2017, Table 1-1, http://www.cbo.gov/publication/
52370. CBO baseline projections assume current laws remain in effect and that discretionary spending levels remain
constant in inflation-adjusted terms.
20 For BCA caps to be adjusted, emergency funding and war funding (Overseas Contingency Operations/Global War on
Terrorism) must be designated on an account-by-account basis by Congress and the President. Cap adjustments for
disaster funding are subject to a limit set at a 10-year average of previous disaster funding. The BCA established
separate caps for certain program integrity initiatives.
21 See CRS Report R44519, Overseas Contingency Operations Funding: Background and Status, by Brendan W.
McGarry and Emily M. McCabe. Also see Marcus Weisgerber, “‘Magic Money’: DoD’s Overseas Contingency Budget
Might Dry Up,” Defense News, June 29, 2014, http://archive.defensenews.com/article/20140629/DEFREG02/
306290011/-Magic-Money-DoD-s-Overseas-Contingency-Budget-Might-Dry-Up. Also see archived CRS Report
RL33110, The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11, by Amy Belasco,
available to congressional clients upon request.
22 Joe Gould, “Trump Selects OCO-Opponent Mulvaney for OMB,” Defense News, December 19, 2016,
http://www.defensenews.com/articles/trump-selects-oco-opponent-mulvaney-for-omb.
23 A CRS congressional distribution memorandum “The Evolution of Budget Control Act of 2011 Caps on
Discretionary Spending” is available upon request to congressional clients.
24 ATRA was enacted on January 1, 2013. Budgetary adjustments that affected the FY2013 sequester are described in
the CRS congressional distribution memorandum “The Evolution of Budget Control Act of 2011 Caps on Discretionary
Spending.”
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nondefense cap by about $63 billion for FY2018 and $67 billion for FY2019.25 BBA 2018 also
contained several changes in federal social programs and again suspended the debt limit.26
The Bipartisan Budget Act of 2019 (BBA 2019; H.R. 3877, P.L. 116-37), enacted on August 2,
2019, set discretionary cap levels for FY2020 and FY2021, allowing for higher spending in both
the defense and nondefense categories. At the end of FY2021, BCA caps on discretionary
spending (BA) expired, although BCA sequestration of nonexempt mandatory spending has been
extended.27 Discretionary caps, as noted above, were reinstated for FY2024 and FY2025 by the
Fiscal Responsibility Act (P.L. 118-5).
Coronavirus Pandemic and Federal Responses in 2020 and 2021
The COVID-19 pandemic confronted the federal government, like governments around the
world, with extraordinary fiscal challenges.28 In part, deficits were pushed upward through
“automatic stabilizers,” such as expanded income support payments and diminished tax receipts
as household incomes and business profits fell.29 The designation of COVID-19 as a pandemic in
mid-March 2020 prompted fiscal policy responses in 2020 and 2021 that increased federal
spending and deficits, as percentage of GDP, to levels not seen since World War II.30 Most of the
federal fiscal response was provided through mandatory spending, and to a lesser extent in
revenue reductions.
The CARES Act (P.L. 116-136), enacted in late March 2020, provided an estimated $326 billion
in discretionary funding, while providing $988 billion in mandatory spending and $408 billion in
revenue reductions. The Paycheck Protection Program and Health Care Enhancement Act (P.L.
116-139) provided an additional $162 billion in discretionary funding as well as $321 billion in
mandatory spending.31

25 CBO, Bipartisan Budget Act of 2018, February 8, 2018, https://www.cbo.gov/system/files/115th-congress-2017-
2018/costestimate/bipartisanbudgetactof2018.pdf.
26 See CRS Report R45126, Bipartisan Budget Act of 2018 (P.L. 115-123): Brief Summary of Division E—The
Advancing Chronic Care, Extenders, and Social Services (ACCESS) Act, coordinated by Paulette C. Morgan. Also see
CRS Report R45136, Bipartisan Budget Act of 2018 (P.L. 115-123): CHIP, Public Health, Home Visiting, and
Medicaid Provisions in Division E, coordinated by Alison Mitchell and Elayne J. Heisler.
27 The sequestration of mandatory spending was extended through the first half of FY2032 for Medicare patient care
outlays and through FY2031 for other nonexempt programs. See OMB, FY2024 Budget, Analytical Perspectives, p. 37,
https://www.whitehouse.gov/wp-content/uploads/2023/03/ap_4_process_fy2024.pdf.
28 World Health Organization (WHO), “WHO Director-General’s Opening Remarks at the Media Briefing on COVID-
19,” March 11, 2020, https://www.who.int/director-general/speeches/detail/who-director-general-s-opening-remarks-at-
the-media-briefing-on-covid-19—11-march-2020.
29 CBO, “Automatic Stabilizers in the Federal Budget: 2022 to 2032,” October 2022, https://www.cbo.gov/publication/
58593. Estimated effect of automatic stabilizers in FY2020 was 1.6% of GDP.
30 For 2020, see CBO, “The Budgetary Effects of Laws Enacted in Response to the 2020 Coronavirus Pandemic, March
and April 2020,” June 2020, https://www.cbo.gov/system/files/2020-06/56403-CBO-covid-legislation.pdf (hereinafter
CBO, “The Budgetary Effects of Laws Enacted in Response to the 2020 Coronavirus Pandemic, March and April
2020”). The total estimated effect on federal deficits from those acts (P.L. 116-123, P.L. 116-127, P.L. 116-136, and
P.L. 116-139) was $2.4 trillion, or 11.5% of GDP.
For 2021, see CBO, “The Budgetary Effects of Major Laws Enacted in Response to the 2020-2021 Coronavirus
Pandemic, December 2020 and March 2021,” September 2021, https://www.cbo.gov/system/files/2021-09/57343-
Pandemic.pdf (hereinafter CBO, “The Budgetary Effects of Major Laws Enacted in Response to the 2020-2021
Coronavirus Pandemic, December 2020 and March 2021”). The total estimated effect on deficits from those acts (P.L.
116-260, P.L. 117-2) was $2.7 trillion, or 12.2% of GDP.
31 CBO, “The Budgetary Effects of Laws Enacted in Response to the 2020 Coronavirus Pandemic, March and April
2020.”
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The final appropriations package for FY2021, enacted in late December 2020, included an
estimated $185 billion in discretionary spending, $677 billion in mandatory spending, and $5
billion in revenue decreases. The American Rescue Plan Act (P.L. 117-2) provided $1,803 billion
in mandatory funding and $53 billion in revenue reductions, but no discretionary funding.32
Caps on Discretionary Spending Reinstated for FY2024 and FY2025
In June 2023, the Fiscal Responsibility Act (FRA; P.L. 118-5) suspended the federal debt limit
and reestablished statutory caps on discretionary spending for FY2024 and FY2025. Separate
caps apply to the defense and nondefense categories.
Federal Budget Data and Concepts
Figures in this report are based on the Office of Management and Budget (OMB) Public Budget
Database accompanying the FY2025 budget release.33 Table 5.1 in the Historical Tables volume
of the FY2025 budget reports budget authority by function and subfunction, but does not break
down spending into discretionary and mandatory subcomponents.34
OMB Budget Data
OMB’s public budget data generally do not reflect budgetary categories used in the congressional
budget process such as emergency-designated funding, the appropriations subcommittee
responsible for an account, or distinctions between war and base funding. OMB maintains more
detailed budget data for its internal work. OMB is the official source for historical budget data.
CBO estimates, however, are generally more relevant for congressional budget enforcement.
Budget data in OMB documents may differ from other budget data for various reasons, although
differences in historical data are typically small. For example, appropriations budget documents
often reflect scorekeeping adjustments. Budget data issued at a later date may include revisions.
In some cases, detailed appropriations data may differ from OMB data, which sometimes do not
reflect certain relatively small zero-balance transfers among funds. Differences may also reflect
technical differences or different interpretations of federal budget concepts.
Negative Budget Authority
Within the federal budget concepts, certain inflows, such as offsetting receipts, offsetting
collections, some user fees, and “profits” from federal loan programs, are treated as negative
budget authority.35
Provisions in appropriations acts that affect mandatory spending programs, known as CHIMPs
(changes in mandatory programs) can be counted as negative discretionary spending according to
federal budgetary scorekeeping guidelines. For example, a CHIMP affecting the State Children’s

32 CBO, “The Budgetary Effects of Major Laws Enacted in Response to the 2020-2021 Coronavirus Pandemic,
December 2020 and March 2021.”
33 Data in the OMB Public Budget Database (https://www.whitehouse.gov/omb/budget/supplemental-materials/)
reconcile to information presented in the Historical Tables (https://www.whitehouse.gov/omb/budget/historical-tables/)
of the FY2025 budget. For a further description and important caveats, see the Public Budget Database User Guide,
https://www.whitehouse.gov/wp-content/uploads/2024/03/db_guide_fy2025.pdf.
34 OMB, Historical Tables, Table 5.1, https://www.whitehouse.gov/wp-content/uploads/2024/03/hist05z1_fy2025.xlsx.
35 See OMB, FY2025 Budget, Analytic Perspectives, ch. 18, “Offsetting Collections and Offsetting Receipts,”
https://www.whitehouse.gov/wp-content/uploads/2024/03/ap_19_offsetting_fy2025.pdf.
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Health Insurance Program (CHIP) explains a dip in subfunction 551 (health care services) shown
in Figure 9 for FY2025.36
Scorekeeping adjustments, such as CHIMPs, lead to differences between actual discretionary
budget authority totals and limits set by budget enforcement mechanisms, such as §302
allocations or BCA discretionary caps.37 Scored totals of budget authority—that is, totals that
include scorekeeping adjustments and which are used to check conformity to BCA spending
limits and other budget enforcement measures—typically diverge from totals that do not include
those adjustments.
Federal Credit Programs
Disbursements for federal loan and loan guarantee programs do not appear directly in federal
spending data. The federal government has used a form of accrual accounting for loan and loan
guarantee programs since passage of the Federal Credit Reform Act (FCRA; Title V of the
Omnibus Budget Reconciliation Act of 1990; P.L. 101-508) as well as for certain federal
retirement programs.38 OMB calculates net subsidy rates according to FCRA rules for loan and
loan guarantee programs. The net subsidy cost is then reflected in federal spending data. In
general, FCRA adjustments affect mandatory spending more than discretionary spending because
the largest sources of federal credit are mandatory programs.39
Comparisons of estimates of federal credit program costs before and after FY1991 should be
treated with caution because FCRA changed the budgetary treatment of federal credit programs.
For instance, the budgetary costs of loan guarantee programs before FCRA rules came into effect
were typically understated because they required no upfront federal disbursements, unlike loan
programs. Conversely, the budgetary costs of federal loan programs, which required upfront
federal disbursements, did not reflect future repayments. FCRA changes in budgetary treatment of
credit programs made loan and loan guarantee programs more comparable. Loan or loan
guarantee program cost estimates calculated before FCRA implementation are unlikely to be
comparable to estimates calculated afterward.
FCRA calculations sometimes yield negative net subsidy levels, implying that the federal
government appears to make a profit on those loans.40 FCRA subsidy calculations, however, omit
risk adjustments.41 The true economic cost of federal credit guarantees can be substantially
underestimated when risk adjustments are omitted.42

36 OMB, FY2025 Budget, Budget Appendix, CHIP program and financing table, p. 442, https://www.whitehouse.gov/
wp-content/uploads/2024/03/hhs_fy2025.pdf.
37 Section 302 of the 1974 Congressional Budget Act (P.L. 93-344, as amended) defines spending limits for
appropriations subcommittees consistent with levels recommended in a budget resolution. See CRS Report R47388,
Enforceable Spending Allocations in the Congressional Budget Process: 302(a)s and 302(b)s, by Drew C. Aherne.
More precisely, BCA caps were adjusted upward to reflect those spending categories.
38 See CRS Report RL30346, Federal Credit Reform: Implementation of the Changed Budgetary Treatment of Direct
Loans and Loan Guarantees, by James M. Bickley, available to congressional clients upon request.
39 See OMB, FY2025 Budget, Analytic Perspectives, ch. 7, “Credit and Insurance,” https://www.whitehouse.gov/wp-
content/uploads/2024/03/ap_7_credit_fy2025.pdf.
40 For example, in some years Federal Housing Administration mortgage programs and some federal student loan
programs have been estimated to yield negative net subsidies.
41 While the FCRA calculations include estimates of default costs, they do not discount more volatile income flows, as
a private firm would. See CRS Report R44193, Federal Credit Programs: Comparing Fair Value and the Federal
Credit Reform Act (FCRA), by Raj Gnanarajah.
42 U.S. Congressional Budget Office, Estimating the Value of Subsidies for Federal Loans and Loan Guarantees,
August 2004, available at http://cbo.gov/doc.cfm?index=5751.
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Background on Functional Categories
Functional categories are a tool to compare federal funding for activities within broad policy
areas across multiple federal agencies.43 Various federal agencies may have closely related or
overlapping responsibilities. Functional categories therefore provide a useful view of federal
activities supporting specific national purposes.
Superfunction Categories
Superfunction categories, which provide a higher-level division of federal activities, are
• National Defense,
• Human Resources,
• Physical Resources, and
• Other Functions.
Figure 1 shows trends in discretionary funding for those superfunctions since FY1977. Budget
function categories, grouped by superfunctions, are shown in Table 1. Net Interest, Allowances,
and Undistributed Offsetting Receipts could also be considered as separate categories.
Superfunction categories for National Defense, Net Interest, Allowances, and Undistributed
Offsetting Receipts coincide with function categories. Trends in net interest are excluded, as
federal interest expenditures have been automatically appropriated since 1847.
Figure 1. Discretionary Funding by Budget Superfunction, FY1977-FY2029

Source: CRS, based on OMB data from the FY2025 budget submission.
Notes: FY2024 levels are estimated. FY2024-FY2029 levels reflect Administration proposals and projections.
See OMB budget documents for further caveats.

43 See CRS Report 98-280, Functional Categories of the Federal Budget, by Bill Heniff Jr.
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Allowances, which contain items reflecting technical budget adjustments, and undistributed
offsetting receipts are also excluded. Allowances for FY2025 include pandemic fraud prevention
and enforcement, allowances for discretionary programs (nondefense), and proposals for
spectrum relocation.
In this report, the International Affairs function, which OMB includes in the Other Functions
superfunction, is listed after National Defense because similar influences affect both.
Across the broad superfunction categories, discretionary spending is projected to decline as a
share of the economy, measured by gross domestic product (GDP), as shown in Figure 1. After a
buildup in the early 1980s, National Defense funding fell, especially after the collapse of the
Soviet Union and its allied Warsaw Pact. National Defense funding then rose after the attacks of
September 11, 2001, and the wars in Afghanistan and Iraq, but has been falling as a share of GDP
since FY2010. Human Resources funding as a share of GDP fell sharply in the late 1970s and
early 1980s, but rose significantly during the Great Recession and the COVID-19 pandemic.
Funding for Physical Resources also rose during the Great Recession and the COVID-19
pandemic, as well as after major disasters. Funding for Other Functions—comprising Agriculture;
Administration of Justice; General Science, Space, and Technology; and General Government—
has been falling as a share of GDP since FY2010.
Subfunction Categories
Subfunction categories provide a finer division of funding levels within narrower policy areas.44
Budget functions generally play no role in budget enforcement, although budget legislation
mandates that budget resolutions list preferred spending levels by budget function, thus
highlighting broad fiscal priorities.45 Caps on discretionary spending set by BCA and FRA, as
noted above, define the “revised security category” as “discretionary appropriations in budget
function 050.”46

44 Table 1 largely follows the ordering of functions in the OMB Historical Tables volume. See OMB, FY2025 Budget,
Historical Tables, Table 3.1, https://www.whitehouse.gov/wp-content/uploads/2024/03/hist03z1_fy2025.xlsx. The
ordering of some items was changed to organize the discussion in a thematically consistent manner. As noted in the
text, the international affairs function was grouped with the national defense function, as those categories are affected
by common influences.
45 2 U.S.C. 632(a)(4).
46 2 U.S.C. 900(c)(4)(D).
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Table 1. Budget Function Categories by Superfunction
Superfunction
Code
Function / Subfunction
National Defense

50
National defense

51
Dept. of Defense-Military

53
Atomic Energy Defense Activities

54
Defense-Related Activities
International Affairs
150
International affairs

151
Intl. Dev. and Humanitarian Assistance

152
Intl. Security Assistance

153
Conduct of Foreign Affairs

154
Foreign Information & Exchange Activities

155
International Financial Programs
Human Resources

500
Education, training, employment, and social services

501
Elementary, Secondary, and Vocational Education

502
Higher Education

503
Research and General Education Aids

504
Training and Employment

505
Other Labor Services

506
Social services

550
Health

551
Health Care Services

552
Health Research and Training

554
Consumer and Occupational Health and Safety

570
Medicare

571
Medicare

600
Income security

601
Gen. retirement & disability insurance (exc. Soc. Sec.)

602
Federal employee retirement and disability

603
Unemployment compensation

604
Housing assistance

605
Food and nutrition assistance

609
Other income security

650
Social security

651
Social security

700
Veterans’ benefits and services

701
Income security for veterans

702
Veterans education, training, & rehabilitation

703
Hospital and medical care for veterans

704
Veterans housing

705
Other veterans’ benefits and services
Physical Resources

270
Energy

271
Energy supply

272
Energy conservation

274
Emergency energy preparedness

276
Energy information, policy, and regulation
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Superfunction
Code
Function / Subfunction

300
Natural resources and environment

301
Water resources

302
Conservation and land management

303
Recreational resources

304
Pol ution control and abatement

306
Other natural resources

370
Commerce and housing credit

371
Mortgage credit

372
Postal service

373
Deposit insurance

376
Other advancement of commerce

400
Transportation

401
Ground transportation

402
Air transportation

403
Water transportation

407
Other transportation

450
Community and regional development

451
Community development

452
Area and regional development

453
Disaster relief and insurance
Other Functions

250
General science, space, and technology

251
General science and basic research

252
Space flight, research & supporting activities

350
Agriculture

351
Farm income stabilization

352
Agricultural research and services

750
Administration of justice

751
Federal law enforcement activities

752
Federal litigative and judicial activities

753
Federal correctional activities

754
Criminal justice assistance

800
General government

801
Legislative functions

802
Executive direction and mgmt.

803
Central fiscal operations

804
General property and records mgmt.

805
Central personnel mgmt.

806
General purpose fiscal assistance

808
Other general government

809
Deductions for offsetting receipts
Net Interest

900
Net interest

901
Interest on Treasury debt securities (gross)

902
Interest received by on-budget trust funds

903
Interest received by off-budget trust funds

908
Other interest
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Superfunction
Code
Function / Subfunction

909
Other Investment and income
Allowances

920
Allowances

922
Reductions for Joint Committee Enforcement (Nondefense)

923
Pandemic Fraud Prevention and Enforcement

924
Allowance for Discretionary Programs (Nondefense)

926
Spectrum Relocation
Undistributed Offsetting

Receipts

950
Undistributed offsetting receipts

951
Employer share, employee retirement (on-budget)

952
Employer share, employee retirement (off-budget)

953
Rents & royalties on the Outer Continental Shelf

954
Sale of major assets

959
Other undistributed offsetting receipts
Source: CRS, based on OMB data (OMB, FY2025 Budget, Analytical Perspectives, Table 25-1,
https://www.whitehouse.gov/wp-content/uploads/2024/03/25-1_fy2025.xlsx).
Notes: Allowances subfunctions can change from one year to the next.
Historical Spending Trends
Federal spending trends in functional areas are affected by changing assessments of national
priorities, evolving international challenges, and economic conditions, as well as changing social
characteristics and demographics of the U.S. population. Some of the trends and events that have
had dramatic effects on federal spending are outlined below. Other CRS products provide
background on more specific policy areas. The discussion of budgetary trends is broken up into
three broad categories: defense and international affairs, domestic social programs, and other
federal programs.
Spending in the following figures, as noted above, is shown as a percentage of GDP, which
controls for the effects of inflation, population growth, and real income growth. A flat line on
such graphs indicates that spending in that category is increasing at the same rate as overall
economic growth.
Defense and International Affairs
The National Defense (050) and International Affairs (150) budget functions have been the
categories most affected by larger changes in the geopolitical role of the United States.
Cold War, Peace Dividend, and the Global War on Terror
The allocation of discretionary spending between defense and nondefense programs is one
reflection of changing federal priorities over time. Figure 2 shows defense and nondefense
discretionary funding as a percentage of GDP. Figure 3 shows defense spending by major title,
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including Military Personnel (Mil Pers), Procurement, Operations and Maintenance (O&M), and
Research, Development, Test, and Evaluation (RTD&E).47
Figure 2. Discretionary Defense and Nondefense Spending
Budget authority as a percentage of GDP, FY1977-FY2029

Source: CRS, based on OMB data from the FY2025 budget submission.
Notes: Defense is defined as funding for the National Defense (050) budget function; nondefense is the
remainder. FY1976-FY2023 are historical data; FY2024 is estimated; FY2024-FY2029 reflect the President’s
FY2018 budget proposals. The spikes in nondefense funding in FY2009 and FY2020 reflect enactment of the
Recovery Act (ARRA) and legislative responses to the COVID-19 pandemic, which are discussed elsewhere.
Relations between the United States and its allies on one hand, and the Union of Soviet Socialist
Republics (USSR) and its allies on the other were the dominant security concern in the half
century following the Second World War. In the early 1970s, U.S. involvement in the Vietnam
War wound down, while the United States and the USSR moved toward detente, permitting a
thaw in Cold War relations between the two superpowers and a reduction in defense spending
relative to the size of the economy.48

47 Defense appropriations acts typically also contain titles for Revolving and Management Funds, Other DOD
Programs, and Related Agencies. Military Construction/Veterans Administration appropriations acts typically contain
titles for Military Construction and Family Housing.
48 For histories of deficit finance and American wars, see Robert D. Hormats, The Price of Liberty, (New York: Times,
2007); or Steven A. Bank, Kirk J. Stark, and Joseph J. Thorndike, War and Taxes, (Washington, DC: Urban Institute,
2008). Also see Rosella Cappella Zielinski, How States Pay for Wars (New York: Cornell University Press, 2016); and
Sarah Kreps, Taxing Wars: The American Way of War Finance and the Decline of Democracy (Oxford, 2018).
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Figure 3. Defense Discretionary BA by Major Title, FY1977-FY2029

Source: CRS, based on OMB data from the FY2025 budget submission.
Notes: The five titles with the highest funding levels are shown.
In 1979, during the Jimmy Carter Administration, military spending increased sharply following
intervention by the USSR in Afghanistan and the Iranian hostage crisis.49 The Ronald W. Reagan
Administration increased defense spending further, with procurement costs rising more sharply
than other categories.50
Defense spending continued to increase until 1986, as concern shifted to domestic priorities, the
desire to reduce large budget deficits, and concerns about inflated procurement costs.51 The
collapse in 1989 of most of the Warsaw Pact governments in Central and Eastern Europe and the
1990-1991 disintegration of the Soviet Union was followed by a reduction in federal defense
spending, allowing a “peace dividend” that relaxed fiscal pressures.52 O&M costs, however, fell
more slowly after the mid-1980s than other costs (as seen in Figure 3) and rose more quickly
after 2000.
The attacks of September 11, 2001, were followed by sharp increases in homeland security
spending. Defense spending also increased significantly with the start of the Afghanistan war in

49 For one view of budgetary politics in the early 1980s, see David Stockman, The Triumph of Politics (New York:
Harper & Row, 1986). Also see James M. Poterba, David Stockman, and Charles Schultze, “Budget Policy,” in
American Economic Policy in the 1980s, NBER, pp. 235-292.
50 Stockman (1986), pp. 105-109.
51 Airon A. Mothershed, “The $435 Hammer and $600 Toilet Seat Scandals: Does Media Coverage of Procurement
Scandals Lead to Procurement Reform?” Public Contract Law Journal, vol. 41, no. 4 (2012), pp. 855-880,
http://www.jstor.org/stable/41635361.
52 The Warsaw Treaty Organization established in 1955, included Albania, Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, Romania, and the Soviet Union.
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October 2001 and the Iraq war in March 2003.53 Rising levels of violence and instability in Iraq
in 2006 led President George W. Bush to send an additional “surge” of troops.54 In 2008, the U.S.
and Afghan governments negotiated a Status of Forces Agreement (SOFA) that set a December
2011 deadline for the withdrawal of most U.S. combat troops.55 A smaller number of U.S. troops
returned in 2014 to combat the Islamic State of Iraq and Syria (ISIS).56
President Barack H. Obama announced that additional troops would be sent to Afghanistan to
prevent a collapse of its government. In 2013 and 2014, President Obama stated that most U.S.
troops would be withdrawn from Afghanistan by the end of 2014.57 In November 2014, however,
President Obama announced an extension of operations in Afghanistan.58 In February 2020, the
Trump Administration signed an agreement with the Taliban that set a May 2021 deadline for the
withdrawal of U.S. military forces.59 The collapse of Afghan forces in August 2021 forced the
withdrawal of remaining U.S. personnel.60
The invasion of Ukraine’s Crimean peninsula and eastern portions of Ukraine in March 2014
marked a turning point in U.S.-Russian relations, although those events had no material effect on
defense spending.61 The full-scale Russian invasion of Ukraine in February 2022, however,
prompted a more robust response. By the end of December 2023, the United States had provided
at least $47 billion in security aid since the initial 2014 Russian invasion of Ukraine.62 In October
2023, the Biden Administration requested $58 billion in supplemental appropriations to support
Ukraine and Israel, which appears as a FY2024 uptick for the Defense-Military category in

53 See archived CRS Report RL33110, The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations
Since 9/11, by Amy Belasco, available to congressional clients upon request. The Afghan and Iraq wars, along with
other related activities, were often called the Global War on Terror (GWOT) and later Overseas Contingency
Operations (OCO). The OCO category was created in 1997 to fund activities in Kosovo and Southwest Asia. See DOD
Comptroller, “Overseas Contingency Operations Transfer Fund,” in the FY2000 DOD Budget Justification,
https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2000/budget_justification/pdfs/
01_Operation_and_Maintenance/fy00pb_ocotf.pdf. Also see CRS In Focus IF10143, Foreign Affairs Overseas
Contingency Operations (OCO) Funding: Background and Current Status, by Emily M. McCabe.
54 White House, “President’s Address to the Nation,” January 10, 2007, https://georgewbush-whitehouse.archives.gov/
news/releases/2007/01/20070110-7.html. Also see Timothy A. Sayle et al., The Last Card: Inside George W. Bush’s
Decision to Surge in Iraq, (Ithaca, NY: Cornell Univ. Press, 2019), https://www.jstor.org/stable/10.7591/j.ctvfc522t.
55 See archived CRS Report R40011, U.S.-Iraq Withdrawal/Status of Forces Agreement: Issues for Congressional
Oversight, by R. Chuck Mason, available to congressional clients upon request.
56 Stacie L. Pettyjohn, “Can Iraq Evict U.S. Forces?” January 6, 2020, https://www.rand.org/blog/2020/01/can-iraq-
evict-us-forces.html.
57 See CRS Report RL30588, Afghanistan: Post-Taliban Governance, Security, and U.S. Policy, by Kenneth Katzman.
Also see Kevin Marsh, “Obama’s Surge: A Bureaucratic Politics Analysis of the Decision to Order a Troop Surge in
the Afghanistan War,” Foreign Policy Analysis, vol. 10, no. 3 (July 2014), pp. 265-288.
58 Mark Mazzetti and Eric Schmitt, “In a Shift, Obama Extends U.S. Role in Afghan Combat,” New York Times,
November 21, 2014.
59 U.S. Department of State, After Action Review on Afghanistan: January 2020-August 2021, June 30, 2023, p. 11,
https://www.state.gov/wp-content/uploads/2023/06/State-AAR-AFG.pdf.
60 Ibid., p. 85.
61 Katya Gorchinskaya, “A Brief History of Corruption in Ukraine: the Yanukovych Era,” Eurasianet, June 3, 2020,
https://eurasianet.org/a-brief-history-of-corruption-in-ukraine-the-yanukovych-era. Also see Serhiy Kudelia, “The
House that Yanukovych Built: the Maidan and Beyond,” Journal of Democracy, vol. 25 (2014).
62 See CRS In Focus IF12040, U.S. Security Assistance to Ukraine, by Christina L. Arabia, Andrew S. Bowen, and
Cory Welt.
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Figure 3.63 In February 2024, the Senate agreed to a related measure (S.Amdt. 1388 to H.R.
815).64
Potential security and diplomatic challenges posed by the Peoples’ Republic of China (PRC) have
emerged as a leading strategic concern.65 Other strategic priorities include broader challenges
such as climate change and terrorism, as well as shaping international rules that address potential
policy disputes over trade and technology.66
Defense Funding Outside of the Department of Defense
Figure 4 shows subfunctions within the National Defense (050) budget function. The Department
of Defense (DOD)-Military (051) subfunction accounts for over 95% of that funding. Almost all
of the Atomic Energy Defense Activities (053) subfunction supports operations within the U.S.
Department of Energy (DOE). About two-thirds of that funding supports the National Nuclear
Security Administration (NNSA) and the remainder funds environmental clean-up of weapons
production and research sites, along with other related activities. Much smaller amounts support
the Defense Nuclear Facilities Safety Board and site remediation activities of the U.S. Army
Corps of Engineers.
The Defense-Related Activities (54) subfunction comprises a variety of activities outside of
DOD. In recent years, funding for counterterrorism activities within the Federal Bureau of
Investigation (FBI) has accounted for almost two-thirds of all funding within this subfunction and
about half of the FBI’s total discretionary funding.

63 CRS Insight IN12274, FY2024 Emergency Supplemental Funding Request: Defense Appropriations, by Cameron M.
Keys and Luke A. Nicastro. Also see Biden Administration, letter to Congress, October 20, 2023,
https://www.whitehouse.gov/wp-content/uploads/2023/10/Letter-regarding-critical-national-security-funding-needs-
for-FY-2024.pdf.
64 CBO, Cost Estimate of Senate Amendment 1388 to H.R. 815, the National Security Act, 2024, February 8, 2024,
https://www.cbo.gov/system/files/2024-02/
CBO_Estimate_for_Div_A_of_SA_1388_to_HR815_National_Security_Act_2024.pdf.
65 OMB, Budget of the U.S. Government FY2024, p. 63, https://www.whitehouse.gov/wp-content/uploads/2023/03/
budget_fy2024.pdf. “…the Budget prioritizes China as America’s pacing challenge in line with the 2022 National
Defense Strategy.”
66 See CRS Report R47582, FY2024 Defense Budget Request: Context and Selected Issues for Congress, by Cameron
M. Keys and Brendan W. McGarry.
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Figure 4. National Defense (050) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1977-FY2029

Source: CRS, based on OMB data from the FY2025 budget submission.
Notes: FY2024 levels are estimated. FY2024-FY2029 levels reflect Administration proposals and projections.
See OMB budget documents for further caveats.
International Affairs
Figure 5 shows levels of budget authority allocated to international affairs (budget function 150)
as a share of GDP. Spending for activities within the international affairs budget function has
fluctuated in response to changes in U.S. foreign policy and national security and economic
priorities.
International Security Assistance rose sharply in the late 1970s and early 1980s, in large part due
to foreign military financing support provided to Israel and Egypt following the 1979 Camp
David Accords.67 The Economic Support Fund (ESF), which provides financial support to
promote political and socioeconomic stability within a range of countries of strategic importance
to the United States, also grew rapidly in the same time period.68 Funding for security assistance
fell after the collapse of the Warsaw Pact governments in 1989 and the dissolution of the Soviet
Union in 1991.

67 U.S. General Accounting Office (now Government Accountability Office; GAO), Military Sales to Israel and Egypt:
DOD Needs Stronger Controls Over U.S.-Financed Procurements, GAO/NSIAD-93-184, July 1993,
http://www.gao.gov/assets/160/153579.pdf.
68 For more on U.S. foreign assistance history and trends, see CRS Report R40213, Foreign Assistance: An
Introduction to U.S. Programs and Policy, by Emily M. McCabe and Nick M. Brown.
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Figure 5. International Affairs (150) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1977-FY2029

Source: CRS, based on OMB data from FY2025 budget submission.
Notes: FY2024 levels are estimated. FY2024-FY2029 levels reflect Administration proposals and projections.
See OMB budget documents for further caveats.
The level of funding for International Development and Humanitarian Assistance fell from about
0.2% of GDP in the late 1970s to less than 0.1% of GDP in the 1990s. The George W. Bush
Administration increased funding for International Development and Humanitarian Assistance in
the early 2000s through initiatives such as the President’s Emergency Plan for AIDS Relief
(PEPFAR), which has supported programs to stem the spread of AIDS and HIV in sub-Saharan
Africa and South Asia, and creation of the Millennium Challenge Corporation (MCC), which
seeks to spur economic growth in relatively well-governed developing countries.69 During the
Obama Administration, funding for International Development and Humanitarian Assistance
hovered around 0.15% of GDP, about midway between levels seen in the 1970s and in the 1990s.
More recently, largely as a result of U.S. responses to the COVID-19 pandemic starting in 2020
and Russia’s renewed invasion of Ukraine in 2022, International Development and Humanitarian
Assistance has risen. In 2022, International Development and Humanitarian Assistance as a share
of GDP peaked at more than 0.18%, a level last seen around 2009.
Costs of conducting foreign affairs, relative to GDP, rose during the first decade of the wars in
Afghanistan and Iraq, but largely declined between FY2012 and FY2019. Following the
declaration of the COVID-19 pandemic in 2020, the U.S. withdrawal from Afghanistan in 2021,
and Russia’s renewed invasion of Ukraine in 2022, Function 150 relative to GDP has increased.
Heightened concerns over security of diplomatic facilities and personnel have also contributed to
overall higher funding levels since 2001.

69 See CRS Report RL32427, Millennium Challenge Corporation: Overview and Issues, by Nick M. Brown.
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Upticks in the International Financial Programs subfunction before FY2000 reflect funds
provided by the U.S. government to the International Monetary Fund. In exchange for those
funds, the U.S. government receives Special Drawing Rights (SDRs).70 Steadier International
Financial Program funding after FY2000 appears to reflect changes in budget scoring treatment
of those transactions. CBO has argued that a market-based assessment of U.S. government
commitments to the IMF should include a material risk adjustment.71 The U.S. Treasury objected
to CBO’s analysis and contends that those transactions should be treated as an exchange of assets
with no budgetary cost.72 For that reason OMB does not score those transactions as BA or
outlays.73
Domestic Social Programs
This section discusses budgetary trends among domestic social programs. Figure 6 shows
discretionary funding trends for budget functions within the Human Resources superfunction.
Figure 6. Discretionary Funding for Human Resources Functions
Discretionary budget authority as a percentage of GDP, FY1977-FY2029

Source: CRS, based on OMB data from FY2025 budget submission.

70 CRS In Focus IF11835, International Monetary Fund: Special Drawing Rights Allocation, by Martin A. Weiss and
Rebecca M. Nelson.
71 CBO, The Budgetary Effects of the United States’ Participation in the International Monetary Fund, June 16, 2016,
https://www.cbo.gov/publication/51663.
72 U.S. Treasury, Response to CBO Report on the Budgetary Effects of U.S. Participation in the IMF, January 2017,
https://home.treasury.gov/system/files/206/US-Treasury-Response-to-CBO-Report-on-IMF-Budget-Scoring-January-
2017.pdf.
73 OMB, FY2025 Budget, Analytical Perspectives, ch. 4, pp. 40-41, https://www.whitehouse.gov/wp-content/uploads/
2024/03/ap_4_process_fy2025.pdf.
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Notes: FY2024 levels are estimated. FY2024-FY2029 levels reflect Administration proposals and projections.
See OMB budget documents for further caveats.
In the past two decades, federal responses to the attacks of September 11, 2001, the 2007-2009
financial crisis and ensuing Great Recession, and the COVID-19 pandemic have had the most
prominent effects of spending trends for most categories of federal domestic spending.
Nondefense Security and Nonsecurity Spending Diverge After 9/11
Domestic spending (i.e., nondefense spending excluding international affairs) increased after the
attacks of September 11, 2001, after having fallen for much of the 1990s. Most of that increase in
domestic spending occurred in areas related to nondefense security spending, as the federal
government overhauled airport security procedures, and then established the Department of
Homeland Security. Since 2001, several definitions of “security spending” have been used, most
recently in the 2011 Budget Control Act (BCA).74 Figure 7 shows funding trends divided by BCA
security and nonsecurity categories.
Figure 7. Security and Nonsecurity Funding Trends
Budget Authority as a Percentage of GDP, FY1977-FY2029

Source: CRS, based on OMB data from FY2025 budget submission.
Notes: BCA security and nonsecurity categories used, except that war funding, certain program integrity funds,
and emergency supplemental funding are included. The BCA security category included funding for the

74 The Obama Administration defined security spending in its FY2012 budget as funding for Department of Defense-
Military (subfunction 051); the Department of Energy’s National Nuclear Security Administration; International
Affairs (function 150, which includes State Department and related agencies); the Department of Homeland Security;
and the Department of Veterans Affairs. The BCA defined security similarly, except that it included all military
activities within the Department of Defense excluding war funding (i.e., defined by department rather than by
subfunction), and also included the Intelligence Community Management Account.
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link to page 27 link to page 27 Discretionary Budget Authority by Subfunction: An Overview

Departments of Defense, Homeland Security, Veterans Affairs, the National Nuclear Security Administration, the
intelligence community management account, and all budget accounts in the International Affairs budget function
(150). FY2024 levels are estimated. FY2024-FY2029 levels reflect Administration proposals and projections. See
OMB budget documents for further caveats.
The Recovery Act
After the financial crisis of 2007-2008 plunged the United States into the deepest economic
recession in decades, Congress passed the American Recovery and Reinvestment Act of 2009
(P.L. 111-5; ARRA), often known as the Recovery Act. ARRA includes support for state and
local governments, as well as tax cuts and rebates among other provisions.75 According to initial
CBO estimates, ARRA provisions were expected to total $787.2 billion in increased spending and
reduced taxes over the FY2009-FY2019 period or just over 5% of GDP in 2008, while a more
recent CBO estimate put the total at $814 billion.76 The effects of Recovery Act spending can be
seen in most of the figures shown below.
Since 2010, however, total nondefense discretionary spending has declined in real (i.e., inflation-
adjusted) terms.77 Nondefense discretionary spending as a share of the economy been has
declining more rapidly. Although economic growth has been on average slower than in some
previous decades, most components of federal spending have grown even more slowly. Funding
trends for most budget categories since FY2010 have been less volatile than in past decades.
Education, Training, Employment, and Social Services
Figure 8 shows spending trends for subfunctions within the Education, Training, Employment,
and Social Services budget function.
Federal support for employment and training programs generally declined as a share of GDP
between 1977 and 2023, the period depicted in Figure 8. The initial higher levels of funding
largely reflect public service employment efforts under the Comprehensive Employment and
Training Act (CETA; P.L. 93-203), which addressed high levels of unemployment following the
first oil shock of 1973. The Job Training Partnership Act of 1982 (P.L. 97-300), enacted during
the 1981-1982 recession, replaced CETA. After 1984, discretionary funding has declined as a
share of GDP. Under subsequent workforce development statutes, the Workforce Investment Act
of 1998 (P.L. 105-220) and the Workforce Innovation and Opportunity Act of 2014 (P.L. 113-
128), training and employment funding as a share of GDP continued to decline.78

75 For more information on the provisions of ARRA, see CRS Report R40537, American Recovery and Reinvestment
Act of 2009 (P.L. 111-5): Summary and Legislative History, by Clinton T. Brass et al.
76 For initial estimates, see U.S. Congressional Budget Office, Cost Estimate For the Conference Agreement For H.R.
1, February 13, 2009, available at http://cbo.gov/ftpdocs/99xx/doc9989/hr1conference.pdf. For a later assessment, see
CBO, Budget and Economic Outlook: An Update, August 2010, Box 1-2, available at http://www.cbo.gov/ftpdocs/
117xx/doc11705/08-18-Update.pdf.
77 See OMB, The Budget for FY2025, Historical Tables, Table 8.2, https://www.whitehouse.gov/wp-content/uploads/
2024/03/hist08z2_fy2025.xlsx.
78 See CRS Report R44252, The Workforce Innovation and Opportunity Act and the One-Stop Delivery System for
historical background.
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