The Fiscal Year 2002 budget request includes $679 billion for discretionary spending (the money the President and Congress must decide and act to spend each year), $343 billion of which will go to the Pentagon. The "National Defense" category of the federal budget for FY'02 accounts for over half (50.5 percent) of all discretionary spending.

The other category of federal spending is mandatory spending, money that is spent in compliance with existing laws which govern the particular program or function. Mandatory spending includes entitlements, money or benefits provided directly to individuals such as Social Security, Medicare, Medicaid, Food Stamps, and Federal Retirement. It also includes interest payments on the national debt.

Note: Discretionary funding for Social Security and Medicare covers various administrative costs, and is not related to benefits mandated by law.

Prepared by Christopher Hellman, Senior Analyst, July 17, 2001.
Source: Office of Management and Budget.

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