law so therefore it is mandatory. Discretionary spending Discretionary spending is government spending that is implemented through a supply bill or more commonly known as an appropriation bill. These spending levels are then set by the congress on a yearly basis and it funds the management of all the government agencies and activities. This type of spending forms a part of fiscal policy and is a contrast to the programs that are mandatory where people can be entitled to benefits if they are eligible. Interest on debt Interest on debt is the cost incurred by an entity for borrowed funds. This is a non-operating expense shown on the income statement and it represents the interest payable on any borrowings – bonds, loans, convertible debt or lines of credit. Development of the federal budget The largest federal budgets are in the United States and the development of their federal budgets is made up of a very significant and detailed nine-step plan that the United States Congress use to create the plan. The process starts a full year ahead before the fiscal year begins. The fiscal year in the United States starts on the 1st of October and runs through until September 30th year this means that the budget for 2018 began in the fall of 2016. The federal budgets in the United States are like Germany and Australian federal governments as they normally run a deficit and this is down to the economies engaging in expansionary policy. in the United States, it is the president's role to submit the budget the proposal to the United States Congress. The president would then ask the federal agencies to submit their budgets requests directly to him. The president then submits the budget and requests to congress where it is used as a base guideline for its own budget resolution. This is then used to create appropriation or supply bills and these bills then allocate the available funds to the different fields of federal agencies. 2019 United States Federal Budget In the fiscal year 2019, the United States federal budget will be 4.407 trillion in total spend. The government estimates that it will receive approximately 3.422 trillion in revenue in turn leaving a deficit of 985 billion for October 2018 to September 2019. Spending is in the three main categories: Mandatory (2.739 trillion), discretionary (1.305 trillion) and interest on the debt being (363 billion). See