	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 Trump's FY2018 budget submission. This report provides a graphical overview of historical trends in discretionary budget authority from FY1977 through FY2016, estimates for FY2017 spending, and the levels consistent with the President's proposals for FY2018 through FY2022. 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. Discretionary spending is provided and controlled through appropriations acts. These acts fund 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. For some program areas, such as surface transportation, the division of expenditures into discretionary and mandatory categories can be complex. Discretionary spending in this report is measured in terms of BA. Budget authority for an agency has been compared to having funds in a checking account. For example, rapid growth in national defense and other security spending in the past decade has played an important role in fiscal discussions. 112-25 ). Funding for FY2017 was first provided by a continuing resolution ( P.L. 114-223 ) enacted on September 29, 2016, which provided discretionary funding through December 9, 2016, and included a 0.496% across-the-board reduction relative to the previous fiscal year's levels for most federal programs. A second continuing resolution ( P.L. 114-254 ) was enacted on December 10, 2016, that extended funding through April 28, 2017. A one-week stopgap funding measure (P.L. 115-30) was enacted on April 28, 2017. An omnibus appropriations measure (P.L. 115-31) enacted on May 5, 2017, provided funding for the remainder of FY2017. Overview of Recent Discretionary Spending

Spending caps and associated budget enforcement mechanisms, along with modifications of BCA provisions, framed policy discussions during recent budget cycles. Fiscal policy became a central concern of Congress in the wake of the 2007-2009 Great Recession. The Budget Control Act of 2011

The Budget Control Act of 2011 ( P.L. When that committee did not report a plan by a November 2011 deadline, backup budget enforcement measures were triggered, including a January 2013 sequester (cancellation of budgetary resources), and a revised set of discretionary caps on funding for defense (defined as the national defense budget function 050) and non-defense programs (all other) for FY2013-FY2021. Congress Has 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 to avoid dislocations of federal operations. 59 ; P.L. The Bipartisan Budget Act of 2015 (BBA2015; P.L. For FY2018, the Trump Administration proposed raising the BCA cap on defense (budget function 050) spending by $54 billion and lowering the BCA cap on non-defense by an equal amount. Background on Functional Categories

Functional categories 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. A flat line on such graphs indicates that spending in that category is increasing at the same rate as overall economic growth. Cold War, Peace Dividend, and the Global War on Terror

The allocation of discretionary spending between defense and non-defense programs is one reflection of changing federal priorities over time. Administrative costs for those programs, which account for a small portion of those costs, are generally funded by discretionary spending. Social Security benefits are generally funded by mandatory spending. Since then, the level of funding, measured as a percentage of GDP, has decreased. In other years, rental revenues exceeded building expenses, resulting in negative budget authority.
This report provides a graphical overview of historical trends in discretionary budget authority (BA) from FY1977 through FY2016, preliminary estimates for FY2017 spending, and the levels reflecting the President's proposals for FY2018 through FY2022 using data from the FY2018 budget submission released on May 23, 2017. This report, by illustrating trends in broad budgetary categories, provides a starting point for discussions about fiscal priorities. Other CRS products analyze spending trends in specific functional areas. 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 many of the activities commonly associated with such federal government functions 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 figures presented in this report—generally funds the benefits provided through those programs. For some federal programs, such as surface transportation, the division of funding into discretionary and mandatory categories can be complex.
Spending caps and budget enforcement mechanisms established in the Budget Control Act of 2011 (P.L. 112-25; BCA) strongly affected recent budgets. The BCA set discretionary spending caps on defense (budget function 050) and non-defense funding and created a formula to lower those caps to achieve a portion of spending cuts called for in the BCA. Congress modified BCA caps several times, first for FY2013 as part of the fiscal cliff deal at the start of January 2013 (American Taxpayer Relief Act of 2012; P.L. 112-240), then through the Bipartisan Budget Act of 2013 (BBA2013; P.L. 113-67) and the Bipartisan Budget Act of 2015 (P.L. 114-74), thus avoiding decreases in levels of discretionary funding. The Trump Administration has proposed changes in BCA caps to allow higher defense spending and to constrain non-defense spending.
A first continuing resolution (P.L. 114-223) was enacted on September 29, 2016, which provides discretionary funding through December 9, 2016. A second continuing resolution (P.L. 114-254), enacted on December 10, 2016, extended funding through April 28, 2017. A stopgap funding measure (P.L. 115-30) was enacted on April 28, 2017. An omnibus appropriations measure (P.L. 115-31) enacted on May 5, 2017, provided funding for the remainder of FY2017.
As the 115th Congress begins consideration of the FY2018 budget, past spending trends may help frame policy discussions. For example, rapid growth in national defense and other security spending during the past decade, along with the fiscal consequences and responses to the 2007-2009 Great Recession, has played an important role in fiscal discussions. Since FY2010, base defense discretionary spending has essentially been held flat and non-defense discretionary spending has been reduced significantly. The base defense budget excludes war funding (Overseas Contingency Operations/Global War on Terror). While war funding levels are well below those of the last decade, they still represent significant commitments of federal resources.