Mandatory Spending

Mandatory Spending (German: dutiful expenditure) refers to a category of government spending, which has issued on the basis of existing laws for particular programs.

In the United States, mandatory spending refers to budget authority and the resulting outlays, which are laid down in laws other than annual appropriation Bills. In fiscal year 2011, mandatory spending accounted for approximately 60 % of the federal budget of the United States. The two biggest items that fall under Mandatory Spending, programs for health insurance ( Medicare, Medicaid, and CHIP) and social insurance, which together accounted for 43 % of the federal budget in fiscal year 2012 are. However, there are also parts of the budget of various ministries of Mandatory Spending, such as the Ministry of Agriculture, Ministry of Defence, the Ministry of Education and Ministry of the war veterans.

History

Before the Great Depression, almost all federal spending in the United States was spending the category Discretionary Spending. Since the adoption of the Social Security Act in 1935, however, a growing share of the federal budget of Mandatory Spending was claimed. In 1947, the Social Security accounted for less than five percent of the federal budget and less than 0.5 % of gross domestic product. In 1962, 13% of the federal budget and half of Mandatory Spending was spent on social security. 1965 was decided by the Congress Medicare, a government program to guarantee senior citizens a health insurance. In the following 10 years, the proportion of Mandatory Spending on federal budget by 30 % rose to more than 50%. Although the increase has been reduced since then, Mandatory Spending still made ​​in fiscal year 2012 from approximately 60 % of the federal budget.

In fiscal year 2011, the Social Security, Medicare and Medicaid made ​​a total of 70 % of the largest single expenditure of Mandatory Spending. Various income security programs accounted for another 18% of Mandatory Spending, these were about SNAP, unemployment and programs to reward replenishment and the tax allowance for children.