Mandatory Spending by a Broke Nation

Federal spending has two sides: mandatory spending and discretionary spending.  The biggest programs on the mandatory side are Social Security and Medicare.  These two programs are called "mandatory" because they are not subject to the budget process; spending is said to be "on autopilot."  Until recently, the two programs were entirely funded with the payroll tax.  But with the advent of the Great Recession and the retirement of the Baby Boom generation, the programs are also getting revenue from the general fund, as the revenue from the payroll tax is insufficient to pay benefits. The discretionary side of the federal spending consists of those items that must be included in budgets and appropriations -- everything from Defense to Solyndra. The federal budget also has two sides: the off-budget side and the on-budget side.  The biggest mandatory programs, Social Security and Medicare, are off-budget.  Each year from 1976 through 1984, Congress ran an...(Read Full Article)

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