Discretionary spending by the federal government fell $77 billion, or 12 percent, between 1990 and 1998, according to a new study by Congress' Joint Economic Committee.
And in inflation-adjusted 1998 dollars, discretionary outlays dropped even more dramatically: from $630 billion in 1990 to $553 billion this year. Such spending is expected to fall further to $515 billion in 2002, according to the report, entitled "Trends in Congressional Appropriations: Fiscal Restraint in the 1990s." In actual dollars, discretionary spending in 2002 will be down more than $115 billion, or 18 percent, from the 1990 level, the report predicted.
Discretionary spending as a share of gross domestic product has fallen from 8.8 percent in 1990 to 6.6 percent this year.
Discretionary spending, which now comprises one-third of all federal spending, is the only portion of the budget that Congress revisits and directly sets each year. It includes spending each year for such programs as roads, weapons systems and education programs. Mandatory spending, which comprises the other two-thirds of federal spending, is used for programs such as Social Security where spending increases are prescribed by existing law.
Discretionary spending falls into one of three categories: defense, international or domestic. The end of the Cold War allowed for decreases in defense and international spending, according to the report. In contrast, domestic discretionary spending enjoyed "unrestrained real growth," and reached an all-time high in 1995 at $272 billion.
The report argued, however, that the 104th Congress, which it called the most "fiscally restrained session" of the 1990s, reversed the domestic spending trend. Domestic outlays in the 104th Congress were $10.9 billion below what was spent in the 103rd.
The report's author, Economist Dan Miller, advised legislators that "all types of discretionary spending need to be kept in check in order to preserve the savings achieved thus far."
"If Congress desires to avoid a return to deficit spending, then fiscal restraint must be applied to all types of spending," he said.
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