Discretionary Spending
Multiple Budget Functions
Reduce Selected Nondefense Discretionary Spending
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
Billions of dollars | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2025– | 2025– | |
Change in spending | |||||||||||||
Spending authority | 0 | -41 | -43 | -43 | -44 | -45 | -46 | -47 | -48 | -49 | -171 | -406 | |
Outlays | 0 | -13 | -30 | -36 | -39 | -41 | -43 | -44 | -46 | -47 | -118 | -339 | |
This option would take effect in October 2025.
Spending authority consists of obligation limitations for transportation programs and budget authority for education programs.
Nondefense discretionary spending is controlled by lawmakers through appropriation acts, which specify how much money can be obligated for certain government programs in specific years. Those acts fund a wide array of federal activities that provide direct benefits to individuals, give grants to state and local governments and private entities, pay for federal employees' salaries, and fund contracts for goods and services provided by the private sector. Nondefense discretionary spending also includes outlays for certain highway and airport infrastructure and public transit programs whose funding is considered mandatory. The outlays for those programs are considered discretionary because annual appropriation acts limit the obligations that can be made from the mandatory funding.
There are many possible ways to reduce nondefense discretionary spending. Under this option, the reduction would be achieved by decreasing by one-third funding for two of the largest areas of nondefense discretionary spending: grants to state and local governments for transportation programs and for education programs. (For transportation programs, obligation limitations would be reduced; for education programs, budget authority would be reduced.) For transportation programs, highway and transit grants would be most affected by the reductions. For education programs, grants that provide funding for the education of children from low-income households and of children with disabilities would be substantially affected by the cuts.