An Interactive Tool for Projecting Discretionary Spending, 2026 to 2036

Budget authority. The authority provided by law to allow an agency to incur financial obligations that result in outlays. By law, CBO's baseline projections of discretionary budget authority generally reflect the assumption that such authority grows over the projection period—typically the next 10 years—from the amount appropriated for the current year at the rate of inflation. By contrast, CBO's cost estimates for legislation that affects spending subject to appropriation are based on amounts explicitly stated in the legislation or estimated by CBO.

The interactive model allows users to choose whether to enter budget authority for each year through the end of the projection period or only for the current year, in which case the model extrapolates future years' budget authority by adjusting the current-year amount for inflation on the basis of the wage and nonwage shares shown in the model.

Account type. Discretionary spending can be grouped into broad, informal categories, including spending for salaries and expenses, spending for grants, and spending for construction. Appropriations that fall into the same category will generally have similar allocations between wages and nonwage purposes and similar spendout rates.

Inflator weight. As specified by section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985, CBO must use two inflators when developing most of its projections of discretionary budget authority:

• The employment cost index (ECI) for wages and salaries of workers in private industry is used to project discretionary funding related to compensation of federal personnel (the portion referred to as the wage share in the model).
• The chain-weighted gross domestic product (GDP) price index is used to project all other types of discretionary funding (the nonwage share in the model).

The inflation rates used in the model are shown in the Addendum below the table. When projecting budget authority for an account, CBO calculates a weighted-average rate of inflation for the account by assigning weights to the rates of inflation in the ECI and the GDP price index. The weights are equal to the shares of the account's budget authority that are allocated to wages and nonwage purposes.

Default weights are assigned in the model for each account type, but users can adjust those weights. When a user sets the amount of budget authority for only the current year, the weighted-average rate of inflation is applied to that current-year amount to calculate the amounts for future years.

Spendout rates. The rates at which federal budget authority is converted into outlays—that is, the percentage of a given year's funding that is actually disbursed in the current year and in future years. For most discretionary spending, CBO projects outlays by applying spendout rates to budget authority.

How quickly budget authority translates to outlays varies significantly by the type of spending. Analysts usually determine spendout rates for each account on the basis of historical patterns. For example, outlays for an agency's salaries and administrative expenses generally occur quickly; most of the budget authority is disbursed in the year for which funds are appropriated. By contrast, budget authority for construction of infrastructure or weapon systems may be disbursed over several years. In many cases, some portion of budget authority may be unobligated at the end of the period in which agencies may legally obligate funds; that unobligated budget authority typically reverts to the Treasury and thus does not result in outlays.

By default, each account type in the model has illustrative spendout rates assigned to it; those rates are based not on any particular account but on broad trends in spendout rates for similar functions in CBO's February 2026 baseline budget projections. Alternatively, users can enter their own rates; the sum of those rates cannot exceed 100 percent.

Outlays from budget authority provided before 2026. Because not all budget authority is spent in the year it is provided, some outlays stem from budget authority provided in past years. Such outlays are typically included in baseline projections but not in cost estimates, which focus on the potential effects of new authorizations. Analysts calculate outlays from the unspent balances of past years' budget authority, if applicable, using detailed information from the Treasury, including amounts of unspent budget authority in each account at the beginning of a fiscal year and the extent to which those amounts are obligated.

The interactive model allows users to enter outlays—if any—that stem from budget authority provided before 2026.

Inflation rates. The nonwage rates used in the model are the projected rates for the GDP price index in CBO's February 2026 economic forecast, and the wage rates are the projected rates for the ECI from that forecast.