Question

An example of a discretionary item in the federal budget is

Answer 1

Answer: See explanation below for answer.

Explanation: In micro-economics, a discretionary expense refers to a cost that a business or household can actually do without, if necessary. These expenses are often wants rather than needs. Case in point, a business may allow employees to charge certain meal and entertainment costs to the company.

In macro-economics, discretionary spending is the type of government spending that is implemented through an appropriations bill. What this means is that the spending is an optional part of fiscal policy, which is quite the opposite of entitlement programs for which require mandatory funding and are determined by the number of qualified recipients.

Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation.

Discretionary spending must always be deliberated upon by Congress through the annual appropriations process each year.