Learn how Congress directs government spending – GovTrack.us

Continuing our mailbag, this week we have a question that is perfectly timed for the potential government shutdown looming at the end of this month:  Russ, Jack, and bear6 asked us to explain how the government spending bills that we’ve talked about this year all relate to each other.

To explain it, we have to start a few steps back. Every dollar that the federal government spends is authorized by a law that starts as a bill in Congress — the Constitution requires that. There are two broad ways that Congress writes those bills:

The first are laws that direct payments to individuals or entities based on a benefit formula, such as entitlements like Social Security and Medicare and the federal portion of Medicaid, TANF, SSI, unemployment insurance, and SNAP. This is called, in jargon, “mandatory spending.” Mandatory spending makes up about 60% of federal spending, and these laws typically remain in effect until they are repealed. The Republican signature bill formally named the One Big Beautiful Bill, projected to add $4.1 trillion to the deficit over 10 years, affected this type of spending (and taxes).

The federal government also runs on fiscal years from October 1 to September 30, and about 30% of federal spending is tied to fiscal years. Since this type of funding lapses at the end of a fiscal year, or sometimes sooner, Congress must re-enact the funding or agencies funded this way must stop operating, which is informally called a shutdown. The recent bill that defunded foreign aid (USAID) and public broadcasting (CPB) was a “rescissions bill” which affected this so-called “discretionary” spending.

Let’s go deeper.

Discretionary Spending (Appropriations & Authorizations Bills)

In any given year, you may be hearing about the appropriations and authorizations bills that direct “discretionary” spending for the next fiscal year. It’s currently September 2025, so Congress is now working on fiscal year 2026, abbreviated FY26, which starts on October 1.

“Appropriations” are part of how Congress directs discretionary spending. For example, Congress might “appropriate” $50 million to a hypothetical Department of Cats and Dogs’s Cuddling Program for FY26.

Appropriations are provisions in law passed by Congress and signed by the President (or, very rarely, by overriding the President’s veto) that direct federal dollars to be spent by an agency for a broad purpose. Appropriations are written by the powerful House and Senate Appropriations Committees based on their spending priorities for the whole of the government.

If there are no appropriations bills for a fiscal year, that’s when a government shutdown occurs because it is also unlawful for agencies to spend money that they have not been appropriated.

The most recent appropriations law is H.R. 1968: Full-Year Continuing Appropriations and Extensions Act, 2025, signed by President Trump on March 15. This one bill consolidated the discretionary spending for the whole federal government, but often Congress divides the agencies up among 12 separate bills.

An appropriation is not enough for an agency to spend the funds. Funds can only be spent with both an appropriation and an authorization. An authorization is also a provision in law that looks a lot like an appropriation. The difference is that authorizations are made in bills that come out of the committees that have oversight jurisdiction over the parts of the government spending the funds. This ensures that the legislators most familiar with the government programs have a separate say in how those programs are funded.

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