Appropriation and Budget Terms

Authorization: When Congress creates a program with specific purposes and guidelines, that is known as an "authorization." (Refer to Steps in Making a Bill A Law) The authorization bill recommends, but does not guarantee, that a certain amount of dollars, if any, will be provided by the Committee on Appropriations for the program.

Appropriation: The appropriation enables an agency or department to (1) make spending commitments and (2) spend money. Except in the case of entitlements, an appropriation determines how many dollars the federal government will spend on the program in a fiscal year.

Discretionary Spending: Discretionary spending means spending determined by the Appropriations Committee and Congress. Domestic discretionary spending includes defense spending. Most early childhood and education programs are discretionary spending programs.

Entitlement: An entitlement program requires the government to pay benefits to anyone who is eligible under the program guidelines. Social Security, Medicare, School Lunch program, and the student loan program are examples of entitlement programs.

Fiscal Year: The fiscal year for the federal government begins on October 1 and ends on September 30.

Mandatory Spending: Entitlement programs, and other programs that Congress designates as mandatory spending programs, do not rely on the appropriations process.