Mandatory spending follows eligibility rules and other permanent law unless Congress changes those laws. Discretionary spending is generally set through annual appropriations. Outlays are payments made by the Treasury; budget authority and obligations occur at different stages. A deficit is the annual excess of outlays over revenues, while the national debt reflects accumulated federal borrowing and related changes over time.

Reconciliation is a special process for legislation that changes spending, revenue, or the debt limit to meet budget instructions. Its Senate treatment differs from ordinary legislation, but reconciliation is not a general shortcut for provisions with merely incidental budget effects. The Office of Management and Budget assists the president; the Congressional Budget Office supplies Congress with nonpartisan budget analysis.

For a test item, identify the document, actor, and stage. A proposal from the president is not an appropriation; authorization is not necessarily funding; an obligation is not yet an outlay; and a budget resolution is not presented for presidential signature. When reading budget data, compare like units and years, distinguish nominal from inflation-adjusted amounts, and use the stated denominator.

Video lesson: Congressional Decisions: Crash Course Government and Politics #10