Federal spending is divided into three broad categories: discretionary spending, mandatory spending, and net interest. Those categories are procedural, determined in the way that Congress provides spending authority. The Budget Enforcement Act of 1990 (BEA; P.L. 101-508) provides a statutory definition for those terms, which are therefore referred to as BEA categories. To a large extent, however, the type of spending differs across those categories.Discretionary spending, by and large, funds operations of federal agencies. Discretionary spending is provided and controlled through appropriations acts. Net interest spending is the government’s interest payments on debt held by the public, offset by interest income that the government receives. Mandatory spending is composed of budget outlays controlled by laws other than appropriations acts, including federal spending on entitlement programs. In recent decades, mandatory spending has been the largest component of the federal budget. Major entitlement programs such as Social Security, Medicare, and Medicaid make up the bulk of mandatory spending. Other mandatory spending funds various income-support programs, including Supplemental Security Income (SSI), unemployment insurance, and the Supplemental Nutrition Assistance Program (SNAP; formerly Food Stamps), as well as federal employee and military retirement and some veterans’ benefits. In general, discretionary funding supports veteran health services and mandatory funding supports pensions, housing, and other benefits.Most mandatory spending is administered by the Social Security Administration and the U.S. Department of Health and Human Services (DHHS). Mandatory spending administered by the Department of Labor and the Department of Energy typically rises during economic downturns. Mandatory spending tends to rise during economic downturns when the incomes of many households fall. That increased spending can help stabilize aggregate demand in the economy, thus promoting macroeconomic stability.