This report presents figures showing trends in discretionary budget authority as a percentage of gross domestic product (GDP) by subfunction within each of 17 budget function categories, using data from President Trump's FY2018 budget submission. This report provides a graphical overview of historical trends in discretionary budget authority from FY1977 through FY2016, estimates for FY2017 spending, and the levels consistent with the President's proposals for FY2018 through FY2022. Spending in this report is shown as a percentage of GDP to control for the effects of inflation, population growth, and growth in per capita income. Past spending trends may prove useful in framing policy discussions as the 115 th Congress prepares to confront a new set of challenges as it considers a federal budget for FY2018. Discretionary spending is provided and controlled through appropriations acts. These acts fund many of the activities commonly associated with federal government functions, such as running executive branch agencies, congressional offices and agencies, and international operations of the government. Thus, the figures showing trends in discretionary budget authority (BA) presented below do not reflect the much larger expenditures on program benefits supported by mandatory spending. For some program areas, such as surface transportation, the division of expenditures into discretionary and mandatory categories can be complex. Discretionary spending in this report is measured in terms of BA. Budget authority for an agency has been compared to having funds in a checking account. Funds are available, subject to congressional restrictions, and can be used to enter into obligations such as contracts or hiring personnel. Outlays occur when the U.S. Treasury disburses funds to honor those obligations. Thus, outlays follow BA with a lag. For personnel costs, lags are generally short and outlays mostly occur in the same year that BA is provided. For large and complex projects, outlays may be spread over several years. Nearly all budget authority eventually results in outlays, although some major federal initiatives were later curtailed or cancelled, resulting in the rescission of BA. For instance, most funding for the Carter Administration's synthetic fuels program and the Obama Administration's plans for high-speed rail did not result in outlays. In some cases, changes in funding levels recorded in historical budget data reflect changes in budgetary concepts or the budgetary treatment of some types of spending. For example, the Federal Credit Reform Act of 1990 ( P.L. 101-508 ) changed the budgetary treatment of federal loan and other credit programs starting in FY1992. Discussions about the appropriate levels of spending for various policy objectives of the federal government have played an important role in congressional deliberations over funding measures in the last several years. For example, rapid growth in national defense and other security spending in the past decade has played an important role in fiscal discussions. In particular, concerns about the trajectory of fiscal policy led to the reestablishment of statutory caps on discretionary funding in the 2011 Budget Control Act ( P.L. 112-25 ). Funding for FY2017 was first provided by a continuing resolution ( P.L. 114-223 ) enacted on September 29, 2016, which provided discretionary funding through December 9, 2016, and included a 0.496% across-the-board reduction relative to the previous fiscal year's levels for most federal programs. A second continuing resolution ( P.L. 114-254 ) was enacted on December 10, 2016, that extended funding through April 28, 2017. A one-week stopgap funding measure (P.L. 115-30) was enacted on April 28, 2017. An omnibus appropriations measure (P.L. 115-31) enacted on May 5, 2017, provided funding for the remainder of FY2017. Spending caps and associated budget enforcement mechanisms, along with modifications of BCA provisions, framed policy discussions during recent budget cycles. Fiscal policy became a central concern of Congress in the wake of the 2007-2009 Great Recession. Government deficits and debt typically rise after serious financial crises and economic downturns for two main reasons. First, tax revenues typically drop during economic downturns. Second, as recession reduces incomes for many households, spending increases due to the effect of "automatic stabilizers"—that is, programs that provide benefits linked to income levels or unemployment. In addition, Congress passed the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ), which combined a package of increased federal funding on education, energy, and other areas; greater support for state and local governments; and tax reductions. The Budget Control Act of 2011 ( P.L. 112-25 ; BCA) was enacted in August 2011 in part due to concerns over rising deficits and debt levels. The BCA reinstated statutory caps on discretionary spending, similar to those that had lapsed in 2002, and set up budget enforcement mechanisms designed to achieve $2.1 trillion in savings over the period FY2012-FY2021. Imposition of an initial set of discretionary caps was estimated to save about $900 billion over 10 years. A bipartisan Joint Select Committee on Deficit Reduction, popularly known as the "Super Committee," was charged with developing a plan to reduce deficits by $1.2 trillion or more. When that committee did not report a plan by a November 2011 deadline, backup budget enforcement measures were triggered, including a January 2013 sequester (cancellation of budgetary resources), and a revised set of discretionary caps on funding for defense (defined as the national defense budget function 050) and non-defense programs (all other) for FY2013-FY2021. Those revised caps were to be lowered in each year by an amount calculated by the Office of Management and Budget (OMB) according to a formula designed to achieve a pro-rated share of the $1.2 trillion that a Joint Select Committee plan did not achieve. An annual sequester of non-exempt mandatory spending accounts also contributes to those savings. The spending trajectory implied by those backup enforcement measures implied discretionary base defense spending would revert to a level slightly above its FY2007 level in real dollar terms (i.e., adjusting for inflation but not for growth in population or the economy), while non-defense discretionary spending would revert to a level near its 2003 level. Discretionary spending as a share of GDP, if BCA caps remain in place, would decline to levels well below those seen in recent decades. Congressional Budget Office (CBO) current-law baseline projections suggest that discretionary spending would account for 5.3% of GDP in FY2026, two percentage points below its level in FY2007 (7.3%), just before the start of the Great Recession. The stringency of BCA discretionary spending caps and backup enforcement measures prompted Congress and the President to adjust those limits to avoid dislocations of federal operations. The Bipartisan Budget Act (BBA; H.J.Res. 59 ; P.L. 113-67 ), enacted in December 2013, modified BCA limits for FY2014 and FY2015. The Bipartisan Budget Act of 2015 (BBA2015; P.L. 114-74 ) raised FY2016 and FY2017 cap levels on both categories by $25 billion and FY2017 cap levels by $15 billion. BCA caps for FY2018 through FY2021, however, have not been changed. Absent new legislative modifications, those caps will constrain budgetary decisions for FY2018. BCA caps are adjusted to accommodate certain types of spending, such as war spending, emergency appropriations, disaster relief, and program integrity initiatives. In particular, war-designated funding has been seen as a "relief valve" that has taken budgetary pressure off priority military and international programs. Some Members of Congress have argued that war spending cap adjustments have weakened fiscal discipline. In its budget submission for FY2017, the Obama Administration had proposed raising BCA caps to allow more spending for non-defense and defense priorities. For FY2018, the Trump Administration proposed raising the BCA cap on defense (budget function 050) spending by $54 billion and lowering the BCA cap on non-defense by an equal amount. The Administration also proposed slightly smaller increases in the BCA cap on defense and increasingly large reductions in the non-defense cap for future years. Figures in this report are based on the Office of Management and Budget (OMB) Public Budget Database accompanying the FY2018 budget release. Table 5.1 in the Historical Tables volume of the FY2018 budget reports budget authority by function and subfunction, but does not provide a breakdown by discretionary and mandatory subcomponents. OMB's public budget data generally do not reflect budgetary categories used in the congressional budget process such as emergency-designated funding, the appropriations subcommittee responsible for an account, or distinctions between war and base funding. OMB maintains more detailed budget data for its internal work. Budget data in OMB documents may differ from other budget data for various reasons, although differences in historical data are typically small. For example, appropriations budget documents often reflect scorekeeping adjustments. Budget data issued at a later date may include revisions. In some cases, detailed appropriations data may differ from OMB data, which sometimes do not reflect certain relatively small zero-balance transfers among funds. Differences may also reflect technical differences or different interpretations of federal budget concepts. Within the federal budget concepts, certain inflows, such as offsetting receipts, offsetting collections, some user fees, and "profits" from federal loan programs, are treated as negative budget authority. Provisions in appropriations acts that affect mandatory spending programs, known as CHIMPs (changes in mandatory programs) can be counted as negative discretionary spending according to federal budgetary scorekeeping guidelines. For example, a sharp downward spike in proposed spending for subfunction 754 (criminal justice assistance), shown in Figure 17 , reflects a CHIMP affecting the Crime Victims Fund. That CHIMP, however, has had little effect on programmatic spending levels.