Certified Defense Financial Manager (CDFM) Exam 1 Practice

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Spending that is controlled by laws other than appropriations acts (including entitlement programs and the food stamp program) is known as?

Direct (Mandatory) Spending Mandatory Spending Discretionary Spending Revenue

Correct Answer:

Mandatory Spending

Explanation:

Spending controlled by laws other than appropriations acts is spending that is mandated by statute rather than decided each year through the appropriations process. Entitlement programs like Social Security, Medicare, Medicaid, and SNAP operate under formulas and eligibility rules set by law, so benefits are paid automatically as those laws dictate. That’s why this is called mandatory spending—the spending happens by statute, not by annual funding bills. Discretionary spending, in contrast, is determined through yearly appropriations acts, and revenue is the government’s income, not a type of spending. While some materials may use the term Direct (Mandatory) Spending, the standard label here is mandatory spending.

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