Which statement correctly distinguishes mandatory (entitlement) spending from discretionary spending?

• A. Discretionary spending is decided annually through appropriation.
• B. Discretionary spending grows automatically with program enrollment.
• C. Discretionary spending is legally required and cannot be altered.
• D. Mandatory spending is legally required and grows with eligibility.

Answer: (D)

The key idea is the difference in how these two parts of the budget are determined. Mandatory spending is built into law: the amounts are set by eligibility rules and benefit formulas, so the government is legally required to pay those benefits. Because the program flows with who qualifies, the total grows automatically as the pool of eligible people expands or as benefits are adjusted by statute. Discretionary spending, by contrast, is not guaranteed year to year; it’s decided anew each fiscal year through the appropriations process by Congress and the President, and it can be changed, increased, or decreased.

That statement—mandatory spending is legally required and grows with eligibility—best captures the defining feature: a legal obligation coupled with automatic growth tied to the number of people who qualify. The other options describe aspects of discretionary spending or contain incorrect implications about mandatory spending, so they don’t provide the same precise distinction.