Such so-called discretionary spending has fallen from two-thirds of total outlays in the 1960s to one-third last year, with defense outlays accounting for almost all of the decline. The increase in the share of expenditures that is more or less on automatic pilot has complicated the task of making fiscal policy by effectively necessitating an extension of the budget horizon.
The Presidents’ budgets through the 1960s and into the 1970s mainly provided information for the upcoming fiscal year. The legislation in 1974 that established a new budget process and created the Congressional Budget Office required that organization to provide five-year budget projections. And by the mid-1990s, CBO’s projection horizon had been pushed out to ten years.