Outlays
Money the federal government actually pays out in a period, as distinct from what it is authorised to spend.
Budget authority is permission to obligate funds. An obligation is a binding commitment — a signed contract, a grant award. An outlay is the cash leaving the Treasury.
The three can fall in different years, which is why a program’s appropriation and its outlays rarely match in any single year, and why the deficit is computed from outlays rather than from what was appropriated.
A worked example
Congress appropriates $10 billion in budget authority for a construction programme in year one. The agency signs contracts worth $8 billion that year — obligations. Builders bill as work is done, so the cash actually leaves Treasury over four years: $2 billion in year one, $3 billion in year two, and so on. Those are the outlays. The year-one deficit reflects only the $2 billion, not the $10 billion that was headlined.
Some programmes spend out fast — salaries and benefits are outlaid almost as soon as they are obligated. Infrastructure and procurement spend out over years.
How to read it in coverage
“$X billion for Y” in a bill’s headline is budget authority. What hits the deficit each year is the outlay, which CBO estimates with a spend-out rate. This is why a bill can be “paid for” over ten years while raising the deficit in year one, and why cancelling unspent authority — a “rescission” — saves less than its face value if much of it was never going to be outlaid soon anyway.
Budget documents distinguish budget authority from outlays. A bill can create authority in one year that turns into outlays over several.