When the share of federal tax revenues allocated to discretionary spending is below zero, the government borrows more than the amount of its discretionary spending. During these intervals, the government borrows funds to help pay some of its non-controllable expenditures on entitlements as well as to cover its discretionary spending.

a. What would be true of entitlement spending if the percentage of taxes allocated to discretionary spending rose to 100 percent and the federal budget was balanced? (Hint: Under a balanced budget, tax revenues equal the sum of discretionary and nondiscretionary expenditures.)

b. How would entitlement spending be funded if tax revenues just covered discretionary spending and there was a government budget deficit?