The correct explanation of how mandatory spending differs from discretionary spending is:
Mandatory spending is required by law to be paid while discretionary spending is based on annual appropriations, set by the House and Senate Appropriations Committees.
This distinction highlights that mandatory spending includes expenditures that must be fulfilled based on existing laws (such as Social Security and Medicare), while discretionary spending is allocated through the budgetary process each year and can vary (like funding for education or defense).