The chart you give for discretionary spending goes from 1992 ($803) to 2012 ($1289). It shows an overall 60% increase in discretionary spending in only the last 20 years. Not exactly a trend of decline.
Moreover, if you look at the chart on page 30-31 of the PDF in the first link, you can see that non-defense + defense expenditures increased from $761 billion FY2012 dollars in 1977 to ~$1,166 billion in 2012 (adding back ~$123 billion for Iraq and Afghanistan that isn't reflected in that chart),[1] an increase of 53% over 35 years. In that time period, U.S. real GDP grew 152% and the U.S. population grew 43%.
To put it in concrete terms, each person in 1977 bore $3,460 of discretionary expenditures while someone in 2012 bore $3,700 of discretionary expenditures. But in 1977 it was 14.2% per-capita income, while in 2012 it was 8.6% of per-capita income.
[1] Note that 1977 was two years after the end of the Vietnam war.