Timothy's answer is right. The problem is that you need to have a noun (a direct object) after the word "spend." You can't just "spend." You have to spend something (money, time, effort, etc.). The first sentence is good English. We would need more context in order to know what "it" means ("our vacation money," "the two hundred dollars you mentioned," "your inheritance," etc.) The second question is not good English. You need a noun or pronoun after "spending." It doesn't makes sense to "spend" without a direct object. The two sentences do have the same meaning. The second one, however, is grammatically incorrect.

Different? Yes. Your second question is the right one. 2. What does ”it“ refer to in first sentence？ If you know what "it: is, then the first sentence makes sense. If there is no "it" then the first sentence does not make sense. . What are we spending on? means what in general, are we spending money on? No "it". . Contrast with We have an extra $80 Million this year. What are we spending it on?

Complete difference of experience: Conclusion: All the others are American? My English is New Zealand, close to British. . I mention modern usage, particularly in management. I presume somewhere in there is the origin of the difference. It is a continuing problem, people from one area down-voting answers that are for them just plain wrong, for all the best intentions, but actually just represent a difference in region or application area. . I'd take it from the downvote that they are adamant and never encountered the use I suggest for your second sentence.

Thanks Timothy. So those are same meaning,just the second one is incomplete and grammatical error comparing with the first one,NOT another meaning,right?

(1) is good English. 'it' is a pronoun standing for the money which is spent. You might see this sentence after a first sentence like "we spent $2000 last month." (2) is understandable but not good English.