Federal Spending

Primary Purpose

Funds goods, programs, and services supporting the U.S. economy and people; pays interest on outstanding federal debt

FY2022 Total Spending

$6.3 trillion

Primary Funding Sources

Government tax collection and borrowing

Examples of Spending Areas

Social Security, Medicare, military equipment, highway maintenance, building construction, research, education, defense, veterans, state and local governments, SNAP

FY2022 Spending as % of GDP

25.1%

Main Categories of Spending

Mandatory spending, Discretionary spending, Interest on debt

FY2020 Total Spending (COVID-19 impact)

$7 trillion

FY2025 Preliminary Spending (as of June 2025)

$5.3 trillion

FY2024 Discretionary Spending as % of Federal Budget

26%

2017-09-30

2018-09-30

2020-09-30

2022-09-30

2025-01-01

2025-06-30

The federal government spends money on a variety of goods, programs, and services that support the economy and people of the United States. The federal government also spends money on the interest it has incurred on outstanding federal debt. Consequently, as the debt grows, the spending on interest expense also generally grows. [...] Federal government spending pays for everything from Social Security and Medicare to military equipment, highway maintenance, building construction, research, and education. This spending can be broken down into two primary categories: mandatory and discretionary. These purchases can also be classified by object class and budget functions. [...] Money for federal spending primarily comes from government tax collection and borrowing. In FY 0 government spending equated to roughly $0 out of every $10 of the goods produced and services provided in the United States. Federal Spending Overview

During FY2022, the federal government spent $6.3 trillion. Spending as% of GDP is 25.1%, almost 2 percentage points greater than the average over the past 50 years. Major categories of FY 2022 spending included: Medicare and Medicaid ($1.339T or 5.4% of GDP), Social Security ($1.2T or 4.8% of GDP), non-defense discretionary spending used to run federal Departments and Agencies ($910B or 3.6% of GDP), Defense Department ($751B or 3.0% of GDP), and net interest ($475B or 1.9% of GDP).( [...] During FY2017, the federal government spent $3.98 trillion, up $128 billion or 3.3% vs. FY2016 spending of $3.85 trillion. Major categories of FY 2017 spending included: Healthcare such as Medicare and Medicaid ($1,077B or 27% of spending), Social Security ($939B or 24%), non-defense discretionary spending used to run federal Departments and Agencies ($610B or 15%), Defense Department ($590B or 15%), and interest ($263B or 7%).( [...] During FY2018, the federal government spent $4.11 trillion, up $127 billion or 3.2% vs. FY2017 spending of $3.99 trillion. Spending increased for all major categories and was mainly driven by higher spending for Social Security, net interest on the debt, and defense. Spending as% GDP fell from 20.7% GDP to 20.3% GDP, equal to the 50-year average.(

The U.S. Treasury divides all federal spending into three groups: mandatory spending, discretionary spending and interest on debt. Together, mandatory and discretionary spending account for more than ninety percent of all federal spending, and pay for all of the government services and programs on which we rely. Interest payments on the national debt account for a much smaller amount than the other two categories. The pie chart shows federal spending in 2020 broken into these three categories. [...] Source: OMB, National Priorities Project ## All Federal Spending Finally, putting together discretionary spending, mandatory spending, and interest on the debt, you can see how the total federal budget is divided into different categories of spending. This pie chart shows the breakdown of $7 trillion in combined discretionary, mandatory, and interest spending budgeted by Congress in fiscal year 2020. This year looks different from previous years, thanks to spending on the COVID-19 response. [...] The total federal budget of the United States has recently run about $4 trillion or more each year. In 2020, the total federal budget ran much higher, at $7 trillion, because of all of the steps the government took to address the COVID-19 pandemic.

While finalized spending data is released annually, the federal government also shares preliminary spending data each month to show how much the federal government is spending in the current fiscal year. As of June 2025, FY 2025 spending reached $5.3 trillion, which is 6.3% higher than spending in June 2024. \ \ \ Keep exploring [...] The second type of federal spending is “discretionary.” This type of spending funds things like education and defense and is subject to congressional appropriations each year. Congress can increase or decrease discretionary spending each year depending on national priorities. Discretionary spending was 26% of the federal budget in FY 2024. [...] The federal government allocates funds across a wide range of programs and services. About 17.7% was spent on defense and veterans, and another 16.2% went to state and local governments. Other spending categories include debt interest payments and benefit programs such as SNAP. \ \ \ \ \ \ \ \ \