Donald Trump is determined to shrink the federal government, arguing that there is too much inefficiency and waste.
But how much the U.S. federal government spends?
About $6.8 trillion in fiscal year (FY) 2024. This averages about $19,900 per person in the US. The amount the government can spend depends on the amount of revenue it collects (e.g., through taxes, customs duties, and other sources). If it has to spend more revenue than it brings in, it borrows the funds, creating debt.
Federal spending increased by 6.7% from FY 2023 to FY 2024. 2024’s spending was 23.8% higher than FY 2019, prior to the COVID-19 pandemic.
From 1980 to 2024, spending increased 2.9 times. The US population also increased during this time, by about 1.5 times. Since spending grew more than the population, the government is now spending more per person, on average.
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.
Social Security and Medicare are two of the largest individual programs funded by the federal government. In FY 2024, 21.5% of the federal budget went to Social Security and 12.9% went to Medicare. These programs are part of the government’s “mandatory spending,” which is required by law and is not subject to annual congressional appropriations. For example, the federal government is required to provide Social Security payments to all eligible beneficiaries at levels specified in the Social Security Act, regardless of cost. Congress does not have the power to reduce mandatory program spending unless it changes the rules or laws regarding the programs themselves. Mandatory spending has increased from 45% of the budget in FY 1980 to 62% in FY 2024.
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.
In addition to the mandatory and discretionary spending, the federal government also has to spend money on interest payments for the national debt. Net interest is the cost of debt from past borrowing and is not tied to specific programs or policies Congress can adjust each year.
Source: USA Facts