page_title: United States federal budget
section_title: Major expenditure categories
hierarchical_section_title: United States federal budget / Major expenditure categories
caption_attribution_description: English: CBO forecast of Social Security tax revenues and outlays from 2015-2085. Under 2017 law, the outlays are projected to exceed revenues, requiring a 29% reduction in program payments starting in 2030.
context_page_description: The United States federal budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies. The government primarily spends on healthcare, retirement, and defense programs. The non-partisan Congressional Budget Office provides extensive analysis of the budget and its economic effects. It has reported that large budget deficits over the next 30 years are projected to drive federal debt held by the public to unprecedented levels—from 78 percent of gross domestic product in 2019 to 144 percent by 2049.
  The United States has the largest external debt in the world and the 14th largest government debt as % of GDP in the world. The annual budget deficit increased from $585 billion in 2016 to $984 billion in 2019, up 68%. Relative to a CBO forecast prior to President Trump's inauguration, the budget deficits for 2019-2021 roughly doubled, due to the Trump tax cuts and other spending legislation.
context_section_description: 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.
  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%).
  Expenditures are classified as "mandatory", with payments required by specific laws to those meeting eligibility criteria (e.g., Social Security and Medicare), or "discretionary", with payment amounts renewed annually as part of the budget process. Around two thirds of federal spending is for "mandatory" programs. CBO projects that mandatory program spending and interest costs will rise relative to GDP over the 2016–2026 period, while defense and other discretionary spending will decline relative to GDP.
caption: CBO forecast of Social Security tax revenues and outlays from 2015-2085. Under current law, the outlays are projected to exceed revenues, requiring a 29% reduction in program payments starting around 2030 once the Social Security Trust Fund is exhausted.[30]
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