Where does US government spending go?

More than half of FY 2019 discretionary spending went for national defense, and most of the rest went for domestic programs, including transportation, education and training, veterans’ benefits, income security, and health care (figure 4).

How does the US government finance its spending?

The deficit is financed by the sale of Treasury securities (bonds, notes, and bills), which the government pays back with interest. Part of what the government spends money on each year is the interest owed on all years’ deficits combined, or the national debt. Congress can vote to raise the debt ceiling.

How is tax money distributed in the US?

About 50 percent of federal revenue comes from individual income taxes, 7 percent from corporate income taxes, and another 36 percent from payroll taxes that fund social insurance programs (figure 1). The rest comes from a mix of sources.

What are the 3 components of government spending?

Government spending or expenditure includes all government consumption, investment, and transfer payments.

What does the US spend most of its budget on?

As Figure A suggests, Social Security is the single largest mandatory spending item, taking up 38\% or nearly $1,050 billion of the $2,736 billion total. The next largest expenditures are Medicare and Income Security, with the remaining amount going to Medicaid, Veterans Benefits, and other programs.

What are the four main categories of US Federal government spending?

The four main areas of federal spending are national defense, Social Security, healthcare, and interest payments, which together account for about 70\% of all federal spending. When a government spends more than it collects in taxes, it is said to have a budget deficit.

How much does the US government spend annually?

The federal government spent $6.6 trillion in fiscal year 2020 — or $19,962 per person. Medicare, Social Security, defense and veterans, debt interest, support to businesses, plus assistance like stimulus checks and unemployment insurance accounted for 73\% of spending.