Government Spending By the Year 2024 (Where Do Our Taxes Go?)

United States government spending gets a lot of air time on the news and during political campaigns, but how much the government spends also impacts our daily lives.

Congress creates the federal budget each year. From money spent on programs such as Social Security, education, and national defense to historical trends in spending, government finances and how we use our resources gives us a picture of our country as a whole. 

Here, we look at some recent and historical statistics about government spending and see what insights they can offer into our own lives.

Key takeaways

• The federal government collected $4.1 trillion in revenue during fiscal year 2021, or $12,294 per person.
• The federal government spent $6.8 trillion in the fiscal year 2021, or $20,634 per person.
• In 2021, the federal government spent 68% more than it brought in, leading to a $2.8 trillion deficit.
• $932.8 billion in revenue was transferred to states in 2021.
• In Q1 2022, U.S. expenditures totaled $8,290 billion, while US receipts totaled $7,391.5 billion.
• Federal spending grew 1% in 2021 and was equivalent to 30% of GDP. This was above the 20% annual average equivalent to GDP since 1980.

Government spending by year from 1930 to present

Year	Receipts	Outlays	Surplus or deficit
	In billions of dollars
1930s
1930	4.1	3.3	0.7
1931	3.1	3.6	-0.5
1932	1.9	4.7	-2.7
1933	2.0	4.6	-2.6
1934	3.0	6.5	-3.6
1935	3.6	6.4	-2.8
1936	3.9	8.2	-4.3
1937	5.4	7.6	-2.2
1938	6.8	6.8	-0.1
1939	6.3	9.1	-2.8
1940s
	Receipts	Outlays	Surplus or deficit
1940	6.5	9.5	-2.9
1941	8.7	13.7	-4.9
1942	14.6	35.1	-20.5
1943	24.0	78.6	-54.6
1944	43.7	91.3	-47.6
1945	45.2	92.7	-47.6
1946	39.3	55.2	-15.9
1947	38.5	34.5	4.0
1948	41.6	29.8	11.8
1949	39.4	38.8	0.6
1950s
	Receipts	Outlays	Surplus or deficit
1950	39.4	42.6	-3.1
1951	51.6	45.5	6.1
1952	66.2	67.7	-1.5
1953	69.6	76.1	-6.5
1954	69.7	70.9	-1.2
1955	65.5	68.4	-3.0
1956	74.6	70.6	3.9
1957	80.0	76.6	3.4
1958	79.6	82.4	-2.8
1959	79.2	92.1	-12.8
1960s
	Receipts	Outlays	Surplus or deficit
1960	92.5	92.2	0.3
1961	94.4	97.7	-3.3
1962	99.7	106.8	-7.1
1963	106.6	111.3	-4.8
1964	112.6	118.5	-5.9
1965	116.8	118.2	-1.4
1966	130.8	134.5	-3.7
1967	148.8	157.5	-8.6
1968	153.0	178.1	-25.2
1969	186.9	183.6	3.2
1970s
	Receipts	Outlays	Surplus or deficit
1970	192.8	195.6	-2.8
1971	187.1	210.2	-23.0
1972	207.3	230.7	-23.4
1973	230.8	245.7	-14.9
1974	263.2	269.4	-6.1
1975	279.1	332.3	-53.2
1976	298.1	371.8	-73.7
1977	355.6	409.2	-53.7
1978	399.6	458.7	-59.2
1979	463.3	504.0	-40.7
1980s
	Receipts	Outlays	Surplus or deficit
1980	517.1	590.9	-73.8
1981	599.3	678.2	-79.0
1982	617.8	745.7	-128.0
1983	600.6	808.4	-207.8
1984	666.4	851.8	-185.4
1985	734	946.3	-212.3
1986	769.2	990.4	-221.2
1987	854.3	1,004.0	-149.7
1988	909.2	1,064.4	-155.2
1989	991.1	1,143.7	-152.6
1990s
	Receipts	Outlays	Surplus or deficit
1990	1,032.0	1,253.0	-221.0
1991	1,055.0	1,324.2	-269.2
1992	1,091.2	1,381.5	-290.3
1993	1,154.3	1,409.4	-255.1
1994	1,258.6	1.461.8	-203.2
1995	1,351.8	1,515.7	-164.0
1996	1,453.1	1,560.5	-107.4
1997	1,579.2	1,601.1	-21.9
1998	1,721.7	1,652.5	69.3
1999	1,827.5	1,701.8	125.6
2000s
	Receipts	Outlays	Surplus or deficit
2000	2,025.2	1,789.0	236.2
2001	1,991.1	1,862.8	128.2
2002	1,853.1	2,010.9	-157.8
2003	1,782.3	2,159.9	-377.6
2004	1,880.1	2,292.8	-412.7
2005	2,153.6	2,472.0	-318.3
2006	2,406.9	2,655.1	-248.2
2007	2,568.0	2,728.7	-160.7
2008	2,524.0	2,982.5	-458.6
2009	2,105.0	3,517.7	-1,412.7
2010s
	Receipts	Outlays	Surplus or deficit
2010	2,162.7	3,457.1	-1,294.4
2011	2,303.5	3,603.1	-1,299.6
2012	2,450.0	3,526.6	-1,076.6
2013	2,775.1	3,454.9	-679.8
2014	3,021.5	3,506.3	-484.8
2015	3,249.9	3,691.9	-442.0
2016	3,268.0	3,852.6	-584.7
2017	3,316.2	3,981.6	-665.4
2018	3,329.9	4,109.0	-779.1
2019	3,463.4	4,447.0	-983.6
2020s
	Receipts	Outlays	Surplus or deficit
2020	3,421.2	6,550.4	-3,129.2
2021 (estimated)	3,580.8	7,249.5	-3,668.7
Source: The American Presidency Project - Federal Budget Receipts and Outlays

1. 1943 saw the highest deficit spending in the US

During the height of World War II, the U.S. saw its highest deficit spending relative to the size of the economy. In 1943 the government spent $78.6 billion but only brought in $24 billion from sources such as tax revenue. This deficit amounted to 29.6% of the gross domestic product (GDP).

According to the White House’s Office of Management and Budget, there were periods of surplus and deficit throughout the decades after WWII. Deficits were primarily seen only around times of war, but after the significant tax cuts of the 1980s, deficits became more common until they peaked at $290 billion in 1992. The deficit declined until 1998 when the U.S. recorded its first surplus since 1969.

Source: UC Santa Barbara The American Presidency Project, The White House Office of Management and Budget Historical Tables

2. 2000 saw the highest surplus in the US

The largest surplus period in U.S. history was both relatively recent and brief. In 2000, the nation spent $178 billion, but income receipts brought in more than $200 billion, which was a surplus of 2.3% of GDP, or $236.2 billion.

Between 1992 and 2000, the U.S. went from a budget deficit of 4.5% to a surplus of 2.3%. Unfortunately, the debt would return in 2001 after extensive tax reductions, an economic slowdown, and the September 11th terrorist attacks produced a deficit of $158 billion or 1.5% of GDP in 2002.

Source: UC Santa Barbara The American Presidency Project, The White House Office of Management and Budget Historical Tables

3. The Great Depression dramatically increased the amount of federal debt

Before the Great Depression, federal spending accounted for less than 3% of the GDP, according to the Federal Reserve Bank of St. Louis, but by 1939, federal spending had increased to above 10% of GDP.

The start of the Great Depression began a long string of federal deficits. The national debt ballooned from $3 billion in 1917 to $16 billion in 1930 and then to $242 billion by 1946 and the end of World War II.

Source: The White House Office of Management and Budget Historical Tables, Federal Reserve of St. Louis

4. Spending increased during WWII, but so did income

According to the Federal Reserve, government spending increased before we entered the war to help the allies purchase materials as part of the lend-lease program. When the U.S. entered the war in 1941, the government increased its spending even further.

War spending led the U.S. to its largest deficit ever, but the war also dramatically increased the federal government's income. In the fiscal year 1941, the U.S. took in only $8.7 billion, but by 1945, the U.S. collected $45.2 billion in revenue.

Much of this was due to the Victory Tax and an increased number of people paying income taxes. In 1939 only about 5% of American workers paid taxes, but by 1945 90% of workers submitted tax returns, and 60% paid taxes on their income.

Source: The American Presidency Project, The Federal Reserve, The Internal Revenue Service (IRS)

5. The Great Recession saw the biggest decline in GDP in the post-war era

According to the Federal Reserve, GDP fell by 4.3% from 2007 to 2009, the largest drop during the postwar period. Combined with an unemployment rate of 10% in 2009, the economic effects of the Great Recession wreaked havoc on the finances of both individuals and the federal government.

With the recession in full swing, the government increased its spending through a large stimulus package to help alleviate some financial burden and also increased defense spending for the wars in Iraq and Afghanistan. The deficit peaked at $1.4 trillion, or 9.8% of GDP in 2009.

Source: The Federal Reserve, White House Office of Management and Budget Historical Tables

6. Covid-19 spending ushered in the second biggest deficit in U.S. history

The COVID-19 pandemic caused grief and heartache for millions of Americans but was also the cause of a massive increase in government spending.

According to the Bipartisan Policy Center, the federal government ran a deficit of $3.1 trillion in the fiscal year 2020 (October 1, 2019, to September 30, 2000), which was more than three times the deficit in 2019.

The 2020 deficit amounted to 15.2% of GDP, and was the greatest share of the economy since 1945. Government revenue fell 1% from 2019, but spending was up 47%.

Source: Bipartisan Policy Center

Government spending by major category

1. $187.7 billion spent on education

In 2021, the United States spent a total of $187.7 on education or $14,440 per student as of fall 2021 enrollment numbers. That’s up .9% from the previous year, according to the National Center for Education Statistics.

This continues a trend first noticed in the fiscal year 2019, when educational spending increased 4.7% over the previous year, or $752.3 billion spread out among 48 million children in public schools, the most per pupil in over a decade.

Source: USA Facts, National Center for Education Statistics, U.S. Census Bureau

2. 21% of total spending was aid to the disadvantaged

A large portion of the expenditure in 2021, or $1.43 trillion, was on assistance to American citizens due to the COVID-19 pandemic. $396.5 billion was spent on unemployment insurance, while $555.7 billion was spent on stimulus payments and other cash support to American citizens. The child tax credit payments increased by 175% in 2021, and housing assistance increased by 63%.

The Supplement Nutrition Assistance Program (SNAP) grew by 41%, although that is only a temporary response due to the pandemic, and that amount of spending is not expected to continue. SNAP is often referred to as “food stamps” and is designed to help low-income households secure food. 

The average monthly SNAP benefit in 2021 was $217.83 per person, or $418.32 per household, up from $155.14 per person and $301.96 per household in the fiscal year 2020.

Source: USDA Food and Nutrition Service, USA Facts

3. $71.33 billion spent on transportation in 2021

The U.S. spent 41% of the federal transportation budget on highway transportation, 32% on air travel, and 19% and 8% on rail and water travel, respectively. Although air travel rebounded in 2021, it is still below pre-pandemic levels, with scheduled flights down 20% between January and November 2021.

The U.S. 2021 transportation funding remained elevated from 2020 due to coronavirus stimulus packages. Airports, transit agencies, and air carriers received 81% of pandemic transportation stimulus funds. While the federal government spent $71.3 billion directly, it also transferred $81.7 billion to states for infrastructure and transportation use.

Source: USA Facts

Deficit vs. surplus

1. The US spent $349.7 billion in interest on the national debt

In 2021, the interest on the U.S. national debt amounted to just over 5% of total expenditures. The federal debt has increased steadily since 2001, although the debt to GDP ratio also decreased slightly from the all-time high seen in 2020.

By the end of 2021, the U.S federal debt had grown to $28.43 trillion, with the top three debt holders being U.S. investors (owning $9.8 trillion), the Federal Reserve (owning $5.3 trillion), and Social Security (owning $2.9 trillion).

The U.S. has spent $73 billion on public debt interest this fiscal year as of May 2022.

Source: USA Facts, DataLab at usaspending.gov, Bipartisan Policy Center

2. Real GDP decreased by 1.5% in Q1 2022

According to the Bureau of Economic Analysis's second estimate, the real GDP had increased by 6.9% in quarter four of 2021 but then decreased by 1.6% in the first quarter of 2022. The COVID-19 Omicron variant caused additional restrictions and disruptions to operations in the first quarter of 2022, but government relief enacted in 2020 had expired or was tapering off.

The loss in GDP was mainly due to decreases in private inventory investment (like wholesale trade of motor vehicles), exports, and decreased spending by federal, state, and local governments.

Source: Bureau of Economic Analysis, USA Facts

3. April 2022 saw a surplus of $308 billion

The Congressional Budget Office (CBO) estimates a surplus of $308 billion in April 2022 after the federal government spent $556 billion but received $864 billion in income. Comparatively, April 2021 saw a $226 billion deficit.

The difference is likely due to delayed income tax receipts from the previous year, which arrived in April 2022, and reduced benefits for COVID-19 relief. May 2022 saw a $63 billion deficit but was noticeably smaller than the $739 billion deficit in 2019, well before the COVID-19 pandemic.

Source: Bipartisan Policy Center

Social Security

1. US spent $1.13 trillion on Social Security in 2021

Social Security represented 17% of total U.S. spending in 2021 and is the largest single item in the annual federal budget. $957.9 billion of allocated funds went to retirees, with another $141.8 billion to those on disability.

As of 2020, 69.8 million people received benefits through the Social Security Administration, with 5.8 million newly awarded that year. Fifty-five percent of adult Social Security beneficiaries in 2020 were women.

As of April 2022, $842.28 billion had been allocated to Social Security, or 7.5% of the 2022 U.S. federal budget, with $799.54 billion in planned spending this year.

Source: USA Facts, DataLab at usaspending.gov, Social Security Administration, Center on Budget and Policy Priorities

2. Spending on Social Security increased by $33 billion (6%) in the first six months of 2022

The highest Social Security cost of living adjustment (COLA) since 1982 went into effect at the beginning of 2022, and benefits rose by 5.9% to help account for increasing inflation. The $33 billion spent in the first six months of 2022 also included an increase in the number of beneficiaries newly enrolled in the program.

In May 2022, spending for Social Security, Medicare, and Medicaid (all designated as mandatory spending programs in the federal budget) increased by 7%, or $101 billion. Medicaid spending rose the most and is up 14%.

Source: Bipartisan Policy Center

3. Federal outlays on Social Security are expected to grow beyond 2022

The Social Security program is expected to continue growing, according to projections by the Congressional Budget Office (CBO). Social Security spending was $1.1 trillion in 2021 and is expected to steadily increase to $1.2 trillion in 2022, $1.3 trillion in 2023, and so on, with the most significant projected increase in 2031 totaling $2 trillion.

Social Security, Medicare, and net interest costs are expected to be some of the largest contributors to growth in the coming years. Social Security accounted for 5% of the GDP in 2021 and is expected to be 4.9% in 2022.

Source: Congressional Budget Office's Budget and Economic Outlook: 2022-2032

Health care

1. $696.2 billion was spent on Medicare in 2021

In 2021, 10% (or $696.2 billion) of total spending in the U.S. went toward Medicare. Combined with Medicaid and other major healthcare-related programs, the U.S. spent $1.3 trillion, or 5.8% of GDP, on these programs in 2021. Spending on Medicare alone is estimated to increase by about 5% in 2022, to $726 billion.

Outlays for these three programs are estimated to increase by 10%, or $124 billion, in 2022 and by an additional 7%, or $96 billion, in 2023.

The amount spent on Medicare is projected to grow from 65 million people in 2023 to 77 million in 2032, roughly 2% each year. The projected spending on Medicare in 2032 is $1.6 trillion, or 4.3% of GDP.

Source: Congressional Budget Office's Budget and Economic Outlook: 2022-2032, USA Facts

2. $141 billion spent on public health in 2021

Spending on public health in 2021 decreased by 21% from 2020 but is still more than double what was spent on public health in 2019. According to USA Facts, the increase was primarily due to the Provider Relief Fund, which pays healthcare workers for pandemic-related expenses.

According to the Congressional Budget Office (CBO), discretionary funding for health programs decreased by $54 billion in 2021. This was partly due to reduced funding for the Public Health and Social Services Emergency Fund. In 2021, it received $50 billion, but in 2022, it only received $3 billion.

Source: Congressional Budget Office's Budget and Economic Outlook: 2022-2032, USA Facts

3. The government share of national health spending is expected to fall to 46% by 2024

In 2020, the U.S. government spent 51% on national health, an all-time high at $417.6 billion. It is expected to fall to $286.8 billion in 2021 or 46%. The National Health Expenditure (NHE) report predicts that health spending will grow by 5.3% through 2030 and will be driven by more traditional factors rather than the public health emergency of the last few years.

Spending on Medicaid is expected to rise as some statutory payment cap reductions end in 2027. Conversely, spending growth for Medicare may decrease as members of the Baby Boomer generation begin to reach the end of their lives and enrollment numbers shrink.

Source: Centers for Medicare and Medicaid Services National Health Expenditure Report

Defense

1. The US spent $976.4 billion on national defense and veterans in 2021

Spending on national defense and veterans amounted to 14% of total spending during 2021. We spent $976.4 billion on defense, with $230.6 billion of that on veterans.

In the fiscal year 2022, the Department of Defense has a $1.75 trillion budget distributed among six-sub categories, including the Army, which has been allocated $464.8 billion, the Air Force at $284.11 billion, and the Navy and Marine Corps at $275.0 billion for the two.

Source: USA Facts, Data Lab at usaspending.gov

2. Defense spending decreased in 2021

Defense spending fell during 2021 and was 12% lower than its previous 2010 peak. The most significant defense spending in 2021, about 32%, was on military and civilian personnel compensation.

2021 saw the end of The Budget Control Act, which decreased defense spending by 9.8% in 2014 and continued an annual reduction until 2021, with a final 8.3% reduction in spending. Additional legislation extended the cuts to mandatory funding through 2031.

Source: USA Facts, Congressional Budget Office's Budget and Economic Outlook: 2022-2032

Keeping your tax costs down

While most people can see the benefit of government taxes for things like roads, defense, and public education, the dollar amounts can make your head spin. As you work on how to manage your money and what you pay in taxes every year, consider the following to ensure you’re getting all of the deductions you’re entitled to so you can lower your tax rate.

• Claim all credits and deductions you’re eligible for, such as the child tax credit, mortgage interest deductions, and any charitable deductions.
• If you itemize your deductions, keep detailed records to make tax time easier and help ensure you capture every deduction.
• Use the best tax software to reduce the likelihood of errors.
• Contribute to a 401(k) or another pre-tax retirement account to help you reduce your taxable income now. Note that you will have to pay taxes on this money when you withdraw it in retirement.
• Consider opening a Health Savings Account (HSA) if you have a designated high-deductible health insurance plan. Contributions to HSAs are taken from your gross income, can help reduce your tax burden, and might be tax-free at withdrawal if you meet certain requirements.
• Similarly, if your employer offers a Flexible Spending Account (FSA), contribute to help reduce your taxable income this year and also help you cover routine medical expenses like deductibles, copays, or qualifying medication costs.
• Consult a tax professional for complicated situations. A tax preparer can help ensure you’re getting all the deductions you qualify for, reduce the likelihood of mistakes, and help you develop a plan for next year’s taxes.

Bottom line

While most of us benefit from government spending in ways we don’t always see or understand, it can still make that new pair of shoes or fancy restaurant dinner you splurged on last week seem insignificant by comparison.

Although federal revenue increased by 15% in 2021, equivalent to 17.3% of GDP, spending still dramatically outpaced what we brought in. After the recent spending during the pandemic and rising inflation, many Americans may be looking to decrease costs nationally and in their own budgets.

Sources

1. The American Presidency Project - Federal Budget Receipts and Outlays

2. USAFacts.org

3. Bureau of Economic Analysis

4. The White House Office of Management and Budget - Historical Tables

5. Federal Reserve of St. Louis - The Great Depression

6. Federal Reserve of St. Louis - FRED database

7. The Federal Reserve History

8. The Internal Revenue Service (IRS ) - The Why of Taxes, Theme 2: Taxes in U.S. History

9. Bipartisan Policy Center Deficit Tracker

10. National Center for Education Statistics

11. United States Census Bureau

12. USA Food and Nutrition Service - SNAP Web Table March 2022

13. USAspending.gov Data Lab

14. Social Security Administration

15. Center on Budget and Policy Priorities

16. Congressional Budget Office - Budget and Economic Outlook: 2022 to 2032

17. Center for Medicare and Medicaid Services: National Health Expenditure Report

18. USA.gov Budget of the U.S. Government