Nearly half of the discretionary funding in the US is allocated to national defense.

Federal spending falls into 2 categories: mandatory and discretionary

Federal spending is split between mandatory programs, funded automatically by law, and discretionary programs, funded through annual appropriations. This video breaks down which major programs fall into each category and why the distinction matters.

An analysis of the National Science Foundation's historical budget and spending

The NSF accounted for 0.1% of all federal spending in FY2024, with $9.39B—just over twice its FY1991 spending—out of $6.78T overall. Almost 99% of these funds ($9.29B) went to general science and basic research, with the rest allocated to national defense.

NASA's budget makes up less than 0.4% of total US spending

NASA's annual budget consists mainly of human spaceflight activities (50%) and robotics and scientific research programs (30%). It peaked at almost $70B in 1964 but has been below $30B since 1995, coming from discretionary nondefense funds.

Use this calculator to find out what your federal income taxes pay for

In the fiscal year 2024, the US federal government's biggest spending priorities included $1.5T on Social Security, $877B on national defense, and $874B on Medicare. This calculator from the Microsoft AI for Good Lab can help you estimate how your tax dollars are allocated across $6.8T in federal spending.

The federal government sent roughly $1.1T to state and local governments in 2024

Federal grants support a large portion of state and local budgets, funding Medicaid, infrastructure, education, and housing. In FY 2024, these transfers made up about 16% of total federal spending.

US defense spending peaked during the Korean War at 13% of GDP

In 1953, during the Korean War, US defense spending reached 13.58% of GDP—more than three times today’s level. That peak marked the most militarized moment of the Cold War, and spending has never returned to that level since.

Roughly 22% of US tax dollars go to Social Security

Social security is the US government’s largest expense. You can see other government expenses in a visual breakdown of what one US tax dollar actually pays for. Total spending amounts were converted to cents on the dollar and percentages.

State and local governments fund very different services

Local governments allocate 39% of their spending to K-12 education, while states allocate less than 1% directly—although much of local education funding actually comes from state and federal grants to local communities. States instead allocate their budgets to public welfare and health programs (45%) and higher education (15%).

Nearly 70% of the US government’s debt is domestic

This includes intragovernmental holdings like the Social Security Trust Fund and investments from US citizens, banks, and mutual funds. About 30% is foreign-held, with countries like Japan and China as major creditors, investing in US Treasury securities due to their perceived safety.

The federal government has spent more money annually than it has collected every year since 2022

The government borrows money to cover this deficit, which increases the national debt. It’s the fourth most expensive spending category in the US budget.

As of 2025, every NATO member spent at least 2% of GDP on defense, a target the alliance had been pushing toward for over a decade.

In 2024, the US committed about $82.3B to foreign aid.

That year, 67.2% of foreign aid was for economic purposes, and the remaining 32.8% was for military purposes. Israel received more US foreign aid than any other country in 2024.

Police spending is one of the largest budget items for local governments

Local governments finance most of the costs for police in the US. Total state and local criminal justice spending—covering police, courts, and corrections—reaches hundreds of billions of dollars annually.

The EPA budget was 0.2% of total federal spending in 2024

The EPA spent $13.7B in 2024, making it 23rd among federal agencies in total expenditures. Of that money, more than half was distributed to state environmental agencies for sustainability and environmental protection programs.

The 1956 Federal-Aid Highway Act spent $25B to build 41,000 miles of freeway

Sold to Congress as a national defense measure, the Interstate Highway Act committed the federal government to covering 90 cents of every dollar spent on a 41,000-mile freeway network, a subsidy that reshaped American cities and supercharged car dependency.

The Social Security Administration (SSA) accounted for 22.4% of all federal spending in 2024

The SSA is an independent executive branch agency that is primarily responsible for administering Social Security benefits. In fiscal year 2024, The SSA, ranking second among federal agencies in terms of total spending, behind only the Department of Health and Human Services.

Visualize government spending with USAFacts

This resource turns complex federal budget data into clear charts and summaries, letting users explore how much the government spends; where the money goes; and how revenue, deficits, and debt change over time.

The Federal Emergency Management Agency leads the US response to disasters

Established in 1979, FEMA coordinates the government's response to hurricanes, wildfires, floods, and other disasters, providing funding, logistical support, and recovery assistance. In FY 2024, the agency spent $35.1B, nearly 40% of the Department of Homeland Security's total budget.

The Constitution gives Congress sweeping control over the federal budget

Article I, Section 8's Spending Clause authorizes Congress to tax, pay debts, and promote the "common Defence and general Welfare," making it one of Congress's most powerful tools—and the constitutional foundation of federal budget control.

Federal government supports—but doesn't run—K-12 schools

The Department of Education contributes about 8% of K-12 funding and administers targeted grants, civil‑rights enforcement, research, and data collection. Crucially, it is legally prohibited from directing curriculum, personnel decisions, or instructional content, leaving that control to states and districts.

The global defense industry in one chart

The world's most valuable defense companies (for example, Lockheed Martin) make up much of the global defense industry. As of 2025, RTX led the pack with a roughly $183B market cap.

Government shutdowns, 101

Roughly a quarter of the US federal government's spending must be approved annually through a set of 12 appropriations bills in Congress. When they aren't, a government shutdown ensues, where federal agencies are legally barred from spending any further money on nonessentials. This explainer covers the basics of government shutdowns and their impact on the broader culture.

One in seven US tax dollars is collected by local governments

Local governments collect about $886B each year to support education, infrastructure, and public health. Roughly three-quarters of this funding comes from property taxes, with the rest sourced from sales, excise, and income taxes.

In 2020, government entities spent $316.5B on infrastructure, with state and local governments accounting for 34.8% of that amount.

The Department of Justice spent $44B in 2024.

US public K-12 spending topped $857B in 2024

Public K-12 schools spent around $857B in 2024, averaging $17,277 per student. State and local sources shouldered nearly 90% of costs, and federal funds provided about $2,400 per pupil.

The US has carried debt since 1791

After the Revolutionary War, the US owed $75M to nations like France. Debt builds when spending exceeds revenue, funding programs, wars, and economic recovery efforts. Most debt is domestic, like Social Security bonds, with foreign nations also holding a share.

The House of Representatives controls the $7T federal budget

The House holds the exclusive "power of the purse" to initiate revenue bills, a provision in the US Constitution designed to divide power with the Senate and give states with larger populations greater influence over federal budgeting.

As of 2022, about 40% of scientific research aimed at generating new knowledge has been funded by the federal government—a percentage that has decreased from a high of 72% in 1967.

The federal deficit is the gap between what the US spends and what it collects

This US Treasury page explains how the federal deficit occurs when annual spending exceeds revenue, shows the current fiscal-year shortfall, and tracks how deficits rise and fall with economic conditions and policy choices.

Revenue from tariffs goes to the US Treasury’s general fund

That's also where federal income taxes go. Revenue from tariffs can be spent on almost anything the government needs, such as funding programs like Medicare or the military.

Is there an arms race in the Middle East?

In 2021, countries in the Middle East spent $168 billion on weapons. Defense spending in the Middle East has been falling in the last few years, but this doesn’t necessarily mean that the region is de-militarizing. In 2021, Saudi Arabia spent $55...

Individual income taxes are the federal government's primary revenue source, see a tracker that breaks down where the rest of the budget comes from

The US government historically makes nearly half of its total revenue last year from individual income taxes. But the US makes also makes money from a variety of other sources, including Medicare taxes and corporate income taxes. However, the federal government has run a deficit since 2001—reaching a peak of $3.13T in 2020.

Transit is funded through a three-tier system, and the federal government is the smallest piece

In 2019, the federal government covered about one-sixth of the $79B spent on public transit. States and localities make up the rest. About 85% of all transit trips are taken by bus or heavy rail, and nearly 4 in 10 US transit trips occur in the New York City metro area.

The National Guard serves both state governors and presidents

Roughly 430,000 trained military personnel act as a strategic reserve for the US military, deployed domestically during natural disasters or unrest as well as overseas. It consists of the Army National Guard and the Air National Guard, overseen at the federal level by the National Guard Bureau.

Americans spent an estimated $14.8B for the Fourth of July 2025.