Federal Government Expenditures

Federal government expenditures in selected years from 1940 through 2023 are included in the table below. The table shows that in nominal terms, the size of the federal government in 2023 is more than 700 times greater than in 1940. After adjusting for inflation, the size of the government is more than 37 times greater than in 1940. Since 1940, Social Security, Medicare, Medicaid, unemployment and welfare programs, defense, and interest on the debt have experienced the largest increases. Federal government expenditures skyrocketed and tax revenues declined in 2020 due to the pandemic. Most numbers came down in the years following, but compared to pre-pandemic years, the numbers are significantly higher. The federal deficit (the difference between its spending and its revenue) exceeded $3 trillion in 2020 and in 2023 was nearly $1.8 trillion. The total national debt of the United States government was $34 trillion by the end of 2023. During the 2020 pandemic federal spending on unemployment compensation, small business loans and grants, general purpose fiscal assistance, the Coronavirus Relief Fund, and the Public Health and Social Services Emergency Fund increased significantly. In addition, Medicare and Medicaid spending increased considerably due to expansions approved in 2019.

Federal Government Spending Category 1940 1950 1960 1970 1980 1990 2000 2007 2009 2011 2013 2015 2017 2019 2020 2022 2023
National Defense 1.6 13.7 48.13 81.69 134 299.3 294.4 551.0 661.0 705.6 660 590 599 685 725 778 815
Social Security .03 .78 11.60 30.27 118.5 248.6 409.4 586.2 683.0 730.8 818 857 945 1.047 1,096 1,220 1352
Income Security (Unemployment, Housing, food stamps, Federal Retirement, Welfare Spending, etc.) 1.5 4.1 7.38 15.65 86.5 147.0 253.7 366.0 533.2 597.4 564 509 503 533 1,264 926 792
Medicare 0 0 0 6.21 32.1 98.1 197.1 375.4 431.1 485.6 511 546 597 651 776 761 830
Health (Medicaid, Research, OSHA, etc.) .06 .27 .80 5.91 23.2 57.7 154.5 266.4 334.3 372.5 372 482 533 601 748 868 891
Total Net Interest on the Debt .9 4.8 6.95 14.38 52.5 184.2 222.9 237.1 186.9 230.0 223 223 263 393 345 357 661
Education and training 1.9 .24 .97 8.63 31.8 38.8 53.8 91.7 79.7 101.2 85 122 144 143 238 265 269
Veterans’ benefits and services .57 8.8 5.44 8.68 21.2 29.1 47.1 72.8 95.4 127.2 140 160 177 200 217 274 305
Transportation .39 .97 4.13 7.01 21.3 29.5 46.9 72.9 84.3 93.0 94 90 94 99 146 141 137
Agriculture and farm subsidies .37 2.05 2.62 5.17 8.84 12 36.5 17.7 22.2 20.6 27 19 19 38 47 47 41
Administration of justice .08 .19 .37 .96 4.58 10 28.5 41.2 51.5 56.1 61 52 58 72 72 80 86
Natural Resources and Environment 1 1.3 1.56 3.07 13.9 17.1 25.0 31.8 35.6 45.5 38 36 38 40 42 50 69
General science, space, and technology 0 .06 .60 4.51 5.83 14.4 18.6 25.6 29.4 29.5 31 29 30 34 34 39 43
International affairs .05 4.67 2.99 4.33 12.7 13.8 17.2 28.5 37.5 45.6 57 49 46 54 68 62 80
General government .27 .99 1.18 2.32 13.03 10.7 13.0 17.5 22.0 25.5 30 21 24 27 180 141 43
Community and regional development .29 .03 .22 2.39 11.3 8.5 10.6 29.6 27.7 23.8 38 21 25 33 82 81 100
Commerce and housing credit .55 1.0 1.62 2.11 9.4 67 2.0 5.1 291.5 -12.6 18 -38 -26 -26 307 -19 -1
Energy .09 .33 .46 1.0 10.2 3.3 -.76 -.86 4.7 12.2 15 7 4 3 7 6 11
Total* 9.5 42.56 92.2 195.6 590.9 1253.1 1789.2 2728.9 3,517.7 3,603.1 3,685 3,688 3,982 4,529 6,550 5,852 6,372

* The total does not add to the sum of numbers in the categories listed, because there are several
other small categories of spending not included in this table. Visit https://www.whitehouse.gov/omb/historical-tables
(table 3.2) for more details.

The Top Six Federal Government Expenditures

During most recent years, Social Security has been the largest government expenditure for the United States federal government. It was second in 2020, but took top spot again in 2023. Social Security expenses have increased significantly and will further increase because the “Baby Boomers” reached full retirement age in 2011 and more will be retiring within the next several years. For information about the United States Social Security program, please click HERE.

Income security, the single largest federal government spending item in 2020, came down in 2022 and 2023 because of a relatively healthy economy and an easing of the pandemic effects. It is still a sizeable government expense though.

Medicaid, federal government health assistance to the poor, and other health-related programs have more than doubled since the year 2000. It was the second-largest federal spending item in 2023 at $891 billion.

Because of the uncertainty in the world, the war in Ukraine, and concern for national security issues, defense spending is high. It is currently the fourth largest federal government expenditure item.

Medicare, the federal government health assistance program for persons 65 and older, is the fifth-largest federal government expense at $830 billion in the 2023 budget. Further increases are on the horizon because of the increase in the elderly population.

The fastest rising category, net interest on the debt, is the amount of money that the government pays households and businesses for borrowing from them minus the amount of interest that the federal government receives from lending. It is the sixth-largest federal government expenditure. It fell in 2020 because of increases in interest received from trust funds and generally lower interest rates, but rose considerably in 2022 and 2023. The net interest for the United States government is currently $661 billion and expected to rise to $910 billion by 2027.

The Growth of the United States Government

Below is a table, which shows the changes in United States government expenditures (outlays) as a percentage of GDP during selected years. The last column shows the growth in the United States federal debt as a percentage of GDP.

The amount of federal government spending as a percentage of our total economy (GDP) has risen significantly since the 1930s. During the past several years, the percentage has been in the mid- to high-20s.

The United States total federal debt as a percentage of nominal GDP has risen steadily and significantly during the past several decades. It is currently well above 100%. A rising national debt will pose increasing financial burdens on future generations.

Year Federal Government Outlays as a Percent of nominal GDP Gross Federal Debt as a Percentage of GDP
1935 9.2 N/A
1940 9.8 52.4
1950 15.6 94.1
1960 17.8 56.1
1970 19.3 37.6
1980 21.7 33.3
1990 21.8 55.9
2000 18.4 57.8
2007 19.6 64.2
2008 20.7 65.5
2009 25.0 91.7
2010 23.8 96.7
2011 23.5 99.1
2012 23.7 100.0
2013 21.9 102.0
2014 20.1 103.0
2015 20.5 104.1
2016 20.7 104.5
2017 20.7 105.0
2018 20.2 106.1
2019 21.1 108.0
2020 28.2 127.0
2021 29.8 130.6
2022 25.0 121.0
2023 24.2 123.0

Sources: www.bea.gov (nominal GDP) and www.usdebtclock.org (national debt)