Federal spending is reported in official budget documents, the Treasury's monthly statements, and the public website USAspending.gov, but the scale makes it hard to picture. Most of the budget goes to a handful of large programs that send money directly to people, while the agencies most people think of as the government, from national parks to the FBI, account for a small share.
This guide breaks down where the money goes, how the spending categories work, where revenue comes from, and how much is borrowed. Figures are rounded and change every year.
Individual income taxes, authorized by the 16th Amendment, provide about half of federal revenue. Payroll taxes for Social Security and Medicare provide about a third. Corporate income taxes provide about a tenth. Customs duties rose sharply in 2025 after new tariffs, and excise taxes, estate and gift taxes, and Federal Reserve earnings provide the rest. The Internal Revenue Service collects most of it.
Surveys regularly find that Americans believe foreign aid takes a quarter or more of the budget, when it is about 1 percent. Cutting all nondefense discretionary spending would not close the annual deficit. Debates over the budget therefore turn on the largest items. Some argue for restraining the growth of entitlement programs or defense, others for raising revenue, and others for accepting higher debt, and each group stresses different priorities about what government should do.
In fiscal 2025, which ended September 30, the government spent roughly 7 trillion dollars, about 23 percent of the economy, and took in about 5.2 trillion, leaving a deficit near 1.8 trillion. In fiscal 2026 spending rose to about 7.4 trillion and revenue to about 5.4 trillion, a deficit of nearly 2 trillion, and customs receipts fell to about 172 billion after roughly 130 billion in refunds of tariffs struck down by the Supreme Court. Spending falls into three types: mandatory spending set by permanent law, discretionary spending set each year by Congress, and net interest on the debt. The Congressional Budget Office and the Office of Management and Budget publish the official figures.
National defense, mostly the Defense Department plus nuclear weapons programs at the Energy Department, takes about 13 percent of spending and is the largest part of discretionary spending. Veterans' benefits and health care add roughly another 5 percent, split between mandatory disability compensation and pensions and discretionary funding for the Veterans Health Administration.
Net interest on the debt, about 14 percent of spending, passed defense in 2024. Income security programs, including food assistance, refundable tax credits, unemployment insurance, and federal retirement, take a significant share. Everything else, including transportation, education, science, space, law enforcement, the courts, national parks, and foreign aid, makes up a much smaller slice. Grants to states and localities, about a sixth of spending, pay for much of Medicaid, highways, schools, and housing.
Social Security is the largest single program, about a fifth of all spending, paying retirement, survivor, and disability benefits to more than 70 million people. Medicare, for people 65 and older and some people with disabilities, and Medicaid, the joint federal and state program for people with low incomes, together take roughly another quarter. Smaller health spending includes subsidies for marketplace insurance, the Children's Health Insurance Program, and research at the National Institutes of Health.
See how these totals are set in how the federal budget works, follow the borrowing in the national debt explained, or compare levels of government in who taxes what.