The U.S. federal budget involves trillions in spending and revenue, categorized into mandatory (Social Security, Medicare), discretionary (defense, agencies), and interest on debt, with recent fiscal years (like FY2024/2025) seeing outlays around $6.8-$7 trillion against revenues of about $5.2 trillion, resulting in deficits and increasing national debt, funded by taxes, fees, and borrowing. Congress sets the budget annually for the October 1 to September 30 fiscal year, with Social Security, Health (Medicare/Medicaid), and Defense being major spending areas.
Key Components
Social Security: ~22%.
Medicare: ~13%.
Health (Medicaid, etc.): ~9-10% (other mandatory).
Defense: ~13% (discretionary).
Non-Defense Discretionary: ~14% (discretionary).
Net Interest: ~13%.
Key Components
Revenues: Primarily from individual income, payroll, and corporate taxes, plus fees.
Spending (Outlays): Divided into three main types:
Spending (Outlays): Divided into three main types:
Mandatory: Required by law (Social Security, Medicare, Medicaid, Veterans' benefits).
Discretionary: Funded annually by Congress (Defense, education, transportation, agency operations).
Net Interest: Payments on the national debt.
Recent Figures (Fiscal Year 2024/2025 Estimates)
Total Spending (Outlays): Around $6.8 - $7.0 trillion (approx. 23-24% of GDP).
Total Revenues: Around $5.2 trillion (approx. 17% of GDP).
Deficit: Spending exceeds revenue, leading to borrowing (e.g., $1.7 trillion in 2023).
Total Revenues: Around $5.2 trillion (approx. 17% of GDP).
Deficit: Spending exceeds revenue, leading to borrowing (e.g., $1.7 trillion in 2023).
Major Spending Areas (FY2024/2025)
Social Security: ~22%.
Medicare: ~13%.
Health (Medicaid, etc.): ~9-10% (other mandatory).
Defense: ~13% (discretionary).
Non-Defense Discretionary: ~14% (discretionary).
Net Interest: ~13%.
The Process
Fiscal Year: Runs from October 1 to September 30.
Budget Proposal: President submits a budget to Congress.
Congressional Action: Committees review, debate, and pass spending bills (appropriations).
Enactment: President signs the budget into law.
Budget Proposal: President submits a budget to Congress.
Congressional Action: Committees review, debate, and pass spending bills (appropriations).
Enactment: President signs the budget into law.
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