The federal budget: an overview

The federal budget is a measure of how much the federal government spends and how much revenue it takes in. Typically, annual budgetary data is broken up into fiscal years, which run from October 1 to September 30.

In fiscal year 2023, the US spent $6.16 trillion on public programs and generated $4.47 trillion in revenue.

What is the federal deficit?

The federal government runs a deficit when it spends more than it takes in as revenue. In 2023, the annual federal deficit was $1.69 trillion. To fund deficits, the government borrows money by selling assets, and this borrowing creates debt.

When the government takes in more than it spends, this is a budget surplus. This last happened in 2001. There’s been a deficit in each fiscal year since.

What is federal debt?

The national debt is the total amount that the federal government owes to investors who it has borrowed from. Effectively, it is a summation of all the federal deficits and surpluses over the country’s history, plus the interest accumulated on that debt over time.

As of June 14, 2024, the national debt totaled $34.7 trillion.

As a percentage of gross domestic product, the national debt has been historically high in recent years. In 2020, that ratio reached its highest point since 1946.

What does the US government spend money on?

The largest spending categories in the $6.16 trillion federal budget in 2023 were Social Security at 22% of the budget ($1.35 trillion), national defense and veteran support at 18% ($1.13 trillion), transfers to states at 18% ($1.09 trillion), and Medicare at 14% ($848 billion).