What is Federal Spending?
In FY 2023, federal government spending was
$6.13 trillion
according to the Office of Management and Budget.
Budgeted spending for
FY 2024 is $6.88 trillion.
Recent US Federal Spending
Chart S.01f: Recent Federal Spending
Chart S.02f: Recent Federal Spend as Pct GDP
Federal Spending was increasing modestly, year on year, in the mid 2000s. But it jumped by $700
billion a year in the Great Recession to bail out the banks and provide “stimulus.” Since the recession federal
spending held steady at about $3.6 trillion per year for a few years, before resuming growth in 2015.
Federal spending for FY2023 was
$6.13 trillion.
Viewed from a GDP perspective, federal spending was steady at about 19 percent GDP in the mid
2000s and then jumped, in the Great Recession to almost 25 percent GDP. But in the subsequent
economic recovery federal spending has steadily declined as a percent of GDP down to about 20 percent in 2014 and has remained there.
Federal spending for FY2023 was
23.3 percent GDP.
US Federal Spending Since 1900
Chart S.03f: Federal Spending since 1900
Federal spending began the 20th century at less than 3 percent of GDP per year. It jerked above 24 percent as a result of World War I and then declined in the 1920s to 3 to 4 percent by 1929. Federal spending started to increase after the Crash of 1929, and rose above 10 percent in the depths of the Great Depression.
Federal spending exploded during World War II to nearly 48 percent of GDP, and then declined to about 15 percent in the late 1940s.
In the Korean War of the early 1950s federal spending increased to over
20 percent of GDP, and then declined to about 17 to 18 percent by the end of the 1950s.
In the 1960s federal spending began a slow increase to about 22 percent of GDP in the early 1980s, and then declined modestly to about 18 percent by 2000.
In the 2000s federal spending began a steady increase crossing 20 percent of GDP just before
exploding to 24 to 25 percent in the Crash of 2008. In the 2010s federal spending has resuming its growth as
a percent of GDP.
US Federal Spending since the Founding
Chart S.04f: Federal Spending since the Founding
Federal spending in the first half of the 19th century stayed typically below 2
percent of GDP except in wartime. In the Civil War, federal spending exploded to 13
percent of GDP. After the Civil War spending gradually declined. It dropped below 4 percent of GDP in 1872 and below 3 percent of GDP in 1880. Thereafter, federal spending
hovered between 2.5 percent and 3 percent of GDP until World War I. Federal spending
peaked at 24 percent of GDP and declined below 4 percent in the 1920s. Federal spending
reached 10 percent of GDP in the 1930s before rocketing to 48 percent of GDP at the end of World War II. From the end of World War II to the mid 1980s federal spending gradually
increased from 15 percent to 22 percent and then declined to below 20 percent of GDP
by 2000. Since 2000 federal spending has slowly increased as a percent of GDP, with a blip to 24 percent GDP in the aftermath
of the Crash of 2008.
CBO Forecast for Federal Spending
Chart S.05f: CBO Forecast for Federal Spending
According to the latest forecast from the Congressional Budget Office, federal spending will grow from a little
over 21 percent of GDP in 2019 to over 28 percent of GDP by 2049.
Social Security spending is forecast to increase from 4.9 percent GDP in 2019 to 6.2 percent GDP in 2049;
Healthcare spending (Medicare, Medicaid and CHIP) is forecast to increase from 5.3 percent GDP in 2019 to 9.3 percent GDP in 2049;
All other spending on programs, including Defense, is forecast to decrease from 8.8 percent GDP in 2019 to 7.1 percent GDP in 2049;
Spending on net interest on the federal debt is forecast to increase from 1.8 percent GDP in 2019 to 5.7 percent GDP in 2049.
Suggested Video: Spending 101
Spending Data Sources
Spending data is from official government sources.
Gross Domestic Product data comes from
US Bureau of Economic Analysis and
measuringworth.com.
Detailed table of spending data sources here.
Medicare breakdown here; Medicaid breakdown here.
Federal spending data begins in 1792.
State and local spending data begins in 1820.
State and local spending data for individual states begins in 1957.
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