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What is the spending on Welfare?

In FY 2025 total US government spending on welfare — federal, state, and local — was “guesstimated” to be $2,597 billion, including $1,837 billion for Medicaid, and $760 billion in other welfare.

Welfare Spending Analysis

This page shows the current trends in welfare spending. There are also charts on welfare spending history. See here for a general history of entitlement spending.

Recent Welfare Spending

Recent Welfare Spending

Chart S.31t: Recent Welfare Spending

Welfare spending increased sharply in the late 2000s due to the Great Recession, with Medicaid (health care) rising from $326 billion in 2007 to $397 billion in 2010, and Other Welfare (cash, food, unemployment, housing) from $339 billion in 2007 to $677 billion in 2010. In the recovery, overall welfare stayed at about $1 trillion with Other Welfare declining and Medicaid spending steadily increasing.

In the COVID years welfare spending exploded, to nearly $2 trillion in 2020 and $2.5 trillion in 2021.

Recent Welfare Spending as Pct GDP

Chart S.32t: Recent Welfare Spending as Pct GDP

In 2025 Medicaid spending was $1,837 billion and Other Welfare was $760 billion.

Viewed from a GDP perspective, overall welfare spending increased sharply from 4.6 percent GDP in 2007 to 7.2 percent GDP in 2010. In the trough of the Great Recession Other Welfare hit 4.5 percent GDP. But in the recovery since 2010 Other Welfare spending has steadily decreased to an estimated 2.2 percent GDP in 2019 and Medicaid spending has remained steady at 3 percent GDP.

In the COVID years welfare spending exploded to over 10 percent of GDP.

In 2025 Medicaid spending was 0.0 percent GDP and Other Welfare was 2.6 percent GDP.

See also Welfare Spending History.

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US Welfare Spending Since 1965

Welfare spending, particularly on Medicaid, has surged since the War on Poverty of the 1960s.

Welfare Spending since 1965

Chart S.33t: Welfare Spending since 1965

Welfare was already nearly 2 percent of GDP when Medicaid, a federal and state program to deliver health care to the poor, was created as part of the War on Poverty in 1965. But while spending on Medicaid rose modestly, from 0.12 percent of GDP in 1965 to 0.5 percent of GDP by 1975, Other Welfare increased rapidly, with peaks of 2.8 percent GDP in recessionary 1971, 4.4 percent GDP in the wake of the 1974-75 recession, and 4.0 percent GDP in the 1980-82 recession.

After the 1980s recession Other Welfare declined, with a minor upward blip for the 1990-91 recession declining to 2.2 percent GDP in 2000. But Medicaid spending surged, from 0.7 percent GDP in 1988, blowing past 1 percent GDP in 1991 to peak at 1.76 percent GDP in 1995.

Other Welfare surged to 2.8 percent GDP in 2003 due to recession and then slipped back to 2.34 percent GDP in 2006. But the Great Recession caused a huge increase in Other Welfare, peaking at 4.5 percent GDP in 2010 before declining to an estimated 2.3 percent GDP in 2017.

In the COVID crisis of 2020, Other Welfare bumped up to 5.75 percent of GDP. In 2025 Other Welfare was 2.6 percent of GDP.

Medicaid began a consistent year-on-year expansion starting in 2000, hitting 2 percent GDP in 2002, 2.5 percent GDP in 2009, and reaching 3 percent GDP in 2015. In 2025 Medicaid spending was 6.3 percent of GDP.

Suggested Video: All About Welfare

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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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Data Sources for 2021_2029:

Sources for 2021:

GDP, GO: GDP, GO Sources
Federal: Fed. Budget: Hist. Tables 3.2, 5.1, 7.1
State and Local: State and Local Gov. Finances
'Guesstimated' by projecting the latest change in reported spending forward to future years

Sources for 2029:

GDP, GO: GDP, GO Sources
Federal: Fed. Budget: Hist. Tables 3.2, 5.1, 7.1
State and Local: State and Local Gov. Finances
'Guesstimated' by projecting the latest change in reported spending forward to future years

> data sources for other years
> data update schedule.

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Federal Deficit, Receipts, Outlays Actuals for FY 2025

On October 16, 2025, the US Treasury reported in its Monthly Treasury Statement (and xlsx) for September that the federal deficit for FY 2025 ending September 30, 2025, was $1,775 billion. Here are the numbers, including total receipts, total outlays, and deficit compared with the numbers projected in the FY 2025 federal budget published in February 2024:

Federal Finances
FY 2025 Outcomes
Budget
billions
Outcome
billions
Receipts $5,485$5,235
Outlays$7,226$7,010
Deficit$1,781$1,775

We use the spending projections from the FY 2025 budget because the Federal government did not publish spending projections in its Budget for Fiscal Year 2026 as originally published in May 2025.

The Monthly Treasury Statement includes "Table 4: Receipts of the United States Government, September 2025 and Other Periods." This table of receipts by source is used for usgovernmentspending.com to post details of federal receipt actuals for FY 2025. usdgovernmentspending.com obtains the data for outlays and receipts from apis at fiscaldata.treasury.gov.

This MTS report on FY 2025 actuals is a problem for usgovernmentspending.com because this site uses Historical Table 3.2--Outlays by Function and Subfunction from the Budget of the United States as its basic source for federal subfunction outlays. But the Monthly Treasury Statement only includes "Table 9. Summary of Receipts by Source, and Outlays by Function of the U.S. Government, September 2025 and Other Periods". Subfunction amounts don't get reported until the FY27 budget in February 2026. Until then usgovernmentspending.com estimates actual outlays by "subfunction" for FY 2025 by factoring subfunction budgeted amounts for FY25 by the ratio between relevant actual and budgeted "function" amounts where actual outlays by subfunction cannot be gleaned from the Monthly Treasury Statement.

Final detailed FY 2025 actuals will not appear on usgovernmentspending.com until the FY 2027 federal budget is published in February 2026 with the actual outlays for FY 2025 in Historical Table 3.2--Outlays by Function and Subfunction.
State and Local Finances for 2023
On September 11, 2025 we updated the state and local spending and revenue for FY 2023 using the new Census Bureau  ...

State Spending for 2023
In March 2025 the US Census Bureau released data on state finances for FY 2023 here and  ...

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