Federal Spending by Year: Outlays, Categories, and Debt Impact

Federal spending by year has climbed from about $3.5 trillion in the early 2010s to $7.01 trillion in fiscal year 2025, equal to roughly 23 percent of the U.S. economy.1U.S. Treasury Fiscal Data. Federal Spending Outlays have essentially doubled in nominal terms over fifteen years, with pandemic-era relief driving a one-time spike and mandatory programs plus interest costs pushing the baseline steadily higher. The federal fiscal year runs from October 1 through September 30, so FY 2025 covers October 2024 through September 2025.2Congress.gov. Basic Federal Budgeting Terminology

Annual Federal Outlays, FY 2010 Through FY 2025

The year-by-year figures show steady growth punctuated by an enormous pandemic-era surge, with spending never fully returning to its pre-crisis baseline.

  • FY 2010–2014: Annual outlays ranged from roughly $3.5 trillion to $3.6 trillion. Deficits remained elevated from the aftermath of the 2008 financial crisis.3The American Presidency Project. Federal Budget Receipts and Outlays
  • FY 2015–2019: Spending climbed gradually from about $3.7 trillion to $4.4 trillion. Growth averaged roughly 4 percent per year, driven by an aging population and rising health care costs.
  • FY 2020: Outlays surged to approximately $6.6 trillion as Congress enacted the CARES Act and other pandemic relief measures funding stimulus payments, expanded unemployment benefits, and the Paycheck Protection Program.4USAspending.gov. COVID-19 Spending
  • FY 2021: Spending stayed high at $6.8 trillion after the American Rescue Plan added another round of relief.5Congressional Budget Office. The Federal Budget in Fiscal Year 2021 – An Infographic
  • FY 2022–2023: Outlays dipped as pandemic programs expired but exceeded $6 trillion in both years, well above the pre-pandemic baseline.
  • FY 2024: Total spending climbed back to about $6.9 trillion as interest costs and mandatory program obligations grew.6USAFacts. How Much Does the US Federal Government Spend?
  • FY 2025: The government spent $7.01 trillion.1U.S. Treasury Fiscal Data. Federal Spending

Adjusted for inflation, the federal government now spends roughly twice what it did at the start of the century. Population growth and rising prices explain part of the change. The rest reflects policy choices: expanded health coverage, higher benefit levels, larger defense budgets, and interest costs compounding from years of deficit spending.

Spending as a Share of the Economy

Raw dollar totals can mislead because the economy grows too. Federal outlays as a percentage of GDP give a cleaner picture. The 50-year average sits around 21 percent. Spending spiked to nearly 29 percent of GDP during the FY 2021 pandemic response. By FY 2025, the ratio had settled back to about 23 percent, still above the historical average.7Federal Reserve Bank of St. Louis. Federal Net Outlays as Percent of Gross Domestic Product The Congressional Budget Office projects that share will keep rising over the next decade as mandatory spending and interest costs grow faster than the economy.

Where the Money Goes

A handful of programs dominate the budget, which is why the totals keep drifting up regardless of which party runs Washington. In FY 2025, Social Security was the single largest line item at 22.5 percent of federal spending, and Medicare made up another 14.2 percent.6USAFacts. How Much Does the US Federal Government Spend? Medicaid and the Children’s Health Insurance Program added roughly another 10 percent, bringing total health-related outlays to about a quarter of the budget.8Medicaid and CHIP Payment and Access Commission. Spending Retirement and health programs together consume close to half of every federal dollar before anything else is funded.

Defense spending has claimed a shrinking share over time. It accounted for about 13 percent of the federal budget in recent years, down from nearly 28 percent in the late 1980s.9USAFacts. How Much Does the US Spend on the Military? The Pentagon isn’t spending less in dollar terms. Mandatory programs have simply grown much faster, so defense occupies a smaller slice of a much larger pie. Veterans’ benefits totaled about 5 percent of federal spending in FY 2024.10USAFacts. What Does the Department of Veterans Affairs Do? Transportation, education, scientific research, law enforcement, and foreign aid split what remains.

The balance between mandatory and discretionary spending has shifted sharply. In 1980, mandatory programs made up about 45 percent of the budget. By FY 2025, that share reached nearly 60 percent.6USAFacts. How Much Does the US Federal Government Spend? The practical result: the part of the budget Congress actively negotiates each year keeps shrinking, while costs baked into permanent law keep growing.

Interest on the Debt: The Fastest-Growing Line

Interest payments have gone from a manageable expense to one of the government’s largest. Net interest was around $345 billion in 2020. By 2025, federal interest payments were running at an annualized rate exceeding $1.1 trillion, reflecting both the larger stock of debt and the higher rates the Treasury pays on new and refinanced borrowing.11Federal Reserve Bank of St. Louis. Federal Government Current Expenditures – Interest Payments

The Congressional Budget Office projects net interest will consume about 3.3 percent of GDP in FY 2026, more than federal spending on veterans’ benefits, education, and transportation combined. These costs are essentially non-negotiable. The government cannot cut them without defaulting on obligations to bondholders, so every dollar spent on interest is one unavailable for programs, tax relief, or deficit reduction.

How Each Year’s Spending Adds to the National Debt

When outlays exceed revenue, the Treasury covers the gap by selling bonds, notes, and other securities. The national debt is the running total of every annual deficit, minus the rare surplus years such as the late 1990s.

Recent shortfalls have been large. The government ran deficits of $2.8 trillion in FY 2021, $1.4 trillion in FY 2022, $1.7 trillion in FY 2023, $1.8 trillion in FY 2024, and $1.8 trillion in FY 2025.12Federal Reserve Bank of St. Louis. Federal Surplus or Deficit As of December 2025, total gross national debt stood at $38.4 trillion.13Joint Economic Committee. National Debt Hits $38.40 Trillion

What the Projections Show

The CBO projects a $1.9 trillion deficit in FY 2026, with annual shortfalls widening to $3.1 trillion by 2036 and federal debt reaching 120 percent of GDP.14Congressional Budget Office. The Budget and Economic Outlook 2026 to 2036 Demographics are the main driver. Roughly 10,000 Americans turn 65 every day, becoming eligible for Medicare and eventually full Social Security benefits. Medicaid alone cost the federal government $620 billion in FY 2023, and those costs are projected to grow as medical prices rise and the population ages.8Medicaid and CHIP Payment and Access Commission. Spending

The Social Security trustees project that the combined Old-Age, Survivors, and Disability Insurance trust fund will be depleted by 2034, at which point ongoing payroll tax revenue could cover about 81 percent of scheduled benefits.15Social Security Administration. A Summary of the 2025 Annual Reports Any legislative response, whether tax increases, benefit changes, or a combination, will alter future spending totals.

None of the baseline projections account for future recessions, wars, pandemics, or other emergencies that have historically triggered large spending surges. Based on the last fifteen years of data, the actual path of federal spending will likely run higher than the baseline suggests.