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Fact check: What are the biggest expenses of the federal gov
Executive Summary
The largest federal expenses are mandatory entitlement programs—chiefly Medicare, Medicaid, CHIP, and Social Security—and rapidly rising net interest payments on the national debt; discretionary spending (defense and nondefense) is materially smaller. CBO and CRS long‑term projections show mandatory outlays driving virtually all growth in federal spending over the next three decades, with interest costs becoming a major budgetary burden [1] [2].
1. Why Mandatory Programs Dominate the Budget Picture — A Long‑Range View
The Congressional Budget Office’s long‑term outlook projects mandatory spending increasing substantially as a share of GDP, with major health programs and Social Security accounting for most of that rise. CBO projects mandatory outlays climbing from 13.9% of GDP in 2024 to 16.2% by 2054, driven by Medicare, Medicaid and CHIP growing from 4.3% to 8.3% of GDP and Social Security from 4.5% to 5.9% [1]. The CBO’s emphasis on figures labeled “Composition of Outlays” underscores that entitlement programs are the persistent, structurally growing portion of federal spending, not year‑to‑year discretionary choices [3].
2. The Present Snapshot: Mandatory Spending and Human Resources Superfunction
Contemporary budget snapshots echo the long‑range picture: mandatory outlays already comprise roughly 59% of federal spending, with the Human Resources superfunction—which bundles Social Security, Medicare, Medicaid, and other health programs—representing about half of total outlays. CRS analysis using CBO baselines highlights that mandatory programs outstrip both defense and nondefense discretionary categories combined, making them the primary lever for any large‑scale change in aggregate federal spending [2]. This framing clarifies that policymakers debating deficit reduction face choices largely concentrated in entitlements and revenue, not only discretionary cuts.
3. Net Interest Is the Fastest‑Growing Line Item and a Hidden Driver
CBO projections show net interest costs surging as a share of GDP—from 1.8% in 2024 to 6.3% by 2054—reflecting higher debt and projected interest rates [1]. CRS estimates indicate net interest already exceeds $1 trillion in recent baselines, making debt service a standalone major expense comparable to large federal programs [2]. The practical implication is that even without new program expansions, debt dynamics can elevate interest spending into one of the largest budgetary claims, crowding out discretionary priorities and constraining fiscal flexibility.
4. Discretionary Spending Is Significant But Secondary and Stable
Discretionary spending—divided roughly between defense and nondefense—is substantial in dollar terms yet materially smaller as a share of spending than mandatory programs. CBO long‑term tables show discretionary declining from about 7.0% of GDP toward 4.9% by mid‑century, under the baseline; CRS notes that defense and nondefense discretionary are far smaller than mandatory outlays [1] [2]. Budget proposals from recent administrations highlight priorities within discretionary lines—R&D, defense modernization, education—showing political variation, but these choices do not alter the structural dominance of entitlements and interest [4] [5].
5. Multiple Sources, Shared Conclusions — But Different Emphases and Potential Agendas
Across CBO, CRS, and fiscal data explainers, the consistent fact is that Social Security, major health programs, and interest on the debt are the federal government’s biggest and fastest‑growing expenses [1] [2] [6]. Sources tied to administration budget proposals emphasize discretionary priorities—R&D, AI, defense—reflecting policy agendas rather than disputing the large role of mandatory programs [4] [5]. Those differences suggest an agenda effect: administrations highlight areas they seek to expand while independent budget offices emphasize structural drivers and constraints [3] [2].
6. What’s Often Left Out of Short Explanations — Important Omissions to Note
Standard headlines naming “biggest spending categories” sometimes omit the fiscal trajectory and interplay between program growth and interest costs. The long‑term projections make clear that growth rates matter: health‑care cost growth and demographic trends (aging population) amplify entitlement spending, and rising debt amplifies interest [1]. Brief explainers may list categories like military equipment, highways, or education without noting those are primarily discretionary and dwarfed by entitlement and interest growth in aggregate, an omission that can mislead public understanding [6] [2].
7. Bottom Line for Policy and Public Debate
The evidence converges on a clear, dated fact pattern: mandatory entitlement programs—principally Medicare and Social Security—and escalating net interest costs are the largest federal expenditures now and projected to be the dominant budgetary pressures going forward [1] [2]. Discretionary priorities remain politically salient and vary by administration, but addressing long‑term fiscal pressures requires confronting entitlement growth, health‑care cost trends, and debt dynamics—areas that budget authorities repeatedly flag as central to sustainable fiscal policy [3] [7].