WASHINGTON (TND) — Tax season wrapped up last month, and according to the U.S. Department of Treasury, the federal government has collected $2.19 trillion in fiscal year 2024 thus far.
In fiscal year 2023,the U.S. government collected approximately $4.5 trillion in revenue, with a significant portion stemming from individual, small business, and corporate taxes. However, this revenue is outpaced by the $6.2 trillion spent by the federal government. According to USA Facts, The government spent 38% more than it collected in revenue, resulting in a $1.7 trillion deficit.
This deficit trend isn't new. Since 2001, the federal government has consistently run a deficit each year. Despite this, there was a noticeable spike in spending from fiscal years 2019 to 2021, with federal expenditure increasing by about 50% in response to the pandemic. While the deficit remains high, it's noteworthy that the current deficit of $1.1 trillion is lower than the peak levels witnessed during the COVID-19 crisis - although the deficit is $46 billion more than the government was running at this time last year.
According to USA Spending data for fiscal year 2023, the largest expenditure was on Social Security, amounting to $1.35 trillion or 22% of the annual budget. National defense and veterans' affairs accounted for 18% of spending. The allocation for veterans covered various aspects such as income security, hospital and medical care, and education. The total was just under $824 billion for defense and nearly $3 billion for veterans.
Additionally, over a trillion dollars, constituting 18% of spending, was allocated to states for programs like Medicaid and transportation. Medicare received just over $848 billion, making up 14% of total spending.
When it comes to government spending, there are two primary categories: mandatory and discretionary. Mandatory spending, which represents about two-thirds of annual spending, is mandated by existing laws and includes programs like Social Security, Medicare, and Medicaid. On the other hand, discretionary spending, accounting for around a quarter of spending, is approved by Congress and the President each year. Over half of discretionary spending typically goes towards national defense, with the remainder funding areas such as education, transportation, and housing.
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