Anonymous asked this question on 7/7/2000:
how does the federal goverment use the taxes it collects? What is the breakdown?
budgetanalyst gave this response on 7/7/2000:
The "A Citizen's Guide to the Federal Budget
Budget of the United States Government
Fiscal Year 2001," at URL http://w3.access.gpo.gov/usbudget/fy2001/guidetoc.html, explains the overall budget.
At URL http://w3.access.gpo.gov/usbudget/fy2001/guide02.html#Spendi ng there is a table labeled "spending" that gives a summary of where the money goes - there are too many columns to efficiently reproduce it here. If you visit this page your question will be answered.
I have reproduced below a narrative from the report, but you see the numbers better by looking at the charts. I hope this answers your question and remember that experts like to be rated.
Material from the "Citizens Guide" to the budget:
As we have said, the Federal Government will spend over $1.8 trillion1 and have a surplus of $184 billion in 2001, which we divided into nine large categories as shown in Chart 2-6.
The largest Federal program is Social Security, which will provide monthly benefits to over 45 million retired and disabled workers, their dependents, and survivors. It accounts for 23 percent of all Federal spending.
Medicare, which will provide health care coverage for over 40 million elderly Americans and people with disabilities, consists of Part A (hospital insurance) and Part B (insurance for physician costs and other services). Since its birth in 1965, Medicare has accounted for an ever-growing share of spending. Medicare growth slowed down in 1998 and 1999, but is expected to accelerate in 2000 and beyond. In 2001 it will comprise 12 percent of all Federal spending.
Medicaid, in 2001, will provide health care services to almost 34 million Americans, including the poor, people with disabilities, and senior citizens in nursing homes. Unlike Medicare, the Federal Government shares the costs of Medicaid with the States, paying between 50 and 83 percent of the total (depending on each State's requirements). Federal and State costs are growing rapidly, although the rate of growth has fallen from the double-digit pace of the late 1980s and early 1990s. Medicaid accounts for seven percent of the budget.
Other means-tested entitlements provide benefits to people and families with incomes below certain minimum levels that vary from program to program. The major means-tested entitlements are Food Stamps and food aid to Puerto Rico, Supplemental Security Income, Child Nutrition, the Earned Income Tax Credit, and veterans' pensions. This category will account for an estimated six percent of the budget.
The remaining mandatory spending, which mainly consists of Federal retirement and insurance programs, unemployment insurance, and payments to farmers, comprises six percent of the budget.
National defense discretionary spending will total an estimated $292 billion in 2001, comprising 16 percent of the budget.
Non-defense discretionary spending--a wide array of programs that include education, training, science, technology, housing, transportation, and foreign aid--has shrunk as a share of the budget from 23 percent in 1966 to less than 19 percent in 2001.
Interest payments, primarily the result of previous budget deficits, averaged seven percent of Federal spending in the 1960s and 1970s. But, due to the large budget deficits that began in the 1980s that share quickly doubled to 15 percent in 1989. Since the budget is now in surplus, interest payments are estimated to drop to 11 percent of the budget in 2001.
Nine percent of your Federal dollar (the budget surplus) will not be spent. The President has proposed that the surplus be used to reduce the Federal debt to assure the continued solvency of Social Security and Medicare.
aymz81 asked this question on 7/11/2000:
What are the principal sources of revenue and expenditure of the three levels of government?
stevehaddock gave this response on 7/11/2000:
The Federal government gets most of its income from personal income tax, with corporate income tax making up most of the rest. States use personal income tax, corporate income tax and retail sales tax. Municipalities collect property and business tax, and some collect sales tax as well.
The major expense of all three governments is diret payments to people - mostly pensions and social assistance. Next for the federal government is defence. Then, for all three levels is generally interest on debt.
aymz81 rated this answer:
thanks for your answer it helped me out a lot
aymz81 asked this follow-up question on 7/11/2000:
hi me again, i thought that the government spent most of their money on roads and things?
stevehaddock gave this response on 7/11/2000:
That used to be the main expenditure of government - infrastructure like roads, buildings, hospitals and what have you. However, since World War II, governments in Canada and Western Europe have realized that although infrastructure is important, it often doesn't help the people who need it most. What good is a new road if you have no car? Or for that matter, no food!
Since World War II, however, governments have realized that people living in poverty didn't lack ambition or "the work ethic", but opportunity. While the United States trails most of the industrial world in spending on people (Scandinavia leads), it is still a major expenditure. Most of the money in the United States goes to the elderly (mostly Social Security payments), but a lot goes to the disabled and a smaller proportion to those who are unemployed or living in circumstances where the expense of child care would exceed any income they might be able to earn. Add in the government's Medicare and Medicade expenses and you're talking quite a lot of money.
smorell@..., a user from metacrawler.com, asked this question on 9/27/2000:
What was the total of the 2000 U.S. Budget?
JesseGordon gave this response on 9/27/2000:
Major components of FY2000 budget:
Spending in FY2000's $1.8 trillion budget:
$405 billion (23%) Social Security payments
$328 billion (18%) Medicare/Medicaid payments
$215 billion (12%) interest on the National Debt
$226 billion (13%) other ‘mandatory’ payments
$262 billion (15%) national defense
$330 billion (19%) other ‘discretionary spending’.
Federal revenue sources:
$900 billion (48%) individual income taxes
$637 billion (34%) social insurance (FICA)
$189 billion (10%) corporate income taxes
$157 billion (8%) other taxes & duties
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