The federal government spent $7.01 trillion in fiscal year 2025, according to the U.S. Treasury. That works out to roughly $19.2 billion per day. The Congressional Budget Office projects total federal outlays of $7.4 trillion for fiscal year 2026, which would represent about 23.3% of the country’s entire gross domestic product.
What $7 Trillion Actually Looks Like
A number in the trillions is hard to grasp, so it helps to break it down. If you divided the FY 2025 spending of $7.01 trillion evenly among every person living in the United States (roughly 335 million people), the federal government spent about $20,900 per person that year. For a household of four, that’s roughly $84,000 in federal spending tied, in a loose sense, to your family.
Another way to think about it: $7 trillion is larger than the entire annual economic output of every country in the world except the United States and China. The federal budget alone would rank as the third-largest economy on Earth if it were a country.
Where the Money Goes
Federal spending falls into three broad buckets: mandatory spending, discretionary spending, and interest on the national debt.
Mandatory spending is the largest share by far. These are programs that run on autopilot under existing law, meaning Congress does not vote on their funding each year. Social Security is the single biggest line item in the entire budget, followed by Medicare (health coverage for people 65 and older) and Medicaid (health coverage for lower-income Americans). Other mandatory programs include veterans’ benefits, federal employee retirement, and the Supplemental Nutrition Assistance Program (SNAP). Together, mandatory programs consume roughly two-thirds of total federal spending.
Discretionary spending is the portion Congress actively decides on each year through the appropriations process. Defense spending makes up the largest slice of the discretionary budget, typically running between $800 billion and $900 billion. The rest of discretionary spending covers everything else the government does day to day: education grants, transportation infrastructure, scientific research, law enforcement, diplomacy, housing assistance, and the operations of federal agencies. All non-defense discretionary spending combined is a smaller figure than the defense budget alone.
Net interest on the national debt has grown rapidly in recent years as both the total debt and interest rates have climbed. Interest payments now rival defense spending in size, consuming close to $900 billion annually. This is money that does not fund any program or service. It simply covers the cost of borrowing from previous years.
How the Budget Has Grown
Federal spending has expanded significantly over the past two decades. In fiscal year 2004, total outlays were about $2.3 trillion. By fiscal year 2019, just before the pandemic, they had reached $4.4 trillion. Pandemic-era relief programs pushed spending above $6 trillion in 2020 and 2021. Even after those emergency programs wound down, spending did not return to pre-pandemic levels. It settled above $6 trillion and has now crossed the $7 trillion mark.
Several forces drive this upward trend. An aging population means more people collecting Social Security and using Medicare each year. Health care costs continue to rise faster than general inflation. And the national debt, now exceeding $36 trillion, generates larger interest payments as older low-rate bonds mature and get replaced by new borrowing at higher rates.
Spending vs. Revenue
The federal government does not collect enough in taxes and other revenue to cover what it spends. The gap between revenue and spending is the annual deficit, and it has consistently run above $1 trillion in recent years. CBO’s projection of $7.4 trillion in spending for 2026 against expected revenues suggests the deficit will remain in that range.
Federal revenue comes primarily from individual income taxes (the largest source), payroll taxes that fund Social Security and Medicare, and corporate income taxes. Smaller amounts come from excise taxes, customs duties, estate taxes, and fees. Total revenue has generally hovered between 16% and 18% of GDP in recent decades, while spending has trended above 20% of GDP, creating persistent deficits that add to the national debt year after year.
How Big Relative to the Economy
CBO projects that federal spending in 2026 will equal 23.3% of GDP. For context, the long-run historical average since 1970 is closer to 21%. That gap of roughly two percentage points may sound small, but applied to an economy producing over $30 trillion a year, it represents hundreds of billions of dollars in additional spending relative to the historical norm.
The trend line matters here. CBO’s projections through 2036 show spending continuing to grow as a share of GDP, driven primarily by rising health care costs, Social Security obligations, and compounding interest on the debt. Revenue, meanwhile, is projected to grow more slowly, meaning deficits are expected to widen further without changes in law.