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Estimated FY 2014 Spending
for Governments in the United States

In fiscal year 2014 the governments in the United States are expected to spend about 36 percent of Gross Domestic Product. Most of the money goes for health care, education, pensions, defense, and welfare programs. Health care spending is split mainly between federal and state governments; education spending is mainly spent by local governments; pension spending is primarily the federal government’s Social Security program.

Government Spending: Federal, State, Local

Governments in the US will spend $6.3 trillion in 2014.

Table 2.01: Total Spending in 2014

In fiscal 2014 the federal government estimates spending will be $3.7 trillion, of which $0.6 trillion will be transferred to states and local governments. State spending for 2014 is "guesstimated" by at $1.5 trillion and local government spending is "guesstimated" by at $1.7 trillion.

Total spending at all levels of government in the United States is "guesstimated" by to be $6.3 trillion in 2014.

Government Spending: the Big Picture

The four big programs each cost about one trillion dollars a year.

Table 2.02: Total Spending Breakdown FY 2014

Where does all the money go? It is really quite simple. Governments at all levels, federal, state, and local, spend about $1.2 trillion a year on pensions, including Social Security and government employee pensions. Governments spend about $1.3 trillion a year on health care, principally Medicare and Medicaid. Governments spend about $1.0 trillion a year on education at all levels, principally at the local government level. The federal government spends about $0.8 trillion a year on defense, including the Departments of Defense, State, and Veterans Affairs. Governments spend $0.5 trillion on welfare programs other than Medicaid. All other spending amounts to $1.5 trillion, including interest on the national debt. The grand total of all the spending is $6.3 trillion.

Government Spending: the Details

About 58 percent of government spending comes from the federal government; About 24.1 percent is spent by state governments and 27.4 percent by local governments. About 10 percent of total spending is transferred from the federal government to state and local governments.

Table 2.03: Total Spending Details FY 2014

The federal government is budgeted to spend $3.65 trillion in FY 2014, of which about $0.6 trillion is transferred to state and local governments. Pension programs, including Social Security, will cost about $922 billion; health care programs, including Medicare and Medicaid, will cost $970 billion; defense, including the Departments of Defense and State, and the Veterans Administration, will cost about $820 billion. Welfare costs will come in at $396 billion, and federal education programs will cost about $113 billion. Interest on the national debt is estimated at $224 billion.

State governments are "guesstimated" by to spend about $1.5 trillion in FY 2014. The biggest expenditure will be $490 billion for health care, mainly on Medicaid. Next up are education at $293 billion and employee pensions at $216 billion. Welfare is expected to cost about $152 billion and transportation $123 billion.

Local governments are "guesstimated" by to spend about $1.7 trillion in FY 2014. The biggest expenditure is $675 billion for education. Next comes police and fire protection at $163 billion, transportation at $157 billion, and health care at $143 billion.

Pie Chart of Total US Government Spending

Although the four big government programs — pensions, health care, education, and defense — each cost about a trillion dollars a year they are distributed unequally between the levels of government.

Chart 2.04: Total Spending Details

Total government spending in the United States, including federal, state, and local governments, is expected to total $6.30 trillion in 2014. The total features five major functions. Of the total spending, health care takes a 20 percent share, pensions a 19 percent share, education a 16 percent share, and defense a 13 percent share. Welfare, the fifth largest function, takes an 8 percent share of spending. All other functions, including interest on the debt, take only 24 percent of spending.

Pie Chart of Federal Government Spending

Chart 2.05: Federal Spending Details

Federal spending is budgeted at $3.65 trillion for FY 2014, and includes four major functions. Health care, principally Medicare and Medicaid, takes a 27 percent share; defense, including foreign policy, veterans, and foreign aid, is 22 percent of spending; pensions, principally Social Security, take a 25 percent share; and welfare takes 11 percent of spending. All other spending, including interest on the national debt, takes 15 percent of federal spending.

Notice that education is not a major item in federal spending.

Pie Chart of State Government Spending


Chart 2.06: State Spending Details

State government spending, as "guesstimated" by, will total about $1.52 trillion in FY 2014, and features five major functions. Health care spending takes 32 percent of spending, education a 19 percent share, state government pensions a 14 percent share, and welfare 10 percent. Transportation takes an 8 percent share of state spending. All other spending takes an 16 percent share of state government spending.

Pie Chart of Local Government Spending

Chart 2.07: Local Spending Details

Local government spending, as "guesstimated" by, will total about $1.73 trillion on FY 2014, and features two major functions. Biggest program by far is education, K-12 schools, taking a full 39 percent of local spending, followed by protection — police, fire and justice system — at 9 percent. Then comes transportation at 9 percent and health care at 8 percent. All other programs, at 34 percent of total, each take less than 7 percent of local government spending.

Spending 101 Courses

Spending | Federal Debt | Revenue | Defense | Welfare | Healthcare | Education
Debt History | Entitlements | Deficits | State Spending | State Taxes | State Debt

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Spending Data Sources

Spending data is from official government sources.
  Federal data since 1962 comes from the president’s budget.
  All other spending data comes from the US Census Bureau.

Gross Domestic Product data comes from US Bureau of Economic Analysis and

Detailed table of spending data sources here.

Federal spending data begins in 1792.

State and local spending data begins in 1890.

State and local spending data for individual states begins in 1957.

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Next Data Update

> State and Local Finances FY12

> data update schedule.

Data Source

Source: CBO Long-Term Budget Outlook .

> data sources for other years
> data update schedule.

Gross State Product Update for 2013

The US Bureau of Economic Analysis (BEA) released its Gross State Product (GSP) data for 2013 on June 11, 2014. has updated its individual state GSPs for 2013 and projected nominal and real GSP through 2019 for each state using the projected national GDP numbers from Table 10.1 in the Historical Tables for the Federal FY2014 Budget and the historical GDP data series from the BEA as a baseline.

As before we have projected individual state GSPs out to 2019 by applying a factor to reflect each state's deviation from the national growth rate. (E.g. In 2013 the national real GDP expanded by 1.9 percent. But North Dakota grew by 9.7 percent, a deviation of nearly 7 percent. The deviation is reduced by 40 percent for each year after 2013, making the assumption that each state will slowly revert to the national norm.) displays individual state data going back to 1957, but BEA has nominal GSP data going back to only 1963, and real GSP data going back to 1987.  Also the 1987-1997 real GSP data is in 1997 dollars, not 2009 dollars like the 1997-present data, and the pre-1997 data is based on a different model than post 1997 data.  For the pre-1997 data we have factored it to remove any "bumps" over the 1997 transition.

Because needs GSP data to provide e.g., spending as a percent of GDP, we have extended the two BEA GSP data series back to 1957.  We have assumed that the rate of change of GSP prior to 1963 is the same as the national GDP and we have assumed that the rate of change of real GSP prior to 1987 is the same as the nation real GDP growth rate.

Click here to view a complete list of US states and their 2013 GSP growth rates.

Spend links

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