Where $3.9 Trillion In FY2016 Federal Spending Really Went

Monday, November 14th, 2016 @ 12:09PM

Gary D. Halbert

Between the Lines

It is so very tempting to devote this entire space to this week’s historic presidential election, and goodness knows I could. Yet the only thing that mattered to me in this election was that Hillary Clinton lost. She did and did so very badly. While I’m not a big Trump fan, almost anyone would be better than having the Clintons back in the White House. Now on to our main topic.

For most of us it’s hard to fathom how the government could spend almost $4 trillion in a single year. But that is just what happened in fiscal year 2016 which ended on September 30. While we don’t yet have the final spending figures for FY2016, we do know how the $3.9 trillion was initially allocated in the federal budget passed by Congress.

Have you ever wondered where that massive federal spending goes? Data from the White House Office of Management and Budget painted a detailed picture of how the money would be spent in FY2016. Let’s take a look.

Healthcare: $1,107,446,000,000
Healthcare spending, the largest category, accounted for more than $1.1 trillion of the federal budget in FY2016. The reason? It’s primarily due to entitlement programs such as Medicare (predominantly the elderly) and Medicaid (low-income individuals and families). Medicare and Medicaid, along with the Children’s Health Insurance Plan (CHIP), ate up $955.2 billion of the $1.1 trillion healthcare budget.

Obamacare significantly added to these costs. The remaining $152 billion was mostly used to support tax credits for Obamacare enrollees, and to assist states with their health insurance marketplaces.

Social Security: $944,338,000,000
As a single entitlement program, Social Security tops the list by far, with more than $944 billion in budgeted spending in FY2016. As Baby Boomers continue to move into retirement, this figure is going to expand very rapidly. Social Security, Medicare, and Medicaid collectively accounted for $1.9 trillion in annual spending, or basically half of the entire budget!

National Defense: $615,515,000,000
US military spending dwarfs that of every other country in the world. But how does this $615.5 billion break down? Almost $251 billion was to pay for ongoing military operations across the world, as well as cover the cost of new equipment and supplies.

A little more than $148 billion was used to pay the salaries of the United States’ military personnel. Another $216 billion was used in “other” areas of national defense, which would include rapidly growing industries like cybersecurity, and includes funds for federal agencies like the CIA and NSA.

Income Security: $546,350,000,000
Entitlement programs help protect our nation’s seniors, and ensure that low-income individuals and their families have access to medical care. Yet an additional $546 billion in other forms of income securities were also apportioned in the fiscal 2016 budget.

For example, about $108.3 billion has been set aside for food and nutrition assistance programs (food stamps, etc.) that ensure lower-income households have the ability to buy food. Another $95.3 billion helped with affordable housing and unemployment compensation. Another $260 billion was set aside for a variety of programs, including education and child care.


Net Interest: $283,049,000,000

With well over $19 trillion in national debt, the 2016 fiscal budget apportioned $283 billion just to pay interest on our national debt. As the amount we owe as a nation increases and interest rates go up, interest expenses will rise significantly.

Veteran Benefits: $180,324,000,000
In addition to $148 billion spent on the salaries of military personnel, some $180 billion was also set aside to care for veterans of our Armed Forces. Included in this funding was nearly $90 billion apportioned for income and housing support, which also included access to job training. Another $66 billion was used to cover healthcare expenses for veterans, and $24 billion is used for “other” purposes.

Education & Job Training: $106,342,000,000
Of the $106.3 billion apportioned here, $47.9 billion was used to train or retrain people so they could find work. Employers are becoming more specific about the skill sets they’re searching for in today’s economy, so this funding is designed to help the unemployed land a job. Beyond job training, the remainder is focused on education.

Transportation: $98,742,000,000
The transportation agency spent $98.7 billion which was mostly used to improve bridges, ports, highways, mass-transit systems, trains, etc., around the country.

International Affairs: $55,951,000,000
We have more than $25 billion set aside annually to assist overseas nations when it comes to food and health issues. A good example is the threat of the Zika virus spreading. Another $16 billion was apportioned to economic development in areas like Central America.

Other Programs: $164,000,000,000
The balance of the FY2016 budget went to various government programs including the environment and natural resources, federal law enforcement and immigration, science, space and technology, natural disaster response and “other.”

As usual, all these numbers will be larger in FY2017.

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