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off the charts

The big picture on the budget and taxes


As Congress debates measures to extend Bush-era tax cuts and fund government operations for the current fiscal year before its members leave town for the holidays, we thought you might be interested in some perspective on how the federal government uses tax dollars. (For a more detailed analysis, read our Policy Basics here or listen to our podcast on the topic here).

As shown in the graph, about 20 percent of the budget goes for defense and security programs, another 20 percent goes for Social Security, 21 percent goes for the main health insurance programs (Medicare, Medicaid, and the Children’s Health Insurance Program), and another six percent covers interest payments that the federal government must make on the money it has borrowed to finance past deficits.

Another 14 percent of the budget goes for safety net programs that provide assistance to individuals and families facing hardship, such as the refundable portions of the earned-income and child tax credits, which assist low- and moderate-income working families through the tax code; programs that provide cash payments to eligible individuals or households, including Supplemental Security Income for the elderly or disabled poor and unemployment insurance; various forms of in-kind assistance for low-income families and individuals, including food stamps, school meals, low-income housing assistance, child-care assistance, and assistance in meeting home energy bills; and various other programs such as those that aid abused and neglected children.

The remaining 19 percent of the budget covers a multitude of public services, such as providing health care and other benefits to veterans and retirement benefits to retired federal employees, assuring food and drug safety, protecting the environment, and investing in education, scientific and medical research, and basic infrastructure such as roads, bridges, and airports. This 19 percent also includes a very small slice of the budget (about 1 percent) that goes for non-security programs that operate internationally, including programs that provide humanitarian aid.