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Discussions about federal spending are difficult because the numbers are so large that they can be difficult to grasp. How many ordinary folks can truly comprehend how much $1 billion — that’s a thousand millions — is? And still, it’s a rounding error (just 0.01 percent of spending) compared with the nearly $7 trillion federal budget.
This is the context for the federal spending cuts led by President Trump and Elon Musk’s Department of Government Efficiency. Last week, the administration announced its latest dismissals: 10,000 employees at the Department of Health and Human Services. That sounds like a lot of people, but it’s small for a government that employs three million civilian workers.
How much has DOGE pared back so far? Federal spending is actually higher this year than it was at this point in 2024, according to the Hamilton Project.
Today’s newsletter walks through what the federal government spends money on, to clarify these big numbers and show the actual effects of Trump’s efforts.
Growing debt
Since the early 2000s, the federal government has spent more money — sometimes much more — than it collects in taxes. That has caused the debt to grow to levels not seen since World War II.
A chart shows federal debt as a share of gross domestic product, from 1900 to 2024. Debt was over 100 percent of G.D.P. during and after World War II in the 1940s, and has recently reached similar levels after Covid began in 2020.
U.S. entered
World War II
100% of G.D.P.
80
60
40
20
1900
1920
1940
1960
1980
2000
2020
U.S. entered
World War II
100% of G.D.P.
80
60
40
20
1900
1920
1940
1960
1980
2000
2020
A chart shows federal spending from October 2023 to September 2024 by government function. Social security accounted for 21.6 percent of spending; interest payments accounted for 13.1 percent and Medicare and defense each accounted for 12.9 percent.
Total: $6.8 trillion
Other health services
(includes Medicaid)
13.5%
Income security
(includes
welfare
programs)
9.9%
Veteran’s benefits and services
4.8%
Total: $6.8 trillion
Other health services
(includes Medicaid)
13.5%
Income security
(includes welfare
programs)
9.9%
Veteran’s benefits
and services
4.8%
A chart shows that government spending on federal work force wages and benefits was about 4 percent total federal spending in the fiscal year 2022.
Total: $6.3 trillion
Each square
represents
1 percent
of spending.
Federal work force wages and benefits:
$271 billion or 4.3%
Total: $6.3 trillion
Each block
represents 1%
of spending.
Federal work force wages and benefits:
$271 billion or 4.3%
