Federal Budget Breakdown 2026
The federal government is projected to spend $7.45 trillion in fiscal 2026. Here is where every dollar goes, in plain English. Figures are Congressional Budget Office projections from February 2026.
FY2026 projected outlays by category. Source: CBO Budget and Economic Outlook, February 2026.
| Category | Amount | Share | What it is |
|---|---|---|---|
| Social Security | $1.67T | 22% | Retirement, disability, and survivor benefits. Mandatory. |
| Medicare | $1.06T | 14% | Health coverage for Americans 65 and older. Mandatory. |
| Net interest | $1.04T | 14% | Interest on Treasury debt. Must be paid, no matter what. |
| Nondefense discretionary | $1.00T | 13% | Education, transportation, science, housing. Voted on yearly. |
| Other mandatory | $0.96T | 13% | Veterans benefits, SNAP, federal retirement, unemployment. |
| Defense discretionary | $0.89T | 12% | Military personnel, operations, weapons, research. |
| Medicaid and health subsidies | $0.85T | 11% | Health coverage for low-income Americans. Mandatory. |
The three buckets
Federal spending falls into three buckets:
- Mandatory ($4.53T, 61%): set by law, runs on autopilot. Social Security, Medicare, Medicaid, veterans benefits. Congress does not vote on this each year.
- Discretionary ($1.88T, 25%): what Congress debates and votes on annually. Defense plus everything from national parks to the FBI.
- Net interest ($1.04T, 14%): technically mandatory, but reported separately. The cost of past borrowing.
The big picture
Two-thirds of the budget is health care, retirement, and interest. The part Congress argues about each year, discretionary spending, is only a quarter of the total. And discretionary spending has been shrinking as a share of the economy for decades: 5.9% of GDP in 2026, below the 50-year average of 7.8%.
Total outlays of $7.45 trillion against $5.60 trillion in revenue leaves a projected deficit of $1.85 trillion, or 5.8% of GDP.
Keep learning
- Where the money went: every recipient
- Interest on the debt tracker
- Where does the money go? (explainer)
- Get the Ledger Brief every Wednesday
Sources: Congressional Budget Office, The Budget and Economic Outlook: 2026 to 2036, February 2026 (Table: budget outlook by fiscal year). Total outlays $7.449T, receipts $5.596T, deficit $1.853T. All figures are CBO projections, not final results.