America’s Wallet

Breaking Down America’s Wallet

Federal budget. Fiscal year. Am I already losing you? The complexities and intricacies of our budget can make it hard to follow. But we must pay close attention because money shapes our lives, and the budget affects everything. A budget is more than just numbers; it is a mosaic that reflects our values and priorities. It dictates the focus of the federal government and shows whether Congress is serving the people. So, let’s break it down.

Annual budget 

The U.S. budget is broken down into three spending categories: mandatory, discretionary, and net interest spending. 

Mandatory spending includes programs like Social Security, Medicare, and Veterans’ care. This accounts for 60% of spending, estimated at up to $4 trillion in fiscal year 2025. The two largest chunks of mandatory spending are Social Security and Medicare. Social Security costs $1.56 trillion per year, and Medicare costs the federal government about $997 billion. National defense is the largest chunk of discretionary spending—one of the biggest expenditures is spent on maintaining and acquiring new weapon systems. 

Discretionary spending is $1.8 trillion—27% of total spending—and is appropriated on an annual basis by Congress with the advice of the President. Discretionary spending includes education, transportation, science research, housing, and social service programs—nearly half of the funding goes to Defense spending. 

Finally, net interest spending makes up nearly 13% of the federal budget, is the third-largest category of total U.S. spending, and we spent $1,220,000,000,000 on net interest in FY25. Net interest is the amount of money the federal government spends annually on interest on the debt that it owes. 

Total Annual Revenue

The United States’ total annual revenue was $5.23 trillion for FY2025. A majority of the federal revenue comes from individual income taxes, corporate taxes (8.64%), and social insurance taxes. Individual income taxes account for 51% of the total revenue, the United States’ primary source of income. Fun fact: Individual income taxes were authorized by the Sixteenth Amendment. Social Security and Medicare taxes make up another 33%. Taxes from Social Security and Medicare fund these programs. Other revenue comes from customs duties and sales and excise taxes—taxes on goods like alcohol, gas, and cigarettes. 

Debt and Debt Service

In FY2024, the federal government spent $1.8 trillion more than it collected in revenue. This deficit grew by $138 billion from the previous fiscal year. The FY2025 deficit was $1.78 trillion. And the deficit will keep growing the more we borrow. Our total national debt is sitting at $38.12 trillion as of 11/9/2025. We are crippling ourselves, and the United States must eliminate the federal debt, run balanced budgets, and never use debt to finance general revenue obligations.

Net interest is our third-largest spending category. Annual spending of $1.22 trillion on net interest equals $101.6 billion per month on net interest in FY2025. For context, the FY2026 budget for the state of Oklahoma is $12.08 billion. That means that a single month’s interest payment would fund the entire budget for the state of Oklahoma for 101 months, or for 8 years and five months. The interest we pay per month on the federal debt is the future for our children and for ourselves. We are hemorrhaging funds on our exploding federal debt. And the rate at which we are hemorrhaging these funds should alarm you. It certainly scares me.

I believe our national debt is the single most pressing issue for the federal government. I call for fiscal responsibility by the United States Congress. I call upon the United States Congress to represent the People and allocate federal money where it truly needs to go. Being fiscally responsible means not slashing funding to vital programs. It means having a plan before borrowing and borrowing only with a plan. Borrowing is okay for investing in projects we truly need. Projects that represent the people and projects that generate their own revenue. 

The United States budget should be used to address the concerns and issues that affect everyday Americans. And our elected officials should be asking their constituents one simple question: “What can I do to make your life easier?” The budget should reflect the people—their values and priorities. After all, it is the People’s money that Congress spends. So let’s pour the People's money back into the people. 

#MakePoliticsBoringAgain