Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

Fast Facts about Mandatory Spending

by June 7, 2023
June 7, 2023

Romina Boccia and Dominik Lett

The federal government will spend $6.3 trillion in 2023, 73 percent is categorized as mandatory and 27 percent as discretionary. Mandatory spending refers to federal programs that are funded outside of annual appropriations, including Social Security, Medicare, and food stamps (SNAP). Mandatory spending also includes interest spending on the federal debt. Mandatory spending is typically ongoing and determined by statutory formula, meaning it continues from year to year, unless Congress changes the underlying law. This fact sheet lays out key details legislators and the public should know about mandatory spending.

Mandatory spending accounts for three quarters of all federal spending, that’s $4.6 trillion in 2023 or 17.6 percent of gross domestic product (GDP).

The federal government will spend $35,000 in mandatory spending for every U.S. household in 2023.

Between 1973 and 2023, mandatory spending’s budgetary share grew from 47 percent to 73 percent of total federal spending.

Between 1973 and 2023 mandatory spending doubled from 8.5 percent of GDP to 17.6 percent of GDP.

Mandatory spending is growing as a share of the overall budget, primarily due to the growth of major entitlement programs like Social Security and Medicare.

Mandatory spending will reach $7.4 trillion or 19 percent of GDP by 2033 according to projections by the Congressional Budget Office (CBO).

Most mandatory spending is for major entitlements like Social Security, Medicare, and Medicaid.

Social Security spending will grow from $1.4 trillion or 5.1 percent of GDP in 2023 to $2.4 trillion or 6 percent of GDP.

Medicare, excluding offsetting receipts such as premium payments, will spend $1 trillion in 2023.

Medicaid will spend $589 billion in 2023.

Major health care programs when combined make up the largest category of federal spending, spending $1.7 trillion in 2023 or 6.5 percent of gross domestic product (GDP).

Major health care spending will increase to $3 trillion or 7.8 percent of GDP by 2033. That’s almost three times what the U.S. government will spend on defense that year.

Spending for income security programs, including food stamps (SNAP) and unemployment compensation, will reach $413 billion in 2023.

Net interest spending and means‐​tested entitlements like food stamps, welfare, and Medicaid, grew the fastest.

Interest spending on the federal debt is categorized as mandatory spending.

Interest costs on the federal debt are projected to grow faster than any other category of spending.

In 2023, net interest spending will reach $663 billion or 2.5 percent of GDP.

By 2033, interest costs are projected to double to $1.4 trillion or 3.7 percent of GDP. That’s 20 percent of total federal revenues in 2033.

By 2052, net interest costs are projected to rise to 7.2 percent of GDP. That would be higher than spending on Social Security or all discretionary spending.

If interest rates were 1 percentage point higher than projected, cumulative interest costs would increase by $3 trillion over 10 years.

Mandatory spending is the primary driver of the U.S. fiscal imbalance.

Nearly 60 percent of the federal government’s long‐​term structural fiscal imbalance is the result of legislation enacted between 1965 and 1972 pertaining to Medicare, Medicaid, and Social Security.

Together, major entitlement programs and interest will be responsible for 82 percent of projected spending growth over the next 10 years.

Over the next 75 years, Medicare and Social Security are responsible for 95 percent of the total unfunded obligation (the present value of non‐​interest spending less receipts).

Four of the five largest federal budget functions are mandatory spending; only one of the five largest budget functions is subject to regular review and spending limits: national defense.

Further reading:

Why We Have Federal Deficits: An Updated Analysis, by Charles Blahous

“Nearly three‐​fifths of the federal government’s long‐​term structural fiscal imbalance derives from legislation enacted between 1965 and 1972, including the enactments of Medicare and Medicaid in 1965, expansions of Medicare and Medicaid in 1971–72, and substantial increases in Social Security benefits in 1972.”

Designing a BRAC‐​Like Fiscal Commission To Stabilize the Debt

“A well‐​designed BRAC‐​like process will be an effective tool for reducing government spending while also respecting Congress’s constitutional authority.”

How a Better Budget Control Act Would Limit Spending and Control Debt

“An independent, nonpartisan commission can help Congress overcome entitlement reform gridlock by providing politicians with political cover to approve the necessary changes sooner. [That] allows for more gradual changes to old‐​age entitlement programs that preserve benefits for the most vulnerable seniors without economically damaging tax increases on American workers.”

Download a printable PDF version of this fact sheet here.

For other fact sheets on the U.S. federal budget see:

Federal Debt

Discretionary Spending

Social Security and Medicare

0
FacebookTwitterGoogle +Pinterest
previous post
Dental equipment you need to start a dental practice
next post
Female entrepreneurs to add £250b to the economy with equal access to funding and support 

You may also like

Withdrawing from the WHO: A Chance to Rethink...

January 22, 2025

Friday Feature: Colossal Academy

July 28, 2023

Jack Dorsey on Why Social Media’s Future Should...

May 21, 2024

Trump’s School Discipline Executive Order: Both Right and...

April 24, 2025

Journavx: A Promising Opioid Alternative, but Not a...

January 31, 2025

Backlash: Good Intentions Can Have Counter-Productive Consequences

August 31, 2023

Occupational Licensing Harms Workers in Similar Roles

November 30, 2023

New Biden Section 301 Tariffs (Once Again) Put...

May 14, 2024

Cato CEF Friday Feature Marathon

November 27, 2023

Breaking the NIMBY Feedback Loop in Vermont

March 7, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • M&S reopens online orders after cyberattack disruption

      June 10, 2025
    • UK payrolls see biggest drop since covid as wage growth slows and job market weakens

      June 10, 2025
    • Why AI and green tech are vital to SME growth in 2025

      June 10, 2025
    • Yes, it’s great to get PR coverage – until it’s locked behind a bloody paywall

      June 10, 2025
    • We have to act now to keep AI from becoming a far-left Trojan Horse

      June 10, 2025
    • SME lending delays slashed by 80% thanks to fintech-driven back-office reform

      June 10, 2025

    Categories

    • Business (8,174)
    • Investing (2,021)
    • Politics (15,580)
    • Stocks (3,138)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved