Evolving Priorities and Areas of Spending in the US Federal Government Budget

Evolving Priorities and Areas of Spending in the US Federal Government Budget

What are the priorities and areas of spending of the US federal government?

Interestingly, before the hot phase of the Ukrainian crisis began in 2022, the share of spending on national defense (11.1% of all spending) and on the State Department (0.7%) was half lower than the highest levels of the last 20 years.

The US budget is, in fact, at the highest degree of demilitarization. National defense spending as a % of all spending peaked at 21% in 2008, and the State Department spent 1.3 - 1.4% in 2005 and between 2010 and 2015.

U.S. defense and foreign policy activities are maximally "squeezed," even in 2023, with the two areas combined at 13.8%, compared to 22% at the peak and 16.6% in 2019. No significant change in this direction is seen in 2022 - 2023.

Emphasis on Education

The priority of education at all levels, including vocational training, skills development, job training, and job support, has increased dramatically - these programs now account for 5.1 - 5.8% of all spending, up from an average of 2.8% from 2011 to 2019 and 3.7% from 2005 to 2008. The shift in priority occurred after COVID.

Less is spent directly on technology and R&D - 0.6% vs 0.8% from 2011 to 2019, as R&D in the US is funded through the private sector.

Social policy is very high, with 26.9% of all spending vs 26.4% in 2011 - 2019 and 22.5% in 2005 - 2008, with 37.6% vs 41.4% and 37.6% spent on medicine in 2023, respectively.

For government/economic functioning, spending is near historic lows at 7.6% vs 8.6% and 9.4%, respectively.

Expenditures on commercial loans are above the norm - 1.5% of expenditures (growing in crisis conditions), while inter-budget transfers are within the norm - 0.5%.

Almost the entire increase in budget expenditures goes to interest expenses, which are already at 10.2% (the maximum in modern history) vs 6.8% in 2011 - 2019 and 8.3% in 2005 - 2008.

Conclusion

In conclusion, it should be noted that the analysis of priorities and areas of expenditures of the US federal government has revealed some significant shifts in the allocation of budgetary funds in recent years. In particular, spending on national defense and foreign policy has declined and will reach its lowest level in recent history in 2023. This decline in military and diplomatic spending contrasts with previous peaks, especially in the late 2000s.

Table of contents
  1. Historical Trends in National Defense Spending
  2. Emphasis on Education
  3. Conclusion