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October 12, 08

NEWS / Federal Spending Increased 4.4 Percent in 2007

* Tom Edwards
* Public Information Office
* 301-763-3030/763-3762 (phone/fax)
* e-mail:

* CB08-146

Federal Spending Increased 4.4 Percent in 2007

The federal government allocated $2.56 trillion in domestic spending for fiscal year 2007, up 4.4 percent from the prior year, according to the U.S. Census Bureau. This and additional important information on federal funding is included in two new reports being released today. The Consolidated Federal Funds Report: 2007 [PDF] provides a broad overview of how and where the federal government distributes funds. Statistics are broken out by federal department and agency, as well as by state, county and subcounty area. The second report, Federal Aid to States for Fiscal Year 2007, [PDF] contains data on federal grants to state and local governments.

Retirement and disability payments to individuals accounted for $783 billion (more than 30 percent) of total federal spending. Of that amount, 80 percent, or $623 billion, went to Social Security recipients. Social Security was composed of retirement insurance payments ($369 billion), survivors insurance ($113 billion), disability insurance ($105 billion) and supplemental security income payments ($36 billion).

Nearly half of all domestic government spending (excluding interest on the federal debt) went to Social Security, Medicare and Medicaid, accounting for $1.22 trillion. The one-year increase in spending for these three programs was approximately $198 for every person in the United States.

Other highlights from the Consolidated Federal Funds Report:

* Grants accounted for $496 billion (20 percent) of all federal spending. Medical assistance programs under the Centers for Medicare and Medicaid Services made up 41 percent of that amount, followed by highway planning and construction grants (12 percent).
* Procurement contracts accounted for $440 billion (17 percent) of total federal spending. Of this, defense contracts made up 67 percent, followed by other federal agency contracts (30 percent) and the U.S. Postal Service (3 percent).
* Salaries and wages accounted for $253 billion (10 percent) of total federal spending. Department of Defense payrolls made up 38 percent of that amount, followed by federal government civilian payrolls (37 percent) and the U.S. Postal Service payroll (25 percent).
* Per capita spending was highest for Virginia ($14,277), Alaska ($13,721), and Maryland ($12,569). The states that received the lowest per capita distribution of federal funds were Nevada ($6,032), Utah ($6,486) and Oregon ($6,736).
* The three states with the highest per capita social security payments were West Virginia ($3,039), Pennsylvania ($2,581), and Alabama ($2,496).
* Virginia led the states with the highest amount of defense procurement contracts, while California had the highest amount of procurement contracts for other federal agencies.
* California led the states with the highest amount of federal government civilian employee salaries and wages, while Virginia had the highest amount of Department of Defense and California led in the Postal Service.
* In addition to the $2.56 trillion in direct expenditures or obligations, the federal government committed $1.37 trillion in direct loans, guaranteed loans and insurance. Insurance coverage accounted for 86 percent of that total. Guaranteed or insured loans comprised 12 percent (including $60 billion in federal family education loans). Direct loans comprised the remaining 2 percent, led by federal direct student loans ($12 billion) and Commodity Loans and Loan Deficiency Payments ($4 billion).
* Florida received the highest amount of flood insurance coverage and the highest per capita flood insurance coverage.
* The three states with the highest per capita federal direct student loans were Iowa ($140), West Virginia ($114) and Oregon ($96).


The data in these reports are not subject to sampling variability but are subject to nonsampling errors, which include errors of response and processing.

These reports present data for the states and counties only. They do not support the application of federal spending data directly for other areas such as places and congressional districts.



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