Skip to player
Skip to main content
Skip to footer
Search
Connect
Watch fullscreen
Like
Comments
Bookmark
Share
Add to Playlist
Report
Just the Facts – US budget: Steve Ballmer talks through the numbers
Business Insider
Follow
8/16/2024
The US government spent $6.2 trillion dollars last year and took in nearly $4.5 trillion in revenue. Watch Just the Facts with Steve Ballmer & USAFacts. The more we know, the better voters we can be.
Category
🤖
Tech
Transcript
Display full video transcript
00:00
Hi, I'm Steve Ballmer.
00:02
I spent 34 years growing Microsoft,
00:05
10 years owning the L.A. Clippers basketball team.
00:08
I love computers, data, and facts.
00:11
That's why I started USAFacts,
00:14
to help understand what our government is up to
00:17
and what's going on in America.
00:19
I'll share with you the facts and data,
00:22
all from our government,
00:24
you make up your own mind.
00:26
In this episode of Just the Facts,
00:28
the budget.
00:30
The federal budget is a measurement
00:33
of how much our government spends
00:35
and how much revenue it takes in.
00:37
And the budget really took off with COVID.
00:40
In the years leading up to the pandemic,
00:42
annual federal government spending
00:45
hovered between $5 and $5.3 trillion,
00:48
adjusted for inflation.
00:50
Then COVID hit in 2020,
00:52
and the budget really went up to $7.7 trillion
00:56
to help us through the crisis.
00:58
Federal spending has exceeded $6 trillion
01:01
every year since.
01:03
It's really hard to make sense of a trillion of anything.
01:06
So try thinking of it this way.
01:08
If you spent $1,000 every day,
01:12
it would take over 16 million years
01:15
to spend $6 trillion.
01:17
That's a big number.
01:19
In 2023, the federal government spent less.
01:23
As COVID, spending went away.
01:25
Only $6.2 trillion.
01:28
But it took in $4.5 trillion
01:31
of mostly tax revenue.
01:33
This means our government had to come up
01:35
with $1.7 trillion
01:37
to cover the difference between spending and revenue.
01:41
In government speak, that's our deficit.
01:45
Those deficits are ultimately funded with borrowing.
01:49
When you add up all of federal government's borrowing
01:53
over the years,
01:54
you're going to get close to $35 trillion,
01:57
which is the total national debt today,
02:00
which in 2020 was the largest share of our economy
02:05
as measured by our GDP
02:07
at any time since World War II.
02:10
Now let's dive into the details,
02:13
starting with the spending part of the budget.
02:16
About 60% of all federal spending
02:19
is categorized as mandatory spending,
02:22
which amounted to $3.8 trillion last year.
02:25
This spending is essentially on autopilot
02:28
because it funds programs whose eligibility rules
02:32
and benefit formulas are set in law.
02:35
This consists mostly of programs like Social Security,
02:39
Medicare, Medicaid, and Veterans Care.
02:42
Then there are interest payments on our debt,
02:45
which totaled $659 billion last year.
02:50
We're going to have to pay our interest on our debt.
02:53
Everything else Washington does from defense and education
02:56
to transportation, scientific research,
02:59
it's all funded by what's called discretionary spending,
03:02
which accounted for $1.7 trillion last year.
03:07
Let's do a fact check.
03:09
Mandatory spending, $3.8 trillion.
03:13
Discretionary spending, $1.7 trillion.
03:16
And net interest on the debt, $659 billion.
03:20
Total, $6.16 trillion in government spending.
03:26
Now let's try taking a deeper dive
03:28
into the two biggest pieces of mandatory spending,
03:31
Social Security and Medicare.
03:34
Social Security has been around since 1935.
03:38
It provides retirement, disability,
03:42
and survivor benefits to eligible individuals.
03:46
Some key facts about the program,
03:48
it now costs about $1.4 trillion a year
03:52
and accounts for 22% of the total federal budget.
03:57
There are over 67 million people receiving Social Security
04:01
and they're getting an average benefit
04:03
of about $1,900 a month for the actual retirees
04:08
and it's about $1,500 or so
04:11
for the disabled and surviving spouses.
04:14
Social Security, it actually relies on payroll taxes
04:18
from current workers to go into a trust fund
04:22
and then that trust fund pays out the benefits
04:26
to those who receive them.
04:28
With an aging population, there are projections
04:31
that the Social Security trust fund
04:33
will be exhausted by the year 2035.
04:36
Now projections about where Social Security
04:39
is heading could be wrong.
04:41
As the old Yankee catcher from my youth,
04:44
Yogi Berra liked to say,
04:46
it's tough to make predictions,
04:49
especially about the future.
04:53
Let's talk about the second biggest
04:55
mandatory spending item, which is Medicare.
04:58
Medicare costs the federal government
05:00
about $850 billion in 2023
05:04
and that's about 14% of all of our federal spending.
05:09
The bulk of the spending provides health insurance
05:12
for anyone 65 and older.
05:14
Today, Medicare covers 67 million Americans
05:17
or about one in four adults.
05:19
And in 2022, which is the most recent year released,
05:23
we spend about $16,000 per beneficiary per year.
05:27
Medicare's share of the federal budget
05:29
has increased from 10% in 1994 to 14%
05:34
as the number of enrollees in the program
05:37
has continued to grow with our aging population.
05:40
Medicaid, which is a program that provides
05:43
health insurance coverage for those who can least afford it,
05:47
is jointly financed by the federal and state governments.
05:51
In total, the federal government, though,
05:55
paid for $616 billion of it in 2023.
06:00
As of December of 2023,
06:02
there's about 78 million Americans on Medicaid
06:06
and enrollment for the program has grown
06:09
since the passage of the Affordable Care Act in 2010.
06:14
Another line item in mandatory spending
06:16
is veterans' benefits.
06:18
They amount to about $299 billion.
06:22
I, for one, am really happy about the mandatory nature
06:26
of the benefits for our veterans.
06:28
Here's another big ticket item.
06:30
Through a combination of mandatory
06:32
and discretionary spending,
06:34
Washington sent nearly $1.1 trillion
06:38
in grants to our states and local governments in 2023.
06:43
More than half of that was for Medicaid,
06:46
which we just discussed,
06:47
as well as some children's health programs.
06:50
The rest of this spend with the states
06:52
is for a range of programs,
06:54
from education to infrastructure
06:57
and also some other social programs.
07:00
National defense is the single largest category
07:03
of the discretionary part of federal spending,
07:06
and it came in at $820 billion in 2023.
07:11
The two biggest defense expenditures
07:13
are salaries and benefits
07:15
and maintaining and acquiring new weapons systems.
07:19
America has 1.3 million active-duty service members
07:23
in the Army, Navy, Marines, Air Force,
07:26
Coast Guard, and elsewhere.
07:28
We have 767,000 people in the reserves.
07:32
These are people in civilian jobs
07:34
who do regular training, though, for the military
07:37
and can be called into active duty in the future.
07:40
And 779,000 are civilians
07:43
that are filling various support roles in the military.
07:46
I actually had no idea
07:48
we had so many civilians doing important work
07:51
for our military.
07:53
America has also 16 million veterans,
07:57
a number that is declining.
07:59
In 1990, about 11% of the population were veterans,
08:03
while today it's about 6%.
08:06
Finally, as a share of American GDP,
08:09
defense spending's about 3%.
08:12
That's the lowest it's been
08:14
since the data started being published
08:16
around the Korean War.
08:19
When you combine all federal mandatory spending
08:22
with discretionary defense spending
08:24
and our interest payments,
08:26
that accounts for 86% of the 2023 federal spend.
08:30
The remaining 14% is discretionary spending,
08:34
and it covers the rest of the federal government,
08:36
from payments to farmers, food safety,
08:39
environmental protection,
08:40
the administration of justice, and more.
08:43
Some bills signed in the last few years
08:45
will also impact our budget.
08:47
The 2021 Infrastructure and Jobs Act
08:50
will inject an additional $110 billion
08:53
on average per year through 2026
08:56
into public works priorities
08:58
like roads, bridges, water, and broadband.
09:01
That's a 32% increase over the 2021
09:04
combined federal, state, and local spending
09:07
in those areas.
09:09
However, the exact funds are not evenly distributed
09:12
each year and are still being allocated.
09:15
Now let's look at where the money comes from.
09:18
$4.4 trillion out of our $4.5 trillion
09:23
of federal government revenue came from taxes.
09:27
Of the taxes collected in 2023,
09:30
$2.2 trillion, or 49%,
09:34
were from individual income taxes,
09:37
which are the taxes that are paid
09:39
on income from salary, commissions, fees,
09:43
tips, capital gains, dividends,
09:45
retirement income, and more.
09:48
$1.6 trillion, which is 37% of the revenue,
09:53
came from payroll taxes,
09:55
and another $420 billion, or 9%,
09:58
came from corporate income taxes.
10:00
So those are the big revenue streams.
10:03
The federal government does get money
10:05
from other sources, including another
10:07
$80 billion from customs duties,
10:09
$76 billion from sales and excise taxes,
10:13
which are taxes on goods like alcohol, gas, cigarettes.
10:18
Let's take a closer look at individual income taxes
10:21
and who pays them.
10:23
The top 5%, who made a minimum of about $253,000,
10:29
paid $1.4 trillion of tax,
10:33
or close to 66% of all income taxes,
10:36
collected in 2021.
10:38
While the top 10%, who made at least $170,000,
10:43
paid $1.7 trillion,
10:45
or almost 76% of all income tax.
10:49
The bottom 50% of filers,
10:51
who made less than $46,637,
10:55
which is 77 million people,
10:57
paid 2.3% of all income taxes.
11:01
But just to remember,
11:03
people do pay into Social Security
11:05
and Medicare via payroll taxes,
11:08
and they're subject to various state, local taxes,
11:12
and of course sales taxes is part of that.
11:15
In 2017, Congress passed
11:17
and President Trump signed the Tax Cut and Jobs Act.
11:21
That lowered individual rates for every tax bracket
11:25
and increased the tax credit for each child to $2,000.
11:30
Most of that $2,000 is refundable,
11:33
which means you receive cash back
11:36
even if you don't owe federal taxes.
11:39
The bill also cut the corporate income tax rate
11:42
from 35% to 21%.
11:45
Now adjusted for inflation,
11:47
tax revenue from companies went from $379 billion in 2016
11:52
to $248 billion in 2018
11:56
and $422 billion by 2021.
12:00
There's a key thing to note though.
12:02
At the end of 2025,
12:04
the individual tax cuts expire, they go away,
12:09
while the corporate tax cuts do remain in place.
12:13
Let's do a fact check.
12:15
The federal government spent $6.2 trillion last year
12:19
and it took in nearly $4.5 trillion in revenue.
12:23
That leaves a deficit of $1.7 trillion just for 2023.
12:29
I'm going to let you know my personal view on this.
12:31
I do worry about the size
12:33
and especially the growth in our debt.
12:35
In the last 15 years alone,
12:37
Washington has added another $24 trillion to our total debt
12:42
and the interest the government pays on that debt
12:45
has gone up just like it has for millions of Americans.
12:49
America still has the largest
12:51
and most vibrant economy in the world
12:54
and that has sustained us so far.
12:56
But in my view, if we don't have our fiscal house in order,
13:00
it could all unwind.
13:02
Now, you may or may not agree with me.
13:04
That's really not the point.
13:06
You have data now to help you start thinking about these issues.
13:11
And, of course, we'll have to see
13:13
what the presidential candidates have to say about the matter.
13:17
That's it for the federal budget.
13:19
Thanks for hanging in there.
13:20
I hope you agree, the more we know,
13:23
the better voters we can be.
13:25
Just the facts from USA Facts.
13:28
You decide what you believe.
Recommended
14:16
|
Up next
Just the Facts – The U.S. Economy and Your Pocketbook: Steve Ballmer Talks Through the Numbers
Business Insider
9/14/2024
14:43
Just the Facts – US Population: Steve Ballmer Talks Through the Numbers
Business Insider
10/26/2024
14:45
Just the Facts – Immigration: Steve Ballmer talks through the numbers
Business Insider
8/16/2024
14:40
Just the Facts – Health and Healthcare: Steve Ballmer Talks Through the Numbers
Business Insider
10/29/2024
14:16
Just the Facts – Energy and the Environment: Steve Ballmer Talks Through the Number
Business Insider
9/14/2024
11:21
Why Steve Ballmer Doubled The Budget Of One Nonpartisan Political Website
Forbes
10/24/2024
1:11
Donald Trump made more than $600 million last year
The Street
6/16/2025
4:57
How Steve Ballmer Spent $100 Million In A New Twist On Political Giving
Forbes
10/24/2024
16:15
Steve Ballmer On The LA Clippers New Home the 'Intuit Dome'
Forbes
2/22/2024
2:14
Bruce Westerman Touts GOP Budget Resolution: It Will Avert ‘A $4 To 5 Trillion Tax Increase’ On Americans
Forbes Breaking News
4/11/2025
0:50
Live chart: Military spending
The Economist
2/27/2019
1:16
How Donald Trump made more than $600 million in 2024
The Street
6/16/2025
41:55
'We Did It—Congratulations': David Schweikert Decries US Reaching $35 Trillion In National Debt
Forbes Breaking News
7/26/2024
1:51
How Donald Trump’s new tariffs could increase prices
The Street
11/27/2024
1:20
Forbes Reporter Reveals Former President Trump Has Not Released His Annual Financial Disclosure Yet
Forbes Breaking News
5/27/2024
3:33
'This Myth Of Trickle Down Economics': Chris Deluzio Decries GOP's Big Beautiful Bill Defenses
Forbes Breaking News
7/10/2025
1:03
Trump’s bugged bill could increase medical debt by $50 billion
The Street
6/24/2025
21:49
How America's Richest Billionaires Made Nearly $1 Trillion In A Year
Forbes
10/2/2024
2:41
Ilhan Omar: 'It's Funny For' GOP To Talk About Lowering Debt While Proposing $4.5 Trillion Tax Cut
Forbes Breaking News
3/19/2025
20:08
101-Year-Old American veteran shares his secret to a long, happy life
Insider
yesterday
14:49
Why a French chef with 21 Michelin stars is betting on the Middle East
Insider
2 days ago
51:00
How submarines actually work, according to a former Navy commander
Insider
5 days ago
0:25
How to Make S’mores Ice Cream Sandwiches
Better Homes and Gardens
7/21/2025
0:35
We Planted Our Garden!
Better Homes and Gardens
7/21/2025
0:25
S’mores Ice Cream Sandwich Recipe
Better Homes and Gardens
7/21/2025
