Government Spending: Federal, State, Local

Governments in the US will spend $13.6 trillion in 2026.

In fiscal 2026 the federal government estimates spending will be $7.5 trillion, of which $1.3 trillion will be transferred to states and local governments. State spending for 2026 is "guesstimated" by usgovernmentspending.com at $3.7 trillion and local government spending is "guesstimated" by usgovernmentspending.com at $3.6 trillion.

Total spending at all levels of government in the United States is "guesstimated" by usgovernmentspending.com to be $13.6 trillion in 2026.

Government Spending: the Big Picture

The four big functions each cost over one trillion dollars a year. Or more.

Where does all the money go? It is really quite simple. Governments at all levels, federal, state, and local, spend about $2.2 trillion a year on pensions, including Social Security and government employee pensions. Governments spend about $2.9 trillion a year on health care, principally Medicare and Medicaid. Governments spend about $1.9 trillion a year on education at all levels, principally at the local government level. The federal government spends about $1.5 trillion a year on defense, including the Departments of Defense, State, and Veterans Affairs. Governments spend $0.9 trillion on welfare programs other than Medicaid. All other spending amounts to $3.8 trillion, including interest on the national debt. The grand total of all the spending is $13.6 trillion.

Government Spending: The Details

About 59 percent of government spending comes from the federal government; About 24.5 percent is spent by state governments and 26 percent by local governments. About 10 percent of total spending is transferred from the federal government to state and local governments.

The federal government is budgeted to spend $7.54 trillion in FY 2026, of which about $1.3 trillion is transferred to state and local governments. Federal pension programs, including Social Security, will cost about $1,739 billion; federal health care programs, including Medicare and the federal share of Medicaid, will cost $2,118 billion; defense, including the Departments of Defense and State, and the Veterans Administration, will cost about $1,466 billion. Federal welfare costs will come in at $530 billion, and federal education programs will cost about $122 billion. Interest on the national debt is estimated at $1,017 billion.

State governments are "guesstimated" by usgovernmentspending.com to spend about $3.72 trillion in FY 2026. The biggest expenditure will be $1,358 billion for health care, mainly on Medicaid and related programs partially funded by the federal government. Next up are education at $520 billion and employee pensions at $421 billion. Welfare is expected to cost about $277 billion and transportation $222 billion.

Local governments are "guesstimated" by usgovernmentspending.com to spend about $3.63 trillion in FY 2026. The biggest expenditure is $1,343 billion for education. Next comes police and fire protection at $329 billion, health care at $315 billion, and transportation at $304 billion.

Pie Chart of Total US Government Spending

Although the four big government programs — pensions, health care, education, and defense — each cost about a trillion dollars a year they are distributed unequally between the levels of government.

Total government spending in the United States, including federal, state, and local governments, is expected to total $13.64 trillion in FY 2026. The total features five major functions. Of the total spending, health care takes a 26 percent share, pensions a 20 percent share, education a 17 percent share, defense a 13 percent share. All other functions, including interest on the debt, take 47 percent of spending.

Pie Chart of Federal Government Spending

Federal spending is budgeted at $7.54 trillion in FY 2026, and includes four major functions. Health care, principally Medicare and Medicaid, takes a 28 percent share; pensions, principally Social Security, take a 23 percent share; defense, including foreign policy, veterans, and foreign aid, is 19 percent of spending; welfare takes 7 percent of spending. All other spending, including interest on the national debt, takes 22 percent of federal spending.

Notice that education is not a major item in federal spending.

Pie Chart of State Government Spending

State government spending, as "guesstimated" by usgovernmentspending.com, will total about $3.72 trillion in FY 2026, and features three major functions. Health care takes 36 percent of spending; education has a 14 percent share; state government pensions have an 11 percent share. welfare has a 7 percent share. All other spending takes a 31 percent share of state government spending.

Pie Chart of Local Government Spending

Local government spending, as "guesstimated" by usgovernmentspending.com, will total about $3.63 trillion in FY 2026, and features three major functions. Biggest program by far is education, K-12 schools, taking a full 37 percent of local spending; protection — police, fire and justice system — has a 9 percent share. health care has a 9 percent share; All other functions, at 44 percent of total, each take less than 7 percent of local government spending.