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US Federal Grants for FY2025: $1,215 billion; for FY2026 budgeted at: $1,243 billion.
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What is the Federal Grant Spending?

In the Public Budget Database each spending item is tagged as Grant or Nongrant. This analysis shows history of federal grant spending as distributed across various federal functions. The biggest grant item is Medicaid grants to states.

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Federal Grant Analysis  

Recent US Federal Grant Spending

Recent US Federal Grant Spending

Chart S.91f: Recent US Federal Grant Spending

Federal Grant spending increased steadily in the 2010s with a bump during the Great Recession. In the COVID years grant spending jumped from $720 billion in 2020 to $1,245 billion in 2022.

At the end of FY2025 federal grant spending was $1,215 billion, of which $668 billion was for Medicaid.


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Recent US Federal Grants as Pct GDP

Chart S.92f: Recent US Federal Grants as Pct GDP

Viewed as percent of GDP federal grant spending was steady at about 3 percent GDP during the 2010s with a surge to 4 percent GDP during the Great Recession. In the COVID years federal grant spending exploded to 4.7 percent GDP in 2022.

At the end of FY2025 the federal grant spending was 3.9 percent of GDP, of which 2.2 percent of GDP was for Medicaid.

Major Federal Grant Spending Categories

Major Federal Grant Spending Categories

Chart S.93f: Major Federal Grant Spending Categories

The largest federal grant spending category is Medicaid grants to the states, amounting to over one percent of GDP in 2007. The next highest is welfare, at about 0.5 percent of GDP in 2007. Then education, transportation, and other categories. During the COVID years, economic assistance, reaching almost one percent of GDP in 2022, was provided with General Government grants.

The trend in federal grants is upward, as a percent of GDP, with Medicaid grants reaching 2 percent of GDP in 2022.

US Federal Grant Spending Since 1962

Federal Grant Spending since 1962

Chart S.94f: Federal Grant Spending since 1962

Federal grant spending began the 1960s at 1.3 percent GDP, but then surged in the 1970s to over 3 percent GDP. In the 1980s grant spending declined to 2 percent GDP, but in the decades since has steadily increased, hitting 3 percent GDP in 2003, 3.9 percent GDP in 2011, and 4.7 percent GDP during COVID in 2022.

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Debt Data Sources

Debt data is from official government sources.

Gross Domestic Product data comes from US Bureau of Economic Analysis and measuringworth.com.

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Federal debt data begins in 1792.

State and local debt data begins in 1820.

State and local debt data for individual states begins in 1957.

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Data Sources for 2021_2031:

Sources for 2021:

GDP, GO: GDP, GO Sources
Federal: Fed. Budget: Hist. Tables 3.2, 5.1, 7.1
State and Local: State and Local Gov. Finances
'Guesstimated' by projecting the latest change in reported spending forward to future years

Sources for 2031:

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Federal: Fed. Budget: Hist. Tables 3.2, 5.1, 7.1
State and Local: State and Local Gov. Finances
'Guesstimated' by projecting the latest change in reported spending forward to future years

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