FY 2015 U.S. Federal Budget and Spending

Thank Sequestration for a Smaller Deficit in FY 2015

Federal budget FY 2015
The best way to lower the deficit is to reduce healthcare and defense spending.. Photo by Alex Wong/Getty Images

The Fiscal Year 2015 Federal Budget is the U.S. government spending and revenue from October 1, 2014, through September 30, 2015. It spent $3.688 trillion but only receive $3.250 trillion in revenue. That created a $438 billion budget deficit.

The President submitted the FY 2015 budget proposal to Congress on March 4, 2014. Congress passed the  $1.1 trillion spending bill on December 13, 2014. It appropriated funding for the Discretionary budget for the rest of FY 2015.

However, it only funded Homeland Security through February 2015. That was in protest of President Obama's executive actions on immigration. Here's an explanation of how the Budget Process works.

Here is a breakout of FY 2015 budget revenue and spending. It compares actual spending to the President's budget. (Sources: FY 2017 Budget. FY 2015 Budget.)

Revenue

The federal government received $3.250 trillion in FY 2015. That was less than the President's estimate of $3.337 trillion. Income taxes contributed 47%. Payroll taxes for Social Security, Medicare and unemployment insurance added 34%.  Corporate taxes provided 11%. The remaining 9% was divided equally among the following: excise taxes and tariffs, earnings from the Federal Reserve's $4.4 trillion in securities holdings, and miscellaneous revenue.  (Source: FY 2017 Budget, Summary Tables, Table S-5) 

Tax Freedom Day occurred on April 24 in 2015.

That's the first day of the year that Americans weren't working to simply pay taxes.

Spending

The government spent $3.688 trillion. That's much less than the $3.9 trillion in the President's budget. That's partly due to sequestration, which limited discretionary spending to $1.1 trillion. It's also because mandatory spending was less than originally estimated.

Here's the breakout.

Mandatory - As usual, nearly two-thirds of the budget went toward mandatory programs. These were established by prior Acts of Congress, so can't be changed without another Act.  A total $2.301 trillion was spent, lower than the $2.458 trillion originally budgeted. Here's the breakdown:

  • Social Security is the largest. It costs $882 billion, lower than the $896 billion originally estimated. It's currently 100% paid for by payroll taxes, so doesn't add to the deficit.
  • Medicare is next, at $540 billion. This was higher than the $526 billion first estimated. It's only 57% funded by payroll taxes and premiums.
  • Medicaid spent $350 billion, more than the $336 billion budgeted.
  • All other mandatory programs, like Food Stamps, Unemployment Compensation, and Supplemental Security for the Disabled, the Affordable Care Act and TARP, spent $529 billion. This is less than the $659 billion originally estimated. (Source: OMB, FY 2015 Budget, Table S-5)

The only portions affected by sequestration were Medicare provider payments and the unemployment trust fund.

 

Interest payments on the national debt were $223 billion. Lower interest rates meant that the Treasury didn't pay the $251 billion originally budgeted. 

Discretionary - Discretionary spending must comply with the Bipartisan Budget Act, which approved $1.1 trillion for the 2015 discretionary budget. Here's the spending for the major departments:

  • Department of Defense  - $496.1 billion.
  • Health and Human Services - $80.3 billion.
  • Education - $66.9 billion.
  • Veterans Affairs - $65.1 billion.
  • Homeland Security - $39.9 billion.
  • Energy Department - $27.4 billion (includes $11.4 billion for the National Nuclear Security Administration).
  • Housing and Urban Development - $30.4 billion.
  • Justice Department - $26.3 billion.
  • State Department - $40.9 billion.
  • NASA - $18.1 billion.

Congress added $73.7 billion in Overseas Contingency Operations (OCO) to pay for the Afghanistan War.  It added $13.4 billion in Emergency funding for Disaster Relief and other programs. That's not subject to sequestration or the Discretionary budget limit.

The Bottom Line

Most of federal spending goes toward Mandatory ($2.612 trillion) and the military ($659.2 billion, since OCO spending isn't part of the Discretionary Budget). Subtract those two from the $3.759 trillion total spending, and that leaves just $487.8 billion for the rest of the government. From that, subtract the $80.2 billion for Health and Human Services (the agency that administers Medicare, Medicaid, and the ACA), and you've got the real picture--just a little over $407.6 billion to collect taxes, educate the labor force, and uphold the law to name a few. Federal spending measures America's true priorities. 

Military spending should also include those departments that support defense as well as the OCO , as follows:

DepartmentBudget (in billions)
Defense   $496.1
Veterans Administration    $65.1
Homeland Security    $38.2
State Department    $40.1
National Nuclear Security Administration    $11.4
FBI      $8.3
Subtotal without OCO  $659.2
OCO    $64.3
TOTAL SECURITY  $723.5

 

Deficit

The President's budget deficit was estimated to be $583 billion. Instead, it came in at $438 billion. That's because revenue came in much higher than projected, thanks to an improving economy which boosted tax receipts. Spending was slightly lower. This was Obama's smallest deficit. Nevertheless, it's still the second bigger than any other deficit except the $458 billion deficit in FY 2008. For more, see Deficit by President and Deficit by Year.  

Compare to Other Federal Budgets:

Continue Reading...