FY 2020 Federal Budget Compared to Actual Spending

Compare the Actual FY 2020 Budget to Trump’s Budget

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The fiscal year (FY) 2020 federal budget outlines U.S. government revenue and spending from Oct. 1, 2019, through Sept. 30, 2020. Revenue was $3.42 trillion, less than the $6.55 trillion in spending, creating a record $3.13 trillion deficit.

The deficit is $2 trillion more than the $1.08 trillion budgeted. The president's budget planned to spend $4.79 trillion and take in revenue of $3.71 trillion.

The details below compare actual revenue, spending, and the deficit to the budget. It reveals how the COVID-19 pandemic affected the federal government's plans.

Revenue

Out of the $3.42 trillion in revenue, income taxes, at $1.61 trillion, contributed almost half (47%). Income tax receipts were $203 billion lower than the $1.81 trillion budget estimates.

Payroll taxes, including Social Security and Medicare, contributed $1.31 trillion or 38%. Corporate taxes added $212 billion, contributing just 6%.

The Tax Cuts and Jobs Act reduced the corporate tax contribution from 9% in FY 2016.

The remaining $289 billion in revenue comes from excise taxes ($87 billion), customs duties ($69 billion), estate taxes ($18 billion), and other miscellaneous sources ($117 billion).

Spending

The federal government spent $6.55 trillion in FY 2020. That's $1.76 trillion more than the $4.79 trillion budgeted. The CARES Act and three other stimulus measures were responsible for most of this increase.

The table below compares the actual FY 2020 spending for major federal departments compared to what was budgeted. It combines both discretionary (agency) outlays with mandatory (benefits) spending.

Major Departments Spent Budgeted Comments
Agriculture $184 $155 Increased food assistance
Defense $690 $690  
Education $204 $159 Cut costs for student loans
Energy $32 $34  
HHS $1,504 $1,322 COVID
HHS - Medicare  $924 $843 Payroll taxes and premiums fund more than half
HHS - Medicaid  $458 $447 Paid out of general fund
Homeland Security $92 $62 FEMA payments
Housing and Urban Development $33 $36  
Justice $40 $45 Lags in payments to victims
Labor $478 $36 Unemployment benefits
Social Security $1,154 $1,155 Payroll taxes and Trust Fund investments cover 100%
State   $33 $32  
Transportation $100  $85 CARES Act payments
Treasury $1,152 $701 CARES Act payments
Treasury - Interest on the Debt $523 $576 Low interest rates
Veterans Affairs $218 $214 COVID

Defense spending is, by far, the largest component of discretionary spending. For 2020, Congress spent $690 billion on the Department of Defense (DoD). That's just the base budget. There's also an Overseas Contingency Operations (OCO) fund and Emergency funding in addition to the base budget.

There are also many other agencies, such as Homeland Security, that have a role in defending America. To really understand U.S. military spending, these must all be added up.

Other agencies that protect our nation include: Veterans Affairs ($218 billion), Homeland Security ($92 billion), the State Department ($33 billion), and the National Nuclear Security Administration in the Department of Energy ($15 billion). That's $374 billion not necessarily accounted for in defense spending.

Interest on the Debt

Interest payments owed on the national debt are $523 billion. That's the interest the Department of the U.S. Treasury must pay. Even though the debt keeps rising, the interest payments remain moderate. That's because interest rates remain low.

Deficit

The U.S. budget deficit is how much more the federal government spends than it receives in revenue each year. For FY 2020, it was a record $3.13 trillion. That's three times as much as the $984 billion deficit in FY 2019. The increase was due to spending to combat the effects of the COVID-19 pandemic. The 2020 recession also reduced tax receipts.

The FY 2020 deficit was budgeted to be $1.08 trillion. Even before the pandemic, it was the largest budgeted deficit since FY 2011. Congress increased the deficit to pay for record-high levels of military spending.

Background

Government spending has three components: mandatory, discretionary, and interest on the debt.

The mandatory budget estimates how much it will cost to provide certain federal benefits. These include Social Security, Medicare, and Medicaid. All mandatory programs were authorized by previous Acts of Congress. For that reason, the mandatory budget is an estimate, not an appropriation, meaning Congress can't change benefit payments as part of the normal budget process. A new Act of Congress is required to change spending on mandatory programs such as Social Security and Medicare.

Discretionary spending is the part of the budget that Congress appropriates funds for each year.

For example, the Department of Health and Human Services manages Medicare and Medicaid. The department's operations are funded out of the discretionary budget. The benefits that it administers are funded from the mandatory budget.

Stages in the Budget Process

There are three stages in the discretionary budget. 

  1. The president's budget request. The president proposes what he would like Congress to appropriate.
  2. The Congressional appropriation. It typically uses the president’s request as a guideline.
  3. The actual spending that occurs.
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Article Sources

  1. U.S. Department of the Treasury. "Mnuchin and Vought Release Joint Statement on Budget Results for Fiscal Year 2020." Accessed Nov. 5, 2020.

  2. The White House. “A Budget for America’s Future: FY 2021.” Table S-4. Page 112. Accessed Nov. 5, 2020.

  3. The White House. “A Budget for America’s Future: FY 2021." Accessed Nov. 5, 2020.

  4. U.S. Department of the Treasury. "Final Monthly Treasury Statement," Table 5. Outlays of the U.S. Government, September 2020 and Other Periods. Accessed Nov. 5, 2020.

  5. The White House. “A Budget for America’s Future: FY 2021.” Table S-10. Page 127. Accessed Nov. 5, 2020.