What are some of the areas on which government spends money?

The federal government spends its money in three main categories. These categories are discretionary spending, mandatory spending, and paying the interest on our debt.

Congress decides discretionary spending. This is done each year through the appropriations process. Some areas of discretionary spending include spending on education, Medicare, international affairs, the military, energy and the environment, and agriculture. The largest portion of discretionary spending is on the military. The Head Start program and research through the National Institute of Health are some programs that receive discretionary funding.

Mandatory spending is not a part of the appropriations process. Popular programs that are a part of mandatory spending include Social Security and Medicare. Eligibility rules determine who may receive the funding and how much the program will cost. Mandatory spending makes up about 67% of the federal government’s spending.

The third area of expense is paying the interest on our national debt. Since we owe money to other countries, we must pay interest on the amount we owe.

The government spends its money on mandatory and discretionary programs as well as on paying the interest on the national debt.