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The US federal government ran a deficit of $1.8 trillion (6.4% of GDP) in 2024. This is expected to increase to 6.7% of GDP in 2025.

Some notable developments in the federal government’s expenditure:

• Interest payments have grown to a hefty $890b per year, more than three times what they were a decade ago
• Tariff revenue more than doubled to $16b in April 2025, but this barely makes a dent in the overall deficit
• Most of the outlays are in social spending (i.e. welfare), military expenditure, and interest payments for previously incurred debt

Breaking down the expenditures explains why it is so difficult to “cut the deficit”: interest servicing and spending on the military and social security are structural costs. It is not a straightforward matter to reduce these outlays. Where the focus tends to be – DOGE touts cuts in areas like weather forecasting and food safety – are generally much smaller areas of expenditure.

*I am calculating net social spend as revenue from employment taxes and unemployment insurance [minus] outlays for income and social security.

Data from US Treasury; charts produced on Python.