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Please begin with an informative title:

The stacked bar chart below shows the expected income and proposed spending in President Obama’s unified federal budget for FY2014 (which starts next October 1). The budget was released April 10 – two months late because of the uncertainties caused by the fiscal cliff and sequester struggles.
Click on the chart to see a larger version and click here to see a table with the same numbers.

Continuing high unemployment from the worst recession since the Great Depression (with nearly 15 million Americans still looking for jobs) means tax revenue will still be significantly down and social service needs will still be quite high. Passage of the Fiscal Cliff compromise agreement  (American Taxpayer Relief Act of 2012) means that taxes on the rich will go up some in FY2014 (but not as much as they would have if the Bush tax cuts had been completely repealed), so the government will still need to borrow more than $700 billion.

Proposed US Budget FY2014

Below are details about this chart and a comparison to the estimated income and expenditures in FY2013 (the current year), and the actual values for FY2012 (which ended last September 30).

Intro

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Adjustment to Reveal the Strength of Social Security

All the numbers reported here come directly from the US Budget for FY2014 submitted by President Obama. However, I’ve made one important change to illuminate a critical point. In its budget, the government first subtracts the interest earned from trust funds before reporting the overall interest paid out on Treasury bonds. This hides the income from the Social Security trust fund (which is expected to earn $100 billion in FY2014 from current assets of approximately $2.7 trillion) and makes it appear that the Social Security program is more expensive and more endangered than it is. So I have instead opted to list the full amount of interest earned by the trust funds in the income column and the full amount of the interest paid on Treasury debt in the spending column. This change increases both columns by $195 billion (to $3,973 billion instead of the $3,778 billion total the government reports). For decades, the income from Social Security taxes has far exceeded the amount paid out in benefits. Interest earned on these trust funds is used to pay for other parts of the federal government and thereby reduce the net deficit.

Note that Table 27–4 (p. 463) in the Analytical Perspectives section of the budget projects that, with interest receipts included, the Social Security Trust Fund will have a $19.2 billion surplus in FY2014.

Notes on FY2014 Income

As you can see from the chart, sources of income for the federal government are individual and corporate income taxes, estate and gift taxes, excise taxes, custom duties, interest on federal insurance deposits, and a few others. In addition, the government collects payroll taxes for the Social Security trust fund (Old Age, Survivors, and Disability (OASD)), Hospital taxes for the Medicare trust fund, unemployment taxes for the Unemployment Insurance fund, and some other taxes.

Because the economy is still in bad shape, President Obama’s budget assumes that the amount collected from all of these taxes in FY2014 will be smaller than usual. If Americans were working as much as they were in 2007, tax revenue in FY2014 would be much greater and the need for borrowing funds would be much smaller.

Notes on FY2014 Spending

Spending is divided into two main categories: discretionary spending that Congress allocates each year through 15 spending bills and mandatory spending required by various on-going programs.

Mandatory spending includes Social Security benefits, Unemployment Compensation, Medicare benefits, and pensions for retired federal workers as well as means-tested entitlements such as Medicaid payments to states, benefits to disabled Veterans, Supplemental Security Income (SSI) payments to disabled people, the Earned Income Tax Credit (EITC) for poor working people, and Food and Nutrition Assistance (food stamps) for those in need. Interest on Treasury Bonds (the national debt) must also be paid.

The continuing bad economy means that in FY2014 many millions of people are entitled to Unemployment Compensation, Medicaid, food stamps, etc. Many people are also likely to retire early and apply for Social Security. All of this increases government spending. But because interest rates are still very low, the expected total interest to be paid on the debt in FY2014 ($418 billion) is still relatively small even though the overall federal debt has grown a great deal.

Discretionary spending is allocated by 15 spending bills passed by Congress between June and October 1 (when the fiscal year starts). About half of discretionary spending goes to pay for the military: active duty armed service personnel, civilian employees, defense contractors, and the expected costs of the Afghanistan war. President Obama’s request is for $618 billion for FY2014, 52% of the total discretionary budget. The request for the military is projected to be 27.1% larger (adjusted for inflation) than the $363.0 billion spent in FY2001 (see Our Taxes are Off to War - 2013 Edition).

In FY2014, the Obama administration expects Medicare, Medicaid, other Mandatory Healthcare, plus discretionary spending on Health to cost the federal government a total of $953 billion. Some of this money is spent paying excessive drug prices and insurance premiums to private corporations, but the rest provides essential healthcare to millions of aging retirees, veterans, government employees, and poor people.

FY2013 Income and Spending

To see how the proposed FY2014 budget compares to previous years, here is a chart with the estimated income and expenditures for FY2013 (the current year which ends next September 30).
Click on the chart to see a larger version and click here to see a table with the same numbers.

Estimated US Budget FY2013

FY2012 Income and Spending

Here is a chart with the actual income and expenditures in FY2012 (the year which ended last September 30).
Click on the chart to see a larger version and click here to see a table with the same numbers.

Actual US Budget FY2012

Additional Resources

The Center on Budget and Policy Priorities (CBPP) has provided an extensive analysis of the FY2014 budget.

Why Doesn't the Government Prepare Charts like This?

A final note: It is very frustrating that the government doesn’t prepare a comprehensive budget chart. One of the most important things that the President and Congress do each year is put together a budget. As citizens of this country, we should have a clear presentation of how the government plans to spend our money so that we can provide meaningful input. Instead, the basic budget documents for FY2014 are long, complex documents filled with jargon and tables of numbers, many of them seemingly inconsistent.

Admittedly, the federal government budget is very large, includes many kinds of receipts (taxes, fees, interest, rents, royalties, and sales of land, natural resources, radio frequencies, postage stamps) as well as many kinds of expenditures (payroll, contracts, payments to individuals, grants to states, trust funds, loans, etc.). There are multi-year budget authorizations and then the actual yearly spending allocations. There are funds considered "œoff-budget" and "œon-budget," receipts (from fees or sales) that offset spending, taxes not collected that are considered spending, intragovernmental transfers, public-private enterprises, allowances for future disasters, and many other oddities that make it difficult to provide a comprehensive and comprehensible overview.

Still, for legislators and the public to understand the budget, there should be a simple presentation of the overall figures. To fill this gap, I’ve put together these charts using numbers from multiple tables in the FY2014 US Budget Historical Tables document. But I am not a budget expert by any means and may have made errors. It would be better for the people who are experts to create this chart.

Earlier Editions of “US Budget in a Chart”

FY2012

FY2011

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