Fiscal year 2025 closed on September 30, 2025, with the federal government having spent $7.0 trillion — an increase of roughly $250 billion from FY2024's $6.75 trillion total. Most Americans know the headline deficit figure; few have seen where each of those trillions actually went. A GTP analysis of data from the Congressional Budget Office's final FY2025 budget summary and the U.S. Treasury's Statement of Net Cost produces the most granular department-by-department map available for the closed fiscal year.
The picture that emerges is striking in its concentration. Three agencies — the Department of Health and Human Services, the Social Security Administration, and the Department of Defense — accounted for 66.8% of all federal gross spending in FY2024 (the most recent year with complete agency-level Treasury data). As $7.0 trillion in FY2025 outlays is now finalized per CBO, that concentration is structurally unchanged.
The Big Three: HHS, Social Security, and Defense
The Department of Health and Human Services is the single largest spending agency in the federal government. Its gross cost in FY2024 reached $1,907.3 billion — nearly $1.9 trillion — encompassing Medicaid, Medicare, the NIH, the CDC, FEMA, and dozens of other programs. To put that figure in perspective: HHS alone costs more than the entire federal budgets of most peer nations. Its net cost, after offsetting receipts, was $1,738.2 billion — still the dominant line item in federal spending.
The Social Security Administration recorded gross costs of $1,530.5 billion ($1.53 trillion) in FY2024, essentially unchanged at the net level ($1,530.2 billion) because SSA generates almost no offsetting revenue. Social Security's spending has grown steadily with the aging of the Baby Boomer cohort, and that demographic pressure shows no sign of slowing through the 2030s.
The Department of Defense posted gross costs of $1,062.9 billion ($1.06 trillion) — but its net cost of $1,232.3 billion was substantially higher, driven by a $236.7 billion upward adjustment in actuarial assumptions for military retirement and pension liabilities. Defense spending, often described as the largest item in the "discretionary" budget, is actually third in the overall federal spending ranking — behind both HHS and SSA.
Net interest on the public debt, for the first time, surpassed $1 trillion — positioning debt service as the fourth-largest item in the federal budget, within reach of defense spending.
— CBO Monthly Budget Review: Summary for Fiscal Year 2025
The Full Agency Spending Map
Beyond the big three, the remaining agencies divide the roughly 33% of spending not consumed by HHS, SSA, and DoD. The Treasury's Statement of Net Cost provides the most granular breakdown of who spent what in FY2024 on an accrual accounting basis:
| Agency | Gross Cost | Net Cost | % of Total |
|---|---|---|---|
| Health & Human Services | $1,907.3B | $1,738.2B | |
| Social Security Administration | $1,530.5B | $1,530.2B | |
| Defense (DoD) | $1,062.9B | $1,232.3B* | |
| Net Interest (Treasury Securities) | $909.1B | $909.1B | |
| Veterans Affairs | $515.6B | $472.0B | |
| Department of the Treasury | $321.5B | $222.3B | |
| Agriculture | $213.7B | $203.1B | |
| Education | $218.8B | $191.7B | |
| Office of Personnel Management | $147.7B | $199.6B† | |
| Transportation | $116.8B | $115.3B | |
| Homeland Security | $118.4B | $101.4B |
*DoD net cost includes $236.7B actuarial adjustment for military pensions. †OPM net cost includes $83.8B actuarial adjustment for federal employee benefits.
Interest: The Rising Fourth Item
Net interest on Treasury securities recorded a gross cost of $909.1 billion in FY2024 — and according to CBO's FY2025 summary, interest costs surpassed $1 trillion for the first time in FY2025. That historic milestone, covered in GTP's March 13 analysis, means net interest now exceeds DoD gross outlays.
Interest is not an agency — it is a mandatory payment on accumulated debt, not subject to annual appropriations. Its rapid growth reflects both the scale of the debt (now exceeding $36 trillion) and the rate environment of 2022–2025, during which the Federal Reserve raised the federal funds rate to 5.25–5.50%. For context, interest payments now exceed the combined spending of the Departments of Veterans Affairs, Education, Transportation, Homeland Security, Energy, and Agriculture combined. See our live debt data dashboard for current figures.
Veterans Affairs at $472 Billion — Bigger Than Education and Transportation Combined
The Department of Veterans Affairs posted a net cost of $472.0 billion in FY2024 — making it the fifth-largest spending agency in the federal government, and larger than the entire Departments of Education ($191.7B) and Transportation ($115.3B) combined. VA spending has grown substantially over the past decade, from approximately $280 billion in FY2019 to $472 billion in FY2024, reflecting expanded benefits under the PACT Act and rising healthcare utilization among the post-9/11 generation of veterans.
The Department of Education, despite its outsized political profile in budget debates, ranks ninth by net cost at $191.7 billion — approximately 2.8% of total federal spending. Its gross cost of $218.8 billion minus $27.1 billion in loan program offsets produces the net figure. Agriculture ($203.1 billion net) primarily funds nutrition programs including SNAP, crop insurance, and rural development, while Transportation ($115.3 billion) encompasses the Federal Highway Administration, Amtrak, and FAA operations.
Mandatory vs. Discretionary: What Congress Can and Cannot Change
The structural reality of the federal budget is that Congress has direct annual control over only a fraction of total spending. Approximately 73% of FY2025 outlays — roughly $5.1 trillion — is classified as mandatory spending: Social Security, Medicare, Medicaid, interest on the debt, and other entitlement programs that automatically run regardless of the appropriations process. The remaining 27%, or approximately $1.9 trillion, is discretionary — subject to annual congressional appropriation and encompassing defense, education, transportation, and most domestic programs.
This distinction matters enormously for any honest conversation about fiscal policy. When federal spending debates focus on discretionary programs — foreign aid, EPA budgets, arts funding — they are haggling over a sliver of the total. The structural drivers of long-term deficit growth are Social Security, Medicare, Medicaid, and interest payments: categories that require legislative action to reform, not just appropriations votes. According to the CBO's Long-Term Budget Outlook: 2025–2055, mandatory spending's share of the budget is projected to grow further through 2055 as healthcare costs and demographics drive outlays.
Federal Spending at 22% of the Economy
To understand $7.0 trillion in context, consider its relationship to the size of the U.S. economy. FRED GDP data shows Q4 2025 gross domestic product at $31,442 billion (annualized). FY2025 federal outlays of $7.0 trillion as a share of that GDP figure yields approximately 22.3% — elevated compared to the pre-pandemic average of 20–21% that prevailed from FY2015 through FY2019. While below the FY2020 pandemic peak (when CARES Act spending pushed the ratio above 30%), federal spending-as-a-share-of-GDP remains above the historical average of the last two decades. For GDP trend data, see GTP's GDP dashboard tab.
Macro totals ($7.0T total outlays, $5.2T revenues, $1.8T deficit) are drawn from the CBO Monthly Budget Review: Summary for Fiscal Year 2025 (published November 2025) — the final, authoritative source for FY2025 budget totals.
Agency-level figures (gross cost and net cost by department) are from the U.S. Treasury Fiscal Data Statement of Net Cost, FY2024 final — the most recent year with complete agency-level granularity. The Statement of Net Cost uses accrual accounting, which includes changes in actuarial assumptions for pension and benefit obligations; this can differ from cash-basis outlays in CBO reports. GDP figure from FRED GDP series (Q4 2025 advance estimate). Long-term mandatory/discretionary projections from the CBO Long-Term Budget Outlook: 2025–2055.
Primary Sources
- CBO Monthly Budget Review: Summary for Fiscal Year 2025 — FY2025 final outlays $7.0T, revenues $5.2T, deficit $1.8T, net interest exceeds $1T for first time
- U.S. Treasury Fiscal Data — Statement of Net Cost (FY2024) — Agency-level gross cost and net cost data: HHS $1,907B, SSA $1,530B, DoD $1,063B, VA $516B
- FRED — Gross Domestic Product (GDP) — Q4 2025 GDP $31,442B annualized; used for spending-as-%-of-GDP calculation
- CBO Long-Term Budget Outlook: 2025–2055 — Mandatory vs. discretionary spending trends and long-term fiscal projections
- Treasury Fiscal Data — Federal Spending Guide — Mandatory vs. discretionary classification; outlays methodology