How Does the Government Use Tax Money?

In 2008, the United States federal government spent nearly $3 trillion, or approximately $10,000 per person in the United States. Although most people have some idea of how their tax money is spent, exactly how much is spent--and on what--is often unknown.

Mandatory Spending

Consisting of $1.788 trillion, or almost 60 percent of the total budget, mandatory spending is based on how many people pay into the program and how many people are in the program.

The Programs

In this category are services such as Social Security, Medicare, Medicaid, welfare and unemployment. It also includes interest on the national debt.

Fixed Spending

Mandatory spending budgets are inflexible. For example, money paid into Social Security must be paid back out through the Social Security program, and may not be spent on other things.

Discretionary Spending

Consisting of $1.114 trillion, or about 40 percent of the federal budget, discretionary funds can be allotted to whatever programs the government sees fit to fund.

Defense

About $699 billion, which is about 62 percent of the discretionary budget, or 23 percent of the total federal budget, is spent on various military institutions, including the Department of Defense, the Global War on Terror, the Department of Veteran's Affairs and the Department of Homeland Security. This figure does not include money spent in the Iraq war or the war in Afghanistan.

Other Programs

The Department of Health and Human services received $69.3 billion, or 2 percent of the federal budget; the Department of Education received $56 billion, or 1.8 percent of the federal budget; the Department of Housing and Urban Development received $35.2 billion, or 1.1 percent of the federal budget; the Department of State and other international programs received $35 billion, or 1.1 percent of the federal budget. The remaining $219 billion is split between eight other institutions and other uncategorized discretionary spending.