1. News & Issues
You can opt-out at any time. Please refer to our privacy policy for contact information.

FY 2006 Federal Budget

By

FY 2006 Federal Budget
The Federal budget describes how your tax dollars are spent. (Photo: Getty Images)

Fiscal Year 2006 Budget Revenue:

For Fiscal Year 2006, the Federal government received $2.407 trillion in revenue. Income taxes contributed 45%, social security taxes were 34%, corporate taxes were 12%, and the remaining 9% came from excise and other miscellaneous taxes.

FY 2006 Budget Spending:

The Federal government spent $2.655 trillion. Over half ($1.412 trillion) went toward Mandatory programs, such as Social Security, Medicare and Military Retirement programs. These expenditures are mandated by law, and cannot be changed without an act from Congress. Discretionary spending was $1.017 trillion. A whopping $227 billion was spent on nothing more than paying the interest on the $8.4 trillion national debt. (Source: FY 2008 Budget which shows actual spending for FY 2006, Summary Tables, Table S-7)

FY 2006 Mandatory Spending:

Social Security ($544 billion) was the largest Mandatory expenditure, at 37% of the total. Health care spending was next, at $511 billion. Of this, Medicare was $325 billion and Medicaid was $186 billion. All other remaining mandatory programs cost $357 billion.

FY 2006 Discretionary Spending:

Less than half the budget ($1.017 trillion) was Discretionary, which was negotiated by the President and Congress. Non-security spending was $451 billion. The largest departments were: Health and Human Services ($69 billion), Education ($56 billion), Housing and Urban Development ($34 billion), Veterans Affairs ($33 billion), the State Department ($30.2 billion) and Agriculture ($21 billion). Discretionary spending included supplemental spending for Hurricane Katrina clean-up ($24.7 billion), the influenza pandemic ($6.1 billion) and border security ($2.2 billion). This totaled $33 billion. (Source: FY 2008 Budget which shows actual spending for FY 2006, Summary Tables, Table S-2, Table S-3)
Actual military spending was $594.6 billion, although it was listed as $566 billion in the summary tables (S-7). To find out the true military spending, you have to add the following budget items from Table S-2:

Budget Deficit:

The worst effect of the FY 2006 budget was its $248 billion deficit. Keep in mind, most of this deficit went to pay interest on the debt. As in all budget proposals, the deficit was projected to decline five years out. The government always paints a rosy picture of revenues gracefully rising faster than outlays. Instead, rising deficits reached a peak of $1.6 trillion in FY 2010 - more than the entire discretionary budget in FY 2006.

Continued deficit spending puts downward pressure on the dollar's value, increasing the price of imports and the cost of living. At the same time, it acts as a tax on future generations, who must bear the burden of paying off our debt. This puts downward pressure on future economic growth.

However, when you stop to think about it, why was there even a deficit at all? Economic growth had been steady for several years. The government should have been using those "fat years" to save for the future. It should have spent less, thus cooling the economy, not overheat it with deficit spending. Expansionary fiscal policy in FY 2006 contributed to the economic boom which, when it was over, caused the Great Recession.

Compare to Other U.S. Federal Budgets

  1. About.com
  2. News & Issues
  3. US Economy
  4. Fiscal Policy
  5. U.S. Federal Budget
  6. Summary of Fiscal Year 2006 US Government Federal Budget

©2014 About.com. All rights reserved.