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FY 2007 Federal Budget

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FY 2007 Federal Budget The Federal budget describes how your tax dollars are spent. (Photo: Getty Images)

Fiscal Year 2007 Budget Revenue:

For Fiscal Year 2007, the Federal government received $2.568 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 2007 Budget Spending:

The Federal government spent $2.73 trillion. Over half ($1.451 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 $1.042 trillion, which included $594 billion in Defense and Homeland Security spending, and $448 billion for all other discretionary functions. A whopping $237 billion was spent on nothing more than paying the interest on the $8.9 trillion national debt. (Source: FY 2009 Budget shows FY 2007 Actual, Summary Tables, Table S-8, S-11)

FY 2007 Mandatory Spending:

Social Security ($581 billion) was the largest Mandatory expenditure. Health care spending was next, at $568 billion. Of this, Medicare was $371 billion and Medicaid was $197 billion. All other remaining mandatory programs cost $302 billion. These programs include Food Stamps, Unemployment Compensation, Child Nutrition, Child Tax Credits, Supplemental Security for the Blind and Disabled, Student Loans, and Retirement/Disability programs for Civil Servants, the Coast Guard and the Military.

FY 2007 Discretionary Spending:

Less than half the budget ($1.042 trillion) was Discretionary. This is the part that's negotiated between the President and Congress. Total Security Spending, which now included $34.9 billion for Homeland Security, was $671 billion. It also included $173.6 billion for the War on Terror. Non-security spending was $382 billion. The largest departments were: Health and Human Services ($67.6 billion), Education ($54.4 billion), Housing and Urban Development ($33.6 billion), Veterans Affairs ($35.7 billion), the State Department ($33.9 billion) and Agriculture ($29.7 billion). (Source: FY 2008 Budget Request, Summary Tables, Table S-3)

Military Spending:

In FY 2007, the Defense Department base budget was $498 billion. Added to that was $70 billion in supplemental security spending, which was approved during that fiscal year. The budget for FY 2008 Budget added to that an additional $103.6 billion to be spent in the remainder of that fiscal year (January - October 2007). That meant Supplemental Spending for the WoT for FY 2007 was $173.6 billion. This brought total Military spending for FY 2007 to $671.6 billion. (Source: FY 2009 Budget which shows actual spending for FY 2007, Summary Tables, Table S-2)

Budget Deficit:

Thanks to higher than expected revenues, the FY 2007 budget only had a $162 billion deficit. However, when you stop to think about it, why was there even a deficit at all? Economic growth had been steady for several years, and the stock market hit its peak of 14,164 in October of that year. The government should have been using those "fat years" to save for the future and cool the economy, not overheat it with deficit spending. In this way, expansionary fiscal policy contributed to the economic boom which soon became the Great Recession.

Continued deficit spending put 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.

Compare to Other U.S. Federal Budgets

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