FY 2009 Revenue:
For Fiscal Year
2009, the Federal government received $2.1 trillion in revenue. Income taxes contributed 45%, social security taxes were 34%, corporate taxes were only 12%, and the remaining 9% was from excise taxes. Revenue was reduced by the recession.
FY 2009 Discretionary Spending:
in FY 2009 was $1.2 trillion, or 35% of total spending. More than half ($782 billion) was what the OMB
called Security spending: Department of Defense and Homeland Security.
Only $437 billion was spent on non-security programs. The largest departments were: Health and Human Services ($77 billion), Transportation ($70.5 billion), Education ($41.4 billion), Housing and Urban Development ($40 billion), and Agriculture ($22.6 billion). It included $253 billion from the Economic Stimulus Package.(Source: OMB FY 2011 which shows actual spending for FY 2009,Table S-11)
FY 2009 Mandatory Spending:
Mandatory Spending was $2.1 trillion, or 56% of the U.S. Federal Budget. It included Social Security ($678 billion), Medicare($425 billion) and Medicaid ($251 billion combined). It also included $151 billion for TARP
which was moved to Mandatory Spending after it was approved by Congress in 2008.
Security Spending Increased:
Total security spending for FY 2009 was $782 billion, more than the $747 billion in the FY 2008 budget
and way more than the $686 billion actually spent. Security spending started with the Department of Defense Base Budget
, which was $513 billion, and Supplemental Funding for the War on Terror
. Add to that Veterans benefits of $47.6 billion, which was expanded to care for the increased number of wounded service members, especially those needing mental health treatment from traumatic battle experiences and head wounds. Security spending also included $9 billion for Nuclear Security, and $42 billion for Homeland Security. The FY 2009 Budget included $38 billion for the State Department and other international programs.
Largest Budget Deficit in U.S. History:
The worst effect of the FY 2009 budget was the $1.413 trillion deficit. It was the largest in history. To compare it to all other budget deficits, see How the National Budget Deficit Affects the Economy
. However, it was needed to boost the economy out of the greatest recession
since the Great Depression
Deficit spending is nothing new with the recession. In fact, it has been a continual part of the federal budget since its beginning, with only a brief respite in the 1990s. However, since 2002 it has escalated dramatically. By the end of 2009, it had created a $14 trillion debt.
If it continues, deficit spending will weaken the dollar even more. That's because the Treasury Department must issue new Treasury notes to pay for the debt. This has the same effect as printing dollar bills. As the dollar floods the market, supply outstrips demand. Ultimately, the value of the dollar will drop.
As the dollar's value decreases, it makes the price of imports rise. A huge debt burden eventually creates the fear that it might not be repaid. Or, that the government will have to raise taxes to pay for it. This acts as a further drag on economic growth.
Compare to Other U.S. Federal Budgets