Overview
Where Do Your Tax Dollars Go?
The federal government spends over $6 trillion per year. Here is where that money goes — from defense contractors and healthcare providers to Social Security checks and interest payments on the national debt.
The Big Picture: Three Buckets of Spending
All federal spending falls into three categories:
- Mandatory Spending (~65% of total): Social Security, Medicare, Medicaid, and other entitlements that run on autopilot under existing law
- Discretionary Spending (~27% of total): Everything Congress appropriates annually — defense, education, transportation, research, federal agencies
- Interest on the Debt (~8% of total): Payments to holders of U.S. Treasury securities — now exceeding $800 billion per year
Where Contract Dollars Go: Top Federal Agencies
Federal contracts are how the government buys goods and services from private companies — everything from fighter jets to IT consulting.
Top Agencies by Contract Spending
Who Gets the Contracts: Top Federal Contractors
A handful of companies receive the majority of federal contract dollars. The top 10 contractors collectively receive over $101.7B.
Top Federal Contractors
How Spending Decisions Are Made
The annual budget process starts with the President submitting a budget request to Congress. Congress then holds hearings, marks up appropriations bills, and (ideally) passes 12 spending bills before the fiscal year begins on October 1. In practice, Congress rarely finishes on time and relies on continuing resolutions to keep the government funded temporarily.
Individual contracts are awarded by contracting officers following the rules in the Federal Acquisition Regulation (FAR). Most contracts above certain thresholds require competitive bidding.
Tracking the Money
USASpending.gov publishes every federal obligation — contracts, grants, loans, and other financial assistance. The GAO and Inspectors General audit how agencies spend their budgets and investigate fraud and waste.
Explore Federal Spending Data
Frequently Asked Questions
The federal government spends over $6 trillion per year. About one-third is discretionary spending (controlled by annual appropriations), and two-thirds is mandatory spending (Social Security, Medicare, Medicaid, and interest on the debt). Federal contracts account for over $700 billion of that total.
USASpending.gov is the official government source for tracking federal spending. TaxDollarData makes this data more accessible by showing contractor rankings, agency breakdowns, and state-by-state spending comparisons.
Defense spending accounts for about half of all discretionary spending — roughly $850+ billion per year. When you include veterans' benefits and other defense-related spending across agencies, the total defense-related share is even higher.