Order Code 98-319 GOV
Updated April 30, 2003
CRS Report for Congress
Received through the CRS Web
The Largest Spending Programs in
the Federal Budget: FY2002 Outlays
Over $10 Billion
Bill Heniff Jr.
Analyst in American National Government
Government and Finance Division
In FY2002, federal outlays totaled $2,011 billion. Mandatory spending, not
including net interest, ($1,106 billion) accounted for 55.0% of total federal outlays, while
discretionary spending ($734 billion) accounted for 36.5%. Outlays for net interest ($171
billion) accounted for 8.5%. FY2002 is the most recent fiscal year for which actual
outlays are available. This fact sheet identifies the largest spending programs with outlays
greater than $10 billion.
For more information on budget process, see
The federal budget consists of two types of spending: mandatory and discretionary.
Mandatory spending (also called direct spending) is provided by substantive law. Most
mandatory spending programs are funded by permanent appropriations, but some are
funded in annual appropriations acts. In either case, the spending amounts for mandatory
programs are based on benefit levels or other factors established by the substantive laws
rather than through the appropriations process. By contrast, the level of discretionary
spending is established by Congress and the President in the 13 regular appropriations acts
and other appropriations measures during the annual appropriations process.
Table 1 lists the largest mandatory and discretionary spending activities with outlays
greater than $10 billion. The spending activities listed below account for about 78.0% of
total federal outlays. The 15 largest mandatory programs account for 55.1% of total
federal outlays, while the 11 largest discretionary spending activities account for 22.8%.
Congressional Research Service ˜ The Library of Congress
Table 1. Federal Outlays for the Largest Spending Programs
Over $10 Billion, FY2002
(in millions of dollars)
Program or Spending Activity
Social Security (Old-age and survivors insurance)b
Medicaid grants to states
Medicare–Hospital insurance (HI)c
DOD-Operation and maintenance
Medicare–Supplementary medical insurance (SMI)d
Social Security (Disability insurance)e
Unemployment insurance programs
Federal civilian employee retirement and disability
DOD-Research, development, test and evaluation
Supplemental security income
Earned income tax credit
Subsidized, public, homeless, and other HUD housing
Food stamps (including Puerto Rico)f
Medical care and hospital services for veteransg
National Institutes of Health
Temporary assistance for needy families and related programs
Atomic energy defense activities (Dept. of Energy)
Commodity Credit Corporation
Airports and airways (FAA)
Student financial assistance (higher education)
State child nutrition programs
Mandatory spending subtotal
Discretionary spending subtotal
Percent of Total
Source: Office of Management and Budget, Budget of the U. S. Government, Fiscal Year 2004, Analytical
Perspectives (Washington: GPO, 2003), Outlays by Function, Category and Program, Table 25-2, pp. 502-523.
a. M=mandatory; D=discretionary.
b. Does not include discretionary outlays for administrative expenses ($1,893 million in FY2002).
c. Deduction made for premiums and collections ($1,525 million in FY2002), and does not include discretionary
outlays for administrative expenses ($1,444 million in FY2002).
d. Deduction made for premiums and collections ($24,428 million in FY2002), and does not include discretionary
outlays for administrative expenses ($1,712 million in FY2002).
e. Does not include discretionary outlays for administrative expenses ($1,966 million in FY2002).
f. The food stamp program is defined as direct spending by Section 250(c)(8) of the Balanced Budget and Emergency
Deficit Control Act of 1985 (2 U.S.C. 900), as amended, rather than by its substantive legislation.
g. Deduction made for medical care collections ($985 million in FY2002).