What the government does (and does not) spend money on

I'd be more impressed with the standard conservative/libertarian qualms concerning government spending if the majority of them could accurately describe what the federal government actually spends our money on. Alas, they seem permanently fixated on the person buying some pop or chips with an EBT card at the register next to them. Why, this individual may even be wearing normal looking clothes, as opposed to the properly deemed rags for the poor amongst us.

This fixation makes sense, to an extent. It's something you can observe on a regular basis, and if you are apt to project your most negative biases on the welfare recipient next to you, then it only seems natural to consider this exhibit A in government excess. But we don't actually spend a significant amount on means-tested cash assistance welfare programs.

In fiscal year 2012, the federal government spent $80 billion on the Supplemental Nutrition Assistance Program (SNAP), which is still commonly referred to as "food stamps," and $17 billion on Temporary Assistance for Needy Families (TANF). TANF is the 'purest' form of welfare we have today - a cash benefit program for low income families. Combined, these two programs cost the federal government $97 billion. Overall federal expenditures in FY 2012 came to $3.7 trillion. After doing some basic math, we can conclude that these programs amounted to...

2-3% of the federal budget. 

In other words, the two programs that one commonly refers to as "welfare" (the type that requires someone to swipe an EBT card at a cash register) only consumes 2-3% of the federal budget.

Of course, there are 8 other means-tested programs that are specifically designed to assist lower income families and individuals listed above in the CBO link. Taken together, these 10 programs added up to $588 billion in FY 2012, which comes to 15-16% of the federal budget. But many of these are not commonly thought of as "welfare," in the traditional sense. For example, Pell grants help lower income students attend college, so that they may improve their chances of securing a higher paying job. The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are tax credits only available to tax filers with earned income. And Supplemental Security Income (SSI) is only available to low income Americans who are over the age of 65, blind, or disabled. Furthermore, many of these programs enjoy popular support.

Medicaid, the federal health care insurance program for lower income families and individuals, is a good example. A 2011 Kaiser Health Tracking Poll found that only 13% of Americans support "major reductions" to the program, whereas 53% support "no reductions" at all (30% support "minor reductions"). This makes Medicaid just slightly less popular than Medicare, the federal health care insurance program for senior citizens. The same can be said for many of the other means-tested programs.

In the CNN poll, we have another example of Medicaid's popularity. What's more, we can see that SNAP and housing assistance for the poor also enjoy popular support. 72% of Americans think federal spending should either be "increased" or "kept the same" on both programs, while only 25% think spending should either be "decreased a little" or "decreased a lot." 

The same CNN poll brings another phenomenon to light: Americans typically think the federal government spends more on programs designed to assist the poor than it actually does.

Per the poll, Americans think combined federal spending for Medicaid, SNAP, and housing assistance for the poor amounts to 32% of the federal budget. Using the CBO figures, we can see that actual spending on these programs ($251 billion for Medicaid, $80 billion for SNAP, and $36 billion for housing assistance for a combined total of $367 billion) only amounts to less than half of this: 9-10% of the federal budget.

So, what does the federal government actually spend all that money on? The National Priorities Project assembled this pie chart for the very latest FY 2013 budget proposed by President Obama:

What stands out? Three sections: "Social Security, Unemployment, & Labor," "Medicare & Health," and "Military." The vast majority of spending in "Social Security, Unemployment, & Labor" is in Social Security benefits for senior citizens over the age of 65. The vast majority of spending in "Medicare & Health" is spent on Medicare. In America, we spend a lot of money on old people.

Military spending is actually decreasing as of late, thanks to recent legislation, and the wars in Iraq and Afghanistan coming to a close. But the US still spends enormous sums of money on defense when compared to other nations. In FY 2012, the federal government actually spent a combined $877 billion on defense, international security, arms transfers to foreign governments, and veteran's benefits.

Our military spending, put in perspective, looks something like this:

In conclusion, the federal government spends the bulk of our money on senior citizens (especially their health care), and our military.

Not so much on poor people.