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US under Trump Series: Components of US GDP part 2

The newly elected President of the United States, Donald Trump has said that he plans to expand the military budget of the United States by $54 billion in order to boost the United States’ depleted military after more than a decade-long war in the Middle East, Asia, and North Africa. The question, everyone (both Trump critics and non-critics) asking is, where the money might come from as Mr. Trump has so far poured cold-waters on traditional Republican plans to cut on social security and Medicare. In the previous article we discussed some details of the budget like three broad categories, mandatory spending ($2.45 trillion or 64.63 percent of the budget), discretionary spending ($1.1 trillion or 29.34 percent), and interests on federal debt ($229.15 billion or 6.03 percent) and the details of discretionary spending.

In this part, we are going to discuss the mandatory spending details, which take up almost 65 percent of the budget.

  • Mandatory spending (MS) is spending that congress legislates outside the annual appropriations process, which involves components of discretionary spending, such as the military.
  • Total mandatory spending in 2015 was $2.45 trillion.
  • Mandatory spending can be broken up in six broad categories, social security, unemployment, & Labor ($1.25 trillion or 48.56 percent of MS), Medicare & health ($985.74 billion or 38.4 percent of MS), food & agriculture ($122.57 billion or 4.77 percent of MS), veterans’ benefits ($95.31 billion or 3.71 percent of MS), transportation ($58.7 billion or 2.29 percent of MS), and other ($58.18 billion or 2.27 percent of MS).

The social security and Medicare/health takes up almost 61 percent of the total budget, hence the republicans always wanted to cut from here as it is quite an easy thing to do. However, President Trump indicated that he is not in favor of that. But even if he doesn’t touch these, making them efficient could save the government billions of dollars. For example, cutting the cost of medicine alone can save billions in the health program.

 

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