<Li> The deductions for state and local taxes ($77 B), mortgage interest ($70 B) and charitable contributions ($39 B). </Li> <P> In 2013, CBO estimated that more than half of the combined benefits of 10 major tax expenditures would apply to households in the top 20% income group, and that 17% of the benefit would go to the top 1% households . The top 20% of income earners pay about 70% of federal income taxes, excluding payroll taxes . For scale, 50% of the $1.5 trillion in tax expenditures in 2016 was $750 billion, while the U.S. budget deficit was approximately $600 billion . In other words, eliminating the tax expenditures for the top 20% might balance the budget over the short - term, depending on economic feedback effects . </P> <P> During FY2016, the federal government spent $3.85 trillion on a budget or cash basis, up $164 billion or 4% vs. FY2015 spending of $3.69 trillion . Major categories of FY 2016 spending included: Healthcare such as Medicare and Medicaid ($1,060 B or 28% of spending), Social Security ($910 B or 24%), non-defense discretionary spending used to run federal Departments and Agencies ($600 B or 16%), Defense Department ($585 B or 15%), and interest ($240 B or 6%). </P> <P> Expenditures are classified as "mandatory", with payments required by specific laws to those meeting eligibility criteria (e.g., Social Security and Medicare), or "discretionary", with payment amounts renewed annually as part of the budget process . Around two thirds of federal spending is for "mandatory" programs . CBO projects that mandatory program spending and interest costs will rise relative to GDP over the 2016--2026 period, while defense and other discretionary spending will decline relative to GDP . </P>

What does the us government spend the most money on