Key Changes in the 2024 Federal Budget
The 2024 federal budget brought several significant changes that impact how your tax dollars are spent. Whether you’re interested in healthcare, defense, education, or other priorities, understanding these shifts can help you make sense of where your money is going.
Overview of the 2024 Budget
The fiscal year 2024 budget totals approximately $6.75 trillion, representing a modest increase from the previous year. This increase reflects both inflation adjustments and new policy priorities from Congress and the administration.
Major Increases
Defense Spending
Defense spending saw one of the largest increases in the 2024 budget, rising by approximately 3% from the previous year. This increase funds:
- Military personnel pay raises to keep pace with inflation
- Modernization of aging equipment and technology
- Increased focus on cybersecurity capabilities
- Support for allies and partners
For the average taxpayer paying $5,000 in federal taxes, this means roughly an additional $15-20 going toward defense compared to 2023.
Veterans Benefits
Veterans programs received increased funding, continuing a multi-year trend of enhanced support for those who served. Key expansions include:
- Expanded healthcare coverage for conditions related to toxic exposure
- Improved mental health services
- Enhanced job training and education benefits
This reflects bipartisan commitment to supporting veterans, particularly in light of recent legislation like the PACT Act.
Medicare and Healthcare
Healthcare spending continues to grow, driven primarily by:
- An aging population requiring more services
- Rising healthcare costs across the economy
- Expanded coverage provisions
These aren’t discretionary increases but rather reflect the mandatory nature of these programs and demographic trends.
Notable Decreases
COVID-19 Emergency Funding
The most significant decrease in the 2024 budget is the winding down of pandemic-related emergency spending. Funds for:
- Mass vaccination programs
- Emergency rental assistance
- Small business relief programs
- Expanded unemployment benefits
These programs were temporary by design, and their reduction accounts for a large portion of year-over-year budget changes.
Some Discretionary Programs
Certain discretionary programs saw modest cuts or remained flat, including:
- Some environmental programs
- Foreign aid in specific regions
- Certain research and development initiatives
What Stayed the Same
Social Security
Social Security spending continues on its current trajectory, increasing primarily due to:
- Cost-of-living adjustments (COLA) for beneficiaries
- More baby boomers reaching retirement age
- Longer life expectancies
The program’s structure and benefits remain largely unchanged, though long-term sustainability concerns persist.
Education Funding
Federal education funding remained relatively stable, with small adjustments in some areas:
- Title I funding for schools with high percentages of low-income students
- Special education grants
- Pell Grants for college students
Impact on Different Taxpayers
How do these changes affect you personally? It depends on how much you pay in federal taxes.
Lower-Income Taxpayers ($2,000 in annual federal taxes)
The changes are relatively modest in absolute dollar terms. You might see:
- $5-8 more toward defense
- $3-5 more toward veterans benefits
- $15-20 less toward pandemic-related programs
Middle-Income Taxpayers ($5,000 in annual federal taxes)
For middle-income earners, the shifts are more noticeable:
- $15-20 more toward defense
- $8-12 more toward veterans benefits
- $40-50 less toward pandemic-related programs
Higher-Income Taxpayers ($15,000+ in annual federal taxes)
High earners see the largest absolute changes:
- $45-60 more toward defense
- $25-35 more toward veterans benefits
- $120-150 less toward pandemic-related programs
Looking Ahead
Several trends are worth watching as we move through 2024 and into 2025:
Interest on the Debt
One of the fastest-growing parts of the budget is interest payments on the national debt. As interest rates have risen, so has the cost of servicing existing debt. This is money that can’t be spent on programs or services.
Mandatory Spending Growth
Mandatory programs like Social Security and Medicare will continue to grow as a share of the budget due to demographic trends. This may create pressure on discretionary programs in future years.
Deficit Concerns
The budget deficit—the gap between revenue and spending—remains elevated. Future budgets will need to grapple with how to address this imbalance through some combination of spending cuts, revenue increases, or both.
What This Means for You
Understanding these budget changes helps you:
- See the big picture - Budget priorities reflect political compromises and policy values
- Anticipate future changes - Trends in spending often continue across multiple years
- Make informed choices - When voting or engaging with representatives, you can reference specific budget decisions
Using Our Calculator
Want to see exactly how your tax contribution has changed from 2023 to 2024? Our calculator lets you:
- Enter your 2023 and 2024 tax amounts
- Compare side-by-side where your money went
- See which departments received more or less of your contribution
This personalized view makes budget changes concrete rather than abstract.
Final Thoughts
Budget changes reflect evolving national priorities, economic conditions, and demographic realities. While some changes are discretionary—the result of political choices—others are largely automatic, driven by existing laws and economic factors.
The best way to understand how these changes affect you is to explore your own tax breakdown using our calculator. See where your dollars go, track changes over time, and engage with the democratic process in an informed way.
After all, it’s your money. You deserve to know how it’s being spent.