Answer to Question #89092 in Finance for Jessie

Question

How do the different levels of government use tax dollars to provide services for Americans

Answer 1

The main part of federal budget is spent on five major items:

• National defense and security,
• Social Security,
• Medicare, Medicaid and the Children's Health Insurance Program (CHIP),
• Safety net programs,
• Interest on the national debt.

The federal government spends its money in four major ways: direct payments, grants, contracts and insurance.

The ways of spending of state budget differ in different states; each state is free to choose where to spend tax revenue.

The most common ways are:

• education (public K-12 education), 
• health care (Medicaid and the Children's Health Insurance Program or CHIP), 
• transportation (funding for public transit systems, such as light rail, and infrastructure spending, including building and repairing roads and bridges), 
• corrections (state prison costs, juvenile justice programs and parole programs),
• low income assistance (Temporary Assistance to Needy Families program).