United States federal government

How Federal Spending Is Controlled, and the Social Security and Medicare Trust Funds

Does the government track what it spends against what the law allows? How are annual, multi-year and no-year funds kept apart? How is mandatory spending estimated and tracked? And who actually pays for Social Security and Medicare: their own taxes and premiums, or general revenue?

Prepared: October 5-6, 2026. Basis: 121 government documents, all saved in this investigation's repository: the 2026 Social Security and Medicare Trustees Reports, the U.S. Code sections on appropriations and impoundment, OMB Circular A-11, Treasury account documentation, USAspending data, CBO's budget outlook, monthly reviews and expired-authorizations report, OMB's Historical Tables and PAYGO reports, the FY2025 Financial Report of the U.S. Government with GAO's audit report, court rulings on the public apportionment website, and CRS reports. Every figure is checked: each one is a claim recorded with the exact words of its source document and page, and a script fails if those words are not there (see Appendix B).

Years: the federal fiscal year runs October 1 to September 30; FY2025 ended Sept. 30, 2025. The Trustees Reports use calendar years. This is an independent analysis and is not affiliated with any government.

Summary of findings

Does the government track spending against what the law allows? Against appropriations, yes, account by account and by law. Spending or committing more than an appropriation or an OMB apportionment violates the Antideficiency Act; a knowing and willful violation is a crime, and every violation must be reported to the President, Congress and GAO (nine reports reached GAO in fiscal year 2025). Against authorizations, no: no accounting system compares spending with authorized amounts. CBO's annual count found $494 billion of fiscal year 2026 appropriations for programs whose authorizations had expired, $309 billion of it for authorizations that expired more than a decade ago. (Section 1)

Is the executive branch held to spending what Congress provided? OMB's public apportionment website, required by law since 2022, was taken down on or about March 24, 2025; a federal court ruled on July 21, 2025 that OMB must stop violating the law, and the appeals court refused to delay that ruling. GAO issued 11 Impoundment Control Act decisions in 2025, 7 of which found at least one violation. (Section 1)

How are annual, multi-year and no-year funds tracked? Each appropriation, for each period of availability, gets its own Treasury Account Symbol, with "X" marking no-year money. Fixed-period money expires when its period ends, can only settle old obligations for five more years, and is then canceled. Because a year's outlays draw on several years' appropriations, spending can be compared with what Congress provided only account by account, over each account's life. (Section 2)

How reliable are the numbers? The account totals (SF 133, the Monthly Treasury Statement, the Combined Statement) are the books of record. The government's consolidated financial statements are not auditable: GAO has disclaimed an opinion every year since 1997, and the Department of Defense received its eighth disclaimer in eight audits. (Section 3)

How is mandatory spending estimated and tracked? Mandatory programs were 59.5 percent of fiscal year 2025 outlays ($4,168 billion of $7,010 billion), 73.3 percent with net interest. They have no annual limit; CBO projects them under current law (Social Security and Medicare account for 81 percent of the projected growth to 2036) and compares actual outlays with prior years and its projections. Statutory PAYGO is meant to offset new costs, but its sequester has never been triggered: Congress set the scorecards to zero after both the 2024 and 2025 sessions, the second time wiping balances of $529 billion a year. Agencies reported about $186 billion of improper payments in fiscal year 2025. (Section 4)

Are Medicare Parts B and D paid for by premiums? No. In 2025 general revenue paid $571.7 billion of their $765.8 billion cost: 72.9 percent of Part B's income and 81.2 percent of Part D's. Premiums paid 25.9 percent of Part B and 8.1 percent of Part D; states paid 10.4 percent of Part D. The law resets the general-revenue transfer each year, so the fund cannot run out; the cost lands on the rest of the budget, at 1.9 percent of GDP, projected to reach 3.7 percent by 2100. The Trustees issued a Medicare funding warning for the ninth consecutive year. (Section 5)

Is Medicare Part A paid for by its trust fund? Yes: 87.2 percent of the Hospital Insurance fund's income is payroll tax and only 0.2 percent general revenue, and 2025 ended with an $18.2 billion surplus. But deficits are projected from 2027 and the fund runs out in the second quarter of 2033, after which income covers 89 percent of scheduled benefits. No law provides general revenue to fill the gap. (Section 6)

What is the funding situation of Social Security? Payroll taxes are 91.3 percent of its income. In 2025 the program spent $160.2 billion more than it took in. The retirement fund (OASI) lost $200.0 billion and runs out in the fourth quarter of 2032, after which 78 percent of benefits are payable; the disability fund (DI) gained $39.8 billion and is not projected to run out within 75 years. Combined, the funds would last to the third quarter of 2034. The 75-year shortfall grew from 3.82 to 4.42 percent of taxable payroll, mainly because of lower assumed fertility and immigration and the 2025 tax law. (Section 7)

Where the trust funds' cash comes from. The trust funds hold Treasury securities. When they spend more than they take in, as Social Security does now and Medicare Part A will from 2027, the Treasury redeems those securities with cash from general receipts or borrowing. (Section 6)

How this investigation started

It began as seven questions put to an AI assistant on October 5, 2026. Those answers, reproduced unchanged in the original questions and answers, were then checked figure by figure against government documents. Several were wrong or out of date; the audit summary lists every correction.