The excellent Penn Wharton Budget Model has a new report on how federal spending is distributed by age. It shows you where the government’s priorities lie: seniors front of the line, everyone else a distant second.
In 2025, the federal government spent $7.1 trillion overall, of which only $2.6 trillion went to broad public goods such as national defense and transportation (as well as interest on the debt). The remaining $4.4 trillion was attributable to benefits for individuals: entitlements, income security, health-care and education subsidies, and veterans’ programs. That amount was broken down to see how much in outlays each age group in America receives.
Children and adults under 26 received what seems like a fair chunk of change: $449 billion, concentrated in family welfare programs like Medicaid, food stamps, and education funding. But that amount was just 10 percent of age-assignable spending last year. “Working-age adults,” ages 26 to 64, received a lot more: $1.2 trillion. Much of that came from means-tested welfare programs, too, but also health and income benefits for disabled workers and veterans. In total, working-age adults claimed 28 percent of age-assignable spending.
Where did all the other money go? To the last age group — seniors 65 and older — who took home $2.7 trillion, or 62 percent of federal spending on individuals. That’s nearly 40 percent of the entire federal budget. Like working-age adults, seniors receive a good amount in means-tested welfare and veterans’ benefits. The vast majority of the spending they receive, however, is in entitlement programs tailored to retirees: Social Security and Medicare.
Per person, the differences are even starker. Children and young adults receive $4,300 per capita in federal spending. Working-age adults get $7,300 per year. Seniors, on average, receive $43,700 — six times more than those in the workforce and ten times more than America’s young.
The distribution will only become more lopsided from here. Penn Wharton projects that “the share of transfers to retirees relative to the young is likely to increase even more over time due to an aging population — and hence a graying median voter — combined with the large imbalance in the U.S. federal fiscal outlook, which will place increasing strain on future spending.” The Congressional Budget Office agrees, projecting that shortfalls in Social Security and Medicare will drive all deficit spending over the next three decades. That debt will be passed down to generations through higher taxes and/or crimped spending.
It’s true that most seniors have spent decades paying hundreds of thousands of dollars — if not millions — in payroll and income taxes that are supposed to fund Social Security and Medicare. But those taxes were spent on past retirees rather than saved, leaving current and future workers to bear the burden of old-age entitlements. Social Security and Medicare thus function as an enormous wealth transfer from younger, less-affluent Americans to the richest generation that has ever lived.
No one would design this system on purpose. In fact, no one did. Congress appropriates less than a third of the federal budget each year, while large entitlement programs are on autopilot, growing relentlessly as millions of Americans reach retirement age and health care costs balloon. The fastest-growing age group in the country is adults 65 and older — all of whom are eligible for health and retirement benefits. Seniors make up almost 20 percent of the U.S. population today, compared with about 10 percent when Medicare was enacted in 1965, and just over 5 percent when Social Security began in 1935.
There are many proposals to curb excessive retirement spending. One exceedingly reasonable measure, offered by the Committee for a Responsible Federal Budget, would cap the amount a couple could receive from Social Security at $100,000 per year — now the maximum for an extremely high-earning couple, but scheduled to be eclipsed. Even under this generous limit, America’s maximum pension benefits would remain far higher than in any other country.
No such reforms will be implemented anytime soon, though. As the population grays, so does the electorate. And the immense benefits that seniors receive incentivize them to predicate their votes on promises to maintain and expand entitlements. Maintain them, at least, so long as current retirees are living. After that, the looming insolvency of Social Security and Medicare is not their problem.