Imagine that instead of dividing up US spending by program, you instead divide it up by what age group the money is spent upon. Kent Smetters takes this approach in “How Federal Spending is Distributed by Age” (Penn Wharton Budget Model, April 1, 2026). The results are perhaps unsurprising in general, but still eye-opening in their specifics.
The US government spent $7 trillion in 2025. In these calculations, $2.6 trillion of the spending can’t be easily assigned to a certain age group. As Smetters writes: “The largest items in the residual are net interest ($970 billion) and national defense ($917 billion). Transportation ($146 billion), natural resources and environment ($88 billion), administration of justice ($85 billion), community and regional development ($85 billion), and several other functions also remain in the all-ages category. These programs finance public goods, broad administration, place-based investment, or mixed services for households of all ages — they are not programs where recipient age is the central organizing concept.”
As one would expect, much of Social Security and Medicare can be assigned to the elderly, although these programs also cover a certain number of disabled persons who are not over the age of 65. Smetters writes: “Social Security directs $1.3 trillion to retirees, and Medicare sends $835 billion. Together they account for 80 percent of all age-assignable spending on older adults. But the retiree total extends beyond these two entitlements. Federal employee retirement benefits ($169 billion), housing assistance for older households, Medicaid long-term-care spending, and VA medical care all contribute, making the federal budget more retiree-focused than a Social Security–only lens would suggest.” Smetters finds that $2.7 trillion in federal spending goes to the elderly.
For federal spending on working-age adults, ” Medicaid directs $357 billion to working-age adults — more than to any other age bucket. Social Security also sends a substantial amount to working-age adults through disability and survivor pathways, contributing $216 billion. Beyond these two programs, Medicare for disabled beneficiaries under 65 ($159 billion), VA compensation and medical care ($202 billion combined), unemployment compensation ($40 billion), housing assistance ($44 billion), and Marketplace subsidies ($90 billion) all add materially.” Total federal spending directed to this group is $1.2 trillion.
Smetters combines federal spending on children and young adults under the age of 26 into a single group. “For people under age 26, Medicaid is the largest program, contributing $144 billion. SNAP follows at $44 billion, then child nutrition programs ($34 billion), Marketplace subsidies for younger enrollees ($29 billion), higher education support ($26 billion), elementary and secondary education ($24 billion), child care assistance ($21 billion), CHIP ($20 billion), TANF and family support ($18 billion), SSI for children ($15 billion), and foster care and adoption assistance ($11 billion). This is a different mix from the one that drives retiree spending: it is more fragmented and more dependent on means-tested programs.” Total spending here is $448 billion.
Put it together, and here’s a summary table. The punchline is in the final column. US spending on the elderly averaged $43,700 per person in 2025. In comparison, the average was $7,300 on the average working-age adult and $4,300 for the average child.
As I noted at the beginning, the overall pattern here is in unsurprising. Anyone who pays attention knows that federal spending on the elderly via Social Security and Medicare is huge. But of course, the elderly paid payroll taxes during their working lives to support others in these programs, and now it’s their turn to benefit from taxes paid by current workers. The amount directed to working-age people, as well as children, would be higher if one took into account federal benefits delivered through refundable tax credits like the earned income tax credit and the child tax credit, rather than focusing only on spending. Also, in the US system of government, a large portion of spending on children and young adults–like most of education spending and a substantial portion of Medicaid spending–happens at the state and local level, not the federal level.
Smetters, of course, is well aware of all of these issues. He is offering an intentionally blunt comparison to make a point. It’s pretty much always politically popular to offer higher benefits to the elderly, and to push back hard against proposals that seek to hold down the long-term rate of growth in these programs.
But about one-sixth of all US children live in families below the poverty line. If you look at families with income at or below twice the poverty line, which is often used as a measure of “near” poverty, then about two-fifths of US children live in such households. If you look at education as measured by the National Assessment of Educational Progress (often called the “Nation’s Report Card”), about 40% of fourth-graders test below the “basic” level of reading and 69% test below the “proficient” level.” In math, 24% of fourth-graders test below the “basic” level and 61% are below the “proficient” level. In short, the seeds of future inequality and poverty are happening with today’s children, right now. That per person federal spending gap between the elderly and the children/young adults group looks awfully large.
