Key takeaways
- The federal government spent about $7.4 trillion in fiscal 2026, up 6% from fiscal 2025.
- HHS spent $2.0 trillion, Social Security $1.73 trillion and Treasury $1.58 trillion, mostly on benefits and debt interest.
- The Defense Department spent $917 billion and is by far the largest buyer of contracts.
- Big budgets don't always mean big contract markets: benefit payments make up most of the largest agencies' spending.
Federal spending is concentrated in a few departments, but the size of an agency's budget and the size of its contracting market are very different things. This list ranks agencies by what they actually spent in fiscal 2026.
The largest federal agencies by budget
Ranked by net outlays in fiscal 2026 (Oct. 1, 2025, through Sept. 30, 2026), with fiscal 2025 for comparison.
| # | Agency | FY 2026 outlays | FY 2025 outlays | Biggest programs |
|---|---|---|---|---|
| 1 | Department of Health and Human Services | $2,004B | $1,884B | Medicare, Medicaid, NIH, CDC and FDA |
| 2 | Social Security Administration | $1,734B | $1,647B | Retirement, survivors and disability benefits, SSI |
| 3 | Department of the Treasury | $1,581B | $1,459B | Interest on the debt ($1.36 trillion gross), IRS, refundable tax credits |
| 4 | Department of Defense (military programs) | $917B | $868B | Military personnel, operations and maintenance, procurement, R&D |
| 5 | Department of Veterans Affairs | $416B | $377B | Disability compensation, Veterans Health Administration, community care |
| 6 | Department of Agriculture | $217B | $227B | SNAP, school meals, farm programs, Forest Service |
| 7 | Office of Personnel Management | $136B | $128B | Federal retiree pensions and employee health benefits |
| 8 | Department of Transportation | $124B | $128B | Highway and transit grants, FAA, rail |
| 9 | Department of Homeland Security | $110B | $115B | CBP, ICE, FEMA, TSA, Coast Guard |
| 10 | Department of Education | $75B | $35B | Student aid, Title I and special education grants; swings reflect student loan accounting |
| 11 | Department of Housing and Urban Development | $68B | $51B | Rental assistance, public housing, CDBG |
| 12 | Department of Labor | $55B | $50B | Unemployment insurance, job training |
| 13 | Department of Energy | $52B | $52B | Nuclear weapons, national laboratories, environmental cleanup |
| 14 | Department of Justice | $45B | $45B | FBI, Bureau of Prisons, DEA, state and local grants |
| 15 | Department of State | $29B | $28B | Diplomacy, embassies and consular services |
| 16 | NASA | $23B | $25B | Space exploration, science and aeronautics |
| 17 | Environmental Protection Agency | $17B | $37B | Water infrastructure funds, Superfund, regulation |
| 18 | Department of the Interior | $16B | $22B | National parks, land management, Indian Affairs |
| 19 | Department of Commerce | $15B | $30B | NOAA, Census Bureau, broadband and trade programs |
| 20 | Small Business Administration | $12B | $1B | Loan and disaster programs; outlays swing with loan program costs |
Source: U.S. Treasury, Monthly Treasury Statement for September 2026, Table 3 (outlays by agency, fiscal 2026 and fiscal 2025, rounded to billions). Outlays are net of offsetting collections; Treasury's figure includes gross interest on the debt. Not ranked: Other Defense Civil Programs ($65 billion, mainly military retirement), the Army Corps of Engineers ($11 billion), the National Science Foundation ($9 billion), and agencies with net negative outlays such as GSA, whose revolving funds are offset by payments from other agencies.
Budget versus contract spending
Most of the money at HHS, Social Security, Treasury and OPM goes to benefit payments, interest and health care claims, not contracts. The contract market looks very different:
- Defense is the giant. The Defense Department accounts for well over half of all federal contract obligations; see our list of the largest federal contractors.
- Health and veterans' care. HHS and the VA buy IT, medical supplies, drugs and community care networks.
- Energy is contract-heavy. Most Energy Department spending flows through contractors that run national laboratories and nuclear sites.
- GSA is a buying hub. GSA's budget nets out near zero, but its schedules and governmentwide contracts carry tens of billions in purchases for other agencies.
- Grants flow to states and cities. Transportation, HUD, Education and Justice send much of their money to state and local governments, which then buy from vendors.
Fiscal 2026 at a glance
- Total outlays rose about $386 billion, or 6%, to $7.4 trillion.
- Net interest on the debt passed $1 trillion for the first time.
- Defense military programs grew about $48 billion, and the VA about $39 billion.
- EPA, Commerce and Interior outlays fell sharply from fiscal 2025.
How KSG helps
Kensington Sales Group's SDRs book meetings with public agencies across Federal, SLED, K-12 & Higher Ed, Healthcare, Tribal, Special Districts and Utilities. We find the program, IT and contracting contacts at federal agencies and the state and local governments their grants fund, and time outreach to budget and fiscal year cycles. See how our federal sales development works.