Musk wants $2 trillion of spending cuts. Here's why that's hard.

Social Security benefits cost the U.S. government $1.45 trillion in the most recent fiscal year, according to CBO estimates

- Justin Lahart & Rosie Ettenheim

The U.S. federal government spent $6.75 trillion in the most recent fiscal year ended Sept. 30, according to the Congressional Budget Office. Walk around town handing $20,000 to everyone you see. Now do that for the entire U.S. population, all 337 million of us. That is about how much the U.S. spent.

Elon Musk has been tasked alongside biotech company founder Vivek Ramaswamy with leading President-elect Donald Trump's effort to reduce this government spending through the new Department of Government Efficiency.

Most recent fiscal year, according to CBO estimates published this month. Medicare and Medicaid were a combined $1.49 trillion.

Trump has promised to protect Social Security and Medicare benefits. Medicaid could be a target for cuts, but the politics of doing so could prove difficult. In June, the CBO estimated that 56% of Medicaid benefits in fiscal 2024 would go toward the aged, blind and disabled. Many nursing homes receive a substantial share of their revenue from the program.

The amount spent on these mandatory categories has gone up, driven by rising healthcare costs and an aging population tapping into Social Security and Medicare benefits. Mandatory spending was equal to nearly 15% of the U.S. GDP this past year, compared with about 10% two decades ago. These obligations will only continue to grow.

Other, smaller mandatory categories include items such as retirement benefits for military and federal employees, and support for states to help with foster care and adoption.