In economics, a federal budget is the major plan for a federal government's estimated future revenues and spending for the coming fiscal year. The federal budget is representation of the financial plan for the goals and activities of the government which in turn reflects the debates surrounding the various economical principles and ideas. It is the main means of the redistribution of the national income and gross domestic product to meet the needs necessary in order for economic growth. Primarily, the government spends a significant amount of their financial resources in the areas of healthcare, the old and young and social security programs. Overview The revenue for the federal budget each fiscal year is arranged and administered by the government and is then supplied in the form of taxation. These taxes can come in a wide variety of sources such as a tax on one's income, profits from a business and the country's imports (duties and tariffs). Revenue can also be streamed from activities that the government strongly discourages often called a Sin tax and the government can then tax on commodities such as smoking and alcohol consumption. Federal governments don't necessarily exist in every country due to it largely depending on the size and population of the country. The United Kingdom currently doesn't require federal governments but in the United States for example this model is needed as there exists mass population throughout the country in addition to the diverse group of people with diverse needs but federal government suits due to the common culture and values set in place. How federal budget is spent Federal governments splits up the federal budget into three main categories; mandatory spending, discretionary spending and interest on debt. Both mandatory and discretionary spending makes up 90% of the entire federal budget spend. Mandatory spending Mandatory spending is government spending on different mandatory programs that are outside the annual supply bill process and usually occurs less than once in a year. Departments such as social security and medicare normally dominate the mandatory spend. Budget estimates the required costs to administer the following benefits. It cannot be changed without another Act Of Congress. The largest federal spend is in the area of social security which benefits the retired, disabled and their families. In the United States it makes up around 21% of the overall total spend and it is required by the legislation in the