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Every year, the federal government makes payments of various kinds to individuals, private companies, non-profit organizations, and state and local governments.  From Medicare and Social Security payments to retirees, to military procurement contracts for Michigan businesses, to salaries for Post Office employees, to food stamp payments to struggling families, to grants to local governments, these federal payments represent a crucial part of Michigan’s economy.  In federal fiscal year 2005 (FFY2005), U.S. government expenditures in Michigan totaled $64.8 billion, 2.8 percent of federal expenditures of $2.3 trillion (this figure excludes interest on the federal debt and international payments).

In addition, the federal government provided $6.1 billion in direct and guaranteed loans and $4.4 billion in insurance coverage to individuals and organizations in Michigan.

In FFY2005, Federal government grants and other payments to Michigan state and local governments totaled $12.1 billion.  These grants and payments were made from the federal agencies in the following table.

If Michigan had received payments equal to this state’s 3.4 percent of the nation’s population, an additional $13 billion would have been transferred in Michigan.   On a per capita basis, Michigan ranked 43rd of 50 states in the value of federal expenditures made in the state.

This analysis suggests that more could be done to maximize potential payments from existing federal programs and to refine existing, or shape new federal programs to better meet Michigan needs.

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