The $7 billion must have included state and local—the 1928 federal budget came in at slightly under $3 billion. If you pro-rated the present budget along the lines of a 40 hour week, 52 weeks/year, $3 billion wouldn’t cover the first two hours of the first day. $7 billion would at least get you beyond lunch.
I think he meant the total cost of government. Its here in this awesome speech about taxes and the burden government imposes on the people.
http://www.youtube.com/watch?v=5puwTrLRhmw