October 16, 2012

Heritage Foundation economist Alison Fraser offers a summary of the latest “Federal Spending by the Numbers,” a report detailing what Congress is doing with taxpayer money.

• Over the past 20 years, federal spending grew 71 percent faster than inflation.
• Entitlement spending more than doubled over the past 20 years, growing by 110 percent (after adjusting for inflation). Discretionary spending grew by 60 percent.
• Deficits have pushed up the debt each year since 2002 as federal spending exceeded revenue. Fiscal year 2012  marked the fourth consecutive year of $1 trillion deficits.
• Although debt held by the public surged from 33.6 percent of gross domestic product in 2002 to 73 percent in 2012, net interest costs have held below 2 percent of GDP because interest rates have fallen to all-time lows.
• In 1962, defense spending was nearly half the total federal budget (49 percent); Social Security and other mandatory programs were less than one-third of the budget (31 percent). Two major entitlement programs, Medicaid and Medicare, were signed into law by President Johnson in 1965.
•  In 2012 entitlements were nearly 62 percent of total spending, while defense dropped to less than one-fifth (18.7 percent) of the budget.

Read the full report to see a breakdown of where the money goes and how spending on entitlements and interest on the debt is crowding out other spending, including defense spending.

Do you think Congress will ever act to rein in the growth in spending?