NCPA - National Center for Policy Analysis

NUMBER OF FEDERAL SUBSIDY PROGRAMS IS SOARING

October 31, 2006

The proliferation of special interest spending in the federal budget in recent years has created much waste and corruption.  Politicians have helped special interests while helping themselves.  But the main problem has not been that politicians have their hands in the cookie jar; it is that the cookie jar has grown so large, says Chris Edwards, director of Tax Policy Studies, Cato Institute.

  • There are 1,696 subsidy programs in the federal budget, which dispense hundreds of billions of dollars annually to state governments, businesses, nonprofit groups and individuals.
  • The number of subsidy programs is rising rapidly, with a 44 percent increase since 1990.
  • Federal spending, aside from interest, has grown 47 percent since 2001 -- a huge increase that has been widely critiqued.

A related but unexamined trend is the growth in the number of different federal programs.  According to the Catalog of Federal Domestic Assistance:

  • Most of the programs that existed in 1970 had been added during the 1960s; the number of programs increased during the late 1970s but was cut in the early 1980s under President Ronald Reagan, who tried to eliminate programs or consolidate them into block grants.
  • The number of subsidy programs increased rapidly during the early 1990s, was fairly stable during the late 1990s, but then soared again in recent years; a net 271 new programs have been added since 2000, which is the largest increase in programs since the 1960s.
  • The number of federal subsidy programs has grown by 520, or 44 percent, since 1990.
  • The largest recent increases have been in the Departments of Agriculture, Health and Human Services, Homeland Security, Interior and Justice.
  • The number of farm programs has soared partly due to the bloated 2002 farm bill.

Source: Chris Edwards, "Number of Federal Subsidy Programs is Soaring," Cato Institute, Tax & Budget Bulletin No. 41, October 2006.

For text:

http://www.cato.org/pubs/tbb/tbb_0611-41.pdf

 

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