NCPA - National Center for Policy Analysis


April 23, 2009

Federal spending is growing by leaps and bounds.  The budget hit $3.9 trillion this year, double the level of spending just eight years ago.  The government is also increasing the scope of its activities, intervening in many areas that used to be left to state and local governments, businesses, charities, and individuals, says Chris Edwards, Director of Tax Policy Studies at the Cato Institute.

For example:

  • By 2008, there were 1,804 different subsidy programs in the federal budget.
  • Hundreds of programs were added this decade -- ranging from a $62 billion prescription drug plan to a $1 million anti-drug education grant -- and the recent stimulus bill added even more.

We are in the midst of the largest federal gold rush since the 1960s, says Edwards.  In recent years, the range of federal control over society has widened as politicians of both parties have supported nationalizing many formerly state, local, and private activities. 

One measure of the government's rising intervention is the number of programs listed in the Catalog of Federal Domestic Assistance.  The 2,205-page CFDA is an official compilation of all federal aid or subsidy programs, including grants, loans, insurance, scholarships, and other types of benefits:

  • The CFDA was launched in the 1960s after members of Congress realized that they needed a guide to help their constituents access all the new Great Society hand-outs.
  • By 1970, there were 1,019 federal subsidy programs.
  • The number of programs grew in the late-1970s, but was cut back in the early 1980s under President Ronald Reagan.

The number of subsidies started expanding again in the late-1980s, but leveled out in the late-1990s as Congress and President Bill Clinton briefly restrained the budget.  Alas, all restraint vanished this decade, and the number of subsidy programs has exploded 27 percent with the passing of expansionary laws in agriculture, homeland security, transportation, and other areas, says Edwards.

Source: Chris Edwards, "Number of Federal Subsidy Programs Tops 1,800," Cato Institute, Tax & Budget Bulletin No. 56, April 2009.

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