NCPA - National Center for Policy Analysis

Public Believes Government Wastes 51 Cents of Every Dollar

October 22, 2014

American government is growing at leaps and bounds, and with that growth has come massive amounts of wasteful spending on programs that are duplicative, unnecessary, inefficient and outdated. Indeed, the American public is not unaware of this reality; according to a 2014 Gallup poll, Americans believe that the federal government wastes 51 cents of every dollar that it spends. Gallup has been conducting the poll since 1979, and the 2014 result is tied for the highest since the poll began.

Heritage Foundation Fellow Romina Boccia has authored a comprehensive report on government spending. Incredibly, the last two decades have seen federal spending grow by two-thirds, after taking inflation into account.

  • The types of programs on which the federal government is spending money is especially significant; while discretionary spending was two-thirds of the American budget in 1963 (and mandatory spending was one-fourth), mandatory spending is now two-thirds of the budget today.
  • This is important, because mandatory spending is automatically required from year-to-year, while discretionary spending requires congressional approval annually.
  • Why the rise in mandatory spending? Entitlement programs such as Social Security, Medicare and Medicaid. In fact, entitlement spending grew sixfold from 1972 to 2011.

With such massive spending growth, controlling waste is essential. Boccia writes that the public typically thinks about waste in terms of seemingly ridiculous spending -- funding reality television in India, or throwing lavish parties on the government dime or paying farm subsidies to the dead. But waste can be much broader than that, she says, identifying six ways in which the government might misallocate resources: paying for projects that cost more than the benefits they create; intervening in a market and thus creating inefficiencies and slowing production, like granting subsidies; performing functions better left to state governments or the private sector; funding recipients who do not need government benefits; paying for outdated or duplicative programs; and mismanagement or fraud.

Boccia outlines a number of ways to curb federal spending and get the government's finances in check, including reforming entitlement programs to be true safety nets, ending corporate welfare, reducing fraud and improper payments and establishing spending caps.

Source: Romina Boccia, "Eliminating Waste and Controlling Government Spending," Heritage Foundation, October 17, 2014. 

 

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