NCPA - National Center for Policy Analysis

Federal Government Spending Out of Control

February 20, 2004

Spending by the federal government has undergone a colossal expansion over the past few years. Though spending growth has slowed marginally this year -- 7.3 percent in 2003 as compared to 7.9 percent in 2002 -- the average two-year growth rate of 7.6 percent is more than double the annual average growth from 1993 to 2001, according to the Heritage Foundation.

Heritage emphasizes that, while defense and other 9/11-related costs are a convenient scapegoat, they do not sufficiently explain why government is spending so rapidly. Although the federal budget expanded by $296 billion in 2003, defense accounted for $100 billion (34 percent) and various homeland security expenses amounted to only $32 billion (11 percent) -- for a total of 45 percent of new spending.

Therefore, the remaining 55 percent has gone towards other government programs. The report outlines some of the major program recipients of this newfound federal generosity:

  • Triggered by a slow economy, unemployment compensation jumped 132 percent to $56 billion.
  • Education spending, largely through the No Child Left Behind Act, increased by 78 percent to $58 billion.
  • Spending on health programs other than Medicare or Medicaid grew by 81 percent, reaching $60 billion.

Moreover, though the country faces enormous unfunded liabilities in the form of Social Security and Medicare expenses, both programs have expanded, growing by 13 and 16 percent, respectively.

All told, the federal government is spending $20,300 per household while receiving about $16,780 per household in federal taxes. This is the highest level of per household spending since the Second World War. The Heritage Foundation points out that coupling tax relief with rapid spending growth in simply unsustainable -- at some point these deficits will need to be paid off.

Source: Brian M. Riedl, "$20,000 per Household: The Highest Level of Federal Spending Since World War II," Backgrounder No. 1710, Heritage Foundation, December 2003.


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