Crisis in Government Spending
Thursday, February 26, 2004
Read the President's Most Recent Speech on Controlling Spending!
Today, federal spending
is nearly 10 times greater than it was in 1940, even after adjusting for inflation and population growth.
The trend toward a greater government role in the economy is continuing. In just the past 20 years, spending has increased by more than 50%.
Washington's claim on our nation is bigger than ever: today, federal spending equals one-fifth of our $10 trillion dollar economy, compared to less than one-tenth in 1940.
In 2001, the federal government spent a record $2.28 trillion. Spending in the first eight months of fiscal year 2002 is 10% higher than the same period last year.
This pace is expected to hold, resulting in spending in 2002 totaling nearly $2.5 trillion. The Washington Post reports that this year’s spending, combined with the expected increase in 2003, will amount to the largest spending increase since the “Great Society” of the 1960s.
When the first Republican majority in 40 years was elected to Congress in 1994, discretionary spending fell by 3% in real terms. But in succeeding Congresses, that progress has eroded. In the 105th Congress, it increased by 4%. The 106th Congress increased spending by 11%. The current Congress is on pace to increase discretionary spending by more than 15%.
*If the current pace continues
Source: Wall Street Journal, May 13, 2002
Spending as a percentage of GDP fell for much of the 1990s, due to the rapid growth of the economy. With spending continuing to accelerate, that trend has now reversed. Federal government spending this year is expected to total nearly 20% of GDP, up from 18.4% just two years ago.
Nor is it just federal government spending that has ballooned during the past several decades. State and local government spending has also exploded, consuming an ever larger portion of GDP.
Source: U.S. Census Bureau; The First Measured Century, PBS
On March 20, 2002, The House of Representatives passed a responsible budget that would fund our priorities without unnecessarily increasing the burden of government on the economy. Unfortunately, the Democratic Senate has illegally failed to pass a budget, hampering efforts to put a lid on out of control spending.
The recent example of the Senate supplemental funding bill demonstrates how difficult the battle to limit profligate Senate spending will be. The President requested a supplement of $27.1 billion to fund the War on Terrorism. But on June 7, the Senate approved a supplemental totaling $31.4 billion--$4.3 billion more than the President's request. Only by working closely with the White House were House Republican appropriators able to restrain the Senate, and negotiate a bill that fully funds the President's request without requiring him to spend more.
The House of Representatives must continue to work closely with the President to strictly enforce budgetary constraints and control runaway spending. Economic health is a prerequisite to meeting our nation's future challenges, from the War on Terrorism to the impact of retiring baby-boomers on Social Security. It is imperative that we limit the size of government, and preserve our economic health into the new century.
The House has shown that a responsible budget can be enacted, and the Senate should follow suit. I expect the Senate to only spend on what is necessary to fight the war and for our immediate emergency needs. With our nation now at war, now is not the time for unnecessary spending on lower priority items.
--President George W. Bush, May 24, 2002
The Spending Crisis: Facts
Why Is Government Spending A Concern?
How Is Your Money Being Spent?
House-White House Partnership to Control Spending
More Information About the Growth of Government Spending
Topics
Social Programs
Regulatory Burden
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