The 2009 version of "Federal Spending by the Numbers" shows
spending and deficits surging at a pace not seen since World War
II. Washington will spend $33,932 per household in 2009--$8,000 per
household more than last year. While much of this spending is a
temporary result of the recession and financial crisis, President
Obama's 2010 budget would replace this temporary spending with
permanent new programs. Consequently, by 2019--a time of assumed
peace and prosperity--Washington would still spend $33,000 per
household (adjusted for inflation), essentially making permanent
this year's $8,000 per household spending hike. These numbers do
not even include the cost of the President's health plan.
Since 2001, spending has grown across the board. Discretionary
spending has expanded 74 percent faster than inflation as a result
of large defense and domestic spending hikes. Entitlement spending
has reached a record 13 percent of GDP--not even counting the
additional 5 percent of GDP spent on financial bailouts this year.
Other areas receiving large increases since 2001 include:
anti-poverty programs (57 percent faster than inflation), K-12
education (169 percent), veterans spending (72 percent), and
Medicare (59 percent). And despite all the pressing national
priorities, lawmakers approved over 10,000 earmarks last year at a
cost of $20 billion. Simply put, all parts of government are
growing.
Consequently, Washington is estimated to run a 2009 budget
deficit of $1.845 trillion ($15,635 per household). While deficits
naturally rise during recessions, one would expect them to
eventually return back to the $100 billion to $400 billion range
that prevailed before the recession. However, the President's
budget shows annual budget deficits averaging just under $1
trillion over the next decade--a period in which the national debt
would double. These deficits would not only raise interest rates,
they would also nearly quintuple the net interest costs of the
national debt over the next decade.
Of course, not all future spending is inevitable. In the 1980s
and 1990s, Washington consistently spent $21,000 per household
(adjusted for inflation). Simply returning to that level would
balance the budget by 2012 without any tax hikes. Alternatively,
returning to the $25,000 per household level (adjusted for
inflation) that Washington spent before the current recession would
likely balance the budget by 2019 without any tax hikes.
Read the entire report (PDF)