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Defense Spending Remains Below Historical Levels Despite the War on Terror
Although the United States is currently spending a significant portion of GDP on the military, defense spending has actually declined significantly since the early 1960s.
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Federal Spending Grew Nearly Seven Times Faster Than Median Income
Federal spending has increased 221 percent since 1970, nearly nine times faster than median income, which rose just over 32 percent.
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Federal Spending Is Growing Faster Than Federal Revenue
Since 1965, federal tax revenues and spending have soared. Revenues have increased by more than $1.5 trillion, and spending is up by $3.3 trillion. In 2009, federal revenue will drop, while federal spending is expected to increase by nearly $1 trillion.
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Since 9/11, Federal Spending Increased Much Faster Than Inflation
Total nominal spending has increased 116 percent since 1992, while the Consumer Price Index has increased a relatively modest 53 percent, which means that government spending is growing more than twice as fast as inflation. Less than half of the increase in federal spending came from defense and homeland security spending.
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Federal Spending Has Increased Steadily Regardless of Congressional Leadership
Real annual federal spending has more than quintupled since 1965 and more than doubled since 1980. Since 2006, federal spending has increased by nearly $1 trillion.
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Federal Spending per Household Is Skyrocketing
Total federal spending per household is currently at record levels, having risen 203 percent since 1965. The Obama Administration's budget would increase federal spending even further to $33,194 per household by 2019.
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FY 2009 Had the Second-Highest Number of Earmarks in History Despite Change in Congressional Leadership
Earmarks, or "pork" projects, have escalated in recent years. There were more earmarks in 2005 than from 1991 to 1999 combined. In 2007, the number of projects dramatically decreased as a result of a year-long continuing resolution. Under the Democratic Congress, earmarks have shot back up to the second-highest level in recent history.
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Mandatory Spending Has Increased Five Times Faster Than Discretionary Spending
Discretionary spending, the portion of the budget subject to annual review or budget debate, increased 203 percent from 1965 to 2009. Mandatory spending, consisting mostly of Social Security, Medicare, and Medicaid, which run on autopilot, rose 832 percent from 1965 to 2008. In 2009, spending from the Troubled Asset Relief Program (TARP) and President Obama's $250 billion placeholder for additional stabilization efforts will increase mandatory spending over 50 percent.
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Mandatory Spending Will Increase by $7,538 per Household in 2009
Between 1965 and 2008, mandatory spending per household increased $10,777. This was mainly driven by the increasing costs of Social Security, Medicare, and Medicaid. In 2009, spending from the Troubled Asset Relief Program (TARP) and President Obama's $250 billion placeholder for additional stabilization efforts will increase mandatory spending to $21,324 per household.
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Medicare and Medicaid Spending Will Rise with Increasing Health Care Costs
Health care costs have risen faster than the economy over the past few decades. This directly contributes to the uncontrolled growth of Medicare and Medicaid costs. Health care costs are expected to continue increasing rapidly in the future and will be one of the main drivers of future increases in entitlement spending.
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Obama's Budget Would Return Defense Spending to Pre-9/11 Levels
At 4.7 percent of GDP, defense spending is currently about a half percentage point of GDP below the 45-year historical average and well below Cold War and Vietnam War levels. Under President Obama's plan, defense spending will drop to 3 percent of GDP, a near record low.
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Total Government Spending More Than Doubled Since 1965
The total spending burden on American households has grown 140 percent to $41,219 per household since 1965. State and local spending per household has increased 160 percent, while federal spending has increased 128 percent.
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