The 2009 federal spending surge is nothing short of historic. The 25 percent spending increase represents the largest non-war government expansion since the New Deal. Domestic discretionary spending (including stimulus funds) has been hiked more than 80 percent over 2008 levels.
As a result Washington will run a budget deficit of 12.3 percent of gross domestic product (GDP) by far the largest since World War II says Brian M. Riedl a researcher with the Heritage Foundation.
Some justify this spending as a necessary temporary response to a recession.
Setting aside the flaws in that argument excluding the recessionary period does not improve the fiscal picture says Riedl:
• In 2007 before the recession Washington spent $24172 per household.
• By 2019 the Presidents budget would spend $32463 per household -- an inflation-adjusted $8000 per household expansion of government.
• In 2007 Washington spent 20 percent of GDP.
• President Obama would permanently elevate federal spending to nearly 23 percent of GDP by 2019 -- a level reached only three times since the end of World War II.
Yet even that may be an underestimate says Riedl. The Presidents budget unrealistically assumes that:
• All temporary stimulus spending such as higher spending on Pell Grants and health care will be allowed to expire.
• Discretionary spending growth will be held to 2 percent annually after 2012 compared to the 8 percent annual growth of the past two years.
• The $634 billion down payment on universal health care will not be expanded.
• Fixing these assumptions brings spending to 25 percent of GDP by 2019 -- with annual $1.2 trillion deficits.
Taxpayers already cannot afford todays federal programs. Over the next decade Social Security Medicare and Medicaid costs are projected to increase automatically by nearly 7 percent annually. Much of the $800 billion of stimulus spending will likely be made permanent.
The seemingly endless string of financial bailouts will also likely continue. Despite all of these existing commitments that tax¬payers cannot afford President Obama would pile on another $1 trillion over the decade for:
• $429 billion in new domestic discretionary spending.
• $326 billion as the spending portion of new or expanded tax credits such as the Make Work Pay credit.
• $318 billion as a down payment on universal health care.
• $117 billion to convert Pell Grants into an entitlement and put its budget on autopilot preventing Congress from easily controlling its growth.
Source: Brian M. Riedl The Obama Budget: Spending Taxes and Doubling the National Debt Heritage Foundation Backgrounder No. 2249 March 16 2009.
For text:
http://www.heritage.org/Research/Budget/bg2249.cfm
The 2009 federal spending surge is nothing short of historic. The 25 percent spending increase represents the largest non-war government expansion since the New Deal. Domestic discretionary spending (including stimulus funds) has been hiked more than 80 percent over 2008 levels.
As a result Washington will run a budget deficit of 12.3 percent of gross domestic product (GDP) by far the largest since World War II says Brian M. Riedl a researcher with the Heritage Foundation.
Some justify this spending as a necessary temporary response to a recession.
Setting aside the flaws in that argument excluding the recessionary period does not improve the fiscal picture says Riedl:
• In 2007 before the recession Washington spent $24172 per household.
• By 2019 the Presidents budget would spend $32463 per household -- an inflation-adjusted $8000 per household expansion of government.
• In 2007 Washington spent 20 percent of GDP.
• President Obama would permanently elevate federal spending to nearly 23 percent of GDP by 2019 -- a level reached only three times since the end of World War II.
Yet even that may be an underestimate says Riedl. The Presidents budget unrealistically assumes that:
• All temporary stimulus spending such as higher spending on Pell Grants and health care will be allowed to expire.
• Discretionary spending growth will be held to 2 percent annually after 2012 compared to the 8 percent annual growth of the past two years.
• The $634 billion down payment on universal health care will not be expanded.
• Fixing these assumptions brings spending to 25 percent of GDP by 2019 -- with annual $1.2 trillion deficits.
Taxpayers already cannot afford todays federal programs. Over the next decade Social Security Medicare and Medicaid costs are projected to increase automatically by nearly 7 percent annually. Much of the $800 billion of stimulus spending will likely be made permanent.
The seemingly endless string of financial bailouts will also likely continue. Despite all of these existing commitments that tax¬payers cannot afford President Obama would pile on another $1 trillion over the decade for:
• $429 billion in new domestic discretionary spending.
• $326 billion as the spending portion of new or expanded tax credits such as the Make Work Pay credit.
• $318 billion as a down payment on universal health care.
• $117 billion to convert Pell Grants into an entitlement and put its budget on autopilot preventing Congress from easily controlling its growth.
Source: Brian M. Riedl The Obama Budget: Spending Taxes and Doubling the National Debt Heritage Foundation Backgrounder No. 2249 March 16 2009.
For text:
http://www.heritage.org/Research/Budget/bg2249.cfm
