Hi all,
Summary of fed budget 2001-2008:
Federal Spending, 2001-2008: Defense Is a Rapidly Growing Share of the Budget, While Domestic Appropriations Have Shrunk — Center on Budget and Policy Priorities
Defense and related programs have grown far faster than any other area of the budget, while domestic discretionary programs have grown at the slowest rates.
Taking inflation and population into account, the defense/security category has grown 27 times as rapidly as domestic discretionary programs.
The defense/security category also has grown four times as rapidly as all domestic programs combined a category that includes Social Security, Medicare, Medicaid, the other entitlements, and the domestic discretionary programs.
TABLE 1:
DOMESTIC DISCRETIONARY FUNDING IS A SHRINKING SHARE OF TOTAL PROGRAM COSTS
Share of Total 2001 2008 Change
Defense & security 21.7% 29.2% +7.5%
Social Security, Medicare/caid 45.9% 43.5% -2.4%
Other mandatory programs 14.0% 12.5% -1.4%
Domestic discretionary 18.4% 14.7% -3.7%
Total program costs 100% 100% 0.0%
Notes: Figures may not add due to rounding. The defense/security figures also include veterans, homeland security, and international affairs. Medicare is net of premiums. Figures for 2008 are CBO痴 January estimate plus supplemental discretionary funding requested by President Bush. Totals exclude net interest.
TABLE 2:
DOMESTIC DISCRETIONARY FUNDING HAS BEEN GROWING MORE SLOWLY THAN ANY OTHER SET OF PROGRAMS (AVERAGE ANNUAL RATE OF GROWTH, FROM 2001 THROUGH 2008)
nominal real real per person
Defense & security 12.0% 9.1% 8.1%
Social Security, Medicare/caid 6.5% 3.8% 2.8%
Other mandatory programs 5.7% 3.0% 2.0%
Domestic discretionary 4.0% 1.3% 0.3%
Average, all program costs 7.3% 4.6% 3.6%
See Notes, Table 1.
What Are the Major Domestic Discretionary Programs?
The largest domestic discretionary programs (in order of size) are: education, highways and other ground transportation, housing assistance, biomedical research, federal law enforcement, public health services, air traffic and related transportation, and space flight.
Table 3 shows the four areas of the budget as a share of the economy i.e., as a percentage of Gross Domestic Product, which is the broadest measure of the size of the economy. This measure is the best way to determine the affordability of various programs. Absent any changes in tax law, revenues generally grow at about the same rate as the economy (or slightly faster). Therefore, if programs also are growing only as fast as the economy i.e., staying constant as a share of GDP their growth does not put any upward pressure on revenues.
TABLE 3:
DOMESTIC DISCRETIONARY FUNDING IS A SHRINKING PERCENTAGE OF THE ECONOMY (% OF GDP)
2001 2008 Change
Defense & security 3.6% 5.6% +2.0%
Social Security, Medicare/caid 7.7% 8.4% +0.7%
Other mandatory programs 2.3% 2.4% +0.1%
Domestic discretionary 3.1% 2.8% -0.2%
Total program costs 16.7% 19.3% +2.6%
Addendum, revenues 19.8% 18.5% -1.3%
See Notes, Table 1.
As Table 3 shows, while non-interest expenditures as a whole have grown noticeably faster than the economy, domestic discretionary programs have grown more slowly than the economy (and thus have shrunk as a share of GDP). From this perspective, domestic discretionary programs have not contributed to the return of deficits.
In contrast, funding for defense and related programs has been growing at an extraordinary rate. Funding for these programs has shot up by 2 percent of GDP in just seven years. To put this in perspective, it is expected to take more than two decades, from 2010 to the mid-2030s, for Social Security to grow by two percent of GDP.
Conclusion
Despite rhetoric to the contrary, domestic discretionary programs have not been growing rapidly. In fact, this is the only part of the budget where costs have been shrinking relative to the economy, which means these programs are not putting upward pressure on revenues.
By contrast, funding for defense and related areas has been growing far faster than any other part of the budget, much faster in fact than Social Security, Medicare, and Medicaid. Moreover, defense remains the fastest growing area of the budget even if one excludes the costs of the wars in Iraq and Afghanistan and the global war on terror.
This site shows spending in various areas:
Obama?s 2010 Federal Budget Explained in Plain English | OnlineForexTrading.com
This site shows that so far Social Security Taxes has brought in more than 2 trillion dollars more than has been spent.
Defense is about half of all discretionary spending. Any details of what changes to make. I agree that some things have to change. For anyone who cares to research a little I believe that you will conclude that the majority of the budget is very similar no matter which party has more control. We could drop all non military discretionary spending and still have a significant deficit.
Loren
