federal spending

A few ways government could, you know, maybe not waste your money.

“If we can prevent the government from wasting the labors of the people, under the pretence of taking care of them, they must become happy.” ~ Thomas Jefferson, 1802, Letter to Thomas Cooper

Our federal government is an all-consuming, gargantuan parasite growing ever larger with each passing day. Under the rubric of providing for our every need from cradle to grave, it consumes more and more of our labor. It is, to quote Reagan, “like a baby: An alimentary canal with a big appetite at one end and no sense of responsibility at the other.”

Yet one organization has a blueprint for reining in this ocean of red ink; Citizens Against Government Waste. CAGW has compiled a list of wasteful government spending each year since 1983, and the incorporation of some of its recommendations for the federal budget has resulted in spending cuts of $1.4 trillion.

A short sampling of potential taxpayer savings from this year’s report, Prime Cuts 2016, includes:

- Reducing improper Medicare payments by 50% over five years ($4.3 billion), noting, “Medicare is plagued with the highest reported amount of improper payments of any federal program…Because of its chronic vulnerability to fraud, waste, abuse, and mismanagement, the [Government Accountability Office] has for 20 years designated the Medicare program as ‘high risk.’”

- Eliminating federal subsidies for Amtrak ($1.4 billion in one year, $7.1 billion in five years). Amtrak, a government-run railroad, has been in operation for 45 years at a cost to taxpayers of more than $40 billion. It has never turned a profit and now costs taxpayers almost a billion dollars a year, leading Amtrak’s founder to call it a “massive failure”.

Deficits to grow by $7.6 trillion over next 10 years

The Congressional Budget Office expects budget deficits to grow by $7.62 trillion between 2015 and 2024 despite a rise in tax revenue. That, according to updated budget projections released yesterday.

The nonpartisan fiscal research office expects budget deficits to hit $492 billion in 2014, or 2.8% of gross domestic product (GDP), and $469 billion in 2015 before beginning to rise again. By 2020, the budget deficit will hit $804 billion, or 3.5% of the economy.

The main drivers of federal spending are entitlements, known budget language as “mandatory spending” or “autopilot spending,” and debt service. These budgetary items will consume nearly 74% of the federal budget over the 10-year budget window.

Though tax revenues will eclipse $4.9 trillion, or 18.3% of GDP, by 2024, spending will continue to rise at an unsustainable pace. The federal government will spend nearly $6 trillion in that same year. The federal government will spend nearly $48.2 trillion over the course of this timeframe.

Added together, taxpayers will be hit with $7.62 trillion in budget deficits over the 10 year budget window. The share of the national debt held by the public will eclipse $20 trillion by 2024. This, despite higher than average tax revenues collected by the federal government.

The Congressional Budget Office warns of potentially dire consequences if federal lawmakers don’t act soon to deal with the threats to the United States’ long-term prosperity.

CBO director warns of “unpleasant” choices on federal spending

The growth of federal entitlements programs is the biggest fiscal issue facing the United States, says CBO Director Doug Elmendorf, and it’s one that is going to require Washington to make some “unpleasant” choices, preferably sooner rather than later:

“So we have a choice as a society to either scale back those programs relative to what is promised under current law; or to raise tax revenue above its historical average to pay for the expansion of those programs; or to cut back on all other spending even more sharply than we already are,” Elmendorf said.

“And we haven’t actually decided as a society…what we’re going to do. But some combination of those three choices will be needed.”

Elmendorf said there are various ways to proceed: “But they tend to be unpleasant in one way or another, and we have not, as a society, decided how much of that sort of unpleasantness to inflict on whom.”

Though there’s a lot of attention paid to short-term deficits, this is symptomatic of a much, much larger problem. It’s not a new crisis, and it’s one that most people in Washington realize exists. The CBO has been pointing out these concerns for some time, most recently its September long-term budget report.

This analysis anticipated that spending as a percentage of GDP would rise to 26.2%, based on current law, and federal revenues will come in around 19.5%. The budget deficit as a percentage would be 6.4% and the public’s share of the national debt will hit 100%.


The views and opinions expressed by individual authors are not necessarily those of other authors, advertisers, developers or editors at United Liberty.