America’s Budget

See if you can guess who I’m talking about:

One of this president’s campaign talking points was the size of the federal budget. He said it was too large and if he was elected he would get it under control. People believed him and they voted him into office. However, the budget continued to grow, and when he left office the national debt was almost 3 times as large as when he took office.

If you guessed Ronald Reagan, you are correct.

It’s not unexpected that the budget grows larger each year, for a number of reasons. Every year we’re a bigger country – our population grows. More people means more poor people, more sick people, more retirees, and more mandated spending to take care of those people. In fact, only 37% of the budget is discretionary spending. Fully 63% of the budget is mandated spending (such as Medicare, Medicaid, and interest on the debt). There are federal programs to assist cities and states with their financial burdens, and more people means those programs will spend more. On top of that, inflation erodes the value of the dollar, so the government has to spend more dollars each year just to stay even with the previous year.

From 1980 to 2009, budget outlays grew from $590.9 billion to $3517.6 billion. That is an average increase of 6.6% per year.

Let’s talk about fiscal years. What is a fiscal year? From Wikipedia:

“The federal government's fiscal year currently begins on October 1 and ends on September 30 of the next calendar year. The fiscal year corresponds to the calendar year in which it ends; thus, fiscal year 2009 would begin on October 1, 2008 and end September 30, 2009.”

What this means is that the last Bush budget was the FY 2009 budget, which was enacted in 2008 and funded government from October, 2008, through September, 2009. Obama’s first budget was the FY 2010 budget, which funded government from October, 2009, until September, 2010.

It’s important to note that only Congress has the power to authorize spending. The President sends a budget to Congress, but it’s really a wish list. Congress can reject it, modify it, or pass it. Usually, many changes are made to a budget before it passes Congress.

Keeping that fact in mind, here are the total outlays (on-budget plus off-budget).

	Expenditure (billions)	Previous Year (billions)	Difference (billions)	Percentage Change (from the previous year)
FY 2010	3,721	3,518	+ 203	+ 5.77%
FY 2011	3,360	3,721	– 361	– 9.70%
FY 2012	3,796	3,360	+ 436	+ 12.98%
FY 2013	3,803*	3,796	+ 7	+ 0.18%
4 year average	3,668	3,599	+ 71	+ 2.3%

(* FY 2013 has been requested but not yet enacted.)

In FY 2010, Obama requested $3.552 trillion, but Congress enacted $3.721 trillion. Congress ordered more spending than Obama requested.

In FY2012, Obama requested $3.729 trillion, but Congress enacted $3.796 trillion. Once again, Congress ordered more spending than Obama requested.

If Obama can restrain Congress from packing his FY 2013 budget full of pork, and if, after four years, government spending has increased by an average rate of only 2.3% per year, it will mean that under Obama, the rate of government’s spending increases has been a third of the historical rate of spending increases since 1980.

Not bad for a “big spender”.

Reference: Office of Management and Budget, Historical Tables
Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits (-): 1789–2017