The Unabridged And Illustrated Federal Budget For Dummies - Part 1: Spending

In a four-part series, on the premise that a picture paints a thousand words, we present, via The Heritage Foundation, everything you wanted to know about the Federal Budget - In Charts. We start with Federal Spending - which is at record levels and is still growing, threatening economic freedom.

Federal Spending per Household Is Skyrocketing

The federal government is spending more per household than ever before. Since 1965, spending per household has grown by 152 percent, from $11,900 in 1965 to $30,015 in 2012. From 2012 to 2022, it is projected to rise to $34,602—a 15 percent increase.


Federal Spending Exceeds Federal Revenue by More than $1 Trillion

Since 1965, spending has risen constantly. While federal revenues are recovering from the recent recession, spending is growing sharply, resulting in four consecutive years of deficits exceeding $1 trillion.


Federal Spending Grew Nearly 12 Times Faster than Median Income

When federal spending grows faster than Americans' paychecks, the burden of government on taxpayers becomes greater. Over the past four decades, median-income Americans' earnings have risen only 24 percent, while spending has increased 288 percent.


What if Families Handled Finances Like the Federal Government Does?

In 2010, median family income was $51,360. If a typical family followed the federal government's lead, it would spend $73,319 and put 30 cents of every dollar spent on a credit card. This family would have racked up $325,781 in credit card debt—like a mortgage, only without the house. What credit card company would continue lending money to this family?


Mandatory Spending Has Increased Nearly Six Times Faster than Discretionary Spending

Mandatory spending— primarily entitlements and interest—is set on budgetary autopilot, growing without congressional debate. It has increased almost six times faster than discretionary spending, including defense, which is the part of federal spending subject to annual budgets.


Runaway Spending, Not Inadequate Tax Revenue, Is Responsible for Future Deficits

The main driver behind long-term deficits is government spending, not low revenue. While revenue will surpass its historical average of 18.1 percent of GDP by 2018, spending remains above its historical average of 20.2 percent, reaching 22.1 percent by 2022, even after $2.1 trillion in spending cuts in the Budget Control Act.


Medicare and Other Entitlements Are Crowding Out Spending on Defense

Ever-increasing entitlement spending is putting pressure on key spending priorities, such as national defense, a core constitutional function of government. Defense spending has declined significantly over time, even when the wars in Iraq and Afghanistan are included, as spending on the three major entitlements—Social Security, Medicare, and Medicaid—has more than tripled.


National Defense Spending Would Plummet Under Obama's Budget

President Obama's lean defense strategy would create a hollow force and exacerbate today's readiness crisis. Decreases in funding for the core defense program mean losing capabilities that are crucial for the military to fulfill its constitutional duty to provide for the common defense.


Budget Control Act Sequestration Would Hit Defense Hardest

The Budget Control Act's $1.2 trillion automatic sequestration cuts, out of $46.3 trillion in total spending, would impose draconian cuts on defense (on top of an estimated $407 billion in cuts from its spending caps). This would slash the defense budget and jeopardize the U.S. military's ability to defend the nation. Entitlement spending—the biggest part of the budget— would scarcely be touched by comparison.


Obama Budget Would Make Defense the Lowest Budget Priority

President Obama's budget would lower defense spending below other major budget priorities, forcing cuts to personnel levels and weakening military readiness. By 2018, the U.S. would spend more on interest on the debt than on protecting the country.


More than Half of All Federal Spending Will Be on Entitlement Programs in 2012

Medicare, Medicaid, and Social Security—along with other entitlements such as food stamps, unemployment, and housing assistance— make up 62 percent of all federal spending. In contrast, spending on foreign aid represents about 1 percent.


Total Welfare Spending Is Rising Despite Attempts at Reform

Total means-tested welfare spending (cash, food, housing, medical care, and social services to the poor) has increased more than 17-fold since the beginning of Lyndon Johnson's War on Poverty in 1964. Though the current trend is unsustainable, the Obama Administration would increase future welfare spending rather than enact true policy reforms.


More than 70 Percent of Federal Spending Goes to Dependence Programs

Government dependence is driving budget deficits and federal debt. More than 70 percent of federal spending goes to 47 government dependence programs, including housing, farm subsidies, and the three largest entitlements, Medicare, Medicaid, and Social Security.


Cut Spending, Fix the Debt, and Restore Prosperity

By rapidly lowering total federal spending, Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity would balance the budget by 2021 and keep it balanced permanently, without raising taxes.


Source: The Heritage Foundation