The Myth of the Spending Orgy
By Neil Stevens Comments (29) / Email this page » / Leave a comment »
Continuing my improbable defense of the current era of federal spending, I now address the rallying cry of the critics from the Heritage Foundation on down: non-defense discretionary spending. To summarize my findings: I don't see the pattern of spending that the critics claim exists, as usual.
In part one of this informal series, I found that total spending is in line with the historic trend. In part two, I showed that pork spending is a negligible part of the federal budget. Previously I have dismissed my doubters as slicing and dicing the figures too much, but I have grown curious as to whether even that analysis holds up, so here it goes.
The sources for the following figures are Federal Spending – By The Numbers by Brian M. Riedl of The Heritage Foundation for the spending breakdowns (see the last page for the table I used), The Bureau of Labor Statistics for CPI deflators, and Citizens Against Government Waste for pork spending estimates.
We know we spent more money in 2005 than we did in 1990, the first year in the Heritage analysis, but where has that money gone? Broadly, we split the budget into two categories. So-called mandatory spending is fixed by law and the Congress does not even bother to decide how much to spend on an annual basis. This spending is on total autopilot. The rest of the federal outlay is then grouped into the so-called discretionary pot.
As it turns out, of the $688 billion (all dollar figures are 2005 dollars) in spending growth in the period, $470 billion of it is in the mandatory pile:
That doesn't tell us much, though. So let's break it down more specifically. The following chart uses the figures from Riedl with two exceptions. I added his categories of "Other Discretionary Spending" and "Katrina" together, then subtracted 20 billion from that to create a new discretionary spending category: Pork. And here's what we get:
For the first few minutes this post was up, the graph was incorrect. I inadvertently left off a digit in the pork figures, making that slice too small. The graph has been corrected. The other graphs were unaffected by this typo.
(SS stands for Social Security, HS stands for Homeland Security) Aha! Non-defense, non-homeland security discretionary spending is right up there with Medicare as a top growth area in the budget! That's true, but do we really want to pretend that about 20% of the total spending growth is the One True Indicator of conservatism?
For the sake of argument, let's say we do. So, let's look at where this non-defense, non-homeland security spending has gone year by year:
Well what do you know. We did have an 'orgy of spending' for exactly one year: 2002, the year we were all running around like chickens with our heads cut off after 9/11. That spike leads me to believe that Riedl missed some Homeland Security money in the Other pile. But even if he didn't, look where we've gone since 2002: right back to normal, below even the final Clinton years.
So slice and dice our Congressional majorities if you must, but please keep things in perspective.
Where does your last graph come from exactly? Based on the Heritage report, pg 6, discretionary spending excluding defense, homeland, and katrina has risen every year since 2001 - a 23% increase in federal spending.
Look, I'm objective on this, that chart shows that the same category of spending rose under 42 by ~23% over eight years. So if you want to argue that federal spending is only a little higher than it was during the 90's, be my guest. Don't expect people who want sound financial management and a focus on actually reducing spending to be happy that the situation is only a little worse than under a (D) administration.
Heritage is hardly an anti-(R) organization, and they certainly give credit where credit is due for making at least some effort in that direction (quote: "President George W. Bush's 2005 budget provides a positive first step by proposing to freeze most non-security discretionary spending at 2004 levels."). Their numbers from page 4 are distressing:
- 137% increase in education spending
- 78% increase in health research and regulation
- 58% increase in housing and commerce
- 56% increase in "water transportation"
This is during a period of time when, as cited by Heritage, inflation rose by 12% and population by 5%. Are these spending increases justified? Are they part of an ingenious plan to make government so big that it collapes in on itself, finally giving us the smaller government we've been promised?
I'm not unsympathetic to your cause, and have no problem with your continued endeavor to point out the ratio between mandatory entitlements versus discretionary spending. But again the report you cite gives us more disturbing data on page 7 regarding the new Medicare Part D entitlement program, which according to Heritage actually creates an additional unfunded liability that is more than twice that of the entire social security liability! So using your logic, are we now to chide the president for trying to reform social security when it's become even less of a problem compared with Medicare? So spare us the diatribe about how 'this' category of spending is so much less than 'that' category of spending. The people you're trying to convince are I think by and large very aware of the looming entitlement train wreck, which is why watching what appears to be an across the board inability to even address easy to cut spending like pork, PBS, and so on while at the same time creating more of an entitlement fiasco draws criticism. Here is an NCPA article with more information on ss/medicare and the amount of liability.
The final pages of the Heritage report point out some other low hanging fruit that our congresspersons apparently lack the will or management experience to address:
The federal government made at least $37 billion in overpayments in 2005. Current estimates are between $40
billion and $100 billion in annual overpayments.
<...>
The Department of Housing and Urban Development’s $3.3 billion in overpayments in 2001 accounted for over
10% of the department’s total budget.
Overpayments? Hey, this is even more than pork waste! And my guess is we don't even get a bridge or a fruit research lab out of it.
On priorities?
Washington spends $60 billion annually on corporate welfare, versus $43 billion on homeland security.
<...>
The Conservation Reserve program pays farmers $2 billion annually to not farm their land.
<...>
Congress recently gave Alaska Airlines $500,000 to paint a Chinook salmon on a Boeing 737.
Again, I understand where you're coming from with the election. But now is the moment when the candidate's ears are theoretically most open to the will of the people. Asking us to shut up about failures to exercise sound fiscal management, prioritize spending, and eliminate waste just don't fly with me. After these guys are elected, they're beyond accountability for almost 2 or 6 more years, so we'd better make it clear now how poorly we feel they've performed on this aspect of their duty even while praising them and possibly electing them on the basis of their good performance elsewhere.
I adjusted for inflation using the CPI. Heritage's figures tend to be nominal, which means just keeping the same spending in real dollars would show an annual increase. It's a pretty sneaky tactic for trying to increase the alarm about higher spending.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
I told you in the diary exactly where I took the numbers: I took them from the table on the last page, which has all the numbers neatly broken down by category, then adjusted using the CPI to get them into 2005 dollars.
Then to get the growth amounts, I subtracted the 2005 from the 1990. The pie charts show the total growth in all categories.
So there you have it.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
You've now officially just shifted the goalposts on me. When I showed the total budget, you claimed I needed to look at real non-defense discretionary spending.
Well I did that, and as the final chart clearly shows, the rate of growth is not going up. It's in fact down from that anomalous 2002 high.
And now you start picking out individual agencies. Whoop-dee-doo. Why don't you tell the full story, and find the agencies that grew by LESS than the average, to make room for the ones that grew by MORE?
That IS the fair thing to do, after all, if you want to give Republicans a fair shake on this.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
You've now officially just shifted the goalposts on me. When I showed the total budget, you claimed I needed to look at real non-defense discretionary spending.
You have me confused with someone else. I didn't think your pork article was convincing (other than as an argument for the already self-evident fact that pork is 1.3% of the total federal spend - and as I pointed out on track to rise to ~5% of the spend in 10 years at current pork growth rates) but I don't think I tasked you to do anything about non-defense spending. Still, I admire someone who digs in and does so much research to argue a point.
According to the Heritage report, page 6, they already adjusted for inflation in arriving at the 23% increase in non-defense discretionary spending over 5 years (from a 34% increase without inflation adjustments). According to the Bureau of Labor Statistics, the CPI would adjust 2006 dollars down by 12.97% in terms of 2001 buying power. 34% minus 23% is 11, which is close to ~13; hey I'm no economist but it seems to me that the Heritage figures are just fine as they are. So now I'm not entirely sure what the point is you're trying to make with this posting - that spending on non-defense discretionary didn't actually rise by 23% in 5 years ?
Or that a 23% rise in federal spending exclusive of entitlements, homeland security, national defense, and katrina shouldn't be a concern because it's not that much more than the rise in spending we saw during the 90's?
Why don't you tell the full story, and find the agencies that grew by LESS than the average, to make room for the ones that grew by MORE?
It would be an interesting exercise, but I leave it up to the person trying (I think) to argue that federal spending really isn't growing more than it should, or even if it is, it should be of no concern whatsoever. I agree, showing cuts in spending on specific programs or within areas of spending would be positive news, as opposed to what you seem to be engaged in - making excuses for negatives.
The problem is that demonstrating some cuts to specific programs in light of the fact that total spending rose by 23% leads one to conclude the same root issue - failure to apply sound financial management to government operation. If you increase spending by X in these areas, offset that through decreasing it by X in other areas. Given the growth in spending, it appears that whatever positive cuts
we can tout are overshadowed by the negative increases. Certainly, according to the Heritage report, not a single "area" of spending has actually decreased since 2001.
That said, you've made a good point, and I hope your next installment focuses on actual positive news rather than another attmept to put lipstick on a pig.
Too much effort to look on the actual page I pulled the actual numbers from?
Whatever.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
Well put. While I too appreciate the efforts to show that things may not be as bad as advertised when seen under a microscope, spending is still up. This "shades of grey" approach could be applied to either party to make almost any point of contention seem benign.
Neither Neil, nor you, nor I, nor anyone here would be going to such lengths to find such silver linings in spending if the blood were on the Dem's hands or occurring under a Dem administration.
Yes, entitlement spending is driving a large portion of the growth and that does tend to get missed but perfectly controllable spending catergories like the ones you've pointed out are also considerably up...not to mention the added non-discretionary liability that was CREATED a few years ago.
Until the over-spending problem is an urgent priority for fiscal conservatives of all stripes that matters equally regardless of whose in power, the DC Monster will continue to grow.
Don't tread on me.
the whole "spending is out of control" has been more of a media and Democrat (but I repeat myself) creation than reality just to force tax increases, or create an environment where the Democrats can claim "fiscal responsibility = tax hikes"
While Neil may be right on point, and fact for that matter, middle class America does not seem to share the sentiment that spending is not up. Nor does middle America seem to feel that they are living a better life style because of said spending. Gas prices are squeezing middle class budgets, and energy prices in general this winter will cause a raft of freezing old and poor people stories.
During the Reagan years, cutting taxes and cutting spending were prime agenda items for the Republican party. At the time, people knew what Republicans stood for, and it was not spending.
Flash forward to today and the general perception by the public is that Republicans are on a spending orgy, maybe spending on things that are different than Democrats but still sending like crazy and with a President who does not like to say no.
In my view, the perception of out of control spending by a Republican controlled congress may be far worse than the fact, but the electorate may not see it that way, the sad reality of politics.
Republicans in the 80s were in favor of keeping government out of our lives, I thought.
This is the point Nick Danger made, that I've chewed on and decided tastes good. Republicans, even if they spend as much as Democrats do (which I do not grant, given that 80s spending was higher), do not spend the money on the same things the Democrats do.
They create new programs, we let the old ones drag on while twisting them to new purposes with earmarks. They invent new centralization, we (well, except for the lamentable Bush/Kennedy NCLB) shift things from the feds to the states. They create new entitlements, we (except for the lamentable Medicare part D) create new opportunities.
Besides, where are you getting the idea that the public, the PUBLIC, is aware of spending, let alone unhappy with it?
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
may not have a grasp of details as many politically engaged bloggers do but they hear enough tid bits of news and info here and there to know that we're deficit-spending.
I've come to realize that your averag unassuming citizen is aware of general narratives and quite cynical about them.
Don't tread on me.
I believe that shifting more power to states would resonate with many more people if message makers explained WHY this is a good idea. Justifying it while criticizing DC doesn';t work, IMO.
Ideas like keeping the money closer to home and arguing local government can better manage its needs are far more appealing, I would think, than anything I hear in favor of more states' rights.
Many moderate non-R's would find this to be sensible reasoning and we simply don't hear it thesew days.
Don't tread on me.
Of the tired old "We suck less" theme that we've been hearing for a while now. Not only do "we suck less" than the Democrats... "We suck less" than we did a few years ago. These numbers are completely unacceptable and inexcusable. There is no excuse for increase non-defense discretionary spending faster than inflation _at all_ on the base we already have built up, especially at a time when we are forced to greatly increase defense spending. That is why there is anger about Republican spending. No matter how many times the mantra "we suck less" is repeated, it isn't going to do anything about that anger.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson
I think if you look dispassionately, the Bush era record on spending is BETTER than the gold standard, the Reagan era record.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
The platinum standard? Reagan didn't have the luxury of a Republican congress, as Bush does, so I don't see how it could be the "gold standard."
I don't happen to think that sitting idly by while non-defense discretionary spending increases by over 10% in a single year can be a component of a good record on spending. I don't think it even qualifies as excusable. I would say that alone is enough to ruin his record on spending and add him to the "lousy on spending" list permanently. The fact that we are _still_ increasing year after year on that bloated base we created is just more evidence of how horrible his (and the legislature's) record is on this.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson
As in the white flag we showed as whe disbanded the military as fast as possible.
Or the apple standard, as in the low-hanging fruit we grabbed in the first post-Contract congress. Things like the ICC were easy to shut down.
You can't keep up that kind of pace forever. That's why the Gingrich House turned to Medicare.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
As in the white flag we showed as whe disbanded the military as fast as possible.
*Non-defense discretionary spending*.... meaning it has nothing to do with spending on the military. That's what the whole non-defense part would be indicative of.
Or the apple standard, as in the low-hanging fruit we grabbed in the first post-Contract congress.
So what are we doing now? Adding a few billion more bushels of low hanging fruit to the trees so we have something to cut the next time a Democrat is elected?
You can't keep up that kind of pace forever. That's why the Gingrich House turned to Medicare.
You don't happen to be one of Mr. Delay's congressional aides, do you? Yes... the budget has really been cut to the bone. We needed to jack up non-defense discretionary spending to undo the horrible mistakes we made in the 90s when we thought government should be smaller.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson
"As in the white flag we showed as whe (sp) disbanded the military as fast as possible."
Peace Dividend I...who started it, George H. Bush. Clinton may have done his part too, but the real cuts were begun under Bush I.
GHW Bush isn't my guy. It was dumb to nominate him after Reagan.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
What is your list of proposed budgetary moves? Which programs would you zero out, which would you scale back?
Things looked good in the ninties in part because we cut defense spending. Would you like to repeat that?
The real growth in the budget, as has been demonstrated, is in the entitlement programs. But you don't seem very interested in talking about them at all. Why is that?
We could eliminate the entire non-defense discretionary budget and we would still be faced with a rapidly growing government. I don't understand your indifference to this. I get the impression that your objection is not to large government per se, but government which does certain things, like building a bridge in Alaska.
What is your list of proposed budgetary moves? Which programs would you zero out, which would you scale back?
I would cut anything and everything that isn't defense related. I would eliminate a whole lot of programs. Is it your contention that there is no place to cut?
Things looked good in the ninties in part because we cut defense spending. Would you like to repeat that?
This chart is non-defense discretionary spending... meaning it has nothing to do with "cutting defense spending." That's a great meme that I once even repeated myself, but the facts just do not back it up.
The real growth in the budget, as has been demonstrated, is in the entitlement programs. But you don't seem very interested in talking about them at all. Why is that?
I'll take cuts wherever I can get them. Entitlements are the hardest place to cut, politically. It is unrealistic to ever expect to see real entitlement spending cuts while we are still throwing money away on the discretionary side.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson
I would cut anything and everything that isn't defense related. I would eliminate a whole lot of programs.
Great. I encourage you to run for Congress on that platform. Let me know how it turns out.
Look, I don't mean to be snarky, but is there anything to suggest that the public at large is remotely interested in what you are proposing? When the government "shut down" in the nineties the GOP took a black eye for it, and that was peanuts compared to what you are proposing.
We're talking politics on this site. Its fair enough for everyone to state their own preferences, but politics concerns itself with what the public finds popular, or at least can be persuaded to go along with.
I find your belief that the public will never accept entitlement reform as long as the NEA is publically funded a little strange. Maybe its just projecting your own views onto the world at large.
Look, I don't mean to be snarky, but is there anything to suggest that the public at large is remotely interested in what you are proposing?
But the public at large is clearly interested in pushing back the retirement age and cutting Medicare coverage, right? Those are real winners at the ballot box. What did Newt get attacked for more than anything? His supposed desire to let Medicare "wither on the vine." That stuff was repeated for years and used to attack all Republicans, not just Newt.
I find your belief that the public will never accept entitlement reform as long as the NEA is publically funded a little strange.
Where's your supporting evidence that suggests Social Security and Medicare programs are unpopular with the public? Where do you get the idea that cuts to those programs would be more popular with the public than cuts to the NEA budget? We cut the NEA budget and we "lose" the starving artists who are busy working on their next urine soaked crucifix project (like we had their votes anyway). You cut Medicare benefits and you lose lots of elderly Republican voters. The kind we need to win elections.
Maybe its just projecting your own views onto the world at large.
Yea, that's it. I am secretly in love with entitlement spending.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson
I am secretly in love with entitlement spending.
Seriously, the problem with your approach is that virtually no GOP Congressman has run on it. Bush certainly did not. Taking them to task for not implementing policies they never promised seems misguided. None of the GOP Congressmen or Senators running in November are promising to slash spending, on anything. Even the class of 1994 were not as aggressive as you would like the current Congress to be.
One important difference between SS and the NEA is that SS is a real problem. Giving money to rich lefties so they can pretend they are "artists" is irritating, but its not a threat to the viability of the country. Bush actually did attempt to get SS reform, and he did get very little support from the right. I cannot imagine why that is.
Seriously, the problem with your approach is that virtually no GOP Congressman has run on it. Bush certainly did not. Taking them to task for not implementing policies they never promised seems misguided.
Well, we do have a party platform... and this stuff is still in there. By running on a Republican ticket you are implying you agree with the platform unless you come out and say otherwise. In any case, they also did not run on jacking up spending, either.
One important difference between SS and the NEA is that SS is a real problem. Giving money to rich lefties so they can pretend they are "artists" is irritating, but its not a threat to the viability of the country.
Of course... the NEA is small potatoes, but, as I've said before, I'll take cuts where ever I can get them (outside of Defense). Even if it only saves 50 bucks, it's better than a 50 dollar increase.
Bush actually did attempt to get SS reform, and he did get very little support from the right. I cannot imagine why that is.
I think he had quite a bit of support from the right, but his SS plan wasn't exactly earthshattering. It was pretty timid and did not do anything to fix the long term viability of the program... and I think that was the biggest problem with it. You can't use the inevitable collapse of the SS system as a reason to go and reform it, then offer up reforms that don't do anything to correct that. It was a worthy attempt, and I certainly supported the plan, but I can also see why it failed to gain any traction.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson
That is essentially the document the president runs on, since everyone else runs in their own district. I'm pretty sure Lincoln Chafee never pretended to sign on the the ideas in the platform, and the same is true for most Congressmen. They say what they need to say to get elected in their district.
In any case I don't see much in the platform about cutting spending. There is a paragraph about how the government should be restricted to its enumerated powers in the Constitution, but then there is a long section about how the national transportation network is essential and how we need to support energy conservation and alternate sources of renewable energy. There are no specific spending cut proposals that I can find.
It tries to be all things to all people, as you might expect from a political party document. But Milton Friedman it ain't.
In 1996 our non-defense discretionary spending seems to have hit a low point. Did we win that year?
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
I will review this later before I comment in depth, but obviously entitlement reform should be a greater priority than pork based on raw numbers.