Spending Growth in Context

Are the budget deficits due to profligate spending by the Bush administration? Are Congressional Republicans truly more spendtrift in their ways than French socialists?

I find a little historical context helpful in assessing these claims from the right. The chart below shows federal spending broken into several major categories over the past few decades, expressed as a fraction of GDP.

What strikes me about this chart is that while spending on Defense and Homeland Security (the red line) has indeed risen quite sharply under the Bush administration, other types of discretionary spending (the green line) have risen only quite modestly, and are still slightly below where they were in 1995. While Bush 43’s budgets have clearly benefited from low interest payments (thanks in part to the low deficits and surpluses of the late 1990s, and in part to the very low interest rates of the past few years), the one other category of spending that has grown rapidly during his presidency is government-provided health insurance.

So perhaps Bush is indeed no Reagan when it comes to non-defense-related discretionary spending. But neither has such federal spending grown dramatically in the past few years.

No, the only category where it seems clear that Bush has deliberately let the money flow freely is in defense. So if you think that the federal government’s spending has grown too fast in recent years, turn your attention to defense spending and health care. That’s where the money has been going.


UPDATE: For more about the contribution that this spending growth has made to the budget deficit, see my latest post, The Role of Spending Growth in the Deficit. For some discussion about the tax side of the equation, see The Budgetary Effects of the Bush Tax Cuts.

Also, I neglected to provide the source for my data. This data is readily available from various sources; I happened to pull these numbers directly from the CBO’s annual budget update, specifically the section entitled “Historical Budget Data“. 2005 data is from the CBO’s August Budget Update.