The Federal Budget: Where is the Money Going?

• Federal spending has grown 62 percent faster than inflation since 2000.
• Defense spending has grown 91 percent over its pre-9/11 trough, yet still remains well below the historical average as a percentage of the economy.
• The expensive Medicare drug benefit played a large role in Medicare’s sharp cost increase.
• Anti-poverty spending rose rapidly under President George W. Bush, and has risen again during the recession.
• Unemployment spending is also up due to the recession.
• Energy costs fluctuate yearly, so the rapid growth rate over 2000 is not indicative of a long-term trend.
• Mortgage credit and deposit insurance costs were high in 2009 due to the financial and mortgage bailouts. The low (and occasionally negative) 2010 totals result from recipients repaying a portion of that spending.
• Despite the new spending and deficits, record-low interest rates caused net interest costs to decline. Net interest spending will jump when interest rates rise back to normal levels.

• Discretionary spending is the portion of the annual budget that Congress actually determines.
• Since 2000, discretionary outlays surged 79 percent faster than inflation, to $1,408 billion. The “stimulus” is responsible for $111 billion of 2010 discretionary spending.
• Between 1990 and 2000, $80 billion annually in new domestic spending was more than fully offset by a $100 billion cut in annual defense and homeland security spending, leaving (inflation-adjusted) discretionary spending slightly lower.
• Since 2000, all types of discretionary spending have grown rapidly.
• Overall, since 1990, domestic discretionary spending has risen 104 percent faster than inflation and defense/security discretionary spending has risen 51 percent.

source