By James Pethokoukis
The WSJ’s Jerry Seib offers a helpful reminder of what’s really happening with federal government spending. While some folks like to focus on wasteful spending on, say, clean energy boondoggles like Solyndra or some unneeded Pentagon weapons system, that stuff isn’t the really big problem:
This reality has been masked by the fact that government spending isn’t declining, although the rate of increase has moderated. But the part of government that is really increasing right now is the part that churns out checks for people receiving Medicare, Medicaid and Social Security.
Meantime the ranks of government workers at the federal, state and local levels—the bureaucrats everybody loves to hate, as well as more beloved figures such as firefighters—are declining, as is the share of government spending that goes to the programs they run.
What’s happening, in short, is that government, particularly at the federal level, is turning increasingly into an entitlement machine, dispensing benefits to those who qualify, while a combination of recession, deficits and an aversion to new taxes is squeezing most remaining government activity.
Make that a nuclear-armed entitlement machine. (Well, at least until Chuck Hagel gets to the Pentagon.) Seib goes on to point out how spending has been turned upside down. Nondefense discretionary spending has declined from almost 25% of the federal budget in 1978 to about 15% of the budget this year — or 3.5% of output from 5.1%. Mandatory spending, on the other hand, has expanded from 45% of federal spending — and just over 9% of GDP — in 1978 to 60% of the federal budget, or 14% of the country’s total output today.
A good question: Is Washington cutting the wrong kind of spending?
James Pethokoukis is the Money & Politics columnist for the American Enterprise Institute.