Federal Spending - Fast Facts
All fast facts for Federal Spending are from the non-partisan Congressional Budget Office (CBO),
the National Commission on Fiscal Responsibility and Reform (NCFRR), the Department of Treasury, the Office of Management and Budget (OMB),
and the U.S. Government Accountability Office (GAO). They do not represent all of their reports on this subject. Some simply provide historical
context. Occasionally minor word adjustments may have been made for clarity or to reflect the updated nature of the statement. As always, verify
and view statements in their full context as often as possible.
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Although we expect that the new fiscal cliff legislation just enacted by the Congress will lead to higher output and income in 2013 we also expect that it will lead to lower output and income later in the decade than would have occurred under prior law.
In our August update, CBO projected that, under the laws in effect at the time, budget deficits from 2013 through 2022 would total $2.3 trillion. The new fiscal cliff legislation will boost deficits over that period by an estimated $4.6 trillion (including debt service costs).
Relative to what would have occurred under the laws previously in effect, the new fiscal cliff legislation will increase budget deficits in coming years.
A small share of federal spending is for direct provision of domestic government services, which many people may think of when considering federal spending, and is normally about 10% of total federal spending
Until the recent recession, most types of nondefense spending have been constant or declining as a percentage of output, but spending for the elderly and health care has been rising. Although some increase in the debt can be attributed to the Bush tax cuts and the conflicts in Iraq and Afghanistan, along with growth in spending on the elderly and health care, the current debt level is not the result of prolonged and significant past deficits. Debt grew during the recession and its aftermath. Federal debt held by the public had actually declined from almost 50% of GDP in 1993 to 33% in 2001; it rose slightly to 36% by 2007. During the three recession/recovery years (2008 through 2010), it rose to 62%, and is projected to continue to grow somewhat, before stabilizing for a while.
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