How Does Uncle Sam Plan to Spend Your Federal Tax Dollar in 2003?

Tax Foundation ^ | 1st Qtr 2002 | Editorial Staff

[vannrox]

How Does Uncle Sam
(Tentatively)
Plan to Spend Your Federal Tax Dollar in FY 2003?

How does President Bush propose to spend your federal tax dollar in FY2003? Despite the increased spending on defense compared to last year's budget, it still pales in comparison to what the nation devoted to national defense in decades past. “Mandatory” spending on Social Security, health care and income security still takes the lion's share of the federal tax dollar as illustrated in the Tax Foundation’s annual comparison.

Assuming that Congress makes no dramatic changes in the President’s FY2003 Budget, 59¢ out of every tax dollar spent will go to three areas — Social Security, health and medical, and income security. These program areas are “mandatory,” so the federal government automatically spends a legally determined amount of money.

Compared to previous budgets, the biggest changes in the last four decades can be found in how much Uncle Sam spends on health-related programs and on national defense. In FY 1963, Uncle Sam spent only 1¢ out of every tax dollar on health, and even after Medicare and Medicaid had been enacted, that cost only rose to 7¢ on the dollar in 1973 and 10¢ in 1983. Those are small slices of the national pie compared to the 22¢ that is planned for 2003.

On the other hand, the portion of federal spending devoted to national defense fell from 48¢ out of every tax dollar in FY 1963 to 26¢ in FY 1983, and President Bush is proposing to a spend 18¢ out of each federal tax dollar on defense in FY 2003.

Net interest payments on the federal debt are projected to fall significantly in FY 2003 compared to ten years ago, from almost 14¢ on a dollar in 1993 to slightly less than 9¢ in the coming fiscal year.

The FY 2003 budget shows that “discretionary” spending — such as defense, education, agriculture, and transportation — now plays a comparatively minor role — only about 37¢ on a dollar. Mandatory spending and net interest now account for 63¢. In contrast, back in FY 1963, the portions were reversed: discretionary spending was roughly 68¢ out of every federal tax dollar while entitlements and net interest payments took up about 32¢.

How the Federal Government Has Spent the Nation's Tax Dollars
	$Billions							Percent
	FY 1943	FY 1953	FY 1963	FY 1973	FY 1983	FY 1993	Proposed FY 2003	FY 1943	FY 1953	FY 1963	FY 1973	FY 1983	FY 1993	Proposed FY 2003
Total	$ 78.56	$ 76.10	$ 111.32	$ 245.71	$ 808.39	$ 1,409.51	$ 2,128.23	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
National Defense	66.70	52.80	53.40	76.68	209.90	291.09	379.01	84.9%	69.4%	48.0%	31.2%	26.0%	20.7%	17.8%
Social Security	0.18	2.72	15.79	49.09	170.72	304.59	475.93	0.2%	3.6%	14.2%	20.0%	21.1%	21.6%	22.4%
Health and Medical	0.09	0.34	1.45	17.41	81.23	229.97	466.30	0.1%	0.4%	1.3%	7.1%	10.0%	16.3%	21.9%
Income Security*	1.74	3.82	9.31	28.28	123.03	209.93	319.68	2.2%	5.0%	8.4%	11.5%	15.2%	14.9%	15.0%
Energy, Natural Resources and Environment	0.84	1.71	2.78	6.01	22.03	24.56	31.17	1.1%	2.3%	2.5%	2.4%	2.7%	1.7%	1.5%
Commerce, Transportation, and Community and Regional Development	5.59	2.29	5.23	14.60	35.58	22.30	80.54	7.1%	3.0%	4.7%	5.9%	4.4%	1.6%	3.8%
Education, training, employment, and social services	0.38	0.44	1.46	12.75	26.20	47.38	79.02	0.5%	0.6%	1.3%	5.2%	3.2%	3.4%	3.7%
Veterans benefits and services	0.28	4.52	5.51	12.00	24.82	35.67	56.58	0.4%	5.9%	5.0%	4.9%	3.1%	2.5%	2.7%
Net Interest	1.53	5.16	7.74	17.35	89.83	198.74	180.66	1.9%	6.8%	7.0%	7.1%	11.1%	14.1%	8.5%
Other*	1.24	2.30	8.64	11.54	25.05	45.30	59.35	1.6%	3.0%	7.8%	4.7%	3.1%	3.2%	2.8%
Source: FY 2003 Budget of the United States Government Historical Tables, Table 3.1. Note: "Income Security" includes General Retirement and Disability, Federal Employee Retirement and Disability, Unemployment Compensation, Food and Nutrition Assistance, Supplemental Security Income, Family and Other Support Assistance, Earned Income Tax Credit, Offsetting Receipts, Housing Assistance and Other. Note: "Other" includes International Affairs, General Science, Space and Technology, Agriculture, Administration of Justice, General Government, Allowances and Undistributed Offsetting Receipts.

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[vannrox]

Hum. Check out the Graphs.

[upchuck]

Thank you LBJ. Your "Great Society" has become the "Great Nightmare."

We gotta find a way to fix this. Gonna be big trouble if we don't.

[speekinout]

Look at that Health and Medical allocation. If we get the "hillarycare" or even just the drug coverage the Dems want, that share is going to grow to an overwhelming amount!

The graphs are important - more so than the numbers. It's easy to get all exercised over spending $1M or $1B on some blatant pork project, but the truth is that the majority of our money goes to support the life styles of people who can't, or don't want to, support themselves.
If we just changed that to supporting the people who can't, and made the "don't want to"s fend for themselves, we could save a lot!

[brat]

Terrible tho that graph is, if our Senators and Reps would STOP the PORK and W would STOP the Corporate give aways, we could probably afford it.