Government Spending Priorities

One thing that has puzzled me about Republicans in the last few years, has been spending. Like tax reform, we hear so much about how it’s got to change, yet little seems to change. But I also understand that to know how to solve a problem, you have to get a handle on the problem. So, I took a look to see where we’ve been spending money.

It’s interesting. Here’s a summary by Administration on what areas got money in the budgets. Because inflation is a factor to consider, I represent the numbers as percentage of the total budget, and show the categories which claimed 1% or more of the budget:

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FDR (1940-45)
National Defense 70.8%
Physical Resources 5.8%
Human Resources 4.9%
Transportation 3.5%
International Affairs 1.6%
Social Services 1.4%
Environment 1.2%
Agriculture 1.2%

Truman (1946-52)
National Defense 37.3%
Human Resources 16.9%
Veterans Benefits 9.6%
International Affairs 6.8%
Physical Resources 4.4%
Transportation 1.8%
Environment 1.6%
General Government 1.6%
Social Security 1.5%
Agriculture 1.2%

Eisenhower (1953-60)
National Defense 43.9%
Human Resources 17.2%
Social Security 6.1%
Veterans Benefits 4.7%
Physical Resources 4.4%
Agriculture 2.7%
International Affairs 2.4%
Transportation 2.0%
Environment 1.1%

Kennedy (1961-63)
National Defense 33.4%
Human Resources 20.4%
Social Security 9.2%
Physical Resources 5.3%
Veterans Benefits 3.6%
International Affairs 3.0%
Transportation 2.8%
Agriculture 2.3%
Environment 1.3%
Science & Technology 1.2%

Johnson (1964-68)
National Defense 29.6%
Human Resources 21.1%
Social Security 9.4%
Physical Resources 6.1%
Veterans Benefits 2.9%
Transportation 2.7%
Science & Technology 2.7%
International Affairs 2.5%
Social Services 2.1%
Agriculture 1.7%
Environment 1.3%
Health 1.3%
Housing 1.2%

Nixon (1969-74)
Human Resources 28.0%
National Defense 22.4%
Social Security 11.2%
Physical Resources 5.2%
Social Services 3.0%
Veterans Benefits 2.9%
Transportation 2.3%
Health 2.2%
Medicare 2.0%
General Government 1.4%
Agriculture 1.3%
International Affairs 1.3%
Environment 1.2%
Energy 1.2%
Science & Technology 1.2%

Ford (1975-76)
Human Resources 31.7%
National Defense 14.8%
Social Security 11.7%
Physical Resources 6.3%
Veterans Benefits 2.9%
Social Services 2.9%
Health 2.4%
Medicare 2.4%
Transportation 2.1%
General Government 1.7%
Housing 1.5%
Environment 1.3%
International Affairs 1.1%

Carter (1977-80)
Human Resources 31.8%
National Defense 13.7%
Social Security 12.2%
Physical Resources 6.5%
Social Services 3.3%
Medicare 3.1%
Veterans Benefits 2.4%
Health 2.4%
Transportation 2.1%
General Government 1.5%
Environment 1.4%
Agriculture 1.2%
Community Development 1.2%
International Affairs 1.0%
Energy 1.0%

Reagan (1981-88)
Human Resources 32.7%
National Defense 17.1%
Social Security 13.3%
Medicare 4.4%
Physical Resources 4.4%
Health 2.4%
Social Services 2.1%
Veterans Benefits 1.9%
Transportation 1.8%
Agriculture 1.5%
Environment 1.0%
International Affairs 1.0%

G.H. Bush (1989-92)
Human Resources 33.8%
National Defense 15.0%
Social Security 13.2%
Physical Resources 5.3%
Medicare 5.2%
Health 3.4%
Housing 2.4%
Social Services 2.0%
Veterans Benefits 1.6%
Transportation 1.5%

Clinton (1993-2000)
Human Resources 38.5%
Social Security 14.1%
National Defense 11.0%
Medicare 6.8%
Health 4.9%
Physical Resources 2.7%
Social Services 1.9%
Veterans Benefits 1.6%
Transportation 1.6%

George W. Bush (2001-08)
Human Resources 38.0%
Social Security 12.8%
National Defense 11.4%
Physical Resources 3.1%
Medicare 7.3%
Health 5.8%
Social Services 2.2%
Veterans Benefits 1.6%
Transportation 1.7%
Justice Administration 1.0%

The key signals I see in these numbers are the biggest numbers, and what gets moved up and down as the years pass. “Human Resources” is just your basic government operating costs; cute, isn’t it, how the Federal Budget separates “General Government” from the cost of all those people, buildings, supplies and so on that make up the real cost of all those bureaucrats? The percentage of ‘HR’ of the total budget rises from 4.9% of the budget under FDR, all the way to 38.5% under Clinton. It is worth mentioning, that the only President in this track who reduced the proportion of ‘HR’ to the total budget, is George W. Bush, although it’s still an unsightly 38.0% of his budget. Also, you should look at Social Security and Medicare, which combined for less than 1 percent of FDR’s federal budget, but which increased every term on until it reached 20.1% of the federal budget under George W. Bush. Bear in mind that the President does not have control of the SSI and Medicare Budgets; only Congress can scale them back, and no Congress in memory has been in such a mood. Granted, Bush bears responsibility for the Prescription drug benefit package, but that may be balanced by his efforts to reform Social Security. On both ends of that point, it should be noted that Congress had the final say, and Congress clearly ignored its duty. Counting in the areas where the President has no or little control then (Human Resources, Physical Resources, Social Security and Medicare), we see that where FDR could address roughly 79.7% of the budget under his control, by the time we get to George W. Bush, he can only control about 23.7% of the budget. In real terms, this means that if a President wants to add resources to a priority goal, he has no choice but to increase the budget to do it.

It’s also interesting to see what got changed from President to President. Truman slashed military spending, but invested heavily in veteran benefits and the State Department. Eisenhower poured more money into Defense, but he also spent money on Agriculture. Kennedy focused on Science and diplomats, while LBJ built NASA and pursued his Great Society. Nixon focused on treaty organizations and government oversight of business and the environment, very much like McCain wants to do now. Ford slashed defense spending and focused on domestic issues, largely abandoning overseas initiatives which posed any apparent risk, much as Ron Paul says he would do. Carter spent more on researching alternative energy, and less on foreign commitments. Reagan did the opposite, rebuilding Defense and expanding U.S. interests abroad, while scaling back domestic government actions. G.H. Bush followed Reagan’s lead in spending, though he spent less on Defense. Clinton cut Defense to its smallest share of the budget since before World War 2, and spent more on infrastructure programs and health research. And George W. Bush renewed investments in Defense and trade agreements.