Economic snapshot | Budget Taxes and Public Investment

The myth of big government and the Clinton budget

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A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for March 3, 1999


The myth of big government and the Clinton budget


 

With Clinton’s recently proposed five-year budget, the debate over government size and domestic spending has begun anew. Conservatives accuse Clinton’s proposal of promoting gross government expansion. But after taking into account the proposal’s spending cuts and adjusting for inflation, the proposal raises domestic discretionary spending by only about 1% over the next five years.

To estimate comparable levels of spending from year to year, discretionary spending projections must be adjusted for inflation, creating what is usually called “current service” spending levels. These current service spending levels simply project how much will need to be spent in future years, adjusting for inflation, to maintain our current level of spending. With this in mind, Clinton’s proposed domestic spending initiatives amount to only an $18.2 billion increase over current spending levels over the next five years. When dealing with budgets of this magnitude, the Clinton proposal of $1,709.5 billion through 2004 is hardly a gross expansion from the $1,691.3 billion budget that would be necessary merely to maintain the current level of services (see figure above).
Chart 2

In the second chart the white bars represent the spending levels required, adjusted for inflation, needed just to maintain current levels of services for the next five fiscal years; the black bars represent the Clinton Administration’s proposals. For the first three years the administration proposes real increases in spending, albeit small ones. For the following two years, spending cuts are envisioned.

Source: The Federal Budget FY2000, Special Analysis, OMB.

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