Today’s soaring federal deficits are a looming disaster and were sadly avoidable. If policymakers had held spending to the same level relative to gross domestic product (GDP) as under President Bill Clinton, this year’s budget would be balanced. Instead, presidents and congresses over the past two decades have failed to reform elderly entitlement programs, while also jacking up spending on many other activities.

The federal budget was balanced the last four years of the Clinton administration from 1998 to 2001, but it has not been balanced since. The imbalance has grown over time, and today’s policymakers seem to shrug off the huge irresponsibility of adding more than a trillion dollars to accumulated debt every year.

The figure shows that federal spending has risen from 17.7 percent of GDP in 2000 to 24.2 percent estimated for 2023. If policymakers had instead held spending to the 2000 level of 17.7 percent of GDP, then the budget would be balanced this year since revenues are expected to be at least that high. The OMB baseline has revenues at 17.7 percent this year, while the CBO baseline has them at 18.3 percent.

Put another way, if policymakers had restrained spending growth over 23 years to the annual average nominal GDP growth rate of 4.2 percent, then today’s budget would be balanced. Unfortunately, actual federal spending grew at an annual average rate of 5.7 percent between 2000 and 2023.

The figure also shows that all three components of federal spending—Health and Human Services (HHS), Social Security, and all other—have grown substantially since 2000. HHS spending includes Medicare, Medicaid, and other programs. People often say that health care and Social Security are breaking the budget, but other spending has grown rapidly as well.

The table further details spending growth since 2000. The rows are federal departments, except that IRS and net interest spending have been broken out from the Treasury Department. The rows are in order of increased spending over the period. Aside from HHS and Social Security, there have been substantial spending increases relative to GDP on veterans, education, the IRS, net interest, homeland security, agriculture, and defense. The rise in IRS spending mainly reflects the growth in refundable tax credits, and the rise in agriculture spending mainly reflects growth in food subsidy programs.

A long-term perspective on federal spending is here, and proposals to cut spending are here and here.

Notes: Spending data for the figure and table are mainly from budget table 4.1 here. Spending is outlays, and data are for fiscal years.