In his speech yesterday, President Obama said, “[M]y plan would reduce our yearly domestic spending to its lowest level as a share of the economy in nearly 60 years.” Such an amazing claim is made possible only by excluding the two domestic programs that have contributed the most to our nearly $16 trillion debt: Medicare and Medicaid.
According to this chart from NPR (based on figures provided by the White House Office of Management and Budget), just fifty years ago, we spent 52 percent of our federal budget on national defense and 1 percent on federal health programs. That was under President John F. Kennedy. Last year, under Obama, we didn’t have a budget — but 23 percent of our federal outlays went to national defense, while 23 percent went to federal health programs.
Moreover, as the same chart shows, the share of federal spending that has either gone to federal health programs or to federal safety net programs has risen from 7 percent under Kennedy to 36 percent under Obama. If you add in Social Security, the percentages become 20 percent under JFK and 56 percent under Obama.
Meanwhile, the percentage of our economic output (the gross domestic product) that the federal government has spent — regardless of what it has spent it on — has risen from 18.8 percent fifty years ago to a projected 24.3 percent this year. That’s according to the White House Office of Management and Budget (see table 1.2).
It’s awfully hard to square any of this with, “[M]y plan would reduce our yearly domestic spending to its lowest level as a share of the economy in nearly 60 years.”