Half US National Budget Goes To Entitlement Programs
Three growing entitlement programs consumed nearly half of all federal spending in 2004, and budget analysts expect them to make an even bigger share in the near future.Social Security, Medicare and Medicaid accounted for more than $1 trillion in the 2004 budget year, according to the Consolidated Federal Funds Report being released Tuesday by the Census Bureau
Overall federal spending was $2.2 trillion, an increase of 5 percent from 2003.
"The total federal spending increase is actually down a bit from recent years," said Gerard Keffer, chief of the Census Bureau's federal programs branch. "It had been running 6 to 8 percent in the past several years."
"I think it's absolutely essential and inevitable that we are going to reform those programs," said Rudolph Penner, a senior fellow at the Urban Institute, a social issues research organization. "How, is another question. There's very little interest, now."
President Bush has pushed to overhaul Social Security and establish private accounts, but Congress has balked. Critics argue that private accounts would do nothing to slow the growth of Social Security spending - unless benefits are cut, a politically unpopular option.
Spending on Medicare, the federal health insurance program for the elderly, is set to increase with the introduction of a drug benefit in January.
Other factors contributing to spending increases include an aging population and soaring health care costs, Penner said. The oldest baby boomers will start turning 60 in January, and once they start qualifying for Social Security benefits, costs will grow at an even faster pace.
Penner said increased spending on entitlement programs eventually will mean less money for other programs and increased pressure to raise taxes.
Other interesting notes
One third of all federal spending went to five states in 2004: California; New York; Texas; Florida; and Pennsylvania.
Alaska received only $8.4 billion. But with its relatively small population, it led the nation in per capita federal spending, at $12,885 a person.
Defense Department spending was highest in California, Virginia, Texas, Florida and Maryland.