Spending Under Congresses and Presidents

I have been following Invictus’ posts (Hey, Big Spender, and Big Spender, Part II) on Barry Ritholtz’s The Big Picture blog, one of my favorite blogs, both for its macro perspective and for its conscientious commitment to the idea that one can work in markets and still value being a good citizen in favor of honesty, transparency, and for being paid for the value that one adds to the economy rather than the value one can extract from it.

The “Big Spender” posts written by Invictus (a pen name) looked at (among other things) the increases in non-defense federal spending under different Presidents to see if Republican administrations live up to their projected commitment to keep deficits under control. Democratic administrations were shown for comparison purposes, but held to a lower standard because the Democrats don’t claim to be master budget cutters, whereas the Republicans do.

The obvious issue with looking at this by President is that Congress is the body that controls spending and taxation policy, even if part of the President’s job is to propose measures to Congress and develop support for his or her policies. Thus, in addition to looking at spending in Presidential administrations, it makes sense to look at budget increases and spending for each Congress, broken down by 2-year Congressional Terms.

CongressSpending1951-2010a-2010-10-20-09-411.jpg

(Here is a link to a larger version)

The above chart does just this, from the last congress of the Truman Administration (1951-1952) to the most recent Congress in the Obama administration. The lines represent cumulative spending by each administration indexed to the final spending level of the previous administration. The bars represent the percentage increase in spending for each Congress (with scale on the right hand side). Democratic Congresses are shown in blue, Republican Congresses are in red. Divided Congresses (Republican Senate & Democratic House) are shown in purple.

We see that Truman and Eisenhower were the last Presidents ever to see a reduction in overall non-defense spending. After that, Congress has increased total spending every year, although the rates of increases have – on the whole – trended downwards for most of the last half-century. The Clinton years appear to have had the slowest average increases of any administration, although much of this was when the Republicans controlled the Congress. Spending during the Obama administration is similar to the spending under Bush II, although one should remember that defense spending for the wars in Afghanistan and Iraq (as well as the Vietnam War earlier) is excluded in these figures.

Since the data for 2010 only goes to the end of Q2, the chart estimates 2010 spending simply by doubling the spending recorded for the first half of the year. Data come from the Federal Reserve Economic Data database (FRED), and use the series FNDEFX. It uses the entirety of the data available, but excludes the Truman years because we do not have data on the full administration and using it would bias the Truman spending downwards. The last Congress of the Truman years is included to establish a baseline. Note that Congressional periods start with odd numbered years, because Congress is seated in January of a year following an election. It can be debated whether one should shift these figures one year further into the future, because current spending in the first year of a Congress is often determined by the last year of a previous Congress. Again, a topic for another day.

(Added 27 Oct 2010: Part II of this post takes a look at the same data in inflation-adjusted terms)

8 Comments

  1. John from GR Said,

    October 20, 2010 @ 12:08

    Could you re-post that graphic as a jpg, gif or png? It doesn’t show up as a tiff.

    Having said that, thanks for doing this. A little perspective goes a long way.

  2. Bruce Said,

    October 20, 2010 @ 12:57

    I didn’t notice that my software saved as a TIFF. I’m away from my machine for the next few hours, but will repost as jpg ASAP. Thanks for catching that. It showed up fine on my machine, so I couldn’t tell.

  3. Invictus Said,

    October 20, 2010 @ 18:04

    Same tiff issue. Would love to see the image.

  4. Bruce Said,

    October 20, 2010 @ 18:39

    OK, the image should be JPG now, and I’ve added an HTML link to the jpeg, just in case. Hope it helps!

    Remember to “refresh” the page. Your browser may have an old image cached.

  5. Big Spender, Part II | The Big Picture Said,

    October 20, 2010 @ 21:22

    [...] Spending Under Congresses and Presidents Says: October 20th, 2010 at 11:20 am [...]

  6. Bruce Said,

    October 21, 2010 @ 11:49

    I’d like to redo the chart using constant dollars. Some federal spending increases simply because of inflation adjustments. Nominal tax revenues should increase with inflation (actually real tax revenues should increase with inflation too, since assets with 0% real return will end up being taxed on their nominal increase).

  7. PeakVT Said,

    October 22, 2010 @ 13:55

    Nice chart, though I agree that it should be redone with constant dollars. I think doing so would affect the 1970s the most.

  8. Spending Under Congresses and Presidents, Part II Said,

    October 27, 2010 @ 22:08

    [...] my last post on Spending under Congresses and Presidents, I mentioned that the data on budget spending would be more revealing if done in real (i.e. [...]