Cato Institute
Press Release: July 15, 2003

WASHINGTON -- The White House released its Mid-Session Review of the federal budget showing deficits and spending at record high levels. Cato's analysis of the new budget numbers show:

Deficit: The federal deficit will eclipse $450 billion this year and next. Unfortunately, the Bush administration has done little to curb the government's record spending increases to control the rising deficit. The new estimates show that total outlays in fiscal 2004 will be $2.272 trillion, or $408 billion higher than 2001 outlays. Clearly, if spending had been frozen when the economic downturn began, the budget would be nearly balanced today. Hopefully, the sky-high deficit will now cause the administration and Congress to get serious about spending control.

Discretionary spending: While discretionary outlays are projected to be roughly flat for the next couple of years, the new budget numbers show that outlays will rise a stunning 16.9 percent in FY2003 after rising 13.1 percent in FY2002. Increased defense spending is only partly responsible for the large increases. Non-defense discretionary outlays will rise 12.7 percent in FY2003 on top of a 12.2 percent increase in FY2002.

President George W. Bush is a bigger spender than former President Bush, even aside from defense: Former President George Bush is remembered for presiding over large increases in domestic spending. However, Cato's fiscal analyst Veronique de Rugy notes: "The current president easily eclipses his father on federal spending growth." De Rugy and Cato researcher Tad DeHaven calculate that in real, or inflation-adjusted terms, non-defense discretionary outlays will rise about 20.8 percent in George W. Bush's first three years in office (through FY2004). That growth far exceeds the 11.6 percent growth in the first three years of former President Bush's administration. Indeed, the current president's three-year real increase exceeds Jimmy Carter's term (13.8 percent), Ronald Reagan's first term (-13.5 percent), Reagan's second term (-3.2 percent), Bill Clinton's first term (-0.7 percent), and Clinton's second term (8.2 percent). See table for details.