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Cost of Government Day (COGD)
[2005] [2004] [2003] [2002] [2001]

Cost of Government Day: Components

Despite slowing economic growth, accelerating federal spending is driving the two day increase in the Cost of Government Day over 2006.  The average American worker will have to work an additional 6 days out of the year over 2000 to pay for government spending on all levels.  Federal spending continues to be the main driver of the Cost of Government index, adding 6 days on to the days Americans were forced to work for federal government spending in 2000.  The average worker will have to work another 1.6 days out of the year compared to 2000 just to pay for state and local spending.

Federal spending as a percentage of national income in 2007 is expected to significantly rise over the COGD index estimate in the last half of the year as Congress passes appropriations bills.  Iraq war spending, expansion of the State Children’s Health Program and other entitlement spending will drive the spending increases. 

State and local spending as a percentage of national income is increasing this year as well. Substantial surpluses, particularly in natural resource-rich states, are fueling a significant increase in the cost of state and local governments, up over one full day from 2006 alone. 

Facing the cumulative spending burden for the federal, state and local governments, the average American worker will work 130.2 days in 2007 to pay for the cost of government spending. 

The cost of regulations as a percentage of national income remains at 16.9 percent for the fourth year.  It is important to note, however, that revised data on regulatory costs reveal that COGD reports prior to 2006 were underestimating the cost of regulations.  New regulations imposed following the War on Terrorism and corporate scandals significantly increased the regulatory burden in 2001 and 2002 in particular.  Concurrently, the cost of tax compliance continues to grow.  In 2007, the average American will work 61.8 days to pay for regulatory costs, nearly 1 full day more than was required in 2006. 

National income continues to grow, although at slower levels than 2006.  The rise of only two days in the COGD index in 2007 is due partially to slowing economic growth, however, federal spending is increasing at a faster pace than national income.  Without fiscal restraint on the federal level, the cost of government will rise substantially over the next year.  If spending increases under discussion at time of printing are enacted, we would expect the COGD index to rise to levels not seen since the recession of the early 1990s. 

2007 Cost of Government Day Components

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