Cost of Government Day (COGD)
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The elevated levels of federal spending over the past seven years have wiped out 37 percent of the unprecedented reduction in the burden of federal spending as a percentage of national income from 1993-2000. Federal spending (as a percentage of income) declined for eight straight years, which reduced government spending from one out of every four dollars of national income to one out of every five dollars. By 2000, average Americans worked 14.3 days less of the year to pay off their federal spending burden than in 1992. In just the past six years, however, 37 percent of that gain has been eliminated.

37 Percent of Spending Reductions Gains Have Been Wiped Out Since 2000

Long Term Spending Outlook

The real threat to the growth of the government is in the long term. Entitlement spending, specifically, Social Security and Medicare will consume large portions of the budget in each year, especially as the baby boomers begin to retire in 2008.  Particularly with the appetite of the current Congress to expand and create new entitlement programs, the end of 2007 and the next few years will likely be characterized by rapid spending growth. 

One key factor driving the long term spending outlook is the sunset of the tax cuts enacted in the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) which reduced income taxes, cut the capital gains tax, slashed the double tax on dividends and provided incentives for business investment.  Unless Congress acts to make the tax cuts of 2003 permanent, the cost of government will spike in 2011.   

Without reform of Social Security and Medicare, as well as a permanent extension of the Bush tax cuts, the average American worker will be working until late July to pay for a rapidly swelling cost of government.

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