Today marks the end of the 2010 Fiscal Year, but don’t break out the champagne just yet. A year of excessive spending and explosive government growth has left taxpayers with little reason to celebrate.  

  1. Explosion in discretionary spending.  Since FY08, discretionary spending has grown by 84 percent. This is due to failed “stimulus” efforts and government bailouts and aided by Congress’s unwillingness to govern: by not passing a budget or any appropriations bills before the end of the Fiscal Year, members have routinely used stop-gap funding measures and packed funding bills into omnibus packages to hide profligate and extraneous spending.
  2. Government “stimulus.” Acceptance of “stimulus” dollars increased the baselines for state budgets that are now left with gaping holes as federal funds run low. Congress continues to reiterate the failed “stimulus” meme in prolonging unemployment benefits, bailing out state budgets and extending welfare spending. The President’s recent proposal to spend $50 billion on transportation initiatives comes on top of $111 billion spent from the initial “stimulus” in 2010.
  3. The government bailout business. After giving Treasury $700 billion to inject into banks TARP was repurposed to prop up the flailing auto industry, and has been recently revived in the Small Business Lending Act, which funnels $30 billion to small lenders, despite the fact that almost all of the small banks that received TARP funds have failed to pay back the dividends.
  4. Massive mandatory spending. Spending on entitlements has expanded from 10 percent of GDP to 14 percent and is slated to skyrocket under the advent of Obamacare, coupled with the expansion of other programs such as the State Children’s Health Insurance Program (SCHIP). Spending on the three largest entitlements – Social Security, Medicare and Medicaid, is projected to consume all federal revenue by 2036.
  5. Lack of Transparency. Bills have been rushed through Congress rife with pork and sweetheart deals and without any Members professing to have read them. Requiring bills to be online for at least 72 hours before a vote could take place might have prevented the $700 billion TARP, over $500 billion in the “stimulus” bill, $183 billion in discretionary spending in FY 2010 and $794 billion in healthcare “reform.”
  6. The ballooning federal payroll. The federal government has hired 230,000 workers over the past year, bringing the total federal workforce (excluding census and military personnel) to 2.8 million. Federal workers earn 30 to 40 percent more in total compensation (wages and benefits) than private workers, costing taxpayers almost $1 trillion for 2010 hires alone.
  7. An encroaching regulatory burden. The cost of government regulation is estimated to have consumed almost 20 percent of national income in 2010. Obamacare and the Financial Regulatory overhaul have left hundreds of rules open to clarification by regulatory bureaucracies, the cost of which has skyrocketed over the past ten years – the budget for regulatory outlays has increased by over 100 percent since 2000, from $25 billion to $53 billion.
  8. The PAYGO Sham. “Pay-as-you-go” rules which are passed statutorily by Congress serve as nothing more than a rhetorical fig leaf for profligacy. While requiring all spending to be “paid for,” the rules actually give political cover for tax hikes while allowing spending to be designated “emergent” to pass paygo muster.

If you think the end of the Fiscal Year looks bad, just wait until the clock strikes midnight on January 1, 2011, when taxpayers are facing the largest tax hike in history. This New Year families and business will face an increase in income taxes, together with higher taxes to fund Obamacare, the Alternative Minimum Tax and onerous tax hikes on employers has Americans facing $6.2 trillion in higher taxes.