2011 Budget Chart Book

2011
Budget Chart Book
The Federal Budget in Pictures

The Entitlements Initiative is one of 10 Transformational Initiatives making up The Heritage
Foundation’s Leadership for America campaign. For more products and information related to this
initiative or to learn more about the Leadership for America campaign, please visit heritage.org.

The Heritage Foundation is a research and educational institution—a think tank—whose mission is
to formulate and promote conservative public policies based on the principles of free enterprise, limited
government, individual freedom, traditional American values, and a strong national defense.
Our vision is to build an America where freedom, opportunity, prosperity, and civil society flourish. As
conservatives, we believe the values and ideas that motivated our Founding Fathers are worth conserving.
As policy entrepreneurs, we believe the most effective solutions are consistent with those ideas and values.

2011 Budget Chart Book
The Federal Budget in Pictures

The Thomas A. Roe Institute for Economic Policy Studies

214 Massachusetts Avenue, NE • Washington, D.C. 20002 • (202) 546-4400 • heritage.org

Copyright © 2011 The Heritage Foundation

Page About the Budget Chart Book iii
iii

The federal budget is on an unsustainable course, cuts and serious entitlement reforms, debt will ap-
with even more runaway spending and rising debt on proach dangerous levels and further strain the econo-
the horizon. Now, more than ever, it is important for my. As emphasized on page 29, Federal Budget Deficits
Americans to understand what our nation’s spending, Will Reach Levels Never Seen Before in the U.S., and page
taxes, and debt mean to them. The Heritage Foun- 31, U.S. Debt on Track to Fuel Economic Crisis.
dation’s Budget Chart Book is a user-friendly way to America is poised on a precipice of disastrous defi-
learn about the federal budget through pictures. cits due primarily to spending on the three major en-
Federal spending was on the rise prior to the eco- titlement programs—Social Security, Medicare, and
nomic recession and passage of the 2009 stimulus Medicaid. Entitlement spending is growing and bold
bill, and it continues to climb steeply under President reforms are necessary to fix this massive problem. As
Obama. As illustrated on page 2, Federal Spending shown on page 37, Entitlement Spending Will More
per Household Is Skyrocketing, and on page 3, Federal Than Double by 2050, and on page 48, The Heritage
Spending Is Growing Faster Than Federal Revenue. Plan Keeps Spending Low and Ends Deficits Without Rais-
Some policymakers would pay for increased spending Taxes.
ing with tax hikes. However, taxes have already risen to Tough policy choices and strong entitlement re-
burdensome levels and will reach unprecedented heights. forms are essential to get the federal budget back
As explained on page 15, The Top 10 Percent of Earners on track. The Budget Chart Book will help you un-
Paid 70 Percent of Federal Income Taxes, and on page 21, derstand the current fiscal situation, and it will help
Total Tax Burden Is Rising to Highest Level in History. Americans to appreciate the magnitude of the deci-
Record deficits will be the norm as spending con- sions that policymakers must enact to protect Ameri-
tinues to grow faster than revenue. Absent spending ca’s fiscal future.

Table of Contents v

Page
FEDERAL SPENDING
Federal Spending per Household Is Skyrocketing..................................................................................................2
Federal Spending Is Growing Faster Than Federal Revenue..................................................................................3
Federal Spending Grew More Than Ten Times Faster Than Median Income.........................................................4
Federal Spending Is Outpacing Inflation................................................................................................................5
Total Government Spending Has More Than Doubled Since 1965........................................................................6
Mandatory Spending Has Increased Five Times Faster Than Discretionary Spending...........................................7
Defense Spending Has Declined While Entitlement Spending Has Increased........................................................8
Obama’s Budget Would Reduce National Defense Spending..................................................................................9
More Than Half of the President’s Budget Would Be Spent on Entitlement Programs..........................................10
Total Welfare Spending Is Rising Despite Attempts at Reform..............................................................................11
Runaway Spending, Not Inadequate Tax Revenue, Is Responsible for Future Deficits.........................................12

FEDERAL REVENUE
Taxes per Household Have Risen Dramatically.....................................................................................................14
The Top 10 Percent of Earners Paid 70 Percent of Federal Income Taxes............................................................15
Federal Revenues Have More Than Tripled Since 1965.......................................................................................16
Federal Revenues by Source.................................................................................................................................17
Tax Receipts Return to Historical Average............................................................................................................18
Increasing Tax Rates Does Not Necessarily Lead to Higher Income Tax Receipts.................................................19
U.S. Corporate Tax Rate Is Uncompetitive...........................................................................................................20
Total Tax Burden Is Rising to Highest Level in History.........................................................................................21

DEBT AND DEFICITS
vi
National Debt Set to Skyrocket.............................................................................................................................24
Each American’s Share of National Debt Is Growing............................................................................................25
Obama’s Budget Would Send Federal Debt to Levels Not Seen Since World War II.............................................26
Obama’s Budget Worsens Debt Problem, but The Heritage Plan Solves It............................................................27
Obama’s Budget Would Deepen Already Unprecedented Deficits........................................................................28
Federal Budget Deficits Will Reach Levels Never Seen Before in the U.S.............................................................29
Rising Deficits Drive U.S. Debt Limit Higher, Faster............................................................................................30
U.S. Debt on Track to Fuel Economic Crisis.........................................................................................................31
Net Interest Spending Will More Than Triple Over the Next Decade...................................................................32
In One Year, Spending on Interest on the National Debt Is Greater Than Funding for Most Programs...............33

ENTITLEMENTS
Entitlements Will Consume All Tax Revenues by 2049........................................................................................36
Entitlement Spending Will More Than Double by 2050......................................................................................37
Medicare Spending Is Adding to Future Deficits Faster Than Other Program Spending......................................38
Without Entitlement Reform, Federal Spending Could Consume One-Half of the Economy by 2056...............39
Letting Tax Cuts Expire Will Not Balance the Budget...........................................................................................40
Hiking Taxes to Pay for Entitlements Would Require Doubling Tax Rates...........................................................41
Taxing the Wealthy to Cover Future Deficits Won’t Work....................................................................................42
Balancing the Budget Without Cutting Spending Would Cause Taxes to Skyrocket ...........................................43
Discretionary Spending Cuts Alone Are Not an Adequate Substitute for Entitlement Reform.............................44
Even Eliminating Vital Defense Spending Completely Would Not Solve the Entitlement Spending Problem.....45
The Alternative: Saving the American Dream.......................................................................................................46
The Heritage Plan Would Reverse Trajectory of Unsustainable Debt....................................................................47
The Heritage Plan Keeps Spending Low and Ends Deficits Without Raising Taxes..............................................48

ndatory Spending Has Increased Five Times Faster
an Discretionary Spending
one-third of the federal budget, discretionary spending, is subject to annual budgets. The remainder,
atory spending, is set on autopilot without congressional debate and has increased more than ﬁve times faster
discretionary spending. Most of the current increase is due to entitlement spending.
Runaway Spending, Not Inadequate Tax Revenue,
ATION-ADJUSTED TRILLIONS OFfor Future Deficits
rlon
ii
l
t
Is Responsible DOLLARS (2010)
Federal Spending
More Than Half of the President's Budget
The main driver behind long-term deﬁcits is government spending—not low revenues.
While revenue will surpass its historical average of 18.0 percent of GDP by 2021, spending Programs
Would Be Spent on Entitlement
$3. t ilon
6 rli
will shoot past its historical average of 20.3 combination with other entitlements, Medicare, Medicaid, and Social Security constitute the lion’s share
In percent, reaching 26.4 percent in the same year.
rlon
ii
t
l Spending has risen to unprecedented levels, threatening limited
of President Obama’s 2012 budget. In contrast, spending on foreign aid represents 2 percent.
PERCENTAGE OF GDP
rlon
ii
l
t 30% government and economic freedom.
PERCENTAGE OF THE PRESIDENT’S FY2012 BUDGET

Entitlement Programs: 58%
t
rlon
ii
l 26.4%
Social M edi 24.
car 7% I
e ncom e Securtiy N atonal
i N et Al O t
l her
25% Securt
iy: and M edi d:
cai and O ther D ef e:
ens I er t Spendi
nt es : ng:
rlon
ii
t
l Spending
20% 20% Enttem ent :
il s 18% 19% 6% 12%
Av agesf
er or
1960–2009:
rlon
ii
t
l $609 bii n
$609 bilon
609 lo
20% Manda ory
Mandatory
Mandatory
anda
andatory
at
a 20.3% Spendi
ng
18.
4%
Spending
Spending
Spending
d
rlon
ii
t
l 18.0% Revenue
Revenue
rlon
ii
t
l 15% Discretionary
Discreti nar
Discretionary
reti
io
i
14.
8%
Spending
$0 Pr ec ed
oj t
1965 10% 1970 1975 1980 1985 1990 1995 2000 50% 2005 2010
1960 1970 1980 N ot 1990 have been2000
e:Fi es
gur rounded. 2010 2021 2011 fgur ar esFor gn Ai Educaton:
i es e tm at d:
i eies i
2% 3%
e: hie H ous Source:H eriage Foundatent and Budget on C ongressie H ouse O fi fi M dat entand Budget.
W t e O fi ofM anagem i cal atons based Source:W hionalBudgetce fce anagem
fce t on cul i . t
O
f of
a.
Per age ofGD P
cent
FederalSpendi C hart 7 • 2011 BudgetC hartBook
ng hert or
iage. g
ar (
s 2010)
FederalSpendi C hart 4 • 2011 Budget t Book hart 6 •2011 .or C hartBook
ng FederalSpendi C heritage
Char ng Budget hert or
iage. g
runaway-pendi t r
s ng-ax-evenue Per age oft Pr i sFY2012 Budget
cent he esdent

budgetenttem entpr am s
- il - ogr
g

Federal Spending per Household Is Skyrocketing
The federal government is spending more per household than ever before. Since 1965, spending per household
has grown by nearly 162 percent, from $11,431 in 1965 to $29,401 in 2010. From 2010 to 2021, it is projected
to rise to $35,773, a 22 percent increase.
INFLATION-ADJUSTED DOLLARS (2010)

$40,000
$29,401 $35,773
$35,000

$30,000

$25,000

$20,000 $11,431
$15,000

$10,000

$5,000
Actual Projected
$0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Source: U.S. Census Bureau, White House Office of Management and Budget, and Congressional Budget Office.
Inflation-Adjusted Dollars (2010)

federal-spending-per-household Federal Spending Chart 1 • 2011 Budget Chart Book heritage.org

Federal Spending Is Growing Faster Than Federal Revenue
Since 1965, spending has risen constantly. Federal revenues have dropped recently due to the economic recession,
but spending has reached a record high.
INFLATION-ADJUSTED TRILLIONS OF DOLLARS (2010)
$4 trillion
$3.77 trillion

Spending Est. 2011
$3 trillion deficit:
$1.62
trillion

$2 trillion

$2.15 trillion
Revenue
$1 trillion

2011
figures are
$0 estimates
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: White House Office of Management and Budget.
Inflation-Adjusted Billions of Dollars (2010)

growth-federal-spending-revenue Federal Spending Chart 2 • 2011 Budget Chart Book heritage.org

Federal Spending Grew More Than Ten Times Faster
Than Median Income
When federal spending grows faster than Americans’ paychecks, the burden on taxpayers becomes greater.
Over the past few decades, middle-income Americans’ earnings have risen only 27 percent, while spending
has increased 299 percent.
PERCENT CHANGE OF INFLATION-ADJUSTED DOLLARS (2010)
300% 1970 $890 billion
2009 $3,551 billion
250% +299%

200%
Total Federal
150% Spending
1970 $39,732
100% 2009 $50,255
Median +27%
50% Household
Income
0%
1970 1975 1980 1985 1990 1995 2000 2005 2009
Source: U.S. Census Bureau and White House Office of Management and Budget.
Percent Change of Inflation-Adjusted Dollars (2010)

growth-federal-spending Federal Spending Chart 3 • 2011 Budget Chart Book heritage.org

Federal Spending Is Outpacing Inflation
Prices of goods and services normally rise year to year, but federal spending has risen even
faster. Although spending grew substantially after 9/11, less than half of the increase can be
attributed to defense and homeland security spending.
+17.9%
YEAR-TO-YEAR PERCENTAGE CHANGE

Federal Spending
15%
Inflation

Average
Change in Average
10% Federal Change in +9.3%
Spending: Inflation: +7.9% +7.8%
+7.4% +7.4%
+5.3% +2.5%
+6.2%

5%

2010

0%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
–1.7%
Source: U.S. Bureau of Labor Statistics and White House Office of Management and Budget.
Year-to-Year Percentage Change

federal-spending-inflation Federal Spending Chart 4 • 2011 Budget Chart Book heritage.org

Total Government Spending Has More Than Doubled Since 1965
State and local government spending per household imposes a signiﬁcant, and growing, burden on taxpayers on
top of federal spending. In 1970, median household income was $17,839 greater than total government spending
per household, compared to only $2,431 in 2009.
PER-HOUSEHOLD SPENDING, IN INFLATION-ADJUSTED DOLLARS (2010)
2009
$50,000 Median household income: $50,255
1965 Per-household spending: $47,824
Median household income:
$40,000 $39,732

$30,000 Per-household spending:
$21,893 State and Local
Spending
$20,000

Federal
$10,000 Spending

$0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Source: U.S. Census Bureau, White House Office of Management and Budget, and 2011 Economic Repor t of the President.
Per-Household Spending, In Inflation-Adjusted Dollars (2010)

total-government-spending Federal Spending Chart 5 • 2011 Budget Chart Book heritage.org

Mandatory Spending Has Increased Five Times Faster
Than Discretionary Spending
Only one-third of the federal budget, discretionary spending, is subject to annual budgets. The remainder,
mandatory spending, is set on autopilot without congressional debate and has increased more than ﬁve times faster
than discretionary spending. Most of the current increase is due to entitlement spending.
INFLATION-ADJUSTED TRILLIONS OF DOLLARS (2010)
$4.0 trillion
$3.6 trillion
$3.5 trillion

$3.0 trillion

$2.5 trillion

$2.0 trillion

$1.5 trillion $609 billion Mandatory
$1.0 trillion
Spending

$0.5 trillion Discretionary
Spending
$0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
2011 figures are estimates

mandatory-discretionary-spending Federal Spending Chart 6 • 2011 Budget Chart Book heritage.org

Defense Spending Has Declined While Entitlement
Spending Has Increased
Spending on national defense, a core constitutional function of government, has declined
signiﬁcantly over time, despite wars in Iraq and Afghanistan. Spending on the three major
entitlements—Social Security, Medicare, and Medicaid—has more than tripled.
PERCENTAGE OF GDP
10%
1976 was Entitlements
the first year (Social Security,
entitlement Medicare, Medicaid)
8% spending 10%
exceeded
defense
spending
6% 7.4%

National
Defense
4% 2.5%
5%
2%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
2011 figures are estimates
Percentage of GDP

defense-entitlement-spending Federal Spending Chart 7 • 2011 Budget Chart Book heritage.org

Obama’s Budget Would Reduce National Defense Spending
Adequate funding for the core defense program is crucial for the military to fulﬁll its constitutional duty to provide
for the common defense. Yet defense spending has fallen below its 45-year historical average despite ongoing
operations in Iraq and Afghanistan.
DEFENSE SPENDING AS A PERCENTAGE OF GDP

10% 9.5%

8%
6.2%
5.0% 3.4%
6% 45-Year Average: 5.2%

4%

2%

Actual Projected
0%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Defense Spending as a Percentage of GDP

national-defense-spending Federal Spending Chart 8 • 2011 Budget Chart Book heritage.org

More Than Half of the President’s Budget
Would Be Spent on Entitlement Programs
In combination with other entitlements, such as food stamps, unemployment, and housing assistance, Medicare,
Medicaid, and Social Security constitute the lion’s share of President Obama’s 2012 budget. In contrast, spending
on foreign aid represents 2 percent.
PERCENTAGE OF THE PRESIDENT’S FY2012 BUDGET

Entitlement Programs: 58%
Social Medicare Income Security National Net All Other
Security: and Medicaid: and Other Defense: Interest: Spending:
20% 20% Entitlements: 18% 19% 6% 12%

50% Foreign Aid: Education:
Note: Figures have been rounded.
2% 3%
Percentage of the Presidents FY2012 Budget

budget-entitlement-programs Federal Spending Chart 9 • 2011 Budget Chart Book heritage.org

Total Welfare Spending Is Rising Despite Attempts at Reform
Total means-tested welfare spending (cash, food, housing, medical care, and social services for the poor) has increased
17-fold since the beginning of Lyndon Johnson’s War on Poverty in 1964. Though the current trend is unsustainable,
the Obama Administration plans to increase future welfare spending rather than enact true policy reforms.
WELFARE SPENDING IN INFLATION-ADJUSTED DOLLARS (2010)
$890 billion
$900 billion 1996
$800 billion Reform
“ends
$700 billion 1981 welfare”
Reagan
$600 billion
“slashes”
$500 billion
welfare
1964
$400 billion War on
Poverty
$300 billion begins
$200 billion

$100 billion

$0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: Heritage Foundation calculations based on data from current and previous White House Office of Management and Budget
documents and other official government sources.
Spending in Billions of Dollars (2010)

welfare-spending Federal Spending Chart 10 • 2011 Budget Chart Book heritage.org

Runaway Spending, Not Inadequate Tax Revenue,
Is Responsible for Future Deficits
The main driver behind long-term deﬁcits is government spending—not low revenues.
While revenue will surpass its historical average of 18.0 percent of GDP by 2021, spending
will shoot past its historical average of 20.3 percent, reaching 26.4 percent in the same year.
PERCENTAGE OF GDP
30%

26.4%
24.7%
25%
Spending Averages for
1960–2009:
20% 20.3% Spending
18.4%
18.0% Revenue
15%
Revenue
14.8%

Projected
10%
1960 1970 1980 1990 2000 2010 2021
Source: Heritage Foundation calculations based on Congressional Budget Office data.
Percentage of GDP

runaway-spending-tax-revenue Federal Spending Chart 11 • 2011 Budget Chart Book heritage.org

Federal Revenues by Source
The Top 10 Percent of Earners Paid 70 Percent
of Federal Income Taxes Most federal revenues come from individuals. Personal income
Top earners are the target for new tax increases, but the U.S. tax system revenues, though sometop
is already highly progressive. The of this is small-business income. Social
1 percent of income earners paid 38 percent of all federal income taxes in 2008, while the bottom 50 percent
paid only 3 percent. Forty-nine percent of U.S. households paid no federal income tax at all. source.
second-largest
PERCENTAGE OF FEDERAL INCOME TAXES (2008) Federal Revenue Bottom
PERCENTAGE OF TOTAL FEDERAL REVENUE (2010)
50%
U.S. Corporate Tax Rate Uncompetitive
Individual
The tax U.S. federal and state corporate tax rates make it difﬁcult for businesses to compete internationally. record levels
High
burden in America is climbing and will reach Pay
consistently higher than the average of industrialized policy changes.
without nations. 26%–50%$898. bii
( 5 lon)
l ($8
While other countries are reducing corporate tax rates, the U.S. has maintained rates signiﬁcantly and

Thi L v
s e el COMBINED CORPORATE TAX RATES
40%
11%–25%
ofI om e
nc Top 1% 2%–5% 6%–10%
Ear s.
ner .. United States: 39%

. P dThi
. ai s
. 38%
35%
21% 11% 16% 11% 3%
Pr ton of
opori
t F al
he eder
32.
9%
31.
9%
30.
7%
30.
2%
OECD
Average
41.6% 4
I om eT
nc ax 30% 29.
3%
i 2008.
n 28.
2%
27.
6%
27.
2%
26.
2%
26.
0% 26.
0%

Cor at
por e
25%
Sour Tax Foundaton and I er Revenue Servi
ce: i nt nal 2000 ce.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Sour e: r s i f Econom i C o-
c O ganiaton or c oper i and D evel
aton opm ent.
Per age ofFeder I
cent alncom eTaxes(2008)
FederalRevenue C hart 2 • 2011 BudgetC hartBook hert or
iage. g
Cus om sD utes M ic
t i , s
t
op10- centi
per -ncom e- ner
ear s

Com bi Cor at Tax Rat (
ned por e

cor at t r e
por e-ax-at
es 2000-
2010)
FederalRevenue C hart 5 • 2011 Budget t Book
Char heritage
.or

Excie
s
Es at and G i
t e f

Taxes per Household Have Risen Dramatically
Though the economic downturn has temporarily lowered overall tax revenues,
the tax burden on Americans is still high.
$25,000 $24,147 $18,400

$20,000
$17,959
$11,295 Current levels higher than 1994
$15,000

$10,000

$5,000

$0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: U.S. Census Bureau and White House Office of Management and Budget.
Inflation-Adjusted Dollars (2010)

taxes-per-household Federal Revenue Chart 1 • 2011 Budget Chart Book heritage.org

The Top 10 Percent of Earners Paid 70 Percent
of Federal Income Taxes
Top earners are the target for new tax increases, but the U.S. tax system is already highly progressive. The top
1 percent of income earners paid 38 percent of all federal income taxes in 2008, while the bottom 50 percent
paid only 3 percent. Forty-nine percent of U.S. households paid no federal income tax at all.
PERCENTAGE OF FEDERAL INCOME TAXES (2008) Bottom
50%

26%–50%
This Level 11%–25%
of Income Top 1% 2%–5% 6%–10%
Earners ...

... Paid This 38% 21% 11% 16% 11% 3%
Proportion of
the Federal
Income Tax
in 2008.

Source: Tax Foundation and Internal Revenue Service.
Percentage of Federal Income Taxes (2008)

top10-percent-income-earners Federal Revenue Chart 2 • 2011 Budget Chart Book heritage.org

Federal Revenues Have More Than Tripled Since 1965
Overall tax revenues have risen despite a recent decline due to the recession. Congress cut income taxes
and the death tax in 2001 and capital gains taxes and dividends in 2003, yet revenues continued to surge
even after the tax cuts were passed.
$3.0 trillion $2.15 trillion

$2.5 trillion

$2.0 trillion Total Revenue
$1.5 trillion $944 billion

$1.0 trillion Individual
Income Taxes
$0.5 trillion
$196 billion
Corporate Taxes
$0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: White House Office of Management and Budget. 2011 figure estimated

federal-government-revenues Federal Revenue Chart 3 • 2011 Budget Chart Book heritage.org

Federal Revenues by Source
Most federal revenues come from individuals. Personal income taxes provide the largest portion of total tax
revenues, though some of this is small-business income. Social Security and Medicare payroll taxes are the
second-largest source.
PERCENTAGE OF TOTAL FEDERAL REVENUE (2010)

Individual Payroll Taxes
($898.5 billion) ($864.8 billion)

41.6% 40.0%

Corporate: 8.9% ($191.4 billion)
Customs Duties, Misc.: 5.6% ($121.2 billion)
Excise: 3.1% ($66.9 billion)
Estate and Gift: 0.9% ($18.9 billion)

Source: Congressional Budget Office.
Percentage of Total Federal Revenue (2010)

federal-revenue-sources Federal Revenue Chart 4 • 2011 Budget Chart Book heritage.org

Tax Receipts Return to Historical Average
The overall tax burden on Americans is measured as a share of gross domestic product (GDP). Since World War II,
tax receipts have averaged around 18 percent of GDP Receipts have fallen due to the recession, but as the economy
.
recovers, they will rise above the average level by the end of the decade.
TAX RECEIPTS AS A PERCENTAGE OF GDP
24%

20.4% 20.6%
22%
19.3%
Tax
20% Revenue

18%

16% 30-Year
Average:
18.0%
14%
14.4% 14.9%

12%
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Tax Receipts as a Percentage of GDP

current-tax-receipts Federal Revenue Chart 5 • 2011 Budget Chart Book heritage.org

Increasing Tax Rates Does Not Necessarily Lead
to Higher Income Tax Receipts
Tax cuts can create incentives for individuals to generate more income, which can generate more revenue. The most
dramatic decline in the top individual income tax rate, from 70 percent to 28 percent, occurred during the Reagan
Administration, during which tax receipts remained relatively constant as a share of the economy.
PERCENTAGE OF GDP
100%
91%
Top Individual
80% Tax Rate
70%

60%
50%
39.6%
40% 35%
Individual 28%
Tax Receipts
20%
7.8% as % of GDP 9.4% 7.7%
9.2% 6.3%

0%
1960 1970 1980 1990 2000 2010
2011 figures estimated
Source: White House Office of Management and Budget and the Tax Foundation.
Percentage of GDP

income-tax-receipts Federal Revenue Chart 6 • 2011 Budget Chart Book heritage.org

U.S. Corporate Tax Rate Is Uncompetitive
High U.S. federal and state corporate tax rates make it difﬁcult for businesses to compete internationally.
While other countries are reducing corporate tax rates, the U.S. is virtually tied with Japan for the highest
and has maintained rates signiﬁcantly and consistently higher than the average of industrialized nations.
COMBINED CORPORATE TAX RATES
40%

United States: 39%

35%
32.9%
31.9%
30.7%
OECD
30.2% Average
30% 29.3%
28.2%
27.6%
27.2%
26.2%
26.0% 26.0%

25%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Organisation for Economic Co-operation and Development.
Combined Corporate Tax Rates (2000-2010)

corporate-tax-rate Federal Revenue Chart 7 • 2011 Budget Chart Book heritage.org

Total Tax Burden Is Rising to Highest Level in History
Taxes are projected to increase rapidly under various policy scenarios. If the 2001 and 2003 tax cuts expire and
more middle-class Americans are required to pay the alternative minimum tax (AMT), taxes will reach
unprecedented levels. The tax burden will climb even if those tax breaks are extended. President Obama’s budget,
which cuts some taxes and raises others, also increases the overall tax burden.
PERCENTAGE OF GDP
28%
Tax Cuts Expire
26% Obama’s Budget
Highest Tax
24%
Burden in U.S. Permanent
History: 20.6% Tax Cuts and
22% (2000) Fix AMT
20%

18%
30-Year Historical
16% Tax Burden:
(1981–2010): 18%

14%
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

Source: Heritage Foundation calculations based on Congressional Budget Office and White House Office of Management and Budget data.
Percentage of GDP

total-tax-burden Federal Revenue Chart 8 • 2011 Budget Chart Book heritage.org

t Spending Will More Than Triple Over the Next Decade
grows, interest payments will consume more and more of the federal budget.
’s budget, the national debt would double and real net interest costs would more

Debt and Deficits
next decade.
Rising Deficits Drive U.S. Debt Limit Higher, on Track to Fuel Economic Crisis
ED DOLLARS (2010) U.S. Debt Faster
Congress has raised the amount of federal debt subject to a statutory bilonroughly seventy-eight times
$7739 limit
$773. ilon
$773. bii
9 l
since 1940, sometimes multiple times per year. Since 1990, the debtlike Greece and Portugal have suffered or are anticipating ﬁnancial crises as a result of mounting deb
Countries limit has record levels of deficits and debt,
Excessive spendingU.S. continuesseen an averagespending on its current trajectory, it will face similar economic woes.
has created year-to-year
If the
increase of 7.8 percent and a total increase of $10.1 trillion. federal deﬁcit
and the worst is yet to come.
U.S. DEBT LIMIT PROJECTED U.S. PUBLICLY HELD DEBT AS PERCENTAGE OF GDP
$15 tr
illion 200% $14. t ilon
29 rli
Change
fom 2009
r
2. bilon
2. bii n
4 ilo
l t 2010:
o
Change liom 2007 t 2009:
7 f r
$188. bilon 150%o +$2.6 trillionPortugal: +$1.9
Italy: Greece: Japan
$10 tr n
illion 71% trillion
98% 109.6% 178%
(ar t
l ges
annualdol
lar
100% i r e)
nceas
Actual Pr ect
oj ed
1997–2002: 95 t ilon
$5. rli
$5 tr n
illion
1995 2000 2005 2010 2015 U.K.:2020
61.3%
1990: 1 t ilon
$4. rli
50%
fi ofM anagem ent and Budget and C ongr sonalBudget O fil ges perent
fce es i f(ar t c age
ce. Com par
1946–1953:D ebt and D efi tsnceas •+33%)
ci i hart 3 2011 Budget t Book
C r e: Char heritage
.or ar t o
eo
$275 bilon
li natons
i ’
l el of
ev s
$0
0 0%
1940 1950 1960 1970 19802000 1990 2005 2000 20102010 2015 2020 2025 2030 2035
Sour e: hie H ous O fi ofM anagem ent and Budget
c W t e fce .
Sour e: r s i f Econom i C o-
c O ganiaton or c oper i and D evel
aton opm ent and C ongr sonalBudget O fi ( t natve FicalScenaro)
es i fce Aler i s i .

National Debt Set to Skyrocket
In the past, wars and the Great Depression contributed to rapid but temporary increases in the national debt.
Over the next few decades, runaway spending on Medicare, Medicaid, and Social Security will drive the debt
to unsustainable levels.
PERCENTAGE OF GDP
350%
344%
300%

250%

200%
World War on
150% War II Terrorism

108.6% 100%
100% World The Great
War I Depression
50%

0%
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Source: Heritage Foundation calculations based on data from the U.S. Depar tment of the Treasury, Institute for the Measurement of Wor th,
Congressional Budget Office, and White House Office of Management and Budget.
Percentage of GDP

national-debt-skyrocket Debt and Deficits Chart 1 • 2011 Budget Chart Book heritage.org

Each American’s Share of National Debt Is Growing
As Washington continues to spend more than it can afford, future generations of taxpayers will be on the hook for
increasing levels of debt. The amount of debt per citizen will skyrocket.
$300,000
2050: $279,738

$250,000

2044: $206,771
$200,000

$150,000

2032: $103,827
$100,000

2011:
$50,000 1970: $31,871
$6,291
Projected
$0
1970 1980 1990 2000 2010 2020 2030 2040 2050

Source: U.S. Census Bureau and Congressional Budget Office (Alternative Fiscal Scenario).
Inflation Adjusted Dollars (2010)

national-debt-burden Debt and Deficits Chart 2 • 2011 Budget Chart Book heritage.org

Obama’s Budget Would Send Federal Debt to Levels
Not Seen Since World War II
In 2008, publicly held debt as a percentage of the economy (GDP) was 40.3 percent, nearly four points below the
postwar average. Since then, the debt has increased more than 50 percent, and the President’s FY 2012 budget
would more than double it to 87.4 percent by 2021.

DEBT AS A PERCENTAGE OF GDP
120%
108.7%
100%
87.4%

80%

60%

Average, 1946–2010: 43.8%
40%

20% 40.3% Obama’s
Budget
0%
1940 1950 1960 1970 1980 1990 2000 2010 2020
Source: Congressional Budget Office and White House Office of Management and Budget.
Debt as a Percentage of GDP

obama-budget-debt Debt and Deficits Chart 3 • 2011 Budget Chart Book heritage.org

Obama’s Budget Worsens Debt Problem,
but The Heritage Plan Solves It
Spending in the President’s budget proposal for 2012 would drive the debt to 87 percent of the economy by 2021.
In contrast, Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity
solves the debt problem through strong budget reforms, lowering debt to 58 percent of GDP in just 10 years.
DEBT AS A PERCENTAGE OF GDP 87.4%
90% PRESIDENT
OBAMA’S
80% BUDGET
70%

60% HERITAGE
Average, 1981–2010: PLAN
50% 40.6% 58.2%
26.1%
40%

30%

20%
1980 1985 1990 1995 2000 2005 2010 2015 2020
Source: President’s Budget: Congressional Budget Office and White House Office of Management and Budget; Heritage Plan: Calculations by the
Center for Data Analysis based on current projections, data provided by the Peter G. Peterson Foundation, and CDA policy models.
Debt as a Percentage of GDP

obama-budget-worsens-debt Debt and Deficits Chart 4 • 2011 Budget Chart Book heritage.org

Obama’s Budget Would Deepen Already Unprecedented Deficits
The President is responsible for submitting an annual budget to Congress and has the authority to veto legislation,
including irresponsible spending. Most Administrations have run small but manageable deﬁcits, but President
Obama’s unprecedented budget deﬁcits pose serious economic risks.
BUDGET DEFICITS AS A PERCENTAGE OF GDP, BY ADMINISTRATION

Kennedy Johnson Nixon Ford Carter Reagan Bush Clinton Bush Obama
0%
–1%
– 0.1%
–1.0% – 0.9%
–2% –1.6%
–3% –2.4%
–4% –3.5% –3.2%
–5% – 4.3% – 4.3%
–6%
–7%
–8%
– 8.3%
Source: White House Office of Management and Budget. (est.)
Budget Deficits As A Percentage of GDP, By Administration

budget-create-deficits Debt and Deficits Chart 5 • 2011 Budget Chart Book heritage.org

Federal Budget Deficits Will Reach Levels
Never Seen Before in the U.S.
Recent budget deficits have reached unprecedented levels, but the future will be much worse. Unless entitlements
are reformed, spending on Medicare, Medicaid, and Social Security will drive deficits to unmanageable levels.
PERCENTAGE OF GDP
70%
61.5%
60%

50%

40%
Average
30% Historical
Deficit: 3.0%
20% 9.9%
10%

0%
–2.4%
–10%
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2084

Source: Congressional Budget Office (Alternative Fiscal Scenario).
Percentage of GDP

federal-budget-deficits Debt and Deficits Chart 6 • 2011 Budget Chart Book heritage.org

Rising Deficits Drive U.S. Debt Limit Higher, Faster
Congress ﬁrst placed a statutory limit on total federal debt in 1917, in the Second Liberty Bond Act. Since 1962,
Congress has altered the debt limit through 74 separate measures, raising it 10 times since 2001. Since 1990, the debt
limit has been raised a total of $10.1 trillion, but nearly half of that increase has occurred since September 2007.
U.S. DEBT LIMIT
$15 trillion $14.29 trillion
Change
from 2009
to 2010:
Change from 2007 to 2009: +$2.6 trillion +$1.9
$10 trillion trillion
(largest
annual dollar
increase)
1997–2002: $5.95 trillion
$5 trillion
1990: $4.1 trillion
(largest percentage
1940: 1946–1953: increase: +33%)
$50 billion $275 billion

$0
1940 1950 1960 1970 1980 1990 2000 2010
Source: Congressional Research Service and White House Office of Management and Budget (Table 7.3, Historical Tables).
Billions of Dollars

increases-us-debt-limit Debt and Deficits Chart 7 • 2011 Budget Chart Book heritage.org

U.S. Debt on Track to Fuel Economic Crisis
Countries like Greece and Portugal have suffered or are anticipating ﬁnancial crises as a result of mounting debt.
If the U.S. continues federal deﬁcit spending on its current trajectory, it will face similar economic woes.
PROJECTED U.S. PUBLICLY HELD DEBT AS PERCENTAGE OF GDP
200%

150% Portugal: Italy: Greece: Japan:
71% 98% 109.6% 178%

100%

U.K.: 61.3%
50%
Comparisons
are to other
nations’ 2008
levels of debt.
0%
2000 2005 2010 2015 2020 2025 2030 2035

Source: Organisation for Economic Co-operation and Development and Congressional Budget Office (Alternative Fiscal Scenario).
Percentage of GDP

us-debt Debt and Deficits Chart 8 • 2011 Budget Chart Book heritage.org

Net Interest Spending Will More Than Triple Over the Next Decade
As the national debt grows, interest payments will consume more and more of the federal budget, even without
interest rate increases. Under the President’s budget, the national debt would double and real net interest costs
would more than triple over the next decade.
$800 billion $773.9 billion

$600 billion

$400 billion $282.4 billion
$188.7 billion

$200 billion

Actual Projected
$0
1990 1995 2000 2005 2010 2015 2020
Source: White House Office of Management and Budget and Congressional Budget Office.

budget-net-interest-spending Debt and Deficits Chart 9 • 2011 Budget Chart Book heritage.org

In One Year, Spending on Interest on the National Debt
Is Greater Than Funding for Most Programs
In 2010, the U.S. spent more on interest on the national debt than it spent on many
federal departments, including Education and Veterans Affairs.
BILLIONS OF DOLLARS (2010)
$800

$666.7
$600

$414.0
$400

$200 $173.1 $129.5 $108.3 $92.9
$0
Department Interest Department Department Department Department
of Defense Expense of Labor of of Veterans of Education
Agriculture Affairs
Billions of Dollars (2010)

interest-spending Debt and Deficits Chart 10 • 2011 Budget Chart Book heritage.org

2011 Budget Chart Book

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (18)

En vedette

En vedette (7)

Similaire à 2011 Budget Chart Book

Similaire à 2011 Budget Chart Book (9)

Plus de The Heritage Foundation

Plus de The Heritage Foundation (20)

Dernier

Dernier (20)

2011 Budget Chart Book