The federal budget is on an unsustainable course with red ink as far as the eye can see, so it is especially important for Americans to understand spending, taxes, and debt.
The Heritage Foundation’s Budget Chart Book is a user-friendly way to learn about the federal budget in pictures.
As Federal Spending Chart 1 shows, spending has been on the rise—even before the recession and stimulus bill—and will continue to climb steeply under President Obama.
Washington is planning to pay for this and more spending with tax hikes, but as Federal Revenue Charts 1 and 9 reveal, taxes are already a hefty burden and will reach unprecedented levels in the future.
Yet spending continues to grow far faster than revenues, creating record deficits. President Obama’s annual deficits will add more to the federal debt than every other president before him combined, causing the debt to skyrocket as Debt and Deficits Chart 3 illustrates. The main reason America finds itself on a precipice of disastrous deficits is from spending on the three major entitlements—Social Security, Medicare, and Medicaid.
As Entitlements Chart 2 shows, these programs will double in size in a few decades. But Chart 10 explains spending cuts alone can’t pay for entitlements, and the level of taxes, shown in Chart 8, required to pay for the programs would devastate the economy.
Tough policy choices and strong entitlement reforms are necessary to get the budget back on track. The Budget Chart Book will help you appreciate the size and scope of the decisions policymakers must enact to protect America’s fiscal future.