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Government Spending

Government Spending
April 23, 2017
Congressional Committee Approves USPS Pension Reform Bill
In March, the U.S. House Oversight and Government Reform Committee approved a bill changing how the U.S. Postal Service (USPS) must fund pension payments for its government employees.
Health Care
April 23, 2017
States Approach Threshold Required for Article V Convention
A constitutional amendment to limit federal health care spending would have implications for health care policy.
Health Care
April 23, 2017
Study: Medicaid Block Grants Would Save $150 billion by 2022
Various Republican proposals would cap Medicaid spending.
More News
Taxes
April 22, 2017
Soda Tax to Hit Thirsty Cook County Consumers
The cost of enjoying a cold drink on a hot summer day will be going up for consumers in Cook County, Illinois, after a tax hike approved by the Cook County Board of Commissioners in November 2016 takes effect.
Government Spending
April 21, 2017
Treasury Chief Calls on Lawmakers to Raise Debt Ceiling
After legal limits on the total amount of federal government debt were reinstated in March, U.S. Secretary of the Treasury Steven Mnuchin called on lawmakers to increase the limits on the federal government’s authority to borrow and spend.
Government Spending
April 19, 2017
Reform Entitlements to Help People, Not Government
By reforming government-run entitlement programs, lawmakers can start reversing a decades-long trend of trapping people in poverty — causing harm in the name of providing help. States are already leading the way.
 

The Issue

Many states face looming fiscal challenges as tax revenues are insufficient to keep pace with growing government spending. Reforming pensions, welfare programs, and other entitlement program is the most promising solution to these fiscal challenges. Those reforms can help states become more competitive, strengthen state economies, and improve the employment outlook for all of a state’s residents.

Some government pension programs have become too generous. State and local government workers routinely are able to retire in their 50s - a decade or more earlier than most people in the private sector can - with pension benefits that exceed the retirement benefits persons in the private sector receive. The burden on taxpayers to fund public-sector retirement programs has been skyrocketing, forcing elected officials to consider raising taxes, more borrowing, cuts in other government services, or a combination of those strategies.

Entitlement programs, too, have become increasingly expensive for taxpayers, and they rarely work well for persons most in need. Most states can improve the effectiveness of their efforts to help those in poverty. Successful welfare reform can save lives and produce positive effects on multiple generations. It can save taxpayers billions of dollars and help address serious social maladies, such as crime, alcoholism, and teenage pregnancy.

Our Stance

In order to stop tax hikes and compel elected officials to control spending, free-market advocates must first prove that lower taxes, privatization of public services, and tax and spending limitations yield stronger economic growth and prosperity. We also must convince elected officials that lowering taxes and reducing government spending is good policy and good politics. Legislators armed with good information can win debates and get their legislation passed, persuade constituents, and mobilize interest groups that benefit from good policy choices.

Featured Subtopics

Man doing a budget with calculator
States are beginning to turn away from baseline budgeting, a method that has proven ineffective in keeping the size of government to a responsible level. They are moving toward zero-based and performance-based budgeting, which has proven effective in cutting deficits.
Cutting a credit card in half
States across the country continue to struggle with balancing their year to year budgets as a result of increasing spending and a lagging economy. Many state legislatures have also accumulated massive amounts of debt which taxpayers will have to pay due to years of overspending combined with state employee pensions and benefits.
Small jar with retirement money
States across the country are continuing to face structural budget deficits as they try to cope with too-generous pension promises made to their employees. Mandatory payments into pension funds divert money away from essential government services and create pressure for tax increases.
A football stadium at night
Sports stadium subsidies are a poor use of taxpayer dollars. They rarely realize the benefits their supporters claim and shift tax revenue away from where it is better utilized. Cities seeking to improve their competitiveness would be better served reducing their taxes or investing in more cost effective improvements like new and improved infrastructure.

Additional Subtopics

  • Deficits
  • Federal
  • Federalism
  • Gambling and Lotteries
  • Local
  • Privatization
  • State
  • Taxes
  • Unfunded Mandates
  • Unions: Public
  • Waste and Pork

Videos

Title: Emerging Issues Forum (EIF) Chicago: Budget & Taxes Panel
Description: States are seeking ways to create a better business climate to attract jobs and businesses to their states. Some states have been passing right-to-work laws, pushing tax reform, and reforming their public pension systems, while others have increased taxes and regulations. This panel discusses which policies are working and which are not. Speaking on this panel are Tax Foundation Vice President of Legal and State Projects Joe Henchman, National Taxpayers Union Executive Vice President Brandon Arnold, and Kansas state Sen. Forrest Knox (R-Wilson County).

Government Spending Experts Team

The Heartland Institute's experts on government spending are available for legislative testimony, speaking engagements, and media interviews.

Staff & Fellows Policy Experts