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Government Spending

Economy
March 20, 2017
Trump’s Budgetary Blueprint Retains America’s Welfare State
President Trump has issued his preliminary federal budget proposal looking to next 2018 fiscal year. What it shows very clearly is that there will likely be no attempt to reduce the size and cost of most of the American interventionist-welfare state.
Government Spending
March 14, 2017
The National Debt Limit Equals a Balanced Budget
Once again the United States government is rapidly approaching a fiscal debt ceiling: After March 16, 2017, Uncle Sam will not be legally allowed to borrow any more money to cover its budget deficits, unless Congress votes to raise the debt limit.
Health Care
March 14, 2017
Health Care Spending Increases, Federal Share Rises
The federal government spends more on health care than any other entity or group, in part due to Medicaid expansion under the Affordable Care Act.
More News
Government Spending
March 9, 2017
State Lawmakers Working to Protect Property Rights
Most people assume government police are tasked with stopping robbers, but a little-known legal fiction effectively allows the cops to become the robbers.
Taxes
March 8, 2017
Trump Charts His Road To Restoration Of Booming American Prosperity
Addressing a joint session of Congress on February 28, President Trump charted his path to restoring booming economic growth — major tax reform, repeal/replacement of Obamacare, massive deregulation and more.
Health Care
March 6, 2017
States Prepare Dry Run of Article V Convention
The planning convention in Nashville, Tennessee would pave the way for an amendments convention called under Article V of the U.S. Constitution.
 

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