Tracking Congressional Revenue and Spending: From Nixon to Trump

Tracking Congressional Revenue and Spending: From Nixon to TrumpKirbyBlockedUnblockFollowFollowingApr 18Image Credit: National Stone and Gravel AssociationWeek after week we are bombarded with partisan information about how we should be taxed and how that money should be spent.

This bombardment can make interpreting the facts and forming an independent opinion quite difficult for many people.

Most often, this difficulty results from a lack of contextual information perpetuated by pundits arguing for or against this policy or that.

Congressional revenue and spending data is buried in a government website deep within the labyrinth that is the internet.

Besides the obscurity of the base data, there are clear and present political motives for news media and politicians to make their presentation of this information as polarizing as possible.

A nonpartisan presentation of relevant information could help people develop a more informed opinion when it comes to important, albeit maybe not the most exciting, issues like tax policy.

This is what we will attempt.

In best interest of the reader I will present a roadmap for our journey.

When talking about anything numerical, it’s easy to get lost in the details and forget where we’re going.

Our travels will take us first to the source of congressional revenue: taxes.

We will then sail to the twin islands of discretionary and mandatory spending, before finally ending our quest by bringing it all together and looking at the big picture.



If you’re interested, here are the links to the GitHub Repo and Colab Notebook I used for this post.

Congressional RevenueCongressional revenue is the money coming into the Congressional budget.

More formally; Article 1 Section 8 of the United States Constitution gives the United States Congress the power to:“lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States”In 1913, the 16th Amendment extended congressional power of taxation to include individual income taxes.

The congressional power of the purse is one of the legislature’s primary checks on executive power.

Here we can see the fall in tax revenue following the 9/11 attacks and the 2008 financial crisis manifested as two sharp declines in the middle right of the chart.

Another striking observation is how little a part customs duties and estate & gift taxes play in this story.

Each of these two revenue streams on average account for just over 1% of congressional revenue.

We can see the relative changes in how different streams of congressional revenue contribute to the whole in both 1969 and 2018.

The respective rise and fall of payroll and corporate income taxes signals a rise in mandatory spending, but we will get to that later.

Discretionary SpendingWhen we hear news casts of how the government will shut down if both sides of the aisle don’t agree on a budget, this is what they can’t agree on.

Discretionary spending is government spending implemented through an appropriations bill.

This spending is an optional part of fiscal policy, in contrast to entitlement programs (for which funding is mandatory and determined by the number of eligible recipients).



discretionary spending is allocated for:Education,Employment & Social ServicesTransportationVeterans’ Benefits and Services,Income SecurityHealthAdministration of Justice,International AffairsThe EnvironmentScience, Space and TechnologyFor our purposes discretionary spending is split into defense and nondefense spending.

The far left of the chart shows the de-escalation of the conflict in Vietnam.

We can see the Reagan era military buildup as a blue hill left of center.

Discretionary spending has remained relatively stable with the exception of the two previously mentioned periods and the post 9/11 increase in spending.

Mandatory SpendingCongress legislates spending for mandatory programs outside of the annual appropriations bill process.

Congress can only reduce the funding for programs by changing the authorization law itself.

This requires a 60-vote majority in the Senate to pass.

Entitlement programs such as Social Security and Medicare make up the bulk of mandatory spending.

Other mandatory programs include:Income Security ProgramsEarned Income Tax CreditSupplemental Nutrition Assistance Program (SNAP)Temporary Assistance for Needy Families (TANF)Unemployment InsuranceFederal Retirement programs for Federal and Civilian Military RetireesVeterans programsAgricultural subsidiesSalaries of Members of Congress and the President.

Prior to the Great Depression, nearly all federal expenditures were discretionary.

Mandatory spending grew following the passage of the Social Security Act in 1935, and when Congress amended the Social Security Act to create Medicare in 1965.

During the recession in 2008 and 2009, mandatory spending increased by 31% due to federal financial interventions and the economic downturn.

Much of the money went to the Troubled Asset Relief Program and aid to Government Sponsored Enterprises such as Fannie Mae and Freddie Mac.

The number of beneficiaries of entitlement programs has grown as the average age of the population has risen.

The Medicare Act of 1965 extended health benefits for most retirees and expanded mandatory spending.

As life expectancy has increased, the portion of the population over 85 has also increased, which has created a rise in Social Security and Medicare spending.

In 1969, Medicare & Medicaid spending accounted for only 13% of mandatory spending.

By 2018, that has ballooned to nearly 40%.

The Big PictureThe surge in Medicare & Medicaid spending has created somewhat of a crisis in recent years especially as healthcare costs continue to climb.

Mandatory spending first outpaced discretionary spending in 1975.

Today, mandatory spending, driven by increases in Medicare & Medicaid costs, makes up almost 69% of all congressional spending.

The increases in both spending classes, but especially mandatory spending, is driving congressional expenditures to worrying levels, and is far eclipsing congressional revenue.

Here we can see how often Congress runs a budget deficit.

The large block of red towards the end represents the extra mandatory spending caused by the 2008 Financial Crisis.

Running a congressional budget deficit is no anomaly in itself, but at the scale and persistence we have seen in the preceding decade it can be an indicator of larger issues.

Final ThoughtsIf Medicare & Medicaid spending continues to increase at the rate it has for the past 50 years, Congress will be forced to either raise taxes or continue to increase the budget deficit.

It’s easy for news media and others to place blame for the problem on this group or that, but my instinct tells me that the underlying issue is systemic.

The infrastructure of how healthcare is produced and distributed in the US is broken.

We will dive into why this is and ideas of how to fix it in a future post.

SourceI hope I have presented a non-partisan exposition of relevant congressional revenue & spending data.

A well-informed electorate is imperative when it comes to the health of our nation.

Please keep striving to inform yourself about important issues.

Thanks for reading!Follow me on Twitter, GitHub, and LinkedIn.

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