by Chris Edwards
Cato Institute
February 18, 2014
Tax & Budget Bulletin
The federal government spent $3.9 trillion in 2013, according to the Bureau of Economic Analysis. Transfers were the largest spending activity at $1.98 trillion, followed by purchases at $571 billion, aid to the states at $510 billion, interest at $414 billion, and compensation at $407 billion. Official projections show huge federal budget deficits and ever rising debt in coming decades. Policymakers should begin scouring the budget for programs to cut. In this regard, note that the U.S. Constitution does not create an open-ended role for the federal government to transfer wealth or aid the states. So transfers and aid, activities that together account for about two-thirds of federal spending, should be the focus of major cuts. However, cuts should also be made to wasteful and unneeded spending within the government’s purchasing and compensation.

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