Democratic leaders in the House and Senate are hoping to pass a $1 trillion bill to fund infrastructure and a $3.5 trillion bill to fund new and expanded entitlement programs. The bills would entrench a substantial increase in the size and scope of the federal government.
The chart below shows past and projected domestic program spending if the Democratic plans pass, measured as a percent of gross domestic product. Projected spending is as proposed in the Democratic budget resolution less defense and interest outlays.
Domestic program spending almost tripled from 5 percent to 14 percent of GDP from the mid‐1950s to the mid‐1970s under Presidents Eisenhower, Kennedy, Johnson, and Nixon. Spending moderated under Reagan and Clinton, with the latter ending his tenure with four balanced budgets and spending at 12.8 percent of GDP.
Then both parties moved left on spending, with low-interest rates encouraging a free-lunch mindset and rising deficits. Spending rose after 9/11 under Bush, spiked during the Great Recession under Obama, and spiked again during the pandemic under Trump. Usually, after crises subside, spending declines but to a higher plateau than previously. Under the Democratic budget resolution, spending would settle in at a much higher level than under Trump.
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