Non-Profit’s 10-K For the Federal Government Paints Bracing Picture

April 17, 2019 by Dan McCue

Think about it. Every public corporation in America is required to make frequent filings to the U.S. Securities and Exchange Commission.

These reports provide a comprehensive summary of the company’s performance, the risks it foresees encountering in the near and far term, and the controls management it has put in place to buffer those concerns.

These filings, easily accessible on the SEC’s website, are a treasure trove for investors and reporters.

Yet when it comes to the finances of the federal, state and local governments, no such filing requirements exist. You get what you can from a myriad of sources — fuzzy Polaroids in the age jpegs — and hope the aggregate is something meaningful.

It’s a situation that bothered former Microsoft CEO Steve Ballmer, who now owns the L.A. Clippers basketball team.

Ballmer and his wife Connie co-founded The Ballmer Group to invest in non-profit efforts to improve the economic mobility for children and families. At the time, Ballmer knew that the government was by far the largest investor in economic mobility for Americans.

But as The Ballmer Group continued its work, the founders realized more access to information was needed for the public to see how government money was being spent and what it was accomplishing.

The result was USAFacts, a nonpartisan, not-for-profit organization established as a separate legal entity from The Ballmer Group that was founded on the premise that “facts matter and public data should be available and understandable.”

On Tuesday, in cooperation with its partners — the Penn Wharton Budget Model, the Stanford Institute for Economic Policy Research, and Lynchburg College — they released the 2019 United States Government’s 10-K, a 212-page report intended to highlight not only the state of the government’s finances, but other key metrics that show the state of the nation.

It’s key findings are summarized below:

Social and Healthcare Spending Is On The Rise

As the United States’ population grows older — a recent study by the AARP found 10,000 baby boomers are turning 65 every single day — the government is spending more on Social Security and Medicare.

Between 2006 and 2016, the USAFacts report says, Social Security payments increased $360 billion or 66 percent, while Medicare payments went up $305 billion or 82 percent.

Both of these figures went up due to a growing elderly population as well as increasing payments and costs. During that period, the American population 65 years and older went up 12.1 million or 33 percent, the report says.

The organization forecasts that without policy changes, the Medicare Hospital Insurance Trust Fund could be depleted as early as 2023 and the Old-Age and Survivors Insurance and Disability Insurance trust funds may be depleted as early as 2030.

Government Spending Outpaces Its Revenue

The United States posted its largest-ever monthly budget deficit in February and just this past month, the U.S. Treasury Department forecast that the shortfall between what the government spends and what it takes in will exceed $1 trillion by late September.

According to USAFacts, in 2016, federal, state and local governments combined took in $5.097 trillion, up 26 percent from $4.04 trillion in 2006.

But spending during that period increased nearly $800 billion more, with $5.852 trillion in expenditures in 2016, which is up 43 percent from the $4.082 trillion spent in 2006.

Except for revenue from corporate taxes, which decreased 13 percent among all governments between 2006 to 2016, the government has seen an increase in revenue from all other taxes, due to both changes in tax policy and higher overall taxable income.

In addition to growth in Social Security and Medicare payments, the federal government saw a $95 billion increase in spending on veterans’ benefits during that period, despite a 15 percent decline in the number of veterans, the report says.

State governments saw a $246 billion or 85 percent increase in Medicaid and CHIP payments as the number of enrollees has increased since the 2010 enactment of the Affordable Care Act.

It should be noted the report does not include analysis of the federal tax changes that went into effect in 2018.

Spending on Financial Assistance Programs Is In Decline

Multiple government programs aimed at helping the disadvantaged saw spending increase in the years following the onset of the Great Recession in 2008. But participation in and spending on many of those are now declining.

Unemployment insurance benefit spending dropped 78.4 percent from $137 billion in 2010 to $29.5 billion in 2017, USAFacts says.

Spending on Temporary Assistance for Needy Families, informally known as “welfare,” dropped 13.7 percent from $33.2 billion in 2010 to $28.7 billion in 2017. The number of monthly recipients in the program has dropped 41.3 percent from 4.4 million in 2010 to 2.6 million in 2017.

Between 2015 and 2018, Supplemental Nutrition Assistance Program (SNAP), a food assistance program, saw a 13 percent drop in benefits ($60.6 billion from $69.6 billion) and an 11.9 percent drop in monthly recipients (40.3 million from 45.8 million).

Households Earn, Spend and Save More

USAFacts found that American households are earning, spending, and saving a bit more than in the past, but they are also less likely to own their own homes.

Between 2006 and 2016, the median annual wage has increased 2 percent, from $36,210 to $37,040. The average household increased spending just 1 percent, from $92,606 to $93,937. The disposable income savings rate has also increased from 9 percent to 13 percent, the report says.

During the same period, homeownership has dropped as a percentage of households from 69 percent to 64 percent.

Natural Disasters Are Becoming More Costly

Disaster costs increased 256 percent in the past decade even as the disaster declarations decreased 28 percent. Per disaster, costs increased 382 percent over the past decade, the report says. Costs, on an absolute and per disaster basis, have increased over the past decade for floods, fires, and other disasters.

Overall Crime Is Down, Violent Crime Somewhat More Common

While property crime rates fell 27 percent between 2006 and 2016 and violent crime rates fell 19 percent, violent rates did increase 3 percent between 2015 and 2016, the report says. During that same one-year period, the drug-related arrest rate increased 5 percent.

Incarceration rates, both in general and among youths, have fallen since 2006.

Federal Government Spending Less On Higher Ed

The average annual cost of undergraduate education, adjusted for inflation, increased 28 percent between 2006 and 2016, the report says. At the same time, federal spending on education dropped $26 billion or 67 percent. Between 2015 and 2016, there was a $14 billion or 58 percent decrease in Federal Direct Student Loans (FDSL) expenditures.

The entire 2019 United States Government’s 10-K compiled by USAFacts can be read here.

Federal Budget

Lawmakers a Step Closer to Averting Dec. 11 Government Shutdown
Congress
Lawmakers a Step Closer to Averting Dec. 11 Government Shutdown

WASHINGTON — Top appropriators reached bipartisan agreement Tuesday on a framework for an omnibus spending package that would avoid a partial government shutdown next month. The compromise forged between the leaders of the House and Senate Appropriations committees sets spending allocations for the dozen bills that fund federal agencies... Read More

Concord Coalition Weighs U.S. Deficit Against Pandemic’s Effect on Health Care Policy
Think Tanks
Concord Coalition Weighs U.S. Deficit Against Pandemic’s Effect on Health Care Policy
November 13, 2020
by Kate Michael

WASHINGTON - With over 10.5 million Americans so far infected with COVID-19, the U.S. health care system’s focus has understandably been on strategies for combating the virus. Yet when the nation is finally able to shift back to handling longer-term health care issues, The Concord Coalition... Read More

New Government Run Health Insurance Option Could Be More Expensive Than Initial Projections, Study Shows
Health
New Government Run Health Insurance Option Could Be More Expensive Than Initial Projections, Study Shows
November 5, 2020
by Sean Trambley

WASHINGTON -- With Congress considering significant health care reforms, including creating a government-run health insurance plan called the public option, a new study shows that it could be significantly more expensive than previously estimated. The study, released by Lanhee J. Chen, Ph.D., Tom Church, and Daniel... Read More

Committee for Responsible Federal Budget Estimates True Cost of Campaign Plans
Political News
Committee for Responsible Federal Budget Estimates True Cost of Campaign Plans
October 12, 2020
by Kate Michael

WASHINGTON -- The Committee for a Responsible Federal Budget, an independent non-profit organization, released its anticipated report on the estimated costs of both Trump’s and Biden’s campaign plans last week. Not surprisingly, they are very expensive plans.  Both candidates have ambitious proposals and policy priorities if... Read More

DRIVE LESS Act to Reduce Federal Spending on Government Vehicles Has Bipartisan Support
Federal Budget
DRIVE LESS Act to Reduce Federal Spending on Government Vehicles Has Bipartisan Support
October 9, 2020
by Sean Trambley

WASHINGTON. – U.S. Senators Jeanne Shaheen, D-N.H., James Lankford, R-Okla., and Angus King, I-Maine, reintroduced their bipartisan legislation to save taxpayer dollars by reducing the federal funding available for the acquisition and leasing of new federal vehicles. The Domestic Reduction In Vehicle Expenditure and Lowering Emissions... Read More

Senate Votes to Advance Stopgap Spending Bill
Congress
Senate Votes to Advance Stopgap Spending Bill
September 29, 2020
by Dan McCue

WASHINGTON - The Senate voted to advance a stopgap spending bill Tuesday night, the penultimate step to avoiding a government shutdown at midnight Wednesday. The vote to limit debate on the measure paves the way for a final vote in the chamber on Wednesday afternoon. The... Read More

News From The Well
scroll top