Dear Friends,

Many of you have probably read about the unprecedented size of the Fiscal Year 2009 Budget for the federal government.  President Bush’s budget passes the $3 trillion mark which has many people rightfully concerned about the rate of growth of the federal government. 

The above chart displays the federal budget compared against the GDP for the years when the budget hit the $1 trillion, $2 trillion and $3 trillion mark.  As you can tell, the percentage growth of the budget compared against the GDP is a little less than 5% for each trillion dollar marker. 

You may wonder why it took us 14 years to reach the $2 trillion level and eight years to reach the $3 trillion level.  Many critics blame the war funding and while it is true that funding for defense has grown substantially, the $656 billion budgeted for National Defense in FY2009, including Homeland Security, is about 23% of the entire federal budget.  The pie chart below depicts how the federal funds are spent and a significant portion – 61% - is mandatory spending. 

The most significant rate of growth in mandatory spending is Medicare and Social Security.  Mandatory spending is not subject to the congressional appropriations process; it is essentially on “auto-pilot.” Both Social Security and Medicare are expected to double over the next 30 years (source: House Budget Committee).  The rate of growth of these programs is simply unsustainable.

I believe that a balanced budget combined with entitlement spending reform is critical to keeping government small and effective.  Since my first term in Congress, I have co-sponsored and supported bills such as H.JRES.1 which proposes a balanced budget amendment to our constitution.  This bill would ensure that expenditures do not exceed receipts (except on emergency funding bills for national security).  If we are to reach the goal of a balanced budget Congress must tackle entitlement reform.

Let me be clear, individuals close to retirement and older Americans, who have paid into Social Security their entire lives, can count on receiving their benefits.  However, the system must be reformed for future generations. 

America must address the overwhelming growth in entitlement spending and the sooner we do it, the better the financial outlook there will be for future generations. 

Sincerely,

KEN CALVERT

Member of Congress