Thurs., Aug. 19 marks this year's "Cost of Government Day." The date, calculated by the Americans for Tax Reform, signals when the average American finishes paying off his or her respective share of federal, state and local taxes, and the cost of implementing government regulations. This year, that means a whopping 231 days -- or almost 2/3 of the year -- are spent paying to keep the country going.
Feel like you've gotten our money's worth yet?
For 2010, the date arrives a full week later than in 2009, when Cost of Government Day fell on Aug. 12. That gives it the dubious honor of a new record, since the 2009 date was almost a full month later than in previous years. According to the Americans for Tax Reform, the date had never fallen later than July 20th over the period from 1977 to 2008.
About half of the total burden is attributable to the federal government. Keeping the government going these days takes a lot of money. But where does it all go?
Military spending makes up a considerable portion of the annual budget: We spend nearly half a trillion dollars on the Department of Defense. That's more than every other "non-security" agency expenditure combined. "Non-security" agencies include the federal Departments of Agriculture, Commerce, Education, Housing and Justice; the category also includes agencies such as the Small Business Association, NASA and the Social Security Administration. You can see the entire budget breakdown on the White House's website for the Office of Management and Budget.
That's not to say that spending hasn't increased in non-military areasl. Not counting the U.S. Postal Service, federal civilian employment was expected to grow by 141,400 between 2009 and 2010 (though some of this may relate to the U.S. Census). Only two agencies were expected to reduce their personnel: the Department of Agriculture and the Small Business Administration.
Expenses don't stop at the federal level. Roughly 20-25% of the total burden goes to keep state and local governments running. Despite efforts to slow spending in some areas, many state and local governments are seeing spending increases. In addition to the cost of providing benefits for citizens who may be without jobs and health insurance, many state and local governments struggle to meet pension and other retirement funding, due to bloated civil rosters and inefficient and underfunded plans.
Philadelphia's controversial DROP program is an example making news this year. According to the Philadelphia Inquirer, a city analysis of DROP (the Deferred Retirement Option Program) found that it increased the city's pension costs by $258 million in 10 years. A separate study done by an actuary for an article that appeared in the Philadelphia City Paper in April estimated the cost at $1 billion.
The remainder of the "Cost of Government" comes from complying with government regulations. This includes the cost of material resources and labor. According the ATR, the federal government has imposed more than $30 billion in new regulatory costs since 2001. Compliance with the Environmental Protection Agency (EPA), Department of Transportation (DOT) and Department of Homeland Security (DHS) top the list for costliness.
More information on Cost of Government Day 2010 comes later this week when the Americans for Tax Reform address the National Press Club.
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