Why is How Much the Government Spends a Moving Target?

How much did we spend?

The question seems simple enough: how much does the government spend each year? Yet, the answer is surprisingly elusive. Unlike your household budget, the vast and complex nature of government spending makes it incredibly difficult to pin down a single, definitive number. This lack of transparency can be frustrating for taxpayers and undermines trust in government institutions.

There have been efforts to improve this transparency. The Freedom of Information Act (FOIA) allows citizens to request government documents, including spending data. The Data Act of 2014 standardized federal spending data formats, making it easier to compare and analyze. Websites like USASpending.gov offer a wealth of information on federal outlays and obligations.  

However, even with these advancements, challenges remain.

A Maze of Numbers:

• Conflicting Reports: Imagine asking three friends how much they spent last month and getting three different answers. The Government Accountability Office (GAO), Office of Management and Budget (OMB), Treasury, Federal Procurement system, and USASpending.gov might all report different spending figures. This can be attributed to variations in methodology, timing, and the data source used.
• Budgeting vs. Spending: The government operates on a budget cycle, outlining planned spending for the year. However, actual spending (outlays) can differ from budgeted amounts due to factors like delays, adjustments, and economic fluctuations.  
• Appropriations vs. Outlays: Appropriations are the legal authorization to spend money, while outlays are the actual payments made. While appropriations represent future spending, outlays reflect past spending.

USASpending.gov: A step forward, but not the finish line

This government website is a valuable resource, providing detailed breakdowns of federal spending by agency, budget function, program, and even specific contracts. However, a crucial distinction exists: USASpending.gov primarily displays obligations, which are commitments to spend money, rather than actual outlays (spend).

While obligations provide insight into planned spending, they don’t tell the whole story. It can take months or even years for obligated funds to be fully spent, if at all. This mismatch between what USASpending.gov shows and the numbers reported by other agencies can be confusing.

The Trust Factor:

This lack of clear and consistent data on government spending erodes public trust. For example, for Fiscal Year 2023 the OMB shows $6.1Trillion in spending, and USASpending.gov shows $9.3Trillion. A more than 50% budget spending delta, trusting a 3+ Trillion difference makes it hard to comprehend how you could rely on these figures as accurate. In fact, when the Government Accounting Office⁽¹⁾ (GAO) audited the data on USASpending.gov they found that only 10 of 37 reporting groups had “high” quality data. What’s worse is how they defined high quality – meaning error rates up to 20%. Needless to say if a CEO or CFO signed off on their corporate records being off by 20% there is a good chance they could wind up in jail. Additionally, USASpending.gov has billions in “unreported” spending each year even though Federal agencies are legally mandated to supply the data. At TPI, we find that having Contractual Obligations instead of actual spend on USASpending.gov is somewhat misleading in the first place. Don’t get us wrong, it’s a step forward that the data is available, but name the site USAContracts.gov or something other than spend. Taxpayers deserve to know where their hard-earned money goes, and the current complexity makes it difficult to hold elected officials accountable.

The Tax Project Institute: Championing Transparency

The Tax Policy Project Institute (TPI) is a non-partisan organization working to bridge this gap. They believe in the power of accessible, user-friendly data. TPI aims to transform the way government spending information is presented, making it easier for the public to understand and use.

Demystifying the Data:

TPI’s approach involves:

• Standardization: Working to ensure all government agencies use consistent data formats and definitions.
• Data visualization: Creating user-friendly charts and graphs to make complex information more digestible for the average citizen.
• Interactive tools: Developing online tools that allow users to easily explore and analyze government spending data.
• Public education: Raising awareness about the importance of transparent government spending and empowering citizens to engage with the data.

By simplifying access to reliable information, TPI empowers taxpayers to become active participants in the democratic process. Understanding where their money goes fosters trust in government institutions and encourages informed dialogue about our nation’s fiscal priorities.

The Road to Transparency

While significant progress has been made, the quest for clear and consistent information on government spending continues. While we give our Government significant credit for the strides it has made in openness, transparency, and access to data, it is clear there is still a long way to go. By utilizing innovative data management practices and user-centric design, organizations like TPI are paving the way for a more transparent future. With readily available, trustworthy data, citizens can hold government accountable and work together to ensure responsible use of public funds. Then, hopefully, we can answer a simple question: how much does the government spend?

Citations

1. Government Accounting Office https://www.gao.gov/blog/usaspending.gov-contains-treasure-trove-information,-how-reliable-it