Government Spending

It's a Date

Government costs less this year.

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By the time you read this story, you may have stopped working for the government. For 1995, anyway.

Each year, Americans for Tax Reform totes up the cost of federal, state, and local taxes, spending, and borrowing, adds the direct costs of quantifiable regulations, divides by 365, and comes up with Cost of Government Day–the date on which the average American worker has earned enough gross income to pay off the financial obligations imposed by governments. Cost of Government Day falls on July 9 this year, two days earlier than in 1994, and a week earlier than in 1993.

Alan Philp, who compiles the government-cost figures for ATR, says several factors have led to a slightly shrinking state: steady economic growth, which tends to reduce demands on social-welfare programs; a continuing reduction in military spending as a percentage of national income; and (to date) the lack of success Bill Clinton has had in imposing new federal regulatory programs. In 1992, the first year the Bush administration's Americans with Disabilities Act, Clean Air Act Amendments of 1990, and 1991 civil rights act all took effect, Cost of Government Day arrived on July 18.

Not that Clinton doesn't want to make government more expensive. "We're lucky Clinton put all his [regulatory] eggs in the health care basket," says Philp. He says ClintonCare's mandates would have put Cost of Government Day well into August.

Cost of Government Day may start arriving sooner. The 1996 House budget would make Cost of Government Day fall at least two days earlier than it would under the president's budget. And by 2002, without any of the GOP's proposed regulatory reforms, Republican plans to balance the budget could move Cost of Government Day up by another 17 days.