Which are the Largest Federal Agencies?

August 11, 2017

The federal government spends more than $4 trillion a year on programs in hundreds of agencies. Which are the largest agencies, and how fast are they growing?

You can find out using the charting tool at DownsizingGovernment.org/charts. The tool plots spending on hundreds of federal agencies and programs in real, or inflation-adjusted, 2017 dollars. The charts cover 1970 to 2017, based on data from the 2018 federal budget.

The following are seven charts from the tool showing spending by the 21 largest agencies in order by size.

The first chart shows the largest departments: Defense, Health and Human Services, and Social Security. The three used to vie for top spot, but Defense has been left in the dust in recent years as the two entitlement-dispensing agencies have continued to grow. The federal government now has two $1 trillion agencies. Wow.

The second chart shows that spending by Veterans Affairs, Agriculture, and the IRS have soared in recent years. Veterans Affairs spending has doubled in a decade—again this is real dollars. Yikes. Agriculture spending includes food stamps and farm subsidies. IRS spending is fueled by outlays on “refundable” tax credits, particularly the earned income tax credit.

The third chart shows Education, Transportation, and the Office of Personnel Management. For the latter agency, spending includes the retirement and health costs of federal workers. Education spending gyrates widely because of recalculations in the costs of student loans. Transportation spending shows a solid upward trend, despite all the claims that we shortchange infrastructure investment. Either way, federal transportation spending should be cut.

The fourth chart shows Labor, Homeland Security, and Other Defense Civil Programs. The latter includes spending on military retirement and health care. The spike in Labor around 2010 was due to the extra UI benefits passed by Congress during the recession. Homeland spending spiked during the early Bush years and remains high.

The fifth chart shows that State department spending has tripled in constant dollars since 2000. HUD spending gyrates due to the accounting for housing finance subsidies. Justice spending tripled from 1990 to the mid Bush years. If you go to the chart tool, you can see that HUD subsidies for rental aid and community development remain at high levels.

The sixth chart shows Energy, NASA, and International Aid. The Energy spike from 2010-2012 stemmed from President Obama’s “stimulus” legislation. Remember Solyndra?

The seventh and final chart shows Interior, Commerce, and the EPA. The spikes in Commerce surround Census years. You can see this if you go to the charting tool, click open Commerce, and plot Census separately.

Similarly, use the chart tool to see that the Commerce spike in the late 1970s was for the Economic Development Administration, which by the way is one of the dumbest agencies in the government.

Finally, if you click open EPA on the charting tool, you can see that the spike in the late 1970s was due to a surge in grants to state governments.

Which of these departments and agencies should be cut? I suggest starting with these.



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