Addressing the Long-Run Budget Deficit: A Comparison of Approaches

From the Summary:

A small share of federal spending is for direct provision of domestic government services, which many people may think of when considering federal spending. Since this spending is normally about 10% of total federal spending and about 2% of GDP and deficits excluding interest are projected to be as much as 7.7% of GDP by 2037, cutting this type of spending can make only a limited contribution. Transfers and payments to persons and state and local governments constitute most of federal spending, about 70%. Defense spending, currently accounting for about 20% of spending, has declined over the past 35 years, but also tends to vary depending, in part, on the presence and magnitude of international conflicts.

Source: Congressional Research Service, Library of Congress (Prepared for Members and Committees of Congress

Download full pdf report: Addressing the Long-Run Budget Deficit: A Comparison of Approaches by Jane G. Gravelle, Senior Specialist in Economic Policy