ABSTRACT
This chapter reviews the pattern of the growth in federal spending since fiscal year 1951, and sets out a commonly held view of the causes of that growth. It suggests several reasons why the growth in federal domestic spending was curtailed during the first year of the Reagan administration. The Reagan administration also sought to reduce federal outlays as a percentage of gross national product (GNP). In its public statements, the Reagan administration included the following among its policy goals: reducing the overall rate of growth in federal spending and increasing the rate of growth in national defense spending. It also included: cutting federal domestic spending, except for those income-transfer programs that the administration included under the "safety net” and reducing federal support for state and local governments, and allowing those jurisdictions greater freedom in allocating their federal grants. In 1981 the Reagan administration overcame a series of formidable forces to achieve significant reductions in federal domestic spending.
