–Fiorina, New Hampshire Republican Party Leadership Summit speech, April 18, 2015
Fiorina uses her lack of experience in political office to differentiate herself from career politicians in the Republican presidential pool. The two statements made above were made in the same context: that voters are frustrated because they don’t see enough of a difference in the way government is run — the way it spends money, and the way “every large bureaucracy turns in on itself and forgets who it is there to serve.”
Still, this statement sounded curious. Is Fiorina correct that every agency has received more money every year for 40 to 50 years?
As is our standard, we took the “reasonable person” interpretation of her remarks. We contacted experts along the political spectrum, and they interpreted her statement the same way: That each agency had received more money each year, for 40 to 50 years.
There are ups and downs in agency budgets, especially in fee-driven agencies. A look at the Office of Management and Budget’s historical data on agency budgets shows that, using this interpretation, Fiorina’s comments are incorrect.
But we don’t play gotcha at The Fact Checker, so we dug further.
Fiorina’s spokeswoman Sarah Isgur Flores first explained that Fiorina was referring to the aggregate growth of discretionary spending for federal agencies. “Every” is synonymous with “each” and “all,” she said, and Fiorina meant that “all” agencies’ discretionary spending grew over 40 to 50 years. She also noted the growth in the number of federal employees between 1962 and 2013.
Federal agencies’ outlays include discretionary and mandatory spending, and net interest. Politicians who criticize the growth in agency budgets typically refer to discretionary spending, as mandatory spending tends to be tied to things that are out of the government’s control (i.e., the aging, retiring population).
Flores pointed to research by the right-leaning Heritage Foundation on the growth in discretionary spending from 1992 to 2012. In inflation-adjusted 2012 dollars, discretionary spending had gone from $803 billion in 1992 to $1.3 trillion in 2012. It grew in the aggregate, but it did not grow every year. The Heritage Foundation data show discretionary spending fell from $803 billion in 1992 to $739 billion in 1996. Then it rose up to $1.4 trillion in 2010, then fell to $1.3 trillion in 2012.
We used Office of Management and Budget data to look at the time frame that Fiorina referred to in her speech. Total discretionary spending was lower in 1972 at about $632 billion, adjusted to 2012 dollars.
But these numbers do not take population growth into account. The most accurate way of comparing the federal budget over time, especially over several decades, is the budget as a percentage of the gross domestic product because it controls for inflation and population growth. This is used by the non-partisan Congressional Budget Office, considered the gold standard in Washington.
When looking at discretionary spending as a percentage of the GDP, Fiorina’s statement is incorrect. Discretionary spending was 9.3 percent of the GDP in 1974. In 2013, it was 7.2 percent, and it is projected to decline even more. (See Table H-4 in this CBO data and the graph below.)
Another way CBO measures the growth in discretionary spending is as its share of total federal spending. Discretionary spending comprised 67 percent of total spending in fiscal 1962, and remained the largest share of federal spending until the mid-1970s. In fiscal 2013, discretionary spending had shrunk to 33 percent. This decrease largely is due to the growth in mandatory spending, according to the Congressional Research Service.
When we pointed this out to Flores, she further clarified that Fiorina was not referring to discretionary spending, but “‘overall government spending and all agencies.” She pointed to another Heritage Foundation report and its finding that “over the past 20 years, federal spending grew 63 percent faster than inflation.”
In response to our question as to how mandatory spending could be an example of government ineptitude, Flores cited the Department of Veterans’ Affairs as an example: “Take the VA, which is I believe about 90 percent mandatory. I think a lot of people would agree there’s plenty of ineptitude in mandatory spending especially in terms of the fraud waste and abuse in many entitlement programs that are considered mandatory spending.”
Actually, the VA budget has been between 50 and 60 percent mandatory spending for the past few years, not 90 percent. Nevertheless, we looked at agency-by-agency overall spending. This handy chart on the Cato Institute’s Downsizing the Federal Government uses OMB data, adjusted to 2015 dollars, and shows total federal spending by department and agency from 1970 to 2015.
Generally, most department and agency spending trended upward. But some departments and agencies had billions of dollars cut from their overall spending. This included NASA, the General Services Administration and Small Business Administration. Some federal entities and regulatory boards were not just cut, but eliminated or privatized over the decades.
Total spending as a percentage of GDP did grow from 1964 (17.9 percent) to 2014 (24 percent). Flores also pointed this out. But it is important to note that the ballooning of mandatory spending accounts for the majority of this growth especially in recent years, thanks to the Great Recession and increased spending on income support, retirement programs and health care.
The Pinocchio Test
In making her point that government has gotten bigger since the 1960s and 1970s, Fiorina said that “every agency” received “more money,” “every year.” If interpreted to mean that each federal agency and/or department received more money than the previous year, her statement is incorrect. If interpreted to mean that discretionary spending for all federal agencies grew over four to five decades, her statement is not correct.
Fiorina turns out to be more on target if you view her statement in the more narrow (and generous) manner: total federal spending as a percentage of the GDP. But this is a curious way to interpret the federal budget; in recent years, discretionary spending has been cut as a part of the overall budget and is projected to decline even more. In contrast, mandatory spending has ballooned and the government essentially has become a retirement and health-care enterprise with a military attached to it.
There are many ways to slice Fiorina’s statement. But whichever way you interpret her wording, Fiorina is off base. The language is misleading to the average member of the public–and it even took her staff several times to clarify. As phrased, her statement is worthy of Four Pinocchios. However, we are giving her staff the benefit of the doubt, and will award Three.
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