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Tuesday, March 15, 2016

America’s First Trillion Dollar Bureaucracy

And the Winner Is...

The Department of Health and Human Services (HHS) is America’s first $1 trillion bureaucracy. HHS will spend $1.1 trillion in 2016, which is one $1 million repeated one million times.

You are paying for it, so you might want to know that:

  • The department spends more than $8,800 a year for every household in the United States.
  • It runs 528 different subsidy programs for state and local governments, businesses, and individuals.
  • The largest HHS subsidy program is Medicare at $589 billion in 2016, followed by Medicaid at $367 billion.
  • HHS has 73,000 employees.
  • Real, or inflation-adjusted, HHS spending has exploded ten-fold since 1970, as shown in the chart below.
  • At the 1965 signing ceremony for Medicare, President Lyndon Johnson said “No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents.” But since there is no Santa Claus, that is exactly what is happening today as government health spending is imposing huge debt burdens on young families.
  • HHS programs have huge fraud and abuse, which costs taxpayers tens of billions of dollars a year. The programs also distort the health care industry in serious ways because of their top-down structure and masses of regulations. The way to fix the mess is to slash federal spending and move toward a consumer-directed health care system.

By the next president’s fourth budget, annual HHS spending will have grown another $300 billion or so to $1.4 trillion. That is another $300 billion the government will have to borrow from Wall Street, China, and other places that presidential candidates are abusing on the campaign trail.

Along with exploding Social Security spending, rising HHS spending is not making America great again, but pushing us into a financial crisis. What are the candidates proposing to do about it?


  • Chris Edwards is the director of tax policy studies at Cato and editor of