In 2019, Veronique de Rugy and I published a policy brief titled “The End of Policymaking and the Rise of Mandatory Spending.” In it, we warned that if trends in entitlement spending continued, all federal revenues would be consumed by mandatory spending by 2031. At that point, we argued, elected officials would have no meaningful discretion over how Americans’ tax dollars were allocated; everything would go to Social Security, Medicare, Medicaid and interest on the national debt. Policymaking itself would become an exercise in fighting over the margins of deficit spending rather than in shaping fiscal priorities.
Unfortunately, the erosion of fiscal democracy has accelerated faster than we expected.
Discretion in Decline: The Numbers
The decline in budgetary discretion over the past several decades is stark. In the 1960s, policymakers controlled about two-thirds of federal revenues—65% in 1962, for example. By the mid-1970s, that share had fallen below 40%, and by the early 1980s it hovered near 30%. A brief rebound in the 1990s brought discretion back up to around 40%, peaking at just over 42% in 2000.
But since then, the downward trend has returned with a vengeance. By 2009, at the height of the financial crisis, every single dollar of tax revenue was already precommitted to mandatory spending, leaving policymakers with zero discretion. While there was a short-lived recovery—about 19% of revenues were discretionary in 2013—the decline then resumed. By 2019, policymakers had discretion over just 10% of revenues, and by the 2020s discretion had fallen all the way to zero. In other words, the future we projected for 2031 has already arrived.
The End of Policymaking
What this means in practice is that Congress is no longer making decisions with taxpayer dollars. Instead, the vast bulk of the budget runs on autopilot. Policymakers can debate the details of defense appropriations or the latest farm bill, but these represent only a sliver of the federal fiscal picture.
The data reveal that discretionary spending has essentially been reduced to deficit spending. Congress can still borrow, but elected officials can no longer credibly claim to control where tax revenues go.
This “autopilot budgeting” is driven by demographic trends and welfare program design. Social Security and Medicare, in particular, operate as pay-as-you-go systems that expand automatically as the population ages. Meanwhile, rising federal debt has increased interest payments, further squeezing the budget.
The Loss of Fiscal Democracy
Urban Institute economist Eugene Steuerle has described this phenomenon as the “decline of fiscal democracy.” That phrase captures the essence of the problem: Taxpayers and their elected representatives no longer have meaningful control over federal revenues. Instead, current generations are bound by past promises: commitments to transfer income and healthcare benefits to retirees, alongside promises to creditors who finance our debt.
This raises profound democratic questions. If elected officials no longer control how tax revenues are spent, do taxpaying voters retain any sovereignty over their government’s fiscal choices?
Policy Implications
The rapid arrival of our 2019 forecast underscores how urgent reform has become. Relying on higher taxes to sustain mandatory spending would require enormous increases across all tax brackets, discouraging work and investment. Borrowing more only worsens the intergenerational transfer problem, as today’s promises are paid for with tomorrow’s taxes.
The only sustainable path is reforming mandatory spending itself. That means:
· Social Security reforms such as gradually raising the retirement age, indexing benefits differently and encouraging supplemental savings.
· Healthcare reforms that increase cost sharing and competition to slow the growth of Medicare and Medicaid.
· Higher revenues from broadening the tax base through eliminating or reforming distortionary tax expenditures.
· Institutional reforms such as stronger budget rules, limits on emergency spending gimmicks, and potentially even constitutional restraints on federal spending.
These solutions are politically difficult, but the alternative is a fiscal policy process that is no longer democratic in any meaningful sense.
When we published our brief in 2019, we expected that fiscal policymaking would end around 2031. In reality, the numbers show that the share of federal revenues subject to congressional discretion has already collapsed to zero. The “end of policymaking” is not a distant concern—it is the fiscal reality we live in today. Unless entitlement programs are reformed or meaningful budget restraints are put in place, elected officials will have nothing left to debate but how much to borrow. And if history is any guide, that is a recipe for deeper debt, slower growth and a further erosion of democratic accountability.