Thursday, March 31, 2011

Budget part 2: Scope and Scale

House Republicans have made a lot noise over their decisions to cut specific funding and programs. In the debate over these details, it seems that it's easy to lose sight of the whole picture of the federal budget, so it seems a good first step is to look at the overall numbers to get some perspective. This Wikipedia article is a good place to start, and it has a nice (CC licensed!) pie chart:

Now keep in mind that the 2009 federal deficit was $1.42 trillion. That's about 40% of the above total. That's a huge number; you could completely kill two whole categories of that pie chart and still just barely balance the budget. True, 2009 may have been a high year what with special and hopefully temporary circumstances like the bailout, but the deficit is still a big chunk of the total budget. I'm pointing this out to encourage skepticism whenever someone says they can balance the budget by hacking away at line items. The deficit is a large problem that will only be dealt with through significant and systemic changes.

Let's get back to the budget, though, because there are a couple more things it's helpful to understand. There are two types of federal spending: mandatory spending and discretionary spending. Mandatory spending is spending that was passed into law by Congress, and is automatically spent each year without any need for special approval. Social Security and Medicare/Medicaid are the two biggest mandatory expenditures. Changes to mandatory expenditures require changes to the specific laws that call for them, and are generally not dealt with as a part of the budget debates you hear about in the news. Those have to do with discretionary spending. Discretionary spending is not called for by any laws, and so must be approved by Congress in each new budget. The defense budget is by far the largest contributor to discretionary spending, and the rest of discretionary spending is filled by familiar programs such as health and human services, veterans' programs, education, transportation, and many many more. See this chart from the article if you want to see some of those. By my count based on the chart above, 55% of federal spending is mandatory, and 39% is discretionary. (I'm leaving out interest payments on the debt.)

This distinction is important in order to understand what the budget debate, especially the most current possibly-shut-down-the-government debate, is really about. Although many people would like to reform or even remove Social Security and Medicare, that's a separate issue because those programs are mandatory, and it's not addressed as part of the yearly budget. Then there's another distinction that comes into play because no one, least of all Republicans, wants to limit the budget of the military. That means that most of the fuss people have been making over cuts involves solely non-defense discretionary spending. If you read enough news or pundits you'll see this phrase thrown around a bit. It's referring to the orange slice of that pie — only 19% of total federal expenditures. This is the slice that Republican leadership is so adamant about cutting down.

The obvious inconsistency here is that it is impossible to eliminate the deficit by reducing that piece. The deficit is double the size of that whole category! Now it's true that non-defense discretionary spending will have to be trimmed some (though there are reasons there's less waste in this category than in others; more on that later), but the singular and uncompromising focus on such cuts by House Republicans does not match the attitude one would expect from people who claim to be concerned about the deficit first and foremost. The deficit is such a big problem that fixing it will require cuts from multiple categories, including defense, and it will even require an increase in revenue.

Moreover, in the face of a trillion dollar plus deficit, it would seem to be reasonable and humane to compromise on items such as a billion dollars for food and health care assistance to poor kids and pregnant women, or $1.6 billion to the NIH, which is responsible for cancer research. These programs make a significant impact in people's lives and in our nation's future, and they're not contributing significantly to the deficit — the numbers just don't add up!

There's only one way I can see to make sense of these quantitative inconsistencies without supposing that Republicans are completely ignorant of these facts, which I highly doubt. That is to deduce that the deficit is in fact not their #1 priority, but that they are perfectly willing to use it as a propaganda prop in order to persuade voters to get behind their plan to cut things they've wanted to cut all along. This tactic is deceitful, and I can't imagine it is in the best interests in the long run of the American people.

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