Watching CSPAN, the discussion was between various (ex?) congress critters and some reporters (from the Wall Street Journal, and others). One of the senators said that if you took ALL the income to the Feds last year it was roughly the same as Mandatory Spending. That every dollar spent on ‘discretionary spending’ was borrowed (and with something like 1/2 of that borrowed from overseas).
Two names I caught were:
And one of the reporters was:
Alan Murray WSJ Deputy Managing Editor
That was a very nice compact way to say “what’s wrong with the budget”. That caused me to wonder if the numbers could be made more specific.
Well, the wiki gives ‘estimates’ instead of the actual numbers, but I’m going to run with it. ( I may compare with some other sources later, if time and pain meds permit).
This chart says that revenues were a little more than mandatory spending, but not a whole lot. It would be really interesting to find out if the actual expenditures were greater…
Of particular interest is the line marked “potential disaster”. We are flirting with that. That’s the point where if we don’t get a bigger credit card, stuff hits the fan big time.
So what IS that mandatory spending? And what is discretionary?
Mandatory spending: $2.173 trillion (+14.9%)
$695 billion (+4.9%) – Social Security
$571 billion (+58.6%) – Unemployment/Welfare/Other mandatory spending
$453 billion (+6.6%) – Medicare
$290 billion (+12.0%) – Medicaid
$164 billion (+18.0%) – Interest on National Debt
Not the military. Not the postal service. Not a damn thing that is required by the constitution.
ALL of it social welfare programs, other than the interest on the credit card to pay for it…
It is mandatory to have Medicaid? Unemployment and welfare?
The part in parenthesis is the percentage change from 2009. What is ballooning?
Oddly, NOT Social Security. As folks bleat and fuss over raising the retirement age and threaten social security benefits, that’s not where the growth is. What bounced up the most? Welfare and Unemployment. (Yeah, in depressions that happens… especially when they keep extending the time to expiration indefinitely).
The other big one is the interest on the national debt. 18% rise in one year
So clearly one quick thing to do is just stop extending unemployment benefits. (I’d also assert that there is NO constitutional justification for Federal Welfare payments.) Don’t know how much of that number is “other mandatory spending”, but I suspect cutting these two would have a big impact.
Now, the interest on the debt. Right now we’re getting money Dirt Cheap due to everyone running away from the Euro Zone. WHEN that changes, the interest rate we must pay will bounce up. From 2% or so to the Italian or Greek levels of 7% (once folks realize it’s impossible for us to even keep running without more money, and forget any hope of repayment of the debt. It’s Ponzi Rollover or Bust…) So what happens when that $164 Billion turns into $328 Billion? As we’re NOT paying down the debt, it will compound. That’s exponential growth even without the inevitable interest rate bump.
That’s gonna be a problem…
Now, take that Medicaid and Medicare and add to it Obama care. $743 Billion and growing fast with untold billions more when Obamacare kicks in. How to “fix” it? IMHO, Tell the states they can have Medicaid programs if they want them (no, no ‘block grant’ bribery, just “if you want it you can make one”) and shut down Medicaid. Put Obamacare in the dumper along with Baby Bush’s Medicare Drug Plan while you are at it.
Cold? Cruel? Heartless? Nope. Just recognizing that when the money runs out it will happen anyway, so may as well do it now and in an orderly fashion so you can dump some of those interest payments to China as deficit spending gets reduced.
Keep Medicare and Social Security, but put a ‘means test’ on them. We don’t need to be giving Donald Trump a social security check. I’d set the cut off at the 90th Percentile of national income (and perhaps ratchet it DOWN over time… )
How about that discretionary spending? What is in it?
Discretionary spending: $1.378 trillion (+13.8%)
$663.7 billion (+12.7%) – Department of Defense (including Overseas Contingency Operations)
$78.7 billion (−1.7%) – Department of Health and Human Services
$72.5 billion (+2.8%) – Department of Transportation
$52.5 billion (+10.3%) – Department of Veterans Affairs
$51.7 billion (+40.9%) – Department of State and Other International Programs
$47.5 billion (+18.5%) – Department of Housing and Urban Development
$46.7 billion (+12.8%) – Department of Education
$42.7 billion (+1.2%) – Department of Homeland Security
$26.3 billion (−0.4%) – Department of Energy
$26.0 billion (+8.8%) – Department of Agriculture
$23.9 billion (−6.3%) – Department of Justice
$18.7 billion (+5.1%) – National Aeronautics and Space Administration
$13.8 billion (+48.4%) – Department of Commerce
$13.3 billion (+4.7%) – Department of Labor
$13.3 billion (+4.7%) – Department of the Treasury
$12.0 billion (+6.2%) – Department of the Interior
$10.5 billion (+34.6%) – Environmental Protection Agency
$9.7 billion (+10.2%) – Social Security Administration
$7.0 billion (+1.4%) – National Science Foundation
$5.1 billion (−3.8%) – Corps of Engineers
$5.0 billion (+100%-NA) – National Infrastructure Bank
$1.1 billion (+22.2%) – Corporation for National and Community Service
$0.7 billion (0.0%) – Small Business Administration
$0.6 billion (−14.3%) – General Services Administration
$0 billion (−100%-NA) – Troubled Asset Relief Program (TARP)
$0 billion (−100%-NA) – Financial stabilization efforts
$11 billion (+275%-NA) – Potential disaster costs
$19.8 billion (+3.7%) – Other Agencies
$105 billion – Other
Notice that the last 3 items are NOT in descending size. We’ve got $124 Billion of “Other” hiding down there.
So what is “discretionary”? Things like Defense and Veterans Affairs. Department of Justice and courts. Social Security ADMINISTRATION (how you can have mandatory SS spending and a discretionary agency to make it happen is an interesting question…)
OK, the “Lion’s Share” in this bucket is Defense. $663.7 Billion. What to do with it? IMHO, it’s pretty simple. Close foreign bases in almost all the world. Keep a few but ask the host country to pony up some cash for our helping protect them. I’d keep places like Guam, Ramstein, ONE in Japan. Other than that, if someone like the UK wants us there, they can give us a place to park airplanes.
Second thing I’d do is stop trying to be the world cop. Tell the EU they can deal with their neighborhood.
Oh, and about defending Taiwan from an attack by China: Exactly how are we going to do that when we need to borrow the money from China to do it? Hmmm? So it’s not like we would be pulling back from defending other folks, we’re just recognizing that it’s a fantasy to think we can do it. If they want some defense from us, as Rent-A-Army, they can provide a base and consumables.
Finally, I’d just pack up and leave Iraq, Afghanistan, etc. If Europe wants to be protected from them, Europe can put up the money, kids, and machines to do it. If nobody else wants to stop them, well, then maybe the folks in Saudi and Teheran can ask themselves just how much they want to control their neighbors and how much they want “random” spots turned into smoking holes in the ground if anyone attacks us again. Declare victory, come home, and smoke ’em with bombs if they poke their head up again. Tell the Saudis they can either be the Cop On The Block, or we’re putting a $Trillion into Coal To Oil facilities… (Won’t need to spend it on the military, so… )
Now, notice that Department Of State is up 40% IN ONE YEAR. That’s bribe money, pure and simple. Fund the department of state sufficient to have ONE ambassador to each country on the plant. Nothing more. Shit-Can the bribery “aid” money. Empty the slush funds. I’d bet that pretty soon we’d need a lot less military spending as our meddling dropped off and stopped irritating folks around the world. $51 Billion? There are about 200 countries in the world. I make that $255 MILLION dollars PER COUNTRY. I think $1 Million per country ought to be more than enough for a nice office, secretary, and some folks to listen to tourists complaints. Remember, that’s Each Year… So whack that puppy back to about a $1 Billion total budget.
A load of those departments are clearly ‘discretionary’ and you can simply say “not a federal problem”. If the states want to do something, they can. Otherwise, just toss it. At a minimum, force them to rejustify why any particular function is needed and re-pass the enabling legislation one function at a time. Zero Based Budgeting. Which ones would be on my ‘reset to zero and restart’ list?
Transportation – maybe with a ‘pass’ for some of the FAA.
Housing and Urban Development – Cities can develop themselves and it’s not like the Feds have done a very good job on that housing side of things…
Education – Education was fine before the department was created (IIRC under Jimmy Carter) and has just gone down hill since it was created. Can it and let the local governments be free to run their own show.
Homeland Security – Stuff it. Just hand it over to the Department Of Defense. It’s their job anyway. I might actually want to fly again if I don’t have the mandatory grope…
Energy – And exactly what have they managed to do to gain us energy independence? Toss it. If states want one, they can make one (and fund it…)
Agriculture – Dump the subsidy for Farm States program. Don’t need vote buying with federal programs. Not sure what else they do that might be of value (other than some crop research) but frankly, I think Ag States can do their own crop research on their own nickle.
Justice – Keep it, but eliminate the whole “War on drugs” fiasco. It doesn’t work, never has worked, and never will work. Release the folks jailed for ‘victimless crimes’ and shrink the Federal crimes to about 1/10th of what’s on the books today. Does it really need to be a Federal Crime to copy a video tape?…
NASA – At one time I was a great supporter of NASA. Now they have become a Global Warming Propaganda Machine. As private companies are basically ready to provide space trucking, I see little reason to keep it around. Turn the important historical sites over the the Park Service as monuments, and fund the Space Station for the rest of it’s life. Other than that, sell the programs to anyone who wants it. Nobody wants to buy a Hubble? Let it reenter. (They seem to toss $1 Billion assets away anyway, so really just ‘business as usual’ a bit sooner). The military has shown they can make their own Space Toys, so it’s not a big loss. Yes, a lot of future science papers will have Japanese and Chinese names on them instead of US names. So what?
Commerce – Stopped doing the only jobs it ought to do a long time ago (tariffs and preventing monopolies). At this point largely doing promotion of industrial goals on the tax payer dime. IF any states want to regulate something, let them do it.
Labor – Again, something for the states to do. Not a Federal issue at all, really.
Treasury and Interior – Those we need. We have the lands and there is a need for the money management. Hand the indians title to their reservations and get out of the “Indian Affairs” business though… Oh, and if a chunk of forest isn’t a park, but is leased for logging, then sell it to a timber company. It’s just a tree farm on the tax payers dime. Better to just admit that and let a more motivated owner manage the tree farm.
EPA – Needed to some extent, but I’d give it about a 75% haircut. We have things pretty much done in terms of things like auto pollution levels, so just put it into ‘caretaker’ roles.
SS Admin – If you have Social Security, you need to administer it.
National Science Foundation – Sell it. If there are no buyers, close it. Folks who want to do science can beg money from someone other than the tax payer.
Corp of Engineers – a “keeper” as we need them to keep things working, but cut programs like dikes around New Orleans. If N.O. wants dikes, they can build them… Management of Federal Properties only.
National Infrastructure Bank – Tosser…
Corporation for National and Community Service – Tosser… folks can find their own way to ‘serve’.
SBA – I’d keep it. Somebody need to represent the Small Businesses of America at the Federal level.
GSA – Another keeper. They tend to keep the money more focused. WIll likely shrink as the government does.
TARP – Let it wrap up as loans are repaid. Forbid all future activity other than ‘going out of business’ support processes. Make it a sub-section of the GSA.
Financial Stabilization Efforts – A waste of time and treasure. Just stop it…
Potential Disaster Costs – Keep it for a few years, but each year hand another type of ‘Federal Disaster’ back to the states. Start with foods and coastal erosion. Add tornadoes and hurricanes next. Then earthquakes and fires. Finish with ‘else’. Uncle Sugar doesn’t need to be paying for local disasters.
“Other” – can likely use a good pruning, but would take detailed investigation.
At the end of that process, we would have a very lean government with a sharp focus. It would likely cost about 1/4 or less of the present government. IMHO, that would be about right… At that point, have a balanced budget amendment and a mandate that the Federal Government can spend no more than 5% of the Gross National Product.
At that point, I think my budget work would be done…