Friday, December 14

Making Sense of The Whole Budget


or if you prefer...




I respect the work of Iowans for Sensible Priorities--and even have a couple of their magnets on my car, but I also believe that we need to be comparing apples to apples in telling the story of how our Federal tax dollars are spent.

For instance in 2005, The total budget was $2.47 trillion, the "mandatory" budget was $1.5 trillion (or almost 61% of the total budget), and the "discretionary" budget was $960 billion (Mid-Session Review, Budget of the U.S. Government, FY2006).

So which part of the budget is "mandatory" and which is "discretionary?" Who is in charge of deciding? Why don't the Iowans for Sensible Priorities use the whole budget picture?

According to Factcheck.org, the Sensible Iowans "chart doesn't reflect the entire "federal budget" at all. It only shows the fraction that is classified as "discretionary" spending. That omits more than three-fifths of federal spending, including all of Social Security and Medicare."

According to the National Priorities Project, "Mandatory spending includes programs, mostly entitlement programs, which are funded by eligibility rules or payment rules. Congress decides to create a program, for example, Food Stamps. It then determines who is eligible for the program and any other criteria it may want to lay out. How much is appropriated for the program each year is then determined by estimations of how many people will be eligible and apply for Food Stamps.

Unlike discretionary spending, the Congress does not decide each year to increase or decrease the Food Stamp budget; instead, it periodically reviews the eligibility rules and may change them in order to exclude or include more people.

Mandatory spending makes up about two-thirds of the total federal budget. By far the largest mandatory program is Social Security which makes up one-third of mandatory spending and continues to grow as the age demographic of the country shifts towards an older population."

Also according to the National Priorities Project, "Discretionary spending refers to the portion of the budget which goes through the annual appropriations process each year.In other words, Congress directly sets the level of spending on programs which are discretionary. Congress can choose to increase or decrease spending on any of those programs in a given year.

The discretionary money appropriated by Congress is divided among eleven categories. Use the money you have to designate what you would spend if you were in charge of the federal discretionary budget.

1. Administration of Justice: Law Enforcement, Court, Federal Prison, etc.
2. Veterans Benefits and Services: Income Security and Education for Veterans
3. Income Security: Retirement and Disability, Unemployment Compensation
4. Health: Health Care and Research
5. Education, Training, Employment, and Social Services: Public Education,
Higher Education, Training and Employment Services, Children, Family and Elderly Service Programs, etc.
6. Transportation: Roads, Airports, Ocean Shipping, Safety, etc.
7. Natural Resources and Environment: Research, Conservation, Pollution Control, Agriculture, etc.
8. General Science, Space and Technology: Research, Space Exploration, National Science Foundation, etc.
9. International Affairs: Humanitarian Assistance, Int. Security Assistance, etc.
10. National Defense: Dept. of Defense, Atomic Energy Defense, etc.
11. Other: Federal Housing Admin. (loans), Postal Service, Business Assistance, Community and Regional Development, etc."

Obviously Congress and the President will always wrangle over how to spend this money, with the help of you and I and more so from highly compensated lobbyists. Of the $960 billion dollars that is free to be used to meet national priorities, 54% of the discretionary budget (518.4 Billion) did indeed go to Defense, or 19.4% of the total budget.

Does this make the case for reprioritizing the budget any less important? No. The Sensible Iowans are nothing if not, well, sensible. They understand that mandatory spending is just that, so the only part of the budget worth talking about is on the discretionary side.

Sensible Iowans may be lax in not making it crystal clear what pot of money they are talking about, but anyone with a household budget understands that what we have left after we pay our bills is what we have to plan our future with. As they say "We can provide for the needs of our and the world's children at no additional expense to the taxpayer. We can accomplish this through:

* Finally canceling Cold War weapon systems
* Funding our real defense needs at 85% of the 2005 request, a level that will still exceed spending by any possible coalition of military threats by a factor of four (without counting in spending by our allies!).
* Working closely with our allies so that we more equally share the burden of a safer world.

As a result of the above, shifting spending to the other elements of our national well being, particularly education, health care, and national infrastructure, without increasing overall government spending. For example:
- Provide Head Start & Early Head Start for all eligible kids: $ 5 billion/year
- Provide healthcare for all uninsured US kids: $15 billion/year
- Rebuild America's schools over a 10 year period: $15 billion/year
- Achieve energy independence, with clean technology: $10 billion/year
- Double US humanitarian aid to poor countries: $20 billion/year
- Reduce debts of impoverished nations: $10 billion/year."

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