Reprioritizing the Federal Budget

In the ongoing effort to find something we can all agree on, I offer this:

Our federal budget needs some reprioritizing.

The transportation bill, just to offer one example, is so full of pork it sizzles. In most cases, the number of earmarks for a given state went up in conference. Consider Oklahoma -- how did it go from 25 earmarks worth $84 million in the House bill to 66 earmarks worth more than half a billion dollars in the final conference agreement? Then there's Montana, which went from two earmarks in the House bill to 40 in the final version.

And what's up with Florida's 232 earmarks, most of which are for very localized road improvements? Does Florida not have its own Department of Transportation? Do they really need $5.8 million of the taxpayers' money to design and reconstruct "the segment of Church Street from Terry Avenue to Westmoreland in Parramore Neighborhood," or could the good people of Orlando perhaps pay for that renovation out of their own pockets?

Some say high tax rates make people cheat on their taxes, but seeing more than a billion dollars in earmarks for Alaska is what really grinds my gears. Note earmark #406 -- that's the mighty Sen. Ted Stevens's infamous Bridge to Nowhere, classified as a "high priority" project.

Elementary schools in Washington, D.C. are falling apart -- at least one has a door pockmarked with bullet holes -- yet a bridge for the 8,000 residents of Ketchikan is considered high priority? Church Street in Orlando is apparently a "high priority" as well. Good to know that in this age of terrorism, war and increasing poverty, our government has its priorities straight.

Debater Jon M. agrees that pork and waste need to be the first things chopped out of the budget. Still, he writes, "Entitlement spending is now consuming nearly 60 percent of the budget. The fruit of the welfare state, contrary to what many believe, does not come free, and is certainly not sustainable at mandatory spending's current rate of growth." It is true that Medicare, Medicaid and Social Security are big, expensive programs, but surely there must be ways to increase efficiency and reduce costs.

Perhaps one solution would be to create a healthcare system like Canada's. Debater D. pooh-poohs such a suggestion: "Advocates of a Canadian system do tout this benefit: Patients pay nothing for services. But is this accurate? Only for those patients who aren't Canadian taxpayers. Twenty-two percent of all of Canada's tax revenues go to pay for Canada's health care system."

Debater Will responded, "25 percent of American tax revenues already pay towards Medicare and Medicaid." Devastating counterpunch if true, but I haven't seen that stat myself. According to this pie chart, at least 22 percent of our federal dollars go toward Medicare and other health spending, and that's not including veterans' care. This source for the FY2000 budget lists 17 percent as being spent on Medicare and Medicaid.

In the very next comment, a Canadian Debater pointed out that Canada's 22 percent covers everyone in the country, and does it quite well; the United States, with its immense healthcare spending, only manages to cover the elderly and the poor (and not even all of them.)

So increased efficiency in government programs combined with a dramatic reduction in spending for pork projects could take a big bite out of our budget deficit. Of course, it couldn't hurt to stop cutting taxes for the wealthiest, claiming said cuts bring in more revenue, and then attempting to make up for the actual lost revenue by increasing the burden on students (see this op-ed by Dick Morris) and slashing programs that help the poor (as discussed by New York Times columnist Paul Krugman.)

Unfortunately, it doesn't look like this vast reordering of priorities will happen anytime soon, so it's fair to ask: Is our position sustainable? That is, with our current account deficit and our ginormous budget shortfall, are we in for a big crash? Debater Turnabout is "curious as to what form the crash would take. Have any economists prophesized it? Or would it even be a crash? Maybe a slow trickle out of the US economic balloon, leaving us in a recession."

I can't possibly answer that. The most prevalent view seems to be that deficits are fine in the short term, but damaging in the long term. On either end, there are dire warnings of economic collapse and insistence that our big trade deficits are good. Because there's no historical parallel to America's economic and military might, it's all just speculation.

Axel Merk has an interesting piece on what we might experience over the coming years. Back in May, he talked about the deficits: "Fostering a low U.S. savings rate and excessive consumption is as much a factor to the global imbalances as a currency peg by China," he explains. As the current account deficit grows, the likelihood increases that the markets will force the imbalances to readjust. "Such an adjustment may include a global flight out of the dollar, higher interest rates and a collapse in U.S. housing prices."

Macroblog offers an easy-to-understand explanation of the deficit's possible implications -- helpful to those of us who aren't economists.

Next week: The domestic surveillance scandal. Does the president have the right to spy on U.S. citizens without bothering to seek a warrant? (Former Sen. Tom Daschle says absolutey not; Charles Krauthammer defends the president.)

By Emily Messner |  December 23, 2005; 10:44 AM ET  | Category:  Conclusions
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To support my numbers I use the 2004 Congressional Budget Office numbers located at because I think it is unlikely that things have changed significantly between 2004 and 2005, though I would love to be proven wrong.

Here is how I calculated the 25%. I took the amount paid, in billions, on Medicare and Medicaid in the year 2004 which was 297.4 and 176.2 billion respectively according to the CBO. That means we paid 473.6 billion total in Medicare and Medicaid in 2004.

According to the CBO total government revenues in 2004, which includes Individual Income Tax, Corporate Income Tax, Social Insurance Taxes, Excise Taxes, Estate and Gift Taxes, Customs Duties, and Miscellaneous Receipts, numbered 1,880.1 billion dollars. 473.6 billion is over 25% of 1,880.1 billion dollars.

That is why I said that 25% of American tax dollars, in 2004 at least, went towards Medicare and Medicaid.

This statement could be false for any number of reasons and if anyone would like to question my math I welcome them to it, since I'm no mathemetician.

The statement IS false for the following reason: Because our government is criminally irresponsible with the budget, the fact that they only generated 1,880.1 billion dollars in revenues didn't stop them from spending 2,292.2 billion in 2004 (for a nice historical record breaking 412 billion dollar deficit).

The 473.6 billion we paid towards medicare and medicaid is only 20% of the actual government SPENDING, but I will stand by my original statement that currently 25% of American taxes already go towards Medicare and Medicaid.

Posted by: Will | December 23, 2005 12:32 PM

I work in local government. I chose this career when I was a junior in high school many years ago.

What I have found after 18 years in a major urban government in Orlando (yea, give us our earmarks please...Orlando is broke if you haven't heard), is that despite limitations (parochialism being the biggest) there is a great deal of capacity to manage domestic programs and an invovled public checks most dysfunctional bureaucratic excess. Being close to the people truly does force us local guys to live in the real world.

My partial solution for the federal mess is an old one: New Federalism. Block grant everything that serves a purpose, cut back some on domestic spending, give locals discretion, focus Uncle Sam on defense and entitlements.

Problem is Republicans hate government so there is no creative impusle to change things, just destroy them (see Post's article on FEMA and DHS infighting scandal) - Democrats think local yokels will take the discretion and screw poor people and buy tanks with the federal bucks.

Too bad. Things will have to get a lot worse before they get better. Fire up the soup kitchens. I think the federal budget situation is that bad.

Posted by: Bobby S. | December 23, 2005 08:32 PM

I agree that medical spending is a problem, and will be devastating if prices continue to rise.

But the only way to make sense of the budget is to separate the FICA spending (SS and medicare) from the general fund (everything else). Today, and over the last 20 years since the 1986 "reform", FICA has run at a surplus which has been taken to offset deficits in the general fund.

This is fundamental because FICA is a regressive tax paid by working people for their social insurance, separate from the general fund. These social insurance programs are widely supported by our people.

I understand that medicare is unsustainable in the long run (though I won't concede that for SS). But this DEBATE should properly be about the general fund, which is a catastrophe all by itself. I object to dragging medicare into it because it is a common trick by budget apologists to use "entitlements" to distract people from the real budget mess, which in my view was brought by dominance of tax-cut ideology and the resulting debt burden, beginning in 1981 and continuing uninterrupted for 25 years, except 1993-1994.

Emily: The pie charts at the national priorities site say annual interest on the debt is $170B. But that does not count the interest the government owes itself for "borrowing" from the SS trust fund. In effect, it treats the SS trust fund as an interest-free loan. FICA taxes were raised in 1986 to build up that "trust fund". Where is it?

The debate over whether or not deficits are bad must take into account our current level of debt. In 1980, when Reagan came in, our debt was less than $1T. Now it is $8T. We pay almost $1B per day in interest. It is bigger than anything else in the general fund, except DoD. If deficits were OK in 1980, they are just digging the hole deeper now.

Those interest payments can buy a lot of "bridges to nowhere". They are more than all the "waste, fraud, and abuse" that anyone ever talks about. They are more than all the budget cuts that even the "deficit hawks" can contemplate.

Eliminating medicare and SS tomorrow would not fix it, unless you kept the FICA tax but without the social insurance That would be unconscionable. It is a regressive tax.

Merry Christmas!

Posted by: liberal shmiberal | December 25, 2005 10:27 AM

"Post-9/11 Rush Mixed Politics With Security Congressman Benefits From Homeland Security Spending"

I think this is appropriately what you are talking about and since this is my hometown and I get to know what is going on first hand, in some cases, I think it is important for me to speak up!

Hal Rogers and his family is specutively from Monticello Kentucky! I know that his office is based in Somerset Kentucky, Pulaski County the same county that I live in. Let me tell you about this area that we have going here.

This is a predominant tourist trap! What that means is that the rich folk that live here or who have inherited land from way back mostly control it they get wealthier off the trade from the tourist. The rich get richer and the poor get poorer because of this type of industry. The poor here are mentalized/psychiatrized at a predominant rate, this is part of the Appalachian mountains heritage.

Some people still live in shacks in the back country and many poor people still heat with coal or wood stoves. This is due to lack of resources to help those impoverished with real housing needs and the things that go along with living in a home and keeping it up. Many people still get water out of a well. The sewage flows into the ground water, but many of our poor can not afford to hook onto city water even if it is available to them.

Education here is based on getting more money and benefits for teachers and school personnel, by using truancy as an issue, not actually what the children are learning and being taught! The schools have consolidated meaning long hours of bus rides just for a child to get back and forth to a school and there is no control on the buses, or at least in some cases. A child that is constantly in a courtroom or treatment room rather then a schoolroom is not being taught. Poor kids are routinely made fun of by their wealthier peers and then mentalized because they are the ones that are reporting being bullied.

We have many people here that are overweight and have diabetes because poor people do not get a proper amount of income to eat right and then the psychiatric drugs as well. It would seem to be idea for a child to do lots of reading, but a child that does lots of reading and not much exercise can often have problems with weight! In the country there is not much places to really walk to and unless they have games to play, and games cost money, it can be boring going out side with nothing really to do. The wealthy will often accomodate for this by taking their children to public parks, gyms, playing golf, but it takes gas money to get to places that offer these services and some times there are fees that go along with it. Some times it is just a difference in children and the activity that they enjoy and the way that they burn their calories up, but often times poor children can get involved in the psychiatric system this way.

The tourist do not much see the poor white or black or what they have to go through to try to survive in rural areas. It is hard! Not so much for the wealthier farmers who will hire illegal imigrants at an alarming rate or poor people as seasonal workers or find ways of getting tax breaks on their land and equipment taxes.

The tourist that come here mostly see those that have the money and the boats and the houses on the lake or those who work in the services industry that they might use! Life isn't really a major quality for all Kentuckians! Although it is one of the most beautiful states that I have seen and also living in the country can be peaceful in some ways, albeit isolated. Most people must drive to get any place, and with the price of gas can not afford to drive just as much as they want to. Many wealthy people have SUV's that cost to tank up and tend to be able to afford gas better, the poor many times have older larger cars that also cost to tank up and drink more gas then the SUV's because they can't afford newer ones.

Those that have money and investments in land and buildings and production of houseboats reign! This Rural Economic Developement Center was suppose to be a good thing for the people much like putting in the lake was suppose to have been, but it is mostly only good for the wealthy who benefit the most from these things. The lakes do not have much real access for the locals that do not have boats and the water is getting polluted. Just as the Center does not have much access for the poor who can not afford to use it, but this new deal on security will one day make this county one of the most vulnerable to terrorist attacks in my oppionion.

We have many areas of economic employment that pay at the best minimum wage, work people only part time, and do not give people health insurance! At the best you might if you are lucky get a job in a factory and many of them do not pay well either unless you have been there for many years, they do however sometimes provide insurance.

There is also a predominant business in foster care and adoption through the use of coercion and force based on false and anonymous complaints of abuse and neglect that they are using to build data bases as evidence of mental illness with, and day care often goes along with that. They are now mixing government subsidized housing, food stamps, jobs, and medicaid with the mental health department to use as part of the data base.

It is here that four social workers were found not guilty in a case that they were involved in where the parents were literally allowed to beat the child to death because there is not accurate data given and or adequate resources to meet the real needs of this now business. I saw the pictures of this baby in that case, and I do not like remembering them. The disadvantaged parents ended up in jail for murder charges and the state paid thousands of dollars for the social workers defense and they were found innocent of any wrong doing. One of their expert witnesses in their defense bragged about getting one hundred dollars and hour for her time in that courthouse.

We have a state that is trying to pass legislation to stop medical malpractice suits, when there is actually a large amount of medical malpractice and negligence here. We have a psychiatrist that is a leader in this state on medicaid issues and how to get it to pay for those that are deemed mentally ill to have them take psychiatric medications even though these medications actually do cause all kinds of medical and social problems in and of themselves, and do not cure any of the real issues or problems.

Here it is who you know and what you can do for them personally that determines what jobs you get or do not get! It is who your friends and family are and where you go to church that determines all kinds of things from the jobs you get to the social programs and support that you will get or be coerced and forced into using. I once had a deacon of a church get me moved into first place on a housing list that I had before this been denied from and was newly signed up on.

It is routine to buy and sell votes, and because people have been determined to have psychiatric labels in many cases then they are not good witnesses for any kind of prosecution in these cases so nothing much ever really happens to stop it. Of course the republicans control this area because they are the ones that have the money and the influence to buy the votes. In fact they get together and work at doing this in their homes, if anyone does go down for it then they go to jail. However, you can bet that when they are released from their time they are set up real nicely ever after.

This area is also a part of the bible belt and you commonly hear those in the government making statements about how they will mix up the religion, such as putting the Ten Commandments in the courthouse and making sure that this is Christmas day, with the government even if it is unconstitutional and there is no shame in that. My father Paul Lee was the one that got the ACLU to take the case that was recently heard in Pulaski County.

You do not dare speak out about any of the corruption publicly unless you are wealthy because every one knows everyone else and they know where you live and every thing about you or they think they do and it is easy to set you up to penalize you for it. Once you get a name as a trouble maker which you will if you speak out about any of it, then it is commonly known and accepted that the law enforcers of any kind will be after you for any thing that they can be and they find out every least little thing that they can be on you about and watch you for even any small traffic violations that they can. Those that do not understand or know this soon learn!

The criminal justice system does not really have adequate resources to actually defend the people that are poor so they ask them to make plea agreements. Many times these plea bargains include some kind of psychiatric control in one form or another. Once one gets labeled with a mental illness label then it is so easy for them to be made to fear what will be done to them if they do not allow those in political control to do what they choose to do without speaking out about it!

People are convinced here that if there is not any other way that it is just as easy to play crazy and get a crazy check and let psychiatrist and mental health facilities inpatient and outpatient programs prescribe treatments and unwanted psychiatric drugs for them and their children, so they can get a check or needed income, even if they do not take these drugs, sometimes sell them on the streets for cash to those already addicted to them, or throw them down the toilet into the drinking water. There is no group for those who have been a part of this poverty cycle that does not promote taking these medications on a daily bases, even in Kentucky government there is no consumer/survivor groups that are not based on taking these medications on a daily bases.

They promote this because it is commonly said to be the only way that one can "prove" they need a check for their disability which has no other real and factual scientifically based evidence for it. The American Psychiatric Association, the Surgeon General of the United States, and NAMI can give none that is not based on answers from textbooks.

Much of this psycho-social-court ordered psychiatry is paid for through medicaid, at the expense of not having enough resources for the real medical treatment that is needed like eye and dental care or other real disease treatment. That is one reason that you see many poor local people without any teeth. And the republicans are now controlling the government coercion and force behind much of this.

Hal Rogers and his crew support this type of thinking. Many campaign contributions come via this multi-million dollar psychiatric drug business and mental health industry trade.

This is an area that depends on jails, prisons, and mental health as areas of industry. There are many jobs in it. People do not understand that it is not so much helping them or their families, but helping itself by producing this billion dollar industry! I do not know when it will, or how to make it, stop! All I know is that we have big problems and issues here that are not really being addressed and the poor people are not the real cause of it, but the ones being blamed and shamed the most and oppressed and actually terrorized because of it. If any one has any suggestions of what to do about it then I would be glad to find out? Any comments would be appreciated.

Posted by: Janie | December 25, 2005 01:55 PM

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