According to the Center on Budget and Policy Priorities (CBPP), the federal government is projected to spend less money in the next decade on non-defense discretionary programs than at any point since at least 1962. This is a result of the Budget Control Act of 2011.
Two-fifths of the $1.5 trillion in savings from cutting and capping funding for discretionary programs comes from defense, while the other three-fifths comes from reductions in domestic and international programs. These reductions will shrink non-defense discretionary spending to its lowest level on record as a share of GDP, with data going back to 1962.
The $1.5 trillion in reductions in discretionary spending also will produce lower interest payments on the debt. The interest savings amount to about $250 billion, bringing the total deficit reduction achieved to date to more than $1.7 trillion.
The average person may not know exactly what is meant by non-defense discretionary spending. The Center for American Progress (CAP) defines it this way:
What is in this category of spending with the inelegant and painfully nondescript title that is now projected to dwindle to unprecedented levels? It includes nearly all of the federal government’s investments in primary and secondary education, in transportation infrastructure, and in scientific, technological, and health care research and development. It also includes nearly all of the federal government’s law enforcement resources, as well as essentially all federal efforts to keep our air, water, food, pharmaceuticals, consumer products, workplaces, highways, airports, coasts, and borders safe. It includes veterans’ health care services and some nutritional, housing, and child care assistance to low-income families. It even includes the funding for such national treasures as the Smithsonian Institution, our national parks system, and the National Aeronautics and Space Administration, better known as NASA.
You might define this as “nice things,” which we apparently are no longer allowed to have. Even if the sequester is completely cancelled, CAP projects that we will spend 14% less on nice things by 2017 than at any point in our modern history. So, we can’t possibly have a spending problem in this category. What about defense spending?
Well, CBPP points out that, because of the wind down of the Bush Wars, projected spending is already down by a half trillion dollars. The Budget Control Act shaved another $487 billion off projected Pentagon spending. Adjusted for inflation, we are still spending a tremendous amount on the military, but it isn’t rising. For perspective, even if the sequester goes into effect and takes another half trillion away from the Pentagon, we will still spend more in 2013 than we did in 2006, during the height of the Iraq War. Under Obama, defense spending is very high but it is going down. There is plenty of room for it to go down further, although the Defense Department thinks the cuts in the sequester go too far.
While you can argue about the correct budget for defense, it makes no sense to say Obama is spending too much unless you are willing to say that Bush was spending too much, as well.
That leaves entitlement programs. First of all, according to CBPP, over 91% of entitlement spending goes to the elderly, the disabled, or people who worked at least 1,000 hours in the last year. Much of the rest goes to people who worked enough to be receiving unemployment benefits. These people are not “takers” in the Mitt Romney/Paul Ryan sense. Yet, according to a 2009 study by the non-partisan Congressional Budget Office, “Total spending for Medicare is projected to increase to 8 percent of GDP by 2035 and to 15 percent by 2080. Total spending for Medicaid is projected to increase to 5 percent of GDP by 2035 and to 7 percent by 2080.” Those are pre-ObamaCare numbers, but there is no denying that inflation in medical spending is a major problem that will continue to crowd out spending for all other purposes.
The question is, what should we do about it? Let’s consider taxes and revenue. It is not only “mostly true” that CEO’s and hedge-fund managers are paying the lowest effective tax rates since the 1950’s (a period before Medicare and Medicaid), but it’s true about everyone else, too. As a percentage of GDP, only South Korea, Turkey, Chile, and Mexico raise less revenue than the United States. Simply put, we are taxing at a historically low level. It seems to me, then, that we have a revenue problem.
We have a revenue problem and we have a medical inflation problem, and we spend too much on defense. So, should we start slashing the earned benefits people have paid into in Medicare and Social Security? I would argue that we ought to raise taxes before we even think about doing that. But we also need to do more to address the rising cost of health care. That has been the Obama administration’s approach. Yet, cognizant of political realities, they also know that the must make compromises if they want Republican votes. That is why Obama has talked about taking a balanced approach. That’s what the American people basically voted for, and they continue to support it (at least in general terms) in the polling data.
So, the GOP can keep saying that we have a spending problem, but we have a much more clear-cut and inarguable revenue problem. And if you ask people what spending they want to cut, they do not say that we ought to ravage people’s retirement security.
Overall, it’s simply misleading to argue that our budget woes are a result of too much spending. And, to the degree that it has some truth, the people don’t agree with the Republicans’ solutions.
But, but, but………Obama’s giving away fancy cell phones to all his poor black friends!!!
Unfortunately, that is the level of our discourse.
Thank you, once again, for laying out the reality of our “spending problem”. It is worthy of sharing with everyone we know.
Tell your conservative friends that under Obama we have seen:
Ask them if that is what they mean by big-spending liberal socialist.
Well, despite the fact that your 3 points are irrefutably true, we know that this information will have zero effect on my conservative friends. I know, because I have laid out similar facts, and even the very smart ones will look at you like you just told them the moon was made jello. They think you’re nuts.
I sometimes wish that I could don a protective suit and spend just one hour in the brains of some people. It might help me understand that cognitive disconnect which seems to be a feature in many minds.
there are ways to break through to them. For starters, you can give the Republicans some credit, but also deliver them a warning. This will get their attention.
For example, you can point out that Obama initially tried to protect government jobs at the state and local level. The Stimulus bill he passed in the Spring of 2009 dedicated 18% of its spending to helping the states out, mainly through spending on education, Medicaid, and $4 billion for state and local law enforcement.
This worked initially. In the period 2008-2010, over 6 million private sector jobs were lost but public jobs were up by about 30,000. However, once the stimulus wore off and the Tea Party came to power, things changed dramatically. In the period 2011-2012, the private sector added 4 million jobs but the public sector shed half a million. Most of that job loss came at the state and local level (social workers, probation officers, firemen, police, and teachers).
In other words, the Tea Party prevented Obama from saving the jobs of some of his core supporters, resulting in a massive shrinkage in government unlike anything accomplished by Ronald Reagan.
The Tea Party obstinacy preserved almost all of the Bush tax cuts and Obama discovered that targeted tax cuts to the middle class were one of the only available ways to stimulate the economy.
So, here’s the warning. Obama is going to get credit for shrinking government and presiding over historically low taxes, basically branding the Democratic Party so far to the right that there is no room for the Republicans to disagree and remain viable. At the same time, Obama is going to get credit for initiating universal health care and the great triumphs of the gay rights movement, essentially making him a giant on the left. And he also stole the national security advantage away from the Republicans, perhaps for generations.
Rather than seeing Obama as a socialist, they should see him as the left’s Ronald Reagan. He has gobbled up all the political space, making it impossible for the GOP to respond.
The more the Republicans force Obama to govern from the middle, the less room they have to make distinctions.
The result is non-stop crazy talk about birth certificates and other nonsense.
Bingo!
We have a defense spending problem, until that is addressed, all cuts should be off the table, the only thing on the table should be revenue increases.
The lily-livered congress however won’t do what’s necessary and prudent. Shared sacrifice my ass.
In high school my friend and I started a club, and one of the rules for admission was that you had to be tall enough. We didn’t specify how tall “tall enough” was. You just had to be tall enough.
Of course, with us it was just a silly joke, but the right’s insistence that we have a spending problem is of the same nature. What’s the problem? We spend too much. How much should we spend? Less. It’s meaningless. You can’t decide how much you should be spending, any more than you can decide who’s tall enough, without some kind of reference point. Leaving aside wasteful spending, the reference point is of course how much you’re taking in. So really you can’t even have a spending problem in isolation from a revenue problem. They’re the same damn thing!
I wish they could at least be consistent. They’re always telling us we should think about government budgets in the same way we think about our household budget. Which is stupid, of course, but if you are trying to balance your household budget do you solemnly declare, as a matter of sacred principle, that you will never ask your boss for a raise?
Not enough taxes (especially on the wealthy), forcing either excessive borrowing, inadequate spending, or (at present) both. Technically, at the moment borrowing isn’t a problem, but it was under Bush and once we get out of our liquidity trap it will be again.
The nature of the problem becomes clear when you compare the economically successful countries of Northern Europe to the troubled countries of Southern Europe. The rightists rant on about how spending in the southern countries is “excessive” and “out-of-control” and causing their troubles. But, in fact, as a percent of the economy, the southern countries’ governments spend considerably less than the northern ones. The problem is that their taxes are too low, and not progressive enough.
It is the GOP that has a Spending Problem. With their penchant for subsidizing the rich who, as it turns out, cannot analyze worth shit how to produce a palpable product and then market it have ended up using the money they robbed from the middle class to toss $100 bills out the window by the boatload, all for a 1.4% return! That 1.4% is the best they have to offer!
The defense cuts are, indeed, too steep given the mission(s) that the military is responsible for.
Do we need eleven carrier battle groups? Yes, if you assume that the carrier forces will be responsible for the level of coverage that they are currently assigned to provide.
In order to bring down military spending as much as it needs to go down, we need to first change the national defense strategy, reducing it something that can actually be accomplished with $X00 billion dollars a year less than we are currently spending. We need the Secretary of Defense and the Chairman of the Join Chiefs to be able to go to Congress and answer “Yes,” when they are asked “Does this reduced budget provide you with the resources you need to accomplish the mission you’ve been given.”
Yep. It’s time to end the occupation of Europe and Okinawa.
In fact there is reconsideration of strategy going on but unfortunately it’s being driven by the defense-industry friendly Project for National Security Reform.
Some key ideas. Fewer permanent bases in interiors of other countries. More stationing at perimeters of potential areas of threats. More mobility. More short-term missions instead of wars.
Air Force is pushing for most stand-off locations. Navy/Marines are pushing for “seabasing” and amphibious entry. Army is likely pushing airborne. And of course, there will be drones.
My own view is that those ideas are built more around new toys than realistically appraising what needs to be done. And it is primarily intended to make money for the defense industry instead of provide national security.
IMO, it would not be hard to reduce military spending below $300 billion and be more secure through wiser diplomacy. But then it all hinges on the very nebulous magic word “US interests”. Maybe we should as a nation have a discussion about what exactly are US interests.
It’s time to end the occupation of Europe and Okinawa.
Good ones. How about the nuclear triad? It’s the second decade of the 21st century: aren’t bomber-based nukes a few decades out of date?
According to the Kansas City Economists (http://neweconomicperspectives.org/),with a fiat currency government spending should be at whatever level is needed for full employment and the purpose of taxation is to control inflation by removing excess currency from the market.
By these rules we do have a spending problem but the problem is that we are obviously spending too little! Taxes are obviously OK because inflation is non-existent (if you believe the official figures which I do not).
The goal is full employment without inflation. The Republican’s goal is a plutocracy with a permanent pool of unemployed willing to take anything.
You are falling 8into the trap of confusing a fiat money based government with a household or small business that operates on an externally-controlled currency. States like Illinois and Greece fall into this category. The USA, China, and the United Kingdom do not (neither does Iceland, Norway and Sweden).
Another way to look at “non-defense discretionary spending” is:
The government funds 4 things:
*(calling the War Department the Defense Department is like calling the PR department the Ministry of Truth)
But actually, that’s not quite true. A lot of so-called “non-defense” spending is actually about supporting the war machine. That includes the Heimlandversicherheitsamt (Sorry, mean the DHS … somehow that name sounds better in German), all the various “intelligence” agencies, more than half of the science research, much of the Interior Department budget for maintaining military lands, the VA, much of the budget of the Energy Department, etc.