The Five Horsemen of the Federal Budget

“Let’s put this simply. 80% of the budget falls into five categories: Social Security, Medicare/Medicaid, Defense, Veteran’s Benefits, and Interest on the Debt. EIGHTY PERCENT. So if you don’t tell me what you’re going to be able to feasibly cut in those categories, you are not approaching the problem seriously.

This is especially the case when it comes to defense spending. Let’s face it: you can’t argue for more military spending AND a lower federal budget. If the Glenn Becks and Rush Limbaughs of the world want me to take them seriously on controlling federal spending, they shouldn’t have howled when Bob Gates didn’t increase defense spending this year as much as the rest of the Pentagon wanted him to.” ~Alex Knapp, responding to Ross Douthat and the Tea Parties

Outside the Beltway is a great blog – always a good read: clear, concise, and not shouty.  In other words, like Douthat, exactly my type of conservative blog despite any ideological differences James or Alex and I may have.  And on this matter, I can’t help but agree.  It’s all well and good to want lower spending, but what exactly are we going to cut?  I would argue for defense cuts first and foremost, but I’m not a totally unrealistic person.  As Buddy Holly once said: That’ll be the day…

horseBeyond defense are the entitlements – Social Security, Medicaire, Veterans Benefits – that many Americans would be loathe to part with.  Far easier to cry foul than to actually give up the perks of government spending.  Few viable alternatives have cropped up to replace the big entitlements, for on thing.  They are mostly aimed at social stability and security and if there is anything in this world that people want it’s stability and security.  Now more than ever the world feels very unstable.  Our brand of capitalism has failed us.  Foreign terrorists threaten the very notions of Western Civilization that we hold dear (like Reality TV and Cheetos).

This is not to say capitalism has gotten us into this mess, but we’ve obviously not mastered the art of a stable economy anymore than we’ve nurtured our high culture over our pop culture. Nor have we done a very good job at drawing the line between the public and private spheres.

I wonder what it would have looked like if privatization of our Social Security had been pushed through.  Really – what would have happened?

So when somebody can show me a Tea Party that is coherently working out ways to actually reduce both spending, taxes, and debt maybe I’ll whistle a different tune.  Probably once upon a time these Parties were against massive defense budgets, too, but now that they’re part  of the mainstream I seriously doubt this is the case any longer.

I’ve written elsewhere on some of my ideas to reduce the federal government’s involvement in our lives, and I think that the national security apparatus is the place to begin – including but not limited to defense, domestic spying and other invasive “security measures” that essentially erase our civil rights.

I’m much more worried about the Department of Homeland Security and the Patriot Act than I ever have been about the Stimulus package.  The tentacles of government are more troubling when they have the power to indiscriminately lock up suspected terrorists and then not provide them any due process.  How about we protest that, or perhaps the use of torture?  Aren’t these greater threats to our liberty, our dignity, and America than upping the taxes a tiny bit on the top 2% of Americans?

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6 thoughts on “The Five Horsemen of the Federal Budget

  1. To what degree are the entitlement programs – Social Security, Medicare and Medicaid – funded by payroll taxes? In other words, how much of the money for those programs is coming from people’s income/non-payroll taxes?

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  2. Good question, Katherine – anybody know?

    Personally I would like to see more and more of our tax money go directly to local governments, but I am in favor of some federal programs and spending. It’s just not black and white at all.

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  3. Social Security – 100% funded through payroll
    Medicare – Roughly 50% funded via payroll and 50% funded via income taxes.
    Medicaid – Roughly 50% funded via income tax and the rest funded by the States.

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  4. Katherin, taxes are taxes. I don’t care if the money is taken from my paycheck or on April 15th (also taken from my paycheck). If the taxes are spent on meaningful programs, Social Security, Vets, education, libraries, roads, food and drug safety, medicare/aid what does it matter how the money gets to the treasury? It seems a distinction without a difference.

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  5. Mostly I just wanted to know in order to better understand how the system works. But if you’re looking at debt rather than taxes, there is a difference – if Social Security is wholly funded by payroll taxes, it isn’t contributing to the debt, so it’s not a place you should be looking to cut.

    Which seems to leave Defence, Medicare and Medicaid as the main areas that need serious spending reform. Defence especially. It seems like a good place to start, besides cutting extremely expensive weapons systems, would be pulling back most forces stationed overseas in non-combat zones. European countries have their own militaries, they don’t really need US forces over there. But overall cuts to the size of the armed forces are going to have to happen to make substantial savings: about 55% of the defence budget just goes to paying people and “operation and maintenance” costs (I’m going from the 2006 budget).

    In terms of what’s more plausible for cutting costs, conservatives worried about debt and opposed to taxes would probably argue for ditching income assistance and related programs (housing assistance, food stamps, UI and other programs), which make up about 8% of the budget. “Shaft the poor” is usually the main conservative answer to cost overruns.

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