Posted on 09/15/2017 8:29:15 AM PDT by SeekAndFind
t is high time that conservatives reform the budget process.[i] In theory, Congress should prioritize expenditures to achieve the greatest public good with the available funds taxpayers and lenders provide. But in practice, not only are tradeoffs not made, there is no visible mechanism for identifying levels of priority.
The absence of such an analytical tool seems to have bullied President Trump into an unnecessary fear of defaulting on the debt. So much so that he has made a devils deal with Nancy Pelosi and Chuck Schumer. Doesnt he know that they hate him and want him to fail or even die? Perhaps he did what he thought was necessary for the good of the country facing the aftermath of two killer hurricanes. The pathetic Republican Senators could have saved him from dealing with Nancy and Chuck, but the GOP Senators couldnt pass a stand-alone disaster relief bill. President Trump looked like a statesman among a bunch of petty politicians. Time will tell how costly this episode will prove to be.
In previous versions of the phony default scare tactics, I and many others have pointed out that every month there are ample federal receipts to cover the interest on the debt (well under 10% of the annual budget), as well as other high priority outlays. Yet the fear mongers seem to carry the day every time. Maybe some politicians are just lying about their commitment to balanced budgets.
To be fair, the way the budget is designed, it is difficult to prioritize spending. The federal budget is divided into overlapping categories. The various categories and sub-categories often obscure clear understanding. This article contains a proposal to simplify and regroup the spending categories and suggest how to prioritize them.
(Excerpt) Read more at americanthinker.com ...
Instead of a unified federal budget, divide it into two or more tiers. Call the top tier Tier 1 Spending. Think of these as the outlays which must be made before any others. They need not be 100% of any program. Some programs might be funded with multiple tiers. The categories suggested here seem likely to be part of anyones top tier, but politics will surely play a big role. That would require legislation, but absent that, they still make it easier to understand the budget. Just regard tier definitions as informational. Table 1 gives the broadest categories of two tiers of spending for FY 2015 (actual) and FY 2021 (projected).
Instead of a unified federal budget, divide it into two or more tiers. Call the top tier “Tier 1 Spending.” Think of these as the outlays which must be made before any others. They need not be 100% of any program. Some programs might be funded with multiple tiers. The categories suggested here seem likely to be part of anyone’s top tier, but politics will surely play a big role. That would require legislation, but absent that, they still make it easier to understand the budget. Just regard tier definitions as informational. Table 1 gives the broadest categories of two tiers of spending for FY 2015 (actual) and FY 2021 (projected).
The data sources are OMB Tables 3.1, 3.2 and 2.1: https://obamawhitehouse.archives.gov/omb/budget/Historicals
The numbers in parenthesis next to various spending categories refer to the federal accounting system. The column labelled “Mean %” is the implied annual compounded rate of growth for each line.
Table 1: Tiered Spending (Billions of Dollars)
Fiscal Year |
2015 |
2021 |
Mean% |
Tier 1: Core Spending |
2717 |
3740 |
5.47%
|
Net Interest (900) |
223 |
574 |
17.07% |
Defense (050) |
590 |
612 |
0.61% |
Earned Benefits (not means-tested) |
1741 |
2357 |
5.18% |
Primary Functions |
163 |
197 |
3.21% |
Tier 2: Other Spending |
1127 |
1496 |
4.83% |
Unearned Benefits (means-tested) |
808 |
1089 |
5.10% |
Secondary Functions |
319 |
407 |
4.14% |
Credits (370, 950) |
-154 |
-117 |
NA |
Total Spending |
3690 |
5119 |
5.61% |
Tier 1 outlays account for around 70% of current annual spending. Two major sub-categories, interest and earned benefits, are contractual liabilities. Defense and Primary Functions are necessary core functions of any government. There may be other priorities that deserve Tier 1 funding. If I had more detail, some of Tier 2 spending on children’s health and nutrition could be transferred to Tier 1. Part of the Medicaid budget goes to recipients of Medicare. I would transfer these to the Medicare budget on Tier 1.
Table 2 is an expanded version of Table 1. It contains more detailed categories and more years.
I had to infer some of the details from overlapping information and I rounded off liberally. There is no separate category for Homeland Security because the outlays are spread out over multiple categories. The expenditure called “Miscellaneous ACA Outlays” under Tier 2 health is an estimate reflecting the need to reconcile multiple federal sources.
It would be helpful if there were a single document published by the federal government that contained clear and unambiguous non-overlapping categories. Perhaps there is, but I haven’t found it. The OMB tables I refer to are as close as I have found to that ideal. The main classifications these OMB tables use are by “function” and “superfunction.” This is a more informative way to look at outlays rather than by agency or even by federal accounting system numbers.
With the exception of 2015, all the numbers in Table 2 are subject to uncertainty. Anyway, for purposes of discussion, the numbers are probably close enough to reality to give a fair picture. Only by looking at actual numbers can one get an idea of what is at stake in governing.
It is especially distressing when highly educated citizens shun the math. Simply trusting bureaucrats to do the math for us is a step on the road to tyranny. Yes, it is that important. So please be patient with the numbers. Many discussions of the budget employ pie charts. I have chosen to display the raw numbers so that actual calculations can be made.
Table 2: Tiered Spending (Billions of Dollars)
Fiscal Year |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
Mean% |
|
|
Tier 1: Core Spending |
2717 |
2884 |
3023 |
3144 |
3368 |
3554 |
3740 |
5.47%
|
|
|
Net Interest (900) |
223 |
240 |
303 |
385 |
460 |
523 |
574 |
17.07% |
|
|
Defense (050) |
590 |
604 |
617 |
599 |
600 |
606 |
612 |
0.61% |
|
|
Earned Benefits (not means-tested) |
1741 |
1853 |
1908 |
1966 |
2112 |
2228 |
2357 |
5.18% |
|
|
Social Security (651) |
888 |
929 |
973 |
1,031 |
1,100 |
1,162 |
1229 |
5.57% |
|
|
Medicare (570) |
546 |
595 |
605 |
608 |
663 |
703 |
751 |
5.46% |
|
|
Veteran Benefits (700) |
160 |
178 |
181 |
179 |
192 |
200 |
209 |
4.55% |
|
|
Federal Pensions (601,602) |
147 |
151 |
149 |
148 |
157 |
163 |
168 |
2.25% |
|
|
Primary Functions |
163 |
187 |
195 |
194 |
196 |
197 |
197 |
3.21% |
|
|
Admin. of Justice (750) |
52 |
64 |
64 |
63 |
62 |
63 |
64 |
3.52% |
|
|
General Government (800) |
21 |
24 |
29 |
28 |
31 |
32 |
29 |
5.53% |
|
|
Public Health (552,554,304) |
42 |
46 |
49 |
50 |
51 |
50 |
51 |
3.29% |
|
|
Science & Technology (250) |
29 |
31 |
32 |
32 |
32 |
33 |
34 |
2.69% |
|
|
Foreign Affairs (153,154) |
14 |
16 |
15 |
15 |
14 |
13 |
13 |
-1.23% |
|
|
Agricultural Research (352) |
5 |
6 |
6 |
6 |
6 |
6 |
6 |
3.09% |
|
|
Tier 2: Other Spending |
1127 |
1201 |
1257 |
1331 |
1397 |
1441 |
1496 |
4.83% |
|
|
Unearned Benefits (means-tested) |
808 |
866 |
914 |
964 |
1018 |
1049 |
1089 |
5.10% |
|
|
Health Services (551) |
446 |
489 |
527 |
567 |
607 |
632 |
664 |
6.86% |
|
|
Child Health Insurance Program |
9 |
13 |
13 |
12 |
6 |
6 |
6 |
-6.53% |
|
|
ACA Insurance Subsidies |
38 |
49 |
59 |
69 |
76 |
81 |
86 |
14.58% |
|
|
Miscellaneous ACA outlays |
49 |
56 |
62 |
71 |
88 |
86 |
88 |
10.25% |
|
|
Income Security (600, not 601, 602) |
362 |
377 |
387 |
397 |
411 |
417 |
425 |
2.71% |
|
|
Secondary Functions |
319 |
335 |
343 |
367 |
379 |
392 |
407 |
4.14% |
|
|
Foreign Aid (151, 152) |
37 |
39 |
41 |
40 |
39 |
39 |
40 |
1.31% |
|
|
Environment (300, not 304) |
29 |
34 |
35 |
36 |
36 |
37 |
37 |
4.14% |
|
|
Transportation (400) |
90 |
92 |
100 |
108 |
116 |
124 |
130 |
6.32% |
|
|
Education, etc. (500) |
122 |
114 |
108 |
120 |
128 |
135 |
139 |
2.20% |
|
|
Energy (270) |
7 |
7 |
7 |
7 |
7 |
9 |
10 |
6.12% |
|
|
Agricultural Subsidies (351) |
13 |
19 |
20 |
20 |
15 |
14 |
18 |
5.57% |
|
|
Community Development (450) |
21 |
28 |
21 |
19 |
18 |
16 |
14 |
6.53% |
4 |
|
Allowances (920) |
0 |
2 |
11 |
17 |
20 |
18 |
19 |
NA |
|
|
Credits (370, 950) |
-154 |
-128 |
-131 |
-124 |
-117 |
-116 |
-117 |
NA |
|
|
Total Spending |
3690 |
3957 |
4149 |
4351 |
4648 |
4879 |
5119 |
5.61% |
|
|
I’d probably just cut everything in Tier 2.
I’d also just cut some of what is in Tier 1.
That’s fine but what if Congress decides everything is Tier 1.
My eyes glaze over from tier to tier. All I can input is to promote a balanced budget of a government that runs within the original/textual framework and interpretation of the Constitution. What a fantasy that is.
Let’s also get rid of baseline budgeting, where absent specific action, program budgets are automatically increased upwards at the rate of inflation.
Lets also get rid of baseline budgeting, where absent specific action, program budgets are automatically increased upwards at the rate of inflation.
*************
That can be accomplished today.... if we had a conservative Congress..
This already exists to some extent. “Entitlements” don’t have to go through the authorization process.
The problem is that whatever lock boxes you set up, Congress knows they exist in the back of their minds and can equal or exceed that amount.
I think spending should be based on the previous year’s revenue. A lot of high dollar man hours are wasted trying to predict how much money a certain tax bill will bring in. If Congress were told “This is what we brought in last year, what do you spend it on?” it might help, but then again it might turn into another lock box.
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