I worked for government for over a decade. Local government, not federal, but still government. I did budgets. Way back when I did their first ever budget on a computer, something that enabled my department to get their budget turned in on time for the first time in many years. I understand how a governmental budget is developed from the ground up, from every individual budget line, and how it all comes together to make a total budget. And I understand how that happens for both the regular budget and the capital budget, which in local government, although not the federal budget, is a separate thing.
Now, let’s look at your claims, vantage49.
No government ever makes a profit. If revenues exceed expenditures it runs a surplus. That surplus may be allocated in any of a zillion ways. It can fund new programs, or add funds to old programs, or pay off loans, or redeem bonds, or be used for capital projects, or it can just sit in a bank and await a future deficit.
The federal government, unlike most state and local governments, can run a deficit. Let me emphasize this. The federal budget never has to be balanced. Ever. It is not designed to be balanced. Ever. Not even in the Clinton days when the government was running a rare surplus did anybody think of balancing the federal budget.
What happens when a surplus comes in? First, you need to remember that a departmental or project surplus does not go into a bank account marked for that particular department or project. It goes into the general fund. In fact, when the budget is created there is not even a line to associate revenue. This makes sense in the world of government. Budgets are costs. Revenues are certainly taken into account by both the department and the budget bureau, but the latter has to allocate money according to total revenues.
Let’s look at allocation, then. You have an imaginary department that has costs of $10 million but raises $1 million in revenue. What happens next year? Do you drop the budget of that department to $9 million? Probably not. Just as with any business you have certain fixed costs to deal with. You can’t expect to cut staff or hours or services and still make the same amount of money. It’s more likely that if you added staff etc. you’d make even more money. This would increase your budget but the added revenue would be worth it. In the world of government, where making money is secondary, the end result might very well be to hold the budget steady (or adjust for inflation). In real world terms, you can look at such attractions as national parks. These bring in money from visitors, but have huge fixed costs. In recent budget cuts, services have been cut and tourism discouraged. This lowers revenues, but in the overall context of the federal budget it was deemed necessary.
Or take the IRS. Each additional IRS agent brings in revenue to the government by catching tax cheats. The value of a new agent is high, in the millions of dollars a year. Yet the IRS has been starved of money for years. Why? Because revenues are separate from costs. The public sees the costs of government so there are huge incentives to cut costs. And the revenues disproportionately come from business, since that’s where most audits are done and tax cheats are caught. This is discouraged by administrations with large business support, as with Bush. Obama may reverse this trend and add more agents. This will likely increase revenues. But the added revenue will have little or nothing to do with the way the agency is sized or budgeted.
Government is not business. There are parallels at times, but government cannot and is not run as a business. It is not true that “those actual workers in the government - the non-elected or appointed, the ones who work day-to-day and administration-to-administration - the concept of keeping both sides of the ledger even is paramount and not just a guideline or recommendation.” Most areas of government do not generate revenues of any kind. If so taxes would not need to be levied. Revenues in government are a very small percentage of the total inflow. They are usually not even priced to break even. People expect that a governmental charge will be lower than an equivalent private sector charge. The museums on the National Mall are free, although I bet you pay just as much in their gift shops as any other museum’s. The gift shop certainly looks at revenues but none of the employees of the museum proper are working to keep both sides of the ledger even. There isn’t a second side.
I’ve tried to provide a general look at how government budgeting functions. I would refute your points one by one, but you don’t say anything specific enough for me to do so. The bottom line is that government revenues don’t work the way you say they do. Nor does the budget process. Nor do the workers. And to apply anything of what you said to federal government is even more wrong, since the federal budget does not have to be balanced. Budgets are a negotiation and politics does play a very large role in determining them. This is also true in the private sector, though, much more than most people understand. Only the interest groups change.