I can't balance the US budget in four years! Help!

I thought it would be interesting to try to balance the federal budget - I wanted to see what it would take.
It’s absolutely crazy! I’ve posted some thoughts and attempts below, and I thought it would be interesting to both get feedback on my thoughts about the budget, and see what other people would do with it. So please let me know what you think.

I’m starting with using Wikipedia’s information on the 2007 US Federal Budget, so if you want to join in, please use the same numbers from here: http://en.wikipedia.org/wiki/United_States_federal_budget,_2007 to make your work comparable.

If you do want to participate, don’t make it too easy on yourself :wink: - even if you were President, you would not be able to reduce the amount of interest on the debt immediately, and you wouldn’t be able to significantly change how much it costs to operate the mechanisms of government - so the “Interest on debt” and “General government” items are just constraints you’ll have to live with.
Here’s what wikipedia tells us (all figures are in billions of dollars.)

Social Security: $586.1
Defense: $548.8
Medicare: $394.5
Unemployment & Welfare: $294.0
Medicaid & other health care: $276.4
Interest on debt: $243.7
Education: $89.9
Transportation: $76.9
Veterans’ Benefits: $72.6
Justice Administration: $43.5
Natural Resources/Environment: $33.1
Foreign Affairs: $32.5
Agriculture: $27.0
Community/Regional Development: $26.8
Science/Technology: $25.0
Energy: $23.5
General Government: $20.1
Total Spending: $2,814.4
Receipts: $2,504.0
Deficit: $310.4
Here’s what I came up with when I tried to balance it (increases in green, cuts in red):

  1. Social Security: $586.1
  2. Defense: $260.0
  3. Medicare & new insurance program: $604.5
  4. Unemployment & Welfare: $200.0
  5. Medicaid & other health care: $276.4
  6. Interest on debt: $243.7
  7. Education: $30.0
  8. Transportation: $30.0
  9. Veterans’ Benefits: $74.6
  10. Justice Administration: $63.5
  11. Natural Resources/Environment: $25.0
  12. Foreign Affairs: $20.0
  13. Agriculture: $1.5
  14. Community/Regional Development: $1.5
  15. Science/Technology: $28.0
  16. Energy: $38.5
  17. General Government: $20.1
    Total Spending: $2,503.4
    Receipts: $2,504.0
    Deficit: -$0.6

Some reasoning:
2. This could only occur if the wars in Iraq and Afghanistan are over - but I think it still does provide for a powerful defense, spending more than twice our closest competitors according to wikipedia (please correct me if better cites are available.)
3. I really believe universal coverage of some form of health care is needed - this expenditure reflects an additional $5,000 to help pay for health care for 42 million uninsured Americans - not enough to completely pay for health care, but at least it’s something. :frowning:
4, 7, 8, 11, 12: These are all areas I believe government may have a role in, but may just have to be cut to help with the health care and other issues. A Devil’s bargain in many cases.
9. Veterans really get the shaft in general. The least I could do was make sure a little more is devoted to their care.
10. I think law enforcement would have to take the lead in antiterrorism once the wars in Iraq and Afghanistan are over, hence the increase.
13, 14. This may be something of a cop-out, because I don’t understand a lot about what the federal government does in these areas. But I think the government may have to completely abandon certain functions to live within its means.
15, 16. $18 billion a year to help restructure our energy policy, especially to combat global warming, should help get the ball rolling and maybe make up for losing $8 billion a year on environment and natural resources.
I don’t think my proposal is politically realistic. I tried another proposal which softened the cuts to no more than 20% of a budget category, but still wound up with a $106 billion deficit. What do you think?
Mods - sorry if this is more of a IMHO or even Game Room thread. Feel free to move it as needed.

I think that it’s a bit silly to talk about cutting education and transportation, and “abandon[ing] certain functions to live within its means”, when you’re putting an extra 200 billion dollars per year into healthcare. Even if you only increased healthcare funding by 100 billion instead of 200 billion, that would cover the cost of not gutting all those smaller expenditures.

Transportation infrastructure is crumbling down around our ears, and you cut expenditure by more than HALF??? No way am I voting for YOU in November!! :mad:

Anyone CAN balance the budget. It’s the matter of getting it through Congress that’s the hard part. I foresee a government shutdown.

Social Security: $520.1 (means testing begins immediately)
Defense: $438.8 (Iraq ends straightaway. NATO, the UN, or they can finish up)
Medicare: $344.5 (means testing begins immediately)
Unemployment & Welfare: $194.0 (require all recipients to perform tasks or work through subsidized minimum wage positions)
Medicaid & other health care: $250.4 (means testing begins immediately)
Interest on debt: $243.7
Education: $79.9
Transportation: $66.9
Veterans’ Benefits: $122.6 (Lotsa returning vets should get some goodies)
Justice Administration: $38.5
Natural Resources/Environment: $28.1
Foreign Affairs: $62.5 (Small Business American Outreach to the third world)
Agriculture: $22.0
Community/Regional Development: $0.00 (Somethings gotta go and the states do this better)
Science/Technology: $25.0
Energy: $51.9 (Alternative energy research and encouragement)
General Government: $15.1 (General budgetary cuts shared by all others)
Total Spending: $2,504
Receipts: $2,504.0
Per the OP I won’t lower the interest on the debt but refinancing it out to 30 or 50 or 100 years would lower those payments.

Note, also, that this is for year one of my program. Things like ramping down the war and means testing entitlements will have a cumulative effect in subsequent years and make it easier to achieve a balanced budget downstream.
Notes:

  1. As you can tell, I’m a big damn fan of means testing for entitlements. I see little reason why what is called a ‘safety net’ should extend to those who don’t need it to keep them in necessities. Not in fiscally hard times, anyway.
  2. The war. I’ve always thought Iraq was a mistake and would pretty much tell them they’re on their own from this point on. Better military resources are devoted to intel and special forces than large conventional actions in a war on terror.
  3. Veteran’s Benefits. A lot of those folks coming back have skills and education they’d need to formalize. Education and business start assistance is the way to go there. Let them go from soldier to entrepreneur if at all possible.
  4. Foreign Affairs. A creative approach of small business programs and small outreach shops in major cities in the third world. Loan money to people on the business start track and watch them end up appreciating our efforts a little more. Stop awarding money directly to developing governments who are little more than thieves. Support the people, not their governments and win hearts and minds.
  5. Energy. Plowing extra money into alternative energy and making current sources more efficient and effective is a primary task for us during the first half of this century. Coal, Oil, and Natural Gas must be moved away from towards renewable, long-term energy solutions.
  6. General cuts across the board to make up the difference.
  7. It pained me not to increase general science and technology investment as I’m a big believer. But in order to bring balance to the system one must pick and choose.

The question is really one of priorities. I wouldn’t expect this thread to provide any budgets that could actually get through Congress, but rearranging the budget to look at what a person thinks is important and what isn’t is informative. My budget was tried to see what would happen if the federal government had as priorities: 1. Balancing the budget and 2. Providing some form of healthcare for the uninsured. Someone’s ox is inevitably going to get gored. The question is, which ox is least supportable?

It’s also something of a cop-out. Health care is a big news, high-sentiment item. Transportation is something that I don’t really know much about. I know the feds support the highway system mostly with block grants to states. Is the money well-spent? Do we get more bang for a federal transportation dollar than we do for a federal health care dollar? Maybe. Help me, inform me, show me why I’m wrong.

Ah - my candidacy was announced in a different post - the one that said I can balance the budget in four years. :smiley: I was struck in the debate last night by how neither candidate was willing to give the obvious and correct answer - neither of them has the slightest glimmer of hope of balancing the budget. It would be too politically difficult to even come close.

How would you try to do it? What would your spending priorities be?
Jonathan Chance - interesting choices (possibly much better than mine too :wink: .) It looks like your top priorities are veterans, foreign affairs (is this mostly foreign aid?) and energy. The cuts to social security and medicare - are these based on some amount of money means testing would save or are they guesses?

What does all that money for Community and Regional Development go for anyway?

Social Security pays for itself, and more. If you cut benefits by 90% we’d have to cut FICA by 90%. Net= a larger defecit (FICA currently brings in more than it pays out). And what makes you think that 90% of SocSec reciepients earn so much outside incomes they’d be exempt for getting benefits? Cite?

And, even if the War in Iraq ended, that wouldn’t take a huge cut off Defence spending, as according to wiki *“Much of the costs of the Iraq war and the Afghanistan war until FY2008 have been funded through supplemental appropriations or emergency supplemental appropriations, which are treated differently than regular appropriations bills. *”

Social Security: $580.
Defense: $400
Medicare: $394.5
Unemployment & Welfare: $244.0
Medicaid & other health care: $276.4
Interest on debt: $240
Education: $80
Transportation: $70
Veterans’ Benefits: $72.6
Justice Administration: $40Natural Resources/Environment: $33.1
Foreign Affairs: $22
Agriculture: $7.0
Community/Regional Development: $16
Science/Technology: $23.0
Energy: $21
General Government: $18
Total Spending: $2,644

Receipts: $2,644.0

1.15 trillion= Income tax
$400 billion - Corporate income tax
$52.0 billion - Estate and gift taxes
$99.1 billion - Excise taxes

Deficit: $0 more or less.

Note a cross the board cut in most everything. A tiny cut in Soc Sec due to a increase in retirement age being stepped up. Defense & Ag gets a good cut, and the rest get cut about 10%.

Then we put another tax bracket on the top income tax, as before. 5% net increase.

We cut $30B of loopholes in Corp taxes, and increase “sin” taxes. We also get the Estate Tax back to where it was.

If only it were so easy:

Even if you magically got us out of Iraq and Afghanistan immediately you wouldn’t get that money back. Leaving aside the cost of actually moving all those people and equipment out you’d have the costs of repairing and replacing all the damaged stuff. You are making the same mistake Obama is seemingly making by counting this money as some kind of windfall that can be used somewhere else…it isn’t.

And all that assumes the fantasy that we will be getting out of Iraq immediately (or in 16 months according to Obama) AND out of Afghanistan (which Obama is actually planning to ramp up our commitment IIRC).

Why? Why is this such a priority you are willing to increase our spending here but decrease it in other places? If you REALLY want to balance the budget such that you are willing to gut defense (and other things which I’ll get to later) then it seems we shouldn’t spend MORE on something we don’t have now (and so won’t be missed). Once you balance the budget and get spending under control…well, that would be the time to initiate NEW sweeping programs or enhance existing ones.

Why is health care more important that the nations infrastructure?? Put another way, how are all these happy new folks with their shinny new health care going to get to the doctors if the roads are all falling apart? And than education?? Crazy.

Again, why is health care your priority here?

To be sure, and my son is one of them…but…well, you are running into exactly the problem of why the government can’t every balance the budget unless there is a massive surplus due to a booming economy. Because everyone always has their pet projects that they feel just HAVE to be funded. If you are REALLY trying to balance the budget then expanding a program, even one as worthy as this, is perhaps not the best way. Because you won’t be able to simply dictate a budget…and what it will mean in real terms is that if you get THIS programs funding enhanced you’ll have to allow me to fund what I want funded. You scratch my back and I’ll scratch yours, and all that jazz.

Well, you are certainly entitled to your thoughts on this, but you are setting up the worst of both worlds here IMHO. You aren’t funding them enough to actually do the job you are asking them, while funding them more (which costs more) while presumably taking that funding away from others.
Anyway, I think you have illustrated why it’s nearly impossible for our budget to ever get balanced except during exceptional circumstances like during the dot com boom of the 90’s. The problem is that everyone has their own pet projects or priorities…and that doesn’t even get into the political give and take (as well as the ‘got to keep the folks back home’ aspects).

-XT

Playing with numbers without any real understanding of what is behind the numbers makes no sense. I work within one of the departments listed and the cuts you and Jonathan Chance have suggested would have a significant impact upon millions of Americans. Whatever alleged “cost savings” would be easily lost (and then some) caused by the flow-on effects the cuts you propose who have in other areas.

A better idea would be a full year high school (or two semester college) course where the sole purpose is to study a budget from a previous fiscal year and come up with a better one, based on practical fiscal management, politics aside.

Government spending is a serious problem. What many fail to realize is just how many Americans who want a leaner budget regularly screw their fellow Americans by charging their government much, much more than actual value. I am no fan of FEMA, but they paid outlandish costs to private companies during Hurricaines Katrina and Rita. Those companies just wanted to make a quick buck off the government; in reality they screwed us all over. It happens every day.

Great thread. I notice a lot of people are doing what many corporate managers do in times of stress, which is a bit of across-the-board cutting here and there.

How about totally eliminating some things? For example, these numbers are federal expenditures on education. What are those? The department didn’t even exist until the 1970s. Are we better educated since then? Hell, no. It should all go. All of it. Gone.

Same for the Department of Energy. Which was notionally created to improve our Energy Security. Has that worked? Is that even what they do anymore? Hell, no. It’s gone.

FDA. It’s gone. Rather, it’s transitioned to voluntary enrollment. It’s funded by fees paid for by pharmaceutical and food companies who want the ‘FDA’ stamp of approval on their products. Same for the Consumer Products Safety commission, and anything else set up to ‘protect’ the public from X, Y or Z. The public is welcome to only purchase products with the government stamp. Others are free to purchase whatever they want.

ATF. Gone. Not even sure where it is in the line items above.

I know these latter things are small potatoes (FDA, ATF, etc.) compared to Social Security and Medicare, but you get the idea.

Department of Agriculture. Probably 95% of this can go.

We can also get some one-time pops to help pay for transition costs by selling Federal assets, which was covered in another thread.

So these would work like (and presumably just as well as) the bond-rating agencies?

BTW, re the OP balancing or seeking to balance the budget during a worsening recession is incredibly stupid. As in “courting the next Great Depression” stupid.

Yes. They would.

Was that intended to be a ‘trap’ question? Because if you think you are cleverly proving your own point, you are actually proving mine.

No problem. Care to buy some AAA-rated second-order mortgage-backed securities?

A few ideas: A windfall-profits tax on the oil companies. A war tax surcharge on billionaires. Cancel the Pentagon’s more ultra-advanced and unneeded weapons programs. Cancel all of Bush’s tax cuts. A Federal hiring freeze. A national lottery for the chance to ride in an F-14, dive in a submarine, have five minutes with the President (after being screened by the Secret Service), shoot guns with Delta Force, and other cool stuff only Uncle Sam offers. A tax amnesty for past IRS deadbeats. Auction off pollution credits. Cancel agricultural subsidies gradually but inevitably. Auction off mineral and drilling rights that are now going for a song.

All of these, plus the eventual economic recovery, should help get our fiscal house in order.

You guys should check out this simulator.

Well, some of those are bit imaginative, but yes, I agree, the budget needs more than cuts. Your “A war tax surcharge on billionaires” is about what I wanted with “Then we put another tax bracket on the top income tax, as before” and Cancel all of Bush’s tax cuts more or less =“We also get the Estate Tax back to where it was.”

Cutting the FDA and similar testing agencies can be done, and done well. Ever bought a lamp? Have you seen the “UL” logo? Ever wonder why the government doesn’t test electrical products, even though there is an obvious danger?

From Wiki:

“Underwriters Laboratories Inc. (UL) is a U.S. non-profit privately owned and operated product safety testing and certification organization. Based in Northbrook, Illinois, UL develops standards and test procedures for products, materials, components, assemblies, tools and equipment, chiefly dealing with product safety. UL also evaluates and certifies the efficiency of a company’s business processes through its management system registration programs. Additionally, UL analyzes drinking and other clean water samples through its drinking water laboratory in South Bend, Indiana.”

Link http://en.wikipedia.org/wiki/Underwriters_Laboratories

I dare say I’ve spent a great deal of time studying the budget. I covered it for long enough.

That out of the way I challenge you that the dislocations caused by such cuts are contrasted by long-term dislocations caused by continual deficit spending. On the other hand it is clear to most of us (I would hope) that any cutbacks or adjustment in the budget would have a significant impact on millions of Americans. The federal budget is about impacting Americans. That’s what it’s there for. But to argue that as a reason not to attempt to balance the budget (either by raising taxes or cutting spending) is a mug’s game. This is a matter of setting priorities and establishing the limits of government within the constraints of the budgeting process. “Because we’ve always done it this way” or “People will be hurt” is not sufficient argument to avoid the decisions required to set those priorities.

The simple fact is that in any adjustment some will win and some will lose and each person working on the budget will come to a different answer on who those people would be.

It is perfectly reasonable to ask ‘should there be a Department of Education’ or ‘How much should defense cost’ or ‘Should welfare and unemployment be open ended or not’? All are legitimate points for policy discussion and budgeting decisions. And if the citizenry dislike the policymakers perspectives they can be voted out in no more than four years.

But that’s exactly the point: politics cannot be put aside in this manner. Federal elections, stripped down to the basics, are about control over several trillion dollars per year. Each persons personal politics will influence their priorities and decisions. There is no ‘practical fiscal management’ method at the federal level. Someone will see deficit spending as reasonable for the long term provided the percentage of such doesn’t exceed some level. Other’s will see any deficit spending provided there isn’t an emergency as unwise. Still others will see the solution to be cuts or taxes. It’s all political and to think otherwise is pointless and naive.

And so it is. But look at it from the flip side. No one required the federal government to pay those prices. With the purchasing power the federal government has they could say ‘no, we’ll go elsewhere, thanks’ and, in general, the methods employed through the purchasing process and it’s friend, the CCR (Central Contractor Registry) and the GSA schedule should enable that. It doesn’t work fairly often, but it’s in place. Don’t assume that because someone can name a price someone else must pay it. I had a contract with FEMA several years ago to provide clipping services and news analysis and got $14K per month on it. They put it out to bid and I won with the lowest one. It’s the process and the method.

Well, it’s interesting that you mention 90% since I believe I cut it by something like 12-14%. Which, without further research, strikes me as at least a reasonable starting figure.