One of the key aspects of human efficiency is making decisions based on facts, data, and nonideological logic. Before we start defining the individual policy issues and deciding how they will fit into a moderate party platform, we have to look at the budget. The federal budget is the limiting factor of how much government can do. Because of this it is important that the government spend the money wisely and collect enough money to cover the costs. In other words, the government needs to be efficient in the decision making. Unfortunately, the outcome of many decisions is determined by politics which is based on ideology and getting reelected. Decisions need to be based on facts, data, and nonideological logic.
First, some basics about the budget. There are three categories for spending:
- Discretionary spending is determined by Congress each year. This was equal to $1.11 Trillion in 2015. This category includes military spending.
- Mandatory spending is also determined by Congress but is long term. It includes Social Security and Medicare. This category was equal to $2.45 trillion in 2015.
- Finally, we have interest on the debt which was $229 Billion in 2015.
This results in a total of $3.8 Trillion being spent in 2015.
The growing debt has gotten a lot of attention over the last few years and will be the topic of the next blog.
The sources of income to support the budget are, of course, taxes and borrowing. Here we have the following major categories:
- Tax revenue from income taxes, customs, etc. was about $2.05 Trillion in 2015.
- Taxes from what are called trust funds which is primarily Social Security and Medicare taxes. This category took in about $1.13 Trillion in 2015.
- Finally, we had to borrow money in the amount of about $435 Billion in 2015.
It is interesting that about half of the money borrowed went to pay interest on the existing debt.
The biggest parts of the total budget in 2015 were as follows:
- Medicare and Medicaid spending was about $937 Billion or about 25% of total spending.
- Social Security spending was about $882 Billion or about 24% of total spending.
- Defense spending was about $583 Billion or about 16% of total spending.
Then there are lots of smaller categories such as Education (about $100 Billion) and Energy and Environment (about $13 Billion). Some categories have contributions from both discretionary and mandatory spending such as Transportation (about $96 Billion) and Veterans Benefits (about $151 Billion). I keep saying about because different sources have different amounts.
One of the categories that I was interested in, antipoverty programs, did not exist. It turns out that there is quite a list of programs included and they are located in numerous departments so it is very difficult to get an accurate picture of how much is actually spent. The CATO Institute estimated nearly $1 Trillion in 2012 on such programs. Meanwhile, a post in the Washington Post in 2014 estimated $212 Billion for the same programs. Quite a range.
So nothing is simple. However, this is the easy part. Now we have to look at the facts and data of how the government takes in and spends money on an individual issue basis. As mentioned, the next blog will discuss the debt.
Next: The Debt