Balancing the Obama Budget With a Mandatory Gorilla
September 10, 2009
After nearly two months of nothing, I figured I had to put something up. I’ve been tossing this idea around for a while looking for a metaphor that worked appropriately. I didn’t really push the metaphor of a household budget too far in the video because:
- No one runs a household budget on $100 per month
- Government does a lot of things that don’t correspond very well to household budgets
- There is no good correspondence between mandatory spending and anything we budget for in real life.
But it is likely that you simply don’t care about the artistic matter of finding an appropriate metaphor and you only care about where the data came from.
The data came from a couple of different places. First of all, the first data I’m using is a rough budget projection for 2017. This came from the CBO projection of President Obama’s budget extended to 2017. This is also where I got the federal reciept estimates I used to calculate how much we would have to decrease spending in order to balance the budget as well as the estimates for mandatory spending and interest.
For the purposes of the video, I combined what the CBO calls “mandatory spending” (which is mostly entitlement spending like Social Security, Medicare and Medicaid) and interest payments on the national debt into a single “mandatory spending” amount because both these parts of the budget are automatic and neither of them can be changed through the normal budget channels.
The next piece of data is the distribution of spending according to agency. In order to estimate how much we would spend on various departments and agencies, I took the latest projected data from President Obama’s budget, which is for 2014. I then calculated that, if we split up spending proportionally the same way in 2017 as we do in 2014 we would end up with the money distribution you see in the video (give or take a few cents).
Then, for the part where I take away the money until the budget is balanced, I simply looked at the amount of money we would have left over after we take care of all the mandatory spending with the receipts we expect to have.
That number was:
Federal Receipts – Mandatory Spending = Money Left To Spend
The “Money Left To Spend” number came out to $427 billion in 2017. The Defense spending in 2017 is anticipated to be about $662 billion, so I got rid of everything except defense spending. Then I started shaving off parts of the defense department until I got to a number small enough to roughly equal $427 billion.
Using this web site as a guide and calculating the proportional spending between the 2010 budget and the 2017 one, I subtracted the entire intelligence budget and the Navy. Then I reduced “Defense Wide” spending by half (I figure with the Navy gone, we don’t need quite as much military support bureaucracy) and I added up the Army, Air Force and the reduced bureaucracy.
That number came to $447 billion. Which means that we’re technically still running a deficit, but it’s a really small one.
One thing I did not do was calculate out how much more we would have to cut if we pass health care reform. This is because the legislation is so fluid and malleable at this point, it seemed pointless to put it into a number that would just change in a couple weeks.
But, I can say this one thing with an enormous level of certainty (and I’ll even put it into bold so you know I’m really serious):
President Obama, despite his best intentions, will not sign a “deficit neutral” bill.
This is because entitlement programs always start out with the best intentions and with rosy predictions. They almost always fail to meet those predictions, costing far more than was originally estimated. The problem is that the programs go on auto-pilot and neither the president nor Congress can do a damn thing to pull back on the costs.
What can be done about this? My suggestion is one that would satisfy no one.
I think President Obama should refuse to sign any legislation that doesn’t have an expiration date on it. If health care reform is really as wonderful as he says it will be, this shouldn’t be a problem. People will adore it, burn incense to it, throw ticker tape parades for it. Voting it back into law would be like raising Abraham Lincoln from the dead and having him run for another term.
But the fact of the matter is that it will never as wonderful as President Obama claims, which is why it can’t have an expiration date. Once people have a benefit, changing the status quo away from that benefit is often politically impossible. Just ask George W. Bush when he tried to change the clearly broken Social Security system. Everyone agreed that it was broken, but no one could muster the political wherewithal to fix it. So they just left it broken.
This is, I believe, exactly what will happen with health care reform. But that part is just my opinion.