Today on Blogcritics
Home » Balancing the Big Fat Bloated Budget

Balancing the Big Fat Bloated Budget

Please Share...Tweet about this on Twitter0Share on Facebook0Share on Google+0Share on LinkedIn0Pin on Pinterest0Share on TumblrShare on StumbleUpon0Share on Reddit0Email this to someone

After months wrangling with the budget in committees and in back rooms and on the floor of the House and Senate, your representatives in Washington gloriously managed to cut all the fat they felt they could for a grand total of about $42 billion as a special Christmas present last week, presented in the form of the Budget Reconciliation Act, which will theoretically put the Fiscal Year 2006 Budget in its final form to be voted on in January.

The White House and your representatives are heralding that as a major achievement. What they seem to have missed is that the budget is still enormously larger than it ought to be at a whopping total of over $2.5 trillion which continues to include a deficit of almost $300 billion.

Not everyone is as happy as the Washington fat cats. Some on the left are crying that we should end the war in Iraq and repeal ‘tax cuts for the rich’ to save money. Some on the right are pointing out that over half the budget goes to social programs for senior citizens, though I don’t think they’re ready for the logical solution of euthanasia parlors quite yet. What neither side seems willing to do is make the simple, obvious cuts which would balance the budget and do little or no harm – some might even help the economy.

To give credit where it is due, the reconciliation bill has some meaningful cuts in it – or at least a few million here and there. Plus President Bush did his best to cut the budget when he first sent it to Congress, with $20 billion in savings already in the mix from over 200 budget cuts and 99 entirely meaningless programs completely eliminated.

One of the best cuts is the elimination of the Byrd Amendment subsidies, a huge piece of pork put into the federal budget in 2000 by Senator Robert Byrd (D-WV) which takes money from import duties on certain products and actually pays the money to the uncompetitive US companies the duties protect. So far it’s redirected over a billion dollars to only 5 companies, with the vast majority going to a single company. Another good cut is the long delayed elimination of the famous $230 million Bridge to Nowhere, a pet project of Senator Ted Stevens (R-Alaska) to build a bridge to an island with 50 inhabitants who didn’t want a bridge in the first place, putting a local ferry service out of business in the process. They also axed another less well known bridge to a sparsely inhabited island in Alaska at about the same price.

But the truth is that although these pet projects and little bits of pork are numerous – 5800 of them at last count – they add up to only $2.4 billion, less than .1% – that’s 1/10th of one percent – of the total budget. Even cutting all of them would make almost no difference at all, though it is nice to see some of them go for purely symbolic reasons.

But here are five cuts which could balance the budget and do very little harm.

• Farm Subsidies – A total of $120 billion is being paid to farmers not to grow crops. Everyone has known we need to cut subsidies for decades. Even the Europeans are considering cutting their farm subsidies. Yet the total value of these subsidies has risen by a factor of 400% during the Bush administration. That’s beyond ridiculous. Most of these subsidies go to huge agrobusinesses who may contribute mightily to our food supply, but don’t need the money. The entire program was originally conceived to help out the small farmer, but the fact is that small farmers have a very hard time qualifying for any of the major subsidies, and the big agrobusinesses which get the subsidies are given an unfair advantage and are forcing the few remaining small farmers into bankruptcy. This program needs to end now While we’re at it, let’s also cut the $500 million a year in milk subsidies going to a very small number of giant milk producers. Savings: $120 billion.

• Medicare – The reconciliation bill actually makes some modest cuts in Medicaid, but leaves this much more bloated program untouched. Medicare accounts for $385 billion in the budget, and that is a huge increase over last year, mostly because of the confusing new prescription drug benefit which carries substantial administrative costs and costs for the actual drug subsidies. This new addition to an already overblown program should never have been passed and needs to be gotten rid of. Some method of bringing pressure to bear on drug companies to lower prices for seniors, such as opening up access to foreign drug sources to encourage competition is a more practical solution to providing reasonably priced phamaceuticals to seniors. Savings: $53 billion.

• Social Security – Screw the old folks. Something has to be done about it. I don’t really hate old people, but every old person benefiting from the current system is making things worse for generations of old people yet to come, and they’re all equally deserving of our support. Social Security is the single biggest problem in the budget this year and it’s goig to be an even bigger problem with every coming year, ballooning as time passes. In the current budget it’s $546 billion. That needs to be cut by a minimum of 5% per year for the next 10 years, which can be accomplished by offering the opportunity to opt out of the system to younger citizens who will give up all of their past payments into the system and half of their future payments into the system in order to be able to invest the remaining half of their future payments in approved mutual funds. This will make the system solvent in about 20 years. Savings: $27 billion.

• Corporate Welfare – Corporate welfare takes a number of forms, adding up to a total of over $120 billion dollars, but at least $80 billion of that is payments direct to companies to underwrite certain types of research projects, develop particular products or to encourage them to do business in particular ways. Some of that may be necessary, but an awful lot of it can be cut. The administration actually has a remarkably good record on trying to cut corporate welfare, but whenever they propose a set of cuts (usually about 10% in each budget) the money gets added back in by legislators. The worst examples of corporate welfare are subsidies to pharmaceutical companies to research drugs they could develop for profit anyway, to inherently profitable businesses like the Import-Export Bank, and to research grant programs like the Small Business Innovative Research Program and the Advanced Technology Program. If something is worth researching there ought to be a profit to be made from the fruits of that research. The threat of cuts to their subsidies and grants might persuade pharmaceutical companies to lower their prices for seniors, and a minimum overall 20% cut to corporate welfare programs of all sorts seems like a bare minimum to start with, and it ought to be scaled up every year. Savings $24 billion.

• The War on Drugs – It does nothing but harm to individuals and society. It’s time to end it. Since it was started coca production in South America has increased tenfold, more drugs are available cheaper on our streets than ever before, and enormous amounts of money have been wasted. Cut every single program associated with the war on drugs, from the ONDCP on down to subsidies for local law enforcement. Savings $50 billion.

So, there you’ve got $274 billion in additional budget cuts with little or no real harm done – no negation of the economic recovery by raising taxes and no death camps for old people. Add that to the $42 billion cut by Congress and you’ve got $316 billion. Yikes, that’s $2 billion more than the projected deficit. I think I just created a budget surplus. Go me!

Now why don’t the geniuses we keep sending back to Washington year after year have the brains or the guts to do the same thing?

Dave

—-

Resources:

Excellent guide to proposed Budget Cuts: Reconciiation Guide.
Congressional Budget Office Budget Projections
Citizens Against Government Waste Statement on Budget Reconciliation
Overview of Final Reconcilliation Bill in the Detroit Free Press
Actual Text of Budget Reconciliation Act

Powered by

About Dave Nalle

  • SFC SKI

    Before coffee, I won’t even look at your math, but your reasoning is pretty sound. Pork is a big problem in our governemnt budget, but throwing good money after bad is just as much a problem.

  • http://www.elitistpig.com Dave Nalle

    At a minimum you need a couple of cups of coffee before even thinking about numbers ths large.

    Dave

  • Bliffle

    “Some on the right are pointing out that over half the budget goes to social programs for senior citizens, though I don’t think they’re ready for the logical solution of euthanasia parlors quite yet.”

    While ‘they’ may not be ready for euthanasia parlors yet, I surmise that you are.

    Coming to the defense of my senior bretheren who have been so improvident as to believe that the money they put into SS and the lovely pension plans once promised by such stalwarts as IBM and GM, offered to encourage them to take lower wages for 40 years in hopes of the carrot not being jerked rudely away upon reaching age 65, in defense, I say, of those poor beknighted souls who made the bad choice of building, repairing and fighting for this opulent society which so many enjoy in 2005, though they are certainly guilty of poor foresight in not pursuing more remunerative lifepaths such as looting fat corporations, reneging on political promises, exploiting the defenseless, or, like mois, Parasitizing The Rich, in defense of those childlike simples I say Give Them A Break. After all, they DID put the money in originally. It is hardly their fault that the politicians (abetted by eager corporate looting hyenas and their fleas the Lobbyists) chose to loot the SS treasury AND the improperly funded pension plans to finance Vanity Wars and prop up floundering bloat businesses without even a pretense at promise to refund the money.

    Twenty years ago, when Alan Greasepan REALLY worried about longerange financial matters (he was younger then, maybe he’s made a bundle since then and no longer cares) he pursuaded the admin and congress to assure that SS would pay it’s own way by raising the wage tax, which, while one is justified to rail at any and every tax, it would seem that a wage tax earmarked for the direct income benefit of those wage taxpayers would be imminently fair, and indeed every right-thinking American would oppose every effort to divert SS funds to irrelevant uses, such as, say, Vanity Wars.

    Well someone must defend them, for they have precious little recourse in the courts, it being the bespoke policy of our judicial system to be Reluctant To Interfere In The Rights Of Employers.

  • JR

    Them’s big sentences. You read much Pynchon?

    Kudos also to Dave Nalle for the Kornbluth.

  • http://www.elitistpig.com Dave Nalle

    While ‘they’ may not be ready for euthanasia parlors yet, I surmise that you are.

    It’s called sarcasm, Bliffle. And obvious enough to be clear even in this medium.

    Coming to the defense of my senior bretheren who have been so improvident as to believe that the money they put into SS and the lovely pension plans once promised by such stalwarts as IBM and GM, offered to encourage them to take lower wages for 40 years in hopes of the carrot not being jerked rudely away upon reaching age 65, in defense, I say, of those poor beknighted souls who made the bad choice of building, repairing and fighting for this opulent society which so many enjoy in 2005, though they are certainly guilty of poor foresight in not pursuing more remunerative lifepaths such as looting fat corporations, reneging on political promises, exploiting the defenseless, or, like mois, Parasitizing The Rich, in defense of those childlike simples I say Give Them A Break. After all, they DID put the money in originally. It is hardly their fault that the politicians (abetted by eager corporate looting hyenas and their fleas the Lobbyists) chose to loot the SS treasury AND the improperly funded pension plans to finance Vanity Wars and prop up floundering bloat businesses without even a pretense at promise to refund the money.

    I don’t believe that even I suggested taking away benefits from those already on Social Security, but something has to be done about the disaster the system is rapidly going to turn into, and one of the first steps is to start aggressively taking people out of the system who haven’t yet reached retirement age. The rest of your meandering paragraph is a bit hard to get a handle on, but it seems you think that the people of past generations were underpaid and poorly advised economically. That may be true, but who do you lay the blame on? I point to those who created a society where people would assume someone else was going to take care of their needs in their dotage. Discouraging self-reliance and responsibility in that way was a terrible bit of unintentional social engineering, and it’s time to do away with it. We may have made mistakes in the past but that doesn’t mean we have to perpetuate them forever.

    Twenty years ago, when Alan Greasepan REALLY worried about longerange financial matters (he was younger then, maybe he’s made a bundle since then and no longer cares) he pursuaded the admin and congress to assure that SS would pay it’s own way by raising the wage tax, which, while one is justified to rail at any and every tax, it would seem that a wage tax earmarked for the direct income benefit of those wage taxpayers would be imminently fair, and indeed every right-thinking American would oppose every effort to divert SS funds to irrelevant uses, such as, say, Vanity Wars.

    The money was diverted long before we got to the current war. It disappeared in the morass of The Great Society and no one ever bothered to make any effort to restore it.

    Well someone must defend them, for they have precious little recourse in the courts, it being the bespoke policy of our judicial system to be Reluctant To Interfere In The Rights Of Employers.

    They have one of the most powerful and manipulative lobbies on capitol hill in the form of the AARP, which has so intimidated everyone there that virtually no positive change on social security is possible.

    Yes, we do need to make sure the elderly are taken care of, but why does it have to be at the expense of every future generation who will also get old? This is rather like fraternity hazing. Just because one class went through hazing it feels obligated to haze the class that came after it. Just because one generation got a raw deal from social security it feels it has to use its power through lobbyists and a large voting block to see that the next few generations suffer the same way? That’s just vindictive. Think of your grandchildren.

    Dave

  • lumpy

    based on past experience with government I think that few entitlements ever go away, so SS will be with us until it breaks the budget once and for all in a couple of decades.

  • Bliffle

    “While ‘they’ may not be ready for euthanasia parlors yet, I surmise that you are.

    It’s called sarcasm, Bliffle. And obvious enough to be clear even in this medium.”

    Oh I was just joshin’ you, Dave. I don’t believe for a moment that you were preparing to push the seniors into ovens! I was right, wasn’t I? Wasn’t I?

  • http://www.elitistpig.com Dave Nalle

    Well, Bliff. I do think that euthanasia should be legal, but I don’t think it ought to be mandatory. Pretty much the same way I feel about abortion.

    Dave

  • J.M. Harrison

    Dave we might start “dealing” with the blouted budget by telling the insurance companies to shut up and sit down, regulating certain elements of the health industry that takes gross profits (and I don’t mean in the technical sense) and talking of national healthcare.

    Of course this is where conservatives – esp., those in the vest pocket of drug companies and huge HMOs, etc will scream about how we “have the best health care in the world!”

    Really…

    We have been losing groung in numerous areas of measurement – not the least of which is lifespan. Many other countries WITH nationalized health care are either already ahead of us or catching up to us. These countries too have a remarkably lower percentage of many of the major killers of Americans…

    But until we seperate disgustingly HUGE profits from YOUR well-being we will see – among other things, disgustingly HUGE budgets in our government as it struggles with health issues while ignoring the solution.

    J.M. Harrison

  • http://www.elitistpig.com Dave Nalle

    J. M., national healthcare in the sense you mean it is a dead issue and will remain such, not because of conservatives in the pocket of the insurance industry, but because that level of restraint of trade is unacceptable in a free society.

    I do think that we need to make sure that health providers make only fair profits and that insurance companies treat customers fairly. We also need to have a system of reliable gap insurance for those who are unable or unwilling to provide themselves with basic health coverage, a topic I plan to write on at length sometime soon.

    As for your contention that nations with national healthcare are catching up with us or have lower percentages of deaths from major causes than we do, that’s just laughable. I direct you to my article on this subject from last year.

    Double the rate of death from all forms of cancer, 7 times the rate of death from colon cancer, higher rates of death from anything requiring any kind of rapid response or emergency treatment, including all forms of heart disease. That’s what national healthcare offers us. I guess the reduction in the elderly population would be good for our social security expenses, but good luck selling that to the people who will actually have to die under a system like that.

    Dave

  • Bliffle

    Too late folks: we already have National Health Service. Trouble is, it was designed by the 600 lobbyists that infest the halls of Congress and K street. So they designed it to benefit The Providers instead of The Recipients (those being the terms used in the biz). So we have a big fat oligopoly that gives Providers a shared monopoly which the Providers can gleefully divide up among themselves as they please without any danger of being subjected to either ‘market forces’ or government regulation. Meanwhile, the Recipients are thrown to the sharks, not being allowed to use their potential market power by strategems such as the SS prohibition against SS bargaining for low prices, inhibiting importation from non-controlled foreign markets like Canada, etc.

    So we have the worst of both worlds: The high costs and cream-skimming of private health care, and the bureaucracy of government agencies. Just to utterly betray the US citizen this is all financed thru publicly collected taxes. While some 40 million US taxpayers pay to prop up this wretched system they do not benefit from it.

    Oh joy.

    Meanwhile, in those beknighted Euro countries with Recipient oriented NHS my relatives and in-laws get whatever care they need with a minimum of fuss and they live to be 90. Prescriptions are cheap, you can see a doctor the same day, the hospitals are quiet and hysteria-free and they treat you immediately. You don’t have to wait 4 hours with your broken arm and fill out forms. It all seems so easy. I’ve done it myself.

  • http://www.diablog.us Dave Nalle

    Meanwhile, in those beknighted Euro countries with Recipient oriented NHS my relatives and in-laws get whatever care they need with a minimum of fuss and they live to be 90. Prescriptions are cheap, you can see a doctor the same day, the hospitals are quiet and hysteria-free and they treat you immediately. You don’t have to wait 4 hours with your broken arm and fill out forms. It all seems so easy. I’ve done it myself.

    This description bears no resemblance to any health system in Europe today. No one gets treated immediately except for minor emergency treatment. We’re talking waits so long that people die while waiting. I have a relative who died in Germany because they refused to replace her pacemaker even though it was failing. They insisted that it had to fail first, THEN they would replace it. Of course it failed and she died before they could fit in the operation. There’s a reason why Europeans are taking all the cash they can gather and coming to the US or Hungary for treatment of any serious long-term illness.

    Dave

  • http://alienboysworld.blogspot.com/ Christopher Rose

    Dave,

    I can from personal experience over the last five years guarantee you that the European Health Services are indeed as Bliffle described.

    Your opening assertion above “This description bears no resemblance to any health system in Europe today” is completely and utterly incorrect.

    Your relative’s story is tragic but doesn’t really shed any meaningful light on the issue.

    Oh yes, Hungary is in Europe…

  • http://www.diablog.us Dave Nalle

    Hungary is still outside the mainstream of western Europe, despite technically being part of Europe.

    And what long term potentially fatal illness were you diagnosed with, Christopher?

    I’ve never claimed that the EU system didn’t handle scrapes, bruises and even broken bones just fine – but the statistics don’t lie. It’s a disaster for life threatening chronic conditions and diseases.

    Dave

  • Bliffle

    “The money was diverted long before we got to the current war. It disappeared in the morass of The Great Society and no one ever bothered to make any effort to restore it.”

    Ummm, correction please. The LBJ GS was in the 60s and Greenspan/Reagan raised the SS contribution in the 80s to ASSURE funding. It is only a criminal series of presidents and congress-critters since then that have ‘borrowed’ SS funds, which they have litle intention to repay. It amazes me that we forebear simply filing thievery charges at the local police station and slapping them all in irons for their many crimes.

  • Bliffle

    lumpy: “…so SS will be with us until it breaks the budget once and for all in a couple of decades.”

    An odd statement since SS revenues are sustaining GWBs wild spending sprees. You do understand that he borrows copiously from the SS revenues retained above disbursements, don’t you? Do you suppose GWB intends to put the money back? Or are those tax cuts lost irretrievably?

  • lumpy

    Last time I checked there was no actual SS fund at all and all the money went straight into general revenue, so claiming Bush is raiding the fund is meaningless, as that bridge was crossed long before he took office.

  • http://www.diablog.us Dave Nalle

    The current deficit is hardly the result of a wild spending spree. Despite all criticism to the contrary, the Bush administration has made genuine efforts to cut the budget in most areas where cuts could be made, and their biggest spending blunder – the Medicaire Prescription Drug Plan hasn’t really hit the books yet. They’re dealing with the legacy of past administrations and entitlements and mandatory spending which just go up and up over time. The problems date back much farther than just the last 5 years. Current pork spending and the inflation of some programs certainly doesn’t help – but most of the blame for that falls squarely on Congress.

    Bush HAS done an extraordinarily good job of raising government revenues, particularly corporate tax revenues. Plus hist tax cuts have stimulated growth and that has led to more revenue as well.

    Dave

  • Bliffle

    Certainly there IS a SS fund. SS revenues do NOT go into the general fund. But perfidious congress critters, under pressure from one of our criminal too-powerful presidents, passed laws some years ago to allow the pres to borrow SS funds by issueing Special T-Bills that can ONLY be redeemed by the treasury: SS cannot sell them to anyone else.

    Actually, the reason SS is separate is because of the diligent work of good republicans 70 years ago. FDR and his catspaw Francis Perkins wanted SS rev to go into the gen fund (so they could get their grubby hands on it!) but the repubs insisted it be separate for acountability. Ahh for those good old days of financially responsible republicans.

    GWB increased gov size more than 30% and has never vetoed a spending bill.

  • http://www.diablog.us Dave Nalle

    The budgets which Bush has submitted to congress have consistently been 10-20% less in spending than the budgets passed during the previous year. Yes, he didn’t veto the final budgets that got to him, but at least he set the starting point lower than most of his predecessors were prone to do.

    Dave

  • Bliffle

    “The budgets which Bush has submitted to congress have consistently been 10-20% less in spending than the budgets passed during the previous year.”

    Not if one includes the ‘off-budget’ items. You know, little things, like the Iraq invasion.

  • http://www.templestark.com Temple Stark

    #21. Oops deadly, must-be-avoided fact. Thank you.

  • http://www.diablog.us Dave Nalle

    Not if one includes the ‘off-budget’ items. You know, little things, like the Iraq invasion.

    Correct me if I’m wrong, but according to what I’ve read in the budget overview from the OMB, it’s off-budget only in the sense that it isn’t a separate budget item but is included in the total of $426 billion allocated next year for the Department of Defense, and the DoD budget is figured into the final total budget, as indicated in another OMB document. It’s interesting to note that the DoD budget now makes up over half the government’s total discretionary spending.

    So, the point about the war being off-budget is really not particularly accurate, but a good point can be made that a lot of our deficit woes could be alleviated if we cut the Defense budget back to year 2000 levels of under $300 billion a year, or even lower.

    Dave

  • lumpy

    So it sounds like if we made even some of your suggested cuts and continued to pull out of iraq we could easily run a surplus before Bush leaves office. That’s not so grim.

  • Bliffle

    I can’t find that data in the cited references.

  • http://www.diablog.us Dave Nalle

    Once we’re out of Iraq you can’t imagine what I’d like to see done to the military budget. We need to shut down all of our overseas bases, send the majority of all branches of the military home and cut the permanent force to an administrative/planning/maintenance level. IMO we could get the DoD budget under $150 billion and provide all the services we really need. The rest of the responsibilities ought to be in the hands of the state national guards.

    Dave

  • Dave Nalle

    Which data can’t you find, Bliff? If you’re talking about the ‘off budget’ spending, that’s the $93 billion special appropriation which is included in the details for the 2005 budget, and which is no longer ‘off budget’ since it’s been added in for purposes of calculating the 2006 budget where there are no ‘off budget’ appropriations.

    Dave