The Budget Game
The President presented his FY 2005 budget to Congress today. You can find the Times story at the link. The actual budget documents are here. Those documents are my source for this post.
Let’s ignore the 2005 budget for a moment and play the budget game with the 2004 budget. The idea is to balance the budget under certain constraints. What constraints?
Well, the President wants more tax cuts and I would be surprised if the Republican Congress was of a mind to significantly raise taxes. So in our game, you can’t raise taxes. We are at war, so the defense budget is off the table. The 9/11 world puts Homeland Security above almost everything so we are unlikely to get any savings there.
The President and the Republican Congress just enacted a new Medicare prescription drug benefit, so calls for reducing Medicare spending are not realistic. Interest on the national debt must be paid to avoid the calamity of default so that spending is fixed. The Social Security system is a revenue generator with the trust fund enjoying large surpluses. Besides, spending cuts in Social Security in an election year are off the table.
Thus, we are left with discretionary domestic spending. We are told that it is in domestic discretionary spending that waste, fraud, abuse and pork are to be found.
Now, this year’s the budget will be out of balance by more than $520 billion dollars after the entire Social Security surplus is consumed. Given the size of that deficit, we can not be gentle in our approach to cutting discretionary domestic spending. I am talking about using a battle axe, not a scalpel. This is not going to be pretty and we can not be selective. In fact, we are going to start by eliminating whole programs and departments. Ready to play? Okay, let’s have at it.
If you do not like President Bush’s idea of going to Mars, lets just zero out NASA. Hubble and the Mars rovers will rot but we save some money. President Bush’s idea of space exploration is not affordable if we wish to balance the budget. Savings: $15.4 billion.
I think it is time for farmers to face the market without government interference or support. Let’s eliminate the Department of Agriculture. No inspectors will keep mad cow disease from your McDonalds but I am sure the invisible hand will keep you safe. Savings: $20.7 billion.
What does the Commerce Department do anyway? Scrap it. Savings: $5.8 billion
Personally, I am not a big fan of No Child Left Behind. I suspect that it will leave one of my children behind. Besides, isn’t it conservative doctrine that education is a local concern? Newt wanted to eliminate the entire Department of Education. Let’s give him his wish. Savings: $55.7 billion.
The Energy Department regulates nuclear power plants, but what the hey, they are probably pretty safe anyway. Let’s save the money by scrapping the whole department. Savings: $23.2 billion.
Housing and Urban Development doesn’t do anything for me because I am not poor. Besides, few poor people vote. Eliminate HUD. Savings: $30.4 billion.
I never liked Gale Norton anyway. Let her earn her keep in the private sector. Shutter the Interior Department. I am sure that some private group will step in to preserve Yellowstone and Yosemite. Besides, no one is taking the idea of GWB on Mount Rushmore seriously. I will miss the monuments when I visit D.C. but everyone has to sacrifice a bit. Savings: $10.6 billion.
Have we been ruthless enough in cutting spending, so far? Nope. We have saved $161.8 billion. We have a long way still to go.
I like Martha Stewart. If not for her, we could not have made both a centerpiece and a salad for Thanksgiving out of the grass clippings from our back yard. John Ashcroft is another story. Eliminate the Justice Department and not only will Martha go free but Crisco Johnny will be out of a job. If no one is prosecuting the bad guys, that is just too bad. Spending must be cut and the Justice Department closed. Savings: $19.3 billion.
Labor unions often support Democrats. Who needs that? We eliminated Commerce, so the Department of Labor must go as well. Savings: $11.7 billion.
What about the State Department? No one at the White House listens to them and the rest of the world doesn’t like us anyway. If we can’t get passports, well, who wants to go to France? Besides, I hear Colin Powell already has a really good military pension. Close it. Savings: $9.3 billion.
The Treasury Department can be closed. The President has Karl Rove for a body guard so he doesn’t really need the Secret Service. Besides, Treasury plans on leaving a Democrat on the dime instead of replacing him with Saint Ronnie. Savings: $11.2 billion.
Health and Human Services used to be called the Department of Heath Education and Welfare. We do not like welfare. Besides, who cares about stuff like autism research? Eliminate the whole Department. Savings: $69.2 billion.
That was fun. Can we now rest? No, but at least we hare more than half way done. We have cut $282 billion in spending. We still need to cut another $238 billion.
How about Transportation? Everyone knows that the highway appropriations are among the most pork ridden parts of the budget. Eliminate all of its discretionary spending. Savings: $13.9 billion.
The thing about veterans is that they are no longer in the military. We have already gotten their blood, sweat, and tears. Why should we keep providing benefits to them long after they are useful to us? Let’s close the VA. Savings: $29.1 billion.
The Corps of Engineers? Please, let’s be serious. Shut them down. Savings: $4.6 billion.
The EPA prevents the true capitalist spirit of the American people from being realized. All they do is protect snail darters, impose a lot of red tape on self sufficient entrepreneurs and prevent economic growth. EPA is just another one of those big-government liberal ideas from the 1970s. Kill it. Savings: $8.4 billion.
Our savings now amount to $338 billion. We still need to cut $174 billion in discretionary spending so it is time to get really serious.
The Executive office of the President, the GSA (“sorry, we can not fix your heat but since your office is closed, so what?”), International Assistance Programs, the entire Judicial Branch, the entire Legislative branch (who cares about Congress anyway), the National Science Foundations, the Small Business Administration and the Social Security Administration (the administrative portion) can all be eliminated. Total savings: $46.5 billion.
Okay, we have cut all of the fat. Waste, fraud and abuse have been eliminated. Perhaps we nicked a little muscle along the way. The problem is that we have cut only $385 billion out of a deficit of $521 billion.
The other problem is that the only discretionary spending left in the budget is for Defense and Homeland Security.
I am not kidding. We have eliminated all federal government discretionary functions except Defense and Homeland Security and the budget remains more than $130 billion in the hole.
The government does not take in enough money to fund mandatory spending as well as discretionary spending on defense and Homeland Security. Eliminating all domestic discretionary spending of the Federal government will not balance the budget.
If we are serious about balancing the budget, domestic discretionary spending should be restrained but that is not enough. To balance the budget, we have to increase revenues or cut military, Homeland Security and/or entitlement spending (e.g. Granny’s check or her health care).
For any domestic discretionary spending you wish to retain, be it meat inspectors, space exploration, autism research, the FBI or whatever, the money must come from one of four places. Those are, once again, additional revenue, entitlements, defense/homeland security, or deficits.
If you think that balancing the budget can be accomplished by painless cuts of fat, you need to take at look at the actual numbers.
Comments
Whoa! An excellent breakdown ofour current budget woes. Unfortunately I fear our ever vigilant media will not bother to call any GOP politician to task for declaring that we just need to cut spending and all will be well.
Posted by: Chris | February 2, 2004 04:17 PM
Frightening. I have no idea what we are going to do.
Best explanation I have seen of the budget problems.
Posted by: JWC | February 2, 2004 09:01 PM
I just got off the phone with the Assoc. Dir. for the Eisenhower National Clearinghouse for Math and Science Education.
They are a $5m line item in the to-be-cut portion of the budget, mentioned without numbers in Weisman's piece on the budget in today's WaPo.
Posted by: Eric | February 3, 2004 10:48 AM
Brilliant, Grover! You get a gold star! :)
Posted by: Elayne Riggs | February 3, 2004 12:56 PM
Being the cynic that I am, I would hazard a guess that such an out-of-whack "budget" proposal gives Bush enough cover to truthfully claim that his tax cuts are not a big contributor to the deficit, thereby undercutting anyone who suggests repealing them.
Posted by: Skippy X | February 3, 2004 04:01 PM
have any of you heard of the words, sophism or specious. How about hypocrisy. The above article was based on all 3 of those words. I don't care if your left wing or right wing, get a life. A brain would help,too.
Posted by: bill quinn | February 10, 2004 09:03 PM
Bill:
Are the numbers wrong or just the politics?
My point is that trimming domestic discretionary spending will not eliminate the budget deficit in that the deficit exceeds the total of all such spending. If you want to eliminate the deficit you need to look to the entitlement programs or or to the revenue side.
Posted by: dwight meredith | February 10, 2004 09:14 PM
what do you define as discretionary spending? Are you completely eliminating these various departments in your game or are these in fact only a percentage of these departments total budgets?
Posted by: kedar | February 12, 2004 11:37 AM