A primer on the U.S. federal budget; what would you cut?

I got curious the other day about a very simple question: How much does the federal government collect in taxes each year, and from what sources, and how does it spend its money? After some casting about on Google, I found this helpful graphic, courtesy of The Washington Post. The original article has other strong graphics as well, and you can find it here. (When you get there, click on the tabs above this graphic to get access to the other graphics.)

The illustration depicts the FY2011 budget as proposed by President Obama. It didn’t fall out exactly this way, of course, but directionally, the graphic gives a good idea of where our taxes are levied and where the proceeds go.

Included in the category of “mandatory other spending” are things like Food Stamps, Unemployment Compensation, Child Nutrition and Tax Credits, Supplemental Security for the Disabled and Student Loans. Some of the items in other discretionary are Health and Human Services at about $84 billion, Transportation at $76 billion, Education at $47 billion, Housing and Urban Development at $44 billion, and Agriculture at $25 billion.

So the question to you, Mr. and Ms. Citizen, is how would you eliminate that $1.27 trillion deficit, which is just a little lower than the so-called “discretionary spending” made up of the defense budget and other discretionary categories? I’m sure there’s some waste and inefficiency that can be addressed; no one has tackled that issue seriously since Al Gore when he was vice president. Let’s assume you can find $50 billion to $100 billion of waste. That still leaves a large gap to be closed. If you’re close to retirement, are you willing to reduce your Social Security and Medicare benefits?

Do you want to redefine the role of the U.S. military and intelligence communities so we can shrink the defense budget significantly? (Here is a good argument for your case if that’s the path you choose.)

Or, on the other side of the ledger, would you be willing to pay more in taxes to help close the gap? Or do you want to see corporations pay more? Or some other group?

I’m going to think more about these questions and weigh in with my own representatives. I’d like to see some of you do the same and share your ideas here. I’ve been preaching lately that we all need to take a more active role in our government “of the people, by the people, and for the people.” Here’s a potentially meaningful way for you to do so.

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6 Responses to A primer on the U.S. federal budget; what would you cut?

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  2. Brian says:

    Here is my “never going to happen” solution:

    1) End the world’s largest Ponzi scheme, aka – US Social Security. No one was ever meant to collect it. Seriously. Up until the 1970’s the age at which you were allowed to collect was OLDER than the average US life expectancy. Replace it with mandatory 401k plans while employed.

    2) Close all military bases located outside the US unless they are funded by the local country. We should not be securing Germany, Japan, or Saudi Arabia. We should rely on our global allies to assist with stability concerns in those parts of the world and/or charge those governments for us to have a military presence there.

    3) Replace all taxes with a national sales tax. This will tax imports but not exports. A 10% sales tax would replace all revenue. If you are concerned about it being regressive, exempt the sales tax on certain items: fruits, vegetables, second-hand clothing, etc. Those who spend more (the rich) pay more taxes.

    4) Change the way we appropriate funds. No more earmarks. Projects are evaluated based on a set of objective criteria and funded accordingly (ie, like businesses determine which projects to do).

    • Peter Faur says:

      Thanks, Brian. Who knows what could happen? The only sure thing is that we can’t go on like this forever.

      I think many people are ready for some form of VAT or national sales tax. It sure would be a lot easier than doing taxes every year (I say as I’ve started getting everything together.)

      You’d be a good candidate for office someday, I think. Still have any interests in that area?

  3. Cole Lannum says:

    First of all, the descriptions of “mandatory” and “discretionary” are a joke. The only truly mandatory expense is interest on the debt (which–ironically [or perhaps tellingly] the Washington Post does not even show as being mandatory). My solution is simple–take all spending back to 2006 levels. Remember 2006? it was only 5 years ago. The Federal government spent 2.73 trillion that year. Problem solved.

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