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COLUMNISTS
TODAY'S STORIES
14.04.2008
Where Do Your Tax Dollars Go?

In honor of Tax Day tomorrow, the Center on Budget and Policy Priorities has put together a helpful brief reminding us that, as it turns out, the federal government doesn't spend all our hard-earned dollars on a bunch of bridges to nowhere in Alaska. About two-thirds of the federal budget goes to defense, Social Security, and health care. The rest of it goes to interest on the national debt, safety-net programs for the very poor (the Earned Income Tax Credit, housing and heating assistance, food stamps, and so forth), and a handful of other areas like veterans' benefits, scientific research, education, and transportation. This isn't to say that pork-barrel spending isn't an abomination (it is) or that entitlement programs shouldn't be means-tested (they should). But it's always important to keep in mind that when conservatives--like, for instance, a certain senator from Arizona--suggest that we can get our fiscal house in order by cutting huge chunks of generic wasteful spending without confronting any real tradeoffs, they're either ignorant or they're lying.

--Josh Patashnik 

Posted: Monday, April 14, 2008 5:08 PM with 19 comment(s)

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roidubouloi said:

How about they're ignorant AND they're lying.

April 14, 2008 5:26 PM

The Ignorant Populist said:

Taxes will set you free.

(Cut the defence budget)

April 14, 2008 5:29 PM

kyoung said:

OK, I'm sure this is a stupid question to be asking a TNR crowd, but why is Social Security spending on that graph?  Wouldn't the graph be more illustrative if it isolated spending more closely alligned with the federal income tax that we are paying tomorrow, not the FICA taxes we pay each paycheck?

April 14, 2008 5:36 PM

ejbenjamin said:

I do love the irony of waging a war of choice and charging it to the "Defense" account.

April 14, 2008 5:45 PM

roidubouloi said:

kyoung,

This is a graph of spending, not financing for the budget.  If you took out social security, you would just know less than you do with it in the graph.

ejbenjamin,

If it were merely a war of choice, you'd have a good point, but how about a war of sheer blinding stupidity that makes us less secure in every way imaginable.  What should that be charged to?

April 14, 2008 6:00 PM

r-ennis said:

What's "everything else" and is it worth it? I doubt it. 18% is not nothing. A certain Senator from Illinois called for a tax reduction for the middle class and also do away with the Alternate Minimum Tax which affects "rich folks" like me. How does he intend to put our fiscal house in order? Maybe he is also guilty of lying and ignorance.

In plain English, "means testing" entitlement programs means depriving people like me of their Social Security and Medicare because they were responsible enough to save for their retirement while contributing to these programs all their working lives with the thought of eventually getting at least a fraction of it back. No thanks!!

Nevertheless, Clinton, with Republican help did, in fact straighten out the fiscal mess, largely by scaling government down.

April 14, 2008 6:06 PM

AlanSP said:

Speaking of social security, when did that stop being a campaign issue? Seems like not too long ago that we were being warned of looming disaster and we haven't done a thing to the system.  I guess it kind of got pushed into the background by everything else that's going on, but it's weird that nobody is talking about this.

April 14, 2008 6:08 PM

Josh Patashnik said:

r-ennis: Click through the link to see (they have a chart of that, too), but to summarize, the largest chunks are education, transportation money (this is probably where some savings could come, but everyone on both sides of the aisle loves public-works projects and no one likes toll roads), veterans' benefits, homeland security, foreign aid, and governmental operations.

On the entitlement question, no one's talking about depriving people near retirement of benefits, and no one's talking about completely eliminating Social Security and Medicare benefits for wealthier people, just slowing the growth of such benefits ("progressive indexing").  As the Baby Boomers retire, the notion that you can fix the fiscal mess "by scaling government down" (all that mysterious generic waste again!) is laughable.

April 14, 2008 6:24 PM

Rhubarbs said:

"[T]hey're either ignorant or they're lying"? Puh-lease. There's not enough ignorance in all the parochial-school biology classrooms in America to make that a plausible choice. They're lying. Can we please just say so?

April 14, 2008 6:31 PM

williamyard said:

I love the fact that the gray area is a gray area.

April 14, 2008 6:32 PM

The Ignorant Populist said:

:) William.

April 14, 2008 7:09 PM

tarfon said:

Comparing this chart to pork barrel spending and earmarks is comparing apples and oranges.  Pork barrel expenditures and earmarks occur in most parts of the budget -- a specific provision requiring DOD to buy a particular weapons system is a defense expenditure, but it's a pork barrel earmark for the district(s) where the system is manufactured; likewise, a provision requiring that a grant program fund a particular entity is an expenditure for social services (or research, or ....), but it's also a benefit to the district where the entity is located.  So you can't point to this pie-chart and say, see, those earmarks that you're always complaining about are really a small part of the budget, since they're some tiny fraction of what's only an 18% wedge.

April 14, 2008 7:34 PM

teplukhin2you said:

Whose talking about "getting our fiscal house in order"? How very '90s. Sort of like listening to George Gilder.

Obama would win a lot of cred, get on the offensive and wrongfoot McC if he were to get serious about fiscal responsibility and propose that every $ saved from redeployment from/in Iraq be spent toward the yellow and green slices of the pie in that chart.

Coming from a Dem, such a proposal would win over millions of moderate GOPers and independents without losing many votes among liberals, and would make all the talk about Wright, bitterness etc fade into history. Game over. Maybe even landslide time.

April 15, 2008 1:33 AM

AlanSP said:

I think tep's suggestion is a good one politically, especially since Obama has thus far done fairly little to reach out to elderly voters, which remain his worst demographic both in the primary and in the general election.

April 15, 2008 10:46 AM

tec619 said:

Tarfon: Excellent points

Tep: What redeployment savings? Did you also swallow the "peace dividend" crap GHW Bush, aided by the brain-dead news media (primarily t.v.) foisted on Americans.  Draw downs, base closures, etc., all cost MONEY. Was there any jurisdiction that witnessed a base closing that didn't demand cleanup and economic stabilization and redevelopment money?

Moreover, the reality is that the defense budge has never significantly contracted. Apart from the necessary business of national defense, there is significant waste in procurement and through congressionally mandated pork. (The GAO recently released a report stating that the new avionics program for the C-130 is expereincing  cost overruns exceeding 300 + percent.  The oldest planes of the latest C-130 model (the "J") is 9 years old. WTF kind of update could possibly exceed costs by that much? I'm a Herc aircrewman. It's a f---king cargo plane platform, and durable one.  What the hell is this plane supposed to do? Fly Mach 5 with turboprop engines?  Savings?)

It will cost money to redeploy troops and this nonsensical slogan ("redeploy") will prove less efficient because our guys will have to called in time and time again to "stabilize" outbreaks of violence, without an existing forward infrastructure. Plus, the services are holding in abeyance, billions of dollars of maintenance for equipment. This covers everything from fixed and rotary wing aircraft to tanks, APCs and Humvees.  Btw, where are all these troops going to live? Sure Kuwait has excess capacity, such as the tent metropolis at Camp Virgina, etc., but logistics cost money. And thanks to defense-dollar parasite, draft-dodger, Cheney, most logistics support will be provided via no-bid contracts, to companies whose employees earn 2-3 times the salary and benefits (tax-free, of course) of the average service member,

Whence the savings? The out years? I guess by McCain's calculations that'll be 2107.

April 15, 2008 11:30 AM

tec619 said:

Well, maybe we'll save a little money on contractor fraud. . .

From TalkingPointsMemo:

Today's Must Read

By Paul Kiel - April 15, 2008, 10:10AM

Prepare to have your credulity tested.

Back in February, the AP broke the story that the White House had secretly modified a proposed rule to crack down on contract fraud. The rule, originally drafted by the Justice Department, was intended to force contractors to police themselves and report evidence of fraud or abuse. But the White House's version of the rule specifically exempted contractors working overseas on contracts that exceeded $5 million. (Absolutely appalling!! Draft-dodging war-mongers for war-profiteering.)

The Justice Department, which needs all the help it can get in busting corrupt contractors, was dismayed. But it made the major overseas contractors (like, say, Blackwater, KBR, CACI International, etc.), who had been opposing the rule, very happy.

When the AP asked why the White House had inserted the loophole, no answers were forthcoming. A spokeswoman from the Office of Management and Budget would only say that it was a "proposed rule," and that they were reviewing public comments.

And that was it. Over the ensuing months, members of Congress from both parties denounced the rule and vowed investigations. Even the Special Inspector General for Iraq Reconstruction publicly criticized the rule. But the White House otherwise stayed mum.

The first Congressional hearing was set for today. And the White House has let it be known that the loophole is gone -- and that it was all a big misunderstanding:

April 15, 2008 11:42 AM

sdmcleod said:

Somewhere around 1972 the government started counting social security taxes as income to the general fund rather than payments against future benefits. This was done to hide the huge deficits from another war of choice. When social security taxes were not counted as part of the general fund, the money was borrowed from the social security trust fund and counted as part of the national debt. Now that is all fiction. It does not matter whether the money somes from social security taxes or income taxes or whatever taxes. Also, spending all comes from the same pot whether it is for social security, medicare, or whatever. The social security trust fund is a fiction so the pie chart here is accurate.

April 15, 2008 12:43 PM

roidubouloi said:

The social security trust fund is not a fiction.  It is a useful accounting device for tracking the changing balance between receipts and disbursements, no more a fiction than any other balance sheet item based on accumulated flows.  From a macroeconomic standpoint, there is also a difference between transfer payments -- transfers, via taxes and programs such as SS, from one taxpayer to another, and government spending on purchases.  Either way, it is useful to see that relative proportions of these expenditures.

April 16, 2008 11:22 AM

The Plank said:

Ezra Klein and Kathy G. take issue with my remark in passing the other day that I believe entitlement

April 18, 2008 2:40 PM