Schizophrenia and the Federal Budget
Congress and the White House continue to struggle with the federal budget and the national debt. Their inability to put the nation’s finances on a sounder footing reflects partisan differences in what to do about spending and taxes, but it also reflects a national schizophrenia among citizens about what the federal government should and should not do.
In a recent Ipsos poll, 75 percent of respondents said “we should worry about the national debt,” but 60 percent said “health care should be free and universally available.” Sixty-six percent said that “the national debt is an unfair legacy being left to the younger generation,” but 59 percent said “the government takes too much in taxes out of people’s paychecks.” Nearly a third said that “Congress should cut taxes even if it increases the national debt.”
It’s not clear from such data if citizens overall grasp the inconsistency in some of their responses. Indeed, a recent PEW Research poll found Americans equally divided between two choices: a “bigger government providing more services” (49 percent) or a ‘smaller government providing fewer services” (48 percent).
Still another problem is that many Americans just don’t know how they benefit from federal tax and spending policies. A 2008 poll by Cornell’s Suzanne Mettler found, for example, that 57 percent said they had “never used a government social program.” Asked to indicate if they had used any of 21 programs, 60% reported using the mortgage-interest deduction, 53 percent had used a student loan, 44 percent accessed Social Security and 40 percent used Medicare. Ninety-four percent had benefited from at least one such program; the average was four.
If we want Congress and the President to get serious about the budget, citizens need to get serious too. At least part of our task is to form a more accurate assessment of what the budget and taxes do and the benefits and costs that accompany them. We need to be educated.
A modest step could help. The government could send every citizen a single sheet of paper early each year reflecting how the federal budget was spent the previous fiscal year. On the front side there would be two simple pie charts. The first (illustrated for fiscal year 2022 below) would show in simple form how much of each budget dollar was used for the major categories in the budget. So (see below) if Uncle Sam spent 19% of the budget on Social Security, that would appear as 19 cents. Note how this graphic demonstrates that 85 cents of every budget dollar is taken with legally mandatory expenditures, national defense and interest on the debt.
A second pie chart could show what percent of revenue came from major categories of tax collections (e.g. individual, corporate) and what percent of the budget had to be borrowed (debt).
A few explanatory notes to these charts could be added to foster deeper understanding. For example, the elevated expenditure for student loans in 2022 was due to loan forgiveness programs and the non-defense discretionary figure was elevated because of pandemic relief.
Expenditures in CAPS are Mandatory (Required by Law)
Mandatory + Interest on the Debt + Defense = 85 Cents
(Figures May Not Add to 100 % Due to Rounding)
The flip side of the page could include two parts. On top could be a list of 30-40 major government services, with a suggestion that the taxpayer circle which his/her family benefitted from. This might address the common impression that “we pay all this money in taxes and what do we get for it?” Only major programs/services might be listed (e.g. mortgage interest deduction, veterans benefits, national defense, Social Security, Medicare, Medicaid, flight safety, food safety, interstate highway system, housing assistance, student loans, medical research, national parks). The bottom part of the page could include a few “Did You Know?” questions and answers to help further educate citizens and dispel common misperceptions. These could vary from year to year. For example for fiscal year 2022: “Did You Know that the federal government spent on average $34,000 on each senior compared to $8,000 on each child?” and: “Did You Know that spending on foreign aid is one percent of the budget?
For more curious citizens, the bottom of this page could include an invitation to “Fix the Budget” by directing them to one of the nonpartisan online simulations for doing so (or the government could design one itself). The Committee for a Responsible Federal Budget has a tool that contains (for major sections of the budget) policy proposals and associated increases or decreases in budget costs and the debt. By clicking on one’s choices, the impact on the debt over time is shown. Such simulations inform citizens on what’s already in the budget, at least some options for adding or eliminating programs and demonstrates that tough trade-offs are required f we’re serious about tackling the nation’s debt, which currently tops $33 trillion.
There are no easy budget choices, but out current contradictory demands and seemingly irresolvable differences require a more informed and realistic conversation among citizens and their elected officials.
Photo Credit: Alan Cleaver@pixabay.com
