Today, President Bush announced good news for the Federal Budget. It looks as though the budget deficit will be almost $100 thousand million less than expected, because the government is taking in more tax money than expected. Now, keep in mind, they are still going to spend $333 thousand million more than they intend to take in, and add that $333 thousand million to the national debt, which currently stands at $7,843,596,586,237.71. With a population of 296,608,542, that brings your personal share to $29,092.54. If it helps, think of the national debt as representing a nice mid-sized sedan for each and every man, woman, and child in the country. With the magic of compound interest, if we wait much longer to get serious about paying down the debt we will be talking about large luxury sedans.
Mr. Bush cautions that we are on track to reduce the deficit — not the national debt — by half before 2009 but only “so long as Congress holds the line on spending.”
There’s a little problem with that.
No, it isn’t the “Tax and Spend Liberals” in Congress, who to their credit understand that you really ought to have money before you go spending it. Nor, really, is the problem the side order of pork that gets stuffed into the federal budget. Pork costs us a lot of money, but it still accounts for less than a third of the budget, and grumble it does at least get spent in local communities stimulating local economies. I am not saying we shouldn’t demand Congress moderate the pork, but I’m saying there’s a bigger budget buster to consider.
The problem is unfunded mandates, unpaid commitments, and upcoming expenses.
Strictly speaking, an unfunded mandate is when Congress says that state/local governments or private businesses must do something, and then does not put enough/any money in the budget for it. The net effect is that in order to do what must be done, your state or local government must put it in their own budget and raise your taxes accordingly — most states don’t have the option of deficit spending. The deed is done, Congress pats itself on the back for keeping expenses low, and you have a cow when your state income tax, sales tax, and property taxes go up. In the case of a private business, they have no choice but to suck up the costs of compliance and pass the expense on to their customers, resulting in inflation. Wikipedia cites No Child Left Behind, the Emergency Medical Treatment and Active Labor Act, and the Americans with Disabilities Act as examples.
Needless to say, nobody outside Congress likes unfunded mandates. In some cases, such as NCLB, there are lawsuits over the unfunded mandate. Opponents reply that it isn’t an unfunded mandate, just a condition of receiving money and if you don’t like it you can leave your federal education dollars on the table and go. Bottom line on that one is that Ted Kennedy was promised full funding for NCLB, and I don’t know of any Congressman who wants to run for re-election in 2006 on the platform of “less money for public schools.” There’s $40 thousand million that might be tacked onto the budget, a bit less than half the reduction of the budget shortfall that Mr. Bush announced today, in one line-item.
On to unpaid commitments, by which I mean money that has been promised that has not made it into the budget. Sure, we could probably continue to blow off these expenses, but we shouldn’t. Things like the $15 thousand million President Bush promised to send as aid to Africa. Or the $1300 million the United States owes the United Nations. Or worse yet, those War on Terror expenses that seem to be shunted off into “supplemental spending” measures.” The last of these measures was $82 thousand billion and a side order of unfunded mandate Real ID, demonstrating that Mr. Bush’s estimate of reducing the budget deficit at all is predicated on no more military spending. It isn’t that Congress isn’t aware that we are “at war,” but rather that funding the war is like having a teenager who asks you for spending money at every opportunity.
And I didn’t even have to mention that the Veteran’s Administration could sure use another $975 million, minimum.
The final problem with “congress holding the line on spending” is the future. We know that there will be certain expenses in the future. We know we will need to spend more on Social Security benefits, and Medicare benefits. This issue is still thrashing around Capitol Hill, but the bottom line is that if the problem is Social Security not having enough money, they will have to cut benefits, increase taxes, or reduce the number of eligible people.
We also know that we will need to spend money upgrading and repairing highways; this is a vital issue to the American economy, since as one friend puts it, “If you’ve got it, a trucker brought it.” You should be aware that highway spending has remained unchanged since 2003, because Congress and the President cannot come to any kind of middle ground. This is despite the fact that our roads are getting older, our highway expenses are getting higher, our population is getting bigger and more dense. The day will come, soon, when we can no longer put off a real highway bill.
Let’s not forget the money that will be needed to overhaul this nation’s newest executive branch department, the Department of Homeland Security. We need better border security, and that will cost money. If an illegal immigrant can find work cleaning highrise office buildings and processing this nation’s food, then so can Al Qaida operatives. Yeah, I’m willing to pay a bit more to know my food has been processed by legal American workers earning a decent wage. We also need better port surveillance, and to do that right will cost millions if not thousands of millions of dollars.
And just think, that’s only the money we know we need to plan on spending. It does not account for disasters, emergencies, future economic difficulties, or any other thing that might come up.
Let’s not count our reduced budget deficit for the year 2009 just yet.
In closing, I bring you Why Costco is Better than Wal-Mart, the fight to renew the Patriot Act, and Molly Ivins points out that regulations were imposed because they were needed.