Source: Matt Fiedler, Center on Budget and Policy Priorities, April 14, 2008
Over the next several years, policymakers will face important choices about the level of government revenues. Since the government collects taxes in order to finance public services, it is useful to examine where tax dollars go when thinking about these crucial tax-policy decisions.
Source: U.S. Census Bureau
From the press release:
The federal government disbursed $2.45 trillion in domestic spending in 2006, according to two reports published by the U.S. Census Bureau. That represented an 7.5 percent increase in federal spending over 2005.
The first of the new reports, Consolidated Federal Funds Report: 2006 (PDF; 2.6 MB), provides a broad overview of how and where the federal government allocates funds. Statistics are provided for each federal department and agency, and presented by state, county and subcounty area.
The second report, Federal Aid to States for Fiscal Year 2006 (PDF; 3.7 MB), contains data on federal grants to state and local governments.
Defense spending totaled $400 billion in 2006. This amount includes procurement contracts, payroll, military pensions and grants. Department of Homeland Security spending totaled $57 billion.
Per capita spending among states was highest for Louisiana ($16,263). Mississippi was second ($14,516), followed by Alaska ($13,805). The states that received the lowest per capita distribution of federal funds were Nevada ($5,852), Utah ($6,162) and Minnesota ($6,175).
California received 10.3 percent of the total distribution of federal expenditures while Texas received 6.8 percent, followed by New York at 6.2 percent.
Nearly half of all domestic government spending (excluding interest on the federal debt) went to Social Security, Medicare and Medicaid, which accounted for $1.16 trillion. The one-year increase in spending for these three programs was approximately $170 for every person living in the United States.
The government spent $739 billion on retirement and disability. Of that amount, 80 percent, or $594 billion, went to Social Security. Social Security was comprised of retirement insurance payments ($350 billion), survivors insurance ($107 billion), disability insurance ($99 billion) and supplemental security income payments ($38 billion). The remaining federal dollars spent on retirement and disability went to civilian government workers' retirements ($59 billion), military retirements ($36 billion) and veterans' benefits ($34 billion).
Source: Bob McTeer, National Center for Policy Analysis, Brief Analysis, No. 613, March 18, 2008
Economists often refer to the U.S. trade deficit and the federal budget deficit as problems of inadequate domestic saving. They speak of these deficits "crowding out" domestic investment. They allude to unspecified relationships between these deficits but seldom explain them, confusing everyone.
Source: Center on Budget and Policy Priorities, March 2008
The Center analyzes state budget issues including multi-state trends, the adequacy and equity of tax policies, structural budget issues, and budget transparency.
Series includes:
▪ Policy Points: Four Helpful Hints for States Dealing With Deficits
▪ Fiscal Stimulus at the State Level?
▪ Income Tax Surcharges Can Help States Close Budget Gaps
▪ It's Time for Many States To Use Their Rainy Day Funds
▪ and more.
Source: Richard Kogan, Center on Budget and Policy Priorities, March 5, 2008
From the summary:
Both last year and this year, President Bush called for large funding increases for defense and related programs while demanding considerable restraint in domestic appropriations. And this year, like last year, he has threatened to veto appropriations bills if Congress does not adhere to his tight domestic levels.
The President's 2009 budget would provide some $20.5 billion less for domestic discretionary programs outside of homeland security -- a broad category of programs that includes everything from child care to environmental protection to medical research -- than the 2008 level, adjusted for inflation.
The budget calls for reductions in a broad range of services, including some areas that have seen sizable cuts in recent years. For example, the budget would cut child care, environmental protection, and job training -- all areas for which funding in 2008 is well below funding earlier in the decade, after adjusting for inflation.
Source: Budget of the United States Government, Fiscal Year 2009
Issued by the Office of Management and Budget (OMB), the Budget of the United States Government is a collection of documents that contains the budget message of the President, information about the President's budget proposals for a given fiscal year, and other budgetary publications that have been issued throughout the fiscal year. Other related and supporting budget publications, such as the Economic Report of the President, are included, which may vary from year to year
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Source: Edwin Park, Center on Budget and Policy Priorities, February 7, 2008
December 2007, Congress extended the expiring State Children's Health Insurance Program through March 2009. As part of his fiscal year 2009 budget, the President proposes to reauthorize SCHIP through the end of fiscal year 2013. The budget proposal would provide an additional $19.7 billion to states for their SCHIP programs, above the $5 billion-a-year funding level assumed in the budget baseline.
The proposed funding increase has been portrayed in some media reports as a significant expansion of SCHIP to cover more children. Yet while the $19.7 billion amount does substantially exceed the amount proposed for SCHIP in the budget the President submitted a year ago, it would not provide sufficient funding for states to significantly expand their SCHIP programs and cover many more uninsured low-income children. In fact, the amount that the President's new budget proposes for SCHIP likely would not even be sufficient to enable states simply to maintain their current SCHIP programs.
Related Articles:
Bush Budget Gives States Little to Cheer About
Source: Daniel C. Vock and Pamela M. Prah, Stateline.org, February 5, 2008
Source: Iris Lav and Phil Oliff, Center on Budget and Policy Priorities, February 4, 2008
Grants to state and local governments have long been an important way in which the federal government supports and administers programs efficiently. The new budget, however, continues to significantly erode those grants. This leaves states and localities the option of either curtailing services or increasing their own taxes to compensate for declining federal funds. These cuts would come at a particularly difficult time, when many states already are cutting programs to balance their budgets and half of the states face budget gaps for the upcoming fiscal year of more than $34 billion.
The President's budget would provide more tax cuts heavily skewed to the most well-off while cutting vital services for low- and moderate-income Americans, generating large deficits, and increasing the strain on states already confronting budget problems as a result of the economic downturn. The budget reflects misguided priorities that would leave the American people more vulnerable in a number of ways.
Source: Brookings Institution, Opportunity 08, September 26, 2007
On September 26, Opportunity 08 joined Saint Anselm College in Manchester for a forum examining key domestic issues facing presidential candidates in the New Hampshire primary.
Source: Center for American Progress, Press Release, October 15, 2007
The Senate continues the budget battle this week with the consideration of the Labor, Health, and Human Services Appropriations bill, which sets levels for education spending, as well as other key domestic programs. President Bush has already stated he plans to veto the bill because it provides $64.9 billion for the Education Department. Bush's proposed budget appropriates only $61 billion--$3.9 billion less than Congress' budget and $1.3 billion less than the Education Department received last year. The Bush administration, in the same year that it is spending $50 billion each month on operations in Iraq, plans on vetoing a bill because it increases funding for American schools by $2.6 billion, among other domestic budget increases. What's even more surprising is that Education Secretary Margaret Spellings actually announced back in February that Bush's newly proposed budget would increase education funding by 41 percent relative to 2001. A look at the president's budget tells a different story. As this new interactive map shows, 44 out of 50 states would see reductions in federal funding for elementary and secondary education for fiscal year 2008 if the Bush administration got its way. Rather than bold increases, states on average will see a -1.4 percent decrease in elementary and secondary school funding.
From the summary:
The annual 50-state survey of state officials on Medicaid and state budget actions reports enrollment in Medicaid declined for the first time in nearly a decade. The 0.5 percent enrollment decline in fiscal year 2007 was driven primarily by two factors. States reported that the new citizenship documentation requirements were causing significant delays in processing applications, affecting mostly individuals already eligible for the program. State officials also cited the good economy and lower unemployment for reducing enrollment. Faced with an improving economy, 42 states expect to expand coverage to the uninsured in the next year.
See also:
• Executive Summary
• Press Release
Source: U.S. Census Bureau, Press release, CB07-141, October 9, 2007
From the press release:
Social Security, Medicare and Medicaid accounted for more than $1 trillion of the $2.3 trillion the federal government spent in 2005, according to the U.S. Census Bureau, which publishes the only consolidated source of data on the geographic distribution of federal expenditures.
The Consolidated Federal Funds Report for Fiscal Year 2005 is a presentation of data on most domestic spending by the federal government for state and county areas of the United States, including the District of Columbia and U.S. outlying areas. The data include expenditures for the Defense Department and the Department of Homeland Security.
The report covers direct payments, grants, procurement awards, and salaries and wages by federal agency and program. The report does not include expenditures for selected intelligence agencies, international payments, foreign aid and interest on the federal debt.
• Direct to Detailed Tables
• Federal Aid to States for Fiscal Year 2005
Source: Richard Kogan, Center on Budget and Policy Priorities, October 24, 2007
President Bush has said he will veto the appropriations bill that funds the Departments of Labor, Health and Human Services, and Education for the coming fiscal year if Congress sends the bill to him with funding at the level either the House or Senate has approved. The Administration says the funding provided in the House- and Senate-passed bills is "excessive" and "irresponsible" and has sought to portray them as part of a congressional plan that would constitute "runaway spending." This short analysis finds these claims to be misleading or inaccurate.
Related:
Sign AFSCME's petition asking Congress to vote YES for the final bill.
Source: Matt Fiedler and Richard Kogan, Center on Budget and Policy Priorities, August 22, 2007
The "Mid-Session Review" that the Office of Management and Budget issued last month projects that revenues will be slightly above their 30-year average in 2007, measured as a share of the economy. The Administration and many of its supporters have cited this fact as evidence that current tax policies are generating an appropriate level of revenue and the Administration's tax cuts therefore should be made permanent without the costs being offset. Similarly, Senator Charles Grassley, the ranking Republican on the Senate Finance Committee, has cited this fact as a reason for repealing the Alternative Minimum Tax without offsetting the large costs involved.
The simple fact that the government collected a particular level of revenue in the past says little, however, about what level of revenues is appropriate today, will be appropriate or necessary in the future, or even was appropriate in the past.
From the summary:
An honest assessment of the nation’s long-term fiscal outlook almost makes one wonder why, in 2008, so many people are interested in being elected President. And why so little attention is being paid to a problem that budget analysts of diverse perspectives routinely describe as “unsustainable.”
One thing is clear: the status quo is not acceptable. The next President will inherit a fiscally lethal combination of changing demographics, rising heath care costs, and falling national savings. The public should take care not to buy the proposals of Presidential candidates that either ignore the magnitude of the long-term fiscal challenge or lock candidates into positions that make the problems insoluble. Improving the nation’s long-term fiscal outlook will require hard choices on spending and tax policy. Presidential candidates and their consultants might shy away from endorsing such choices on the campaign trail, but they should not rule them out.
The next administration must enter office with a mandate to act on this problem. Doing so will likely require a mix of options arrived at through bipartisan negotiations. The more options taken off the table through ironclad campaign promises, the more difficult it will be to find meaningful solutions once the campaigns are over and the time for governing begins. Candidates must acknowledge the magnitude of the problem, the need for trade-offs and the necessity for prompt action. Vague promises of “fiscal responsibility” give the public insufficient insight into how well candidates understand the task at hand.
Comprehensive solutions may take considerable time to develop, and once implemented, should be subject to periodic review. However, as a framework for action the next President should:
● Commit to a balanced budget
● Take every reasonable step to constrain the rising cost of heath care and retirement programs -- Social Security and, most especially, Medicare
● Make clear to Americans that taxes cannot be cut over the long-term unless programs are cut commensurately, and
● Prevent total spending, taxes, or debt from reaching levels that could reduce economic growth and future standards of living.
Source: Sharon Parrott and Matt Fiedler, Center on Budget and Policy Priorities, February 8, 2007
Under the Administration's budget, domestic discretionary programs -- the programs that are funded each year through the annual appropriations process, other than defense and international programs -- are slated for sizable reductions over the next five years. The budget calls for these cuts to start in 2008, when domestic discretionary programs as a whole would be funded below a freeze of the levels provided for 2007 in the full-year continuing resolution now moving through Congress.[i] The cuts would then grow deeper each year after 2008, and would come from almost every part of the domestic budget. The largest cuts would come in 2012, when domestic programs would be cut $34 billion, or 7.6 percent, relative to the 2007 funding level, adjusted for inflation.
Source: Iris J. Law, Center on Budget and Policy Priorities, February 6, 2007
Grants to state and local governments have long been an important way in which the federal government supports and administers programs efficiently. The new budget, however, continues to significantly erode those grants. This leaves states and localities the option of either curtailing services or increasing their own taxes to compensate for declining federal funds.