Where Does The Money Go? Your Guide to the Federal Budget CrisisPresentation Transcript
FINALLY, THE BATTLE TO FIX THE FEDERAL BUDGET HAS BEGUN . . . . .
► GET THE FACTS ► SORT THROUGH THE SPIN ► CONSIDER THE CHOICES ► TEST YOUR KNOWLEDGE
► AND FIND OUT MORE IN THE 2011 REVISED EDITION
SCOTT BITTLE AND JEAN JOHNSON
The Six Points You Need To Know To Understand The Federal Budget Crisis
For 31 out of the last 35 years, the country has spent more on government programs and services than it has collected in taxes.
Every year the government comes up short, it borrows money to cover the difference. We’ve now built up a very big debt – roughly $14 trillion, and yes, that is trillion with a “t.”
The country will have humongous additional expenses over the next couple of decades as the baby boomers begin to retire and health care costs rise.
There is no realistic way government can lower taxes (or even keep them at current levels) and still spend money on everything people want the government to do (at least according to the polls) and still end up with a balanced budget.
If we keep on going the way we’re going, the debt will get bigger and begin to endanger the U.S. economy and our own personal finances and plans.
A substantial portion of the country’s debt is held in foreign countries.
2009 Federal Spending: $3.5 Trillion
2009 Revenue: $2.1 Trillion
Deficits As Far As the Eye Can See
Social Security and Medicare Costs Are Rising
Interest Costs Will Balloon As Well
Income Tax Rates Are Relatively Low Historically
Picking on the Little Guys Won’t Do It
Tiny Slivers Of Spending
Science, Space And Technology
Total savings: $29.4 billion, less than 1 percent of the budget.
The Arts and Humanities:
Total savings: NEA, $152 million, NEH $151 million, .009 percent of the budget
Foreign Aid And International Relations
Total savings: $37.5 billion, 1.1 percent of the budget
And it all adds up to? Less than 3 percent of the budget.
And Taking The Meat Ax?
The Federal Deficit in 2010:
Eliminating the Departments of Education, Energy, Agriculture, Transportation, HHS, and HUD entirely
Less than $300 billion
The Remaining Red Ink:
$1 trillion for just one year
Where Should We Start?
You can’t do everything at once, but you have to start somewhere. Here are a few ideas now on the table.
Make major spending cuts--$100 billion for 2012
Let the Bush tax cuts lapse after the 2-year extension
Fix Social Security first
Make the tax code much simpler
Get a grip on health care costs first
Improve the Congressional budget process first
Set a budget target
Clean up politics first
Six Realities We Need To Accept To Solve The Problem
We have to start now .
The longer we wait, the more wrenching the choices
We have a short-term problem and a long-term problem -- we need to address them both.
Fighting the recession vs fixing the budget is a false choice
We need to address the waste, fraud, and abuse issue, and then we need to move on
Fighting waste isn’t enough to balance the budget, but it builds trust
We need to demand candor from politicians, and then accept it when they offer it
Vague promises won’t do the job.
We need to think about what we can live with – not what we personally want.
Our budget problems won’t get solved without compromise