15 Ways to Actually Balance The Federal Budget

Americans at Defund Obama Care Rally

Americans at Defund Obama Care Rally

Many Republican and conservative politicians talk about balancing the federal budget. (Democrats don’t because their party is too busy spending more to care about spending less), but very few have specific details on how to get it done. In the case of Donald Trump, the discussion centers on:

Significant tax cuts to dramatically grow the economy (well above OMBs projected 2.2% long term GDP growth rate) to outpace the cost of current government programs, and an increase to the Department of Defense.

Some people, like conservative radio host Sean Hannity, advocate the Penny Plan. The penny plan calls for reducing one penny out of every dollar that the federal government spends. Over a 5 to 6 year period the budget balances.

The devil, however, is always in the details. Specifically how do you reduce one penny out of every dollar that the federal government spends?

I spent 10 years building and balancing budgets in the Department of Defense and the details matter. The following list of ideas are the foundation of, and principles upon which, one penny out of every dollar, for example, could be found over six years in order to shrink the federal government, reduce the burden on American taxpayers, and balance the budget!

First, and a lynchpin to balancing the budget, the economy must be energized and grown beyond historic growth and current CBO projections of 2.2%. While this is well above the average for the Obama Administration, it isn’t nearly good enough.

Spur Economic Growth:

Growing the economy starts by eliminating laws and regulations that strangle small, medium, and large businesses instead of enabling their expansion and competitiveness. Minimum wage laws, Obama care, energy mandates, and oppressive tax laws, for example, should be repealed outright or dramatically simplified to unshackle America’s economy.

  • Minimum wage laws not only hurt small businesses and entry-level workers, they cost the taxpayers as well since the federal government also pays those higher wages.
  • Obama care is a well-documented job killer, massively expensive and the gateway program to institute socialized medicine.
  • Taxes must be reduced to spur business creation, expansion, and innovation. Letting the American people keep more of their own money is also a moral imperative.

We must enact an all the above energy policy and repeal penalties instituted by the Obama administration and the EPA upon nonrenewable sources like coal. Democrat policies drive the costs of energy up, and the federal government uses a lot of it. Cheaper energy means cheaper government. Reducing energy costs results in a net savings not just to the federal government but also to Americans and businesses. With reduced cost comes greater competitiveness, profitability and prosperity both at home and abroad. The United States has enough energy to lead the world for 100+ years. We will need it to balance our budget, pay back our national debt, and posture America for another hundred years of prosperity.

Growing the economy is critical, butwe must cut the budget.

Macro Level Reductions.

  1. Freeze hiring on all civilians within the federal government. There could be exceptions made in areas that are considered strategically important, such as the Department of Defense or Customs and Border Patrol, but on the whole the effort would be a freeze to further hiring across the federal government. A slightly less contentious option would be to institute something like a 3 to 1 hiring policy. In this case for every three people who naturally leave the federal government, such as to retire, one civilian hire would be allowed to replace them.
  1. This policy would reduce manpower in agencies across the federal government. There are duplication of missions and programs throughout our government. As personnel decline those duplicative organizations, agencies and programs should be collapsed into one another. As the organizations are collapsed into one another, the management overhead should be trimmed as well, effectively cut in half and taken as additional savings.
  1. Another benefit of smaller and simpler government is that the oversight and management of government itself becomes less complex, and more effective. The potential for savings and reductions in watchdog organizations like OMB (which oversee the federal government’s budget and budget building process) could be further reduced.
  1. The federal government, including the Department of Defense, owns or leases over 361,000 buildings, office spaces, and warehouses, with an annual operating cost of over $33 Billion.

Much of this infrastructure is excess to need, and should be sold or disposed of now. As the federal government is reduced through manpower reductions, even more excess office space and facilities will be exposed. Those facilities need to be returned to state and local governments or sold outright to businesses and the American people freeing taxpayers from the burden of maintaining them, paying utilities such as water, electricity, etc.

There is significant excess infrastructure and basing across the DOD. The Air Force, for example, constantly states that it has 30% access infrastructure and desperately needs a BRAC in order to cut excess bases down to the proper size to support the diminished Air Force. Done properly, a BRAC could save the Department of Defense billions every year without any adverse impact to our nations military capabilities.

Micro Level Reductions:

  1. There is waste in the Department of Defense when it comes to the military’s energy spending. The Obama administration turned the Department of Defense into a research and development arm of the renewable energy industry.

Untold billions of dollars, hidden within the Service budgets, are being spent every year by the Department of Defense on windmills, solar farms, development of renewable biofuels, and testing of biofuels on military equipment from aircraft to ships. Unfortunately biofuels are far more expensive than the fuels they’re replacing. They’ve also proven to be corrosive, contain less energy per pound of fuel than what the replacing, and effectively reduce the range and capabilities of the equipment in which they are used. They increase the cost of maintenance, wear and tear on assets, and decrease the longevity of jet engines and other components such as seals that are exposed to the more corrosive biofuels. All of this R&D should be stopped and the Department of Defense should no longer be used as an experimental arm for the progressive anti-global warming movement.

  1. Agencies and programs across the federal government need to be eliminated or drastically reduced. The list includes the EPA, the Education Department, Health and Human Services, the IRS, the Public Broadcasting System, and support for the Federal Reserve as a good start.
  1. Tax laws need to be simplified so that businesses can free themselves from the wasted cost of dealing with a tax code that’s become so burdensome no single person can possibly understand it.
  1. Reductions of the types listed above would shrink the federal government to the point where Congress could once again manage it. After all, Congress’s prime responsibility is to pass laws including those funding the federal government. They failed year after year to pass budgets because its become far too big and far too complex. With the reduced size comes an increased ability to manage. When Congress is able to properly manage agencies and their budgets further waste, duplication and costs can be found.
  1. We commonly hear the term too big to fail. In the case of government it’s failing because its too big.

The federal government needs to prioritize its constitutionally mandated responsibilities first. All other missions are secondary and subject to reduction.

  1. The border must be sealed! Illegal immigrants who are committing murders, rapes, robberies, dealing drugs, involved in human trafficking, to gang warfare must be caught, jailed or sent back to their home countries for jailing. Penalties must be stepped up as an effective deterrent to these brutal thugs ever returning to the United States.
  1. The wall must be built and America’s border controlled. We must significantly reduce the number of illegal aliens, and know who enters and stays within our borders. You wouldn’t let strangers into your house, and we should not let them into our country. Fewer illegal aliens will reduce burdens on local, state and federal governments. The costs to America’s schools and law enforcement alone would be a significant savings.
  1. Energy subsidies must be stopped. Let companies and technologies compete on an equal footing. The strong will survive and the inefficient will not.
  1. Waste, fraud and abuse of government welfare programs must stop. Welfare should be tied to work for the able minded and able bodied. The goal is to use the social safety net as a temporary support system, not a way of life.
  1. Finally, we must reform programs like social security, in order to ensure they exist for the long term. Without reform, costs will continue to eat the budget, and our children will see nothing but the bills.
  1. Balancing the budget is a national imperative, and should be codified as a Constitutional Amendment. It wont be easy, and will require courageous politicians with the insight to see, analyze and solve Americas spending problems. No such leadership exists in the Democrat Party. It’s GOP or Bust…literally.

What Are A Dozen CBO Projections for 2016-2026?

Federal Spending Under Obama's 2016 Budget Show Ever Increasing/Unsustainable Annual Deficits

Federal Spending Under Obama’s 2016 Budget Show Ever Increasing/Unsustainable Annual Deficits

The following excerpts from the non-partisan Congressional Budget Office (CBO) analysis of the Federal Budget show a dozen projections looming over America’s economic future.

The quotes are taken from: CBO’s 19 Jan 2016 “Summary of The Budget and Economic Outlook: 2016 to 2026”

 

  • CBO expects federal revenues to rise by 4 percent in 2016 to $3.4 trillion, or 18.3 percent of GDP.
    • Individual income taxes are projected to rise by 5 percent
  • Beyond the 10-year period, if current laws remained in place, the pressures that had contributed to rising deficits would accelerate and push debt up even more sharply.
    • Such high and rising debt would have serious negative consequences for the budget and the nation:
      • The likelihood of a fiscal crisis in the United States would increase.
      • Federal spending on interest payments would rise substantially.
      • Interest rates rise from their currently low levels.
  • Mandatory outlays will be $168 billion higher in 2016 than they were last year.
    • Major health care programs accounts for more than 60 percent of the projected growth…
  • In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009
    • The 2016 deficit will be $544 billion, $105 billion more than the deficit recorded last year and is $130 billion higher than the one that the agency (CBO) projected in August 2015.
  • The economy will expand solidly this year and next.
    • Also push up inflation and interest rates.
  • Federal outlays are projected to rise by 6 percent this year to $3.9 trillion, or 21.2 percent of GDP. The result of
    • A nearly 7 percent rise in mandatory spending
    • 3 percent increase in discretionary outlays
    • 14 percent jump in net interest spending (factors: Interest rates are beginning to rise, and federal debt is growing.)
  • Discretionary outlays for national defense in their first increase in five years will edge up slightly this year
  • The budget deficit increases modestly through 2018 but then rises more sharply, reaching $1.4 trillion in 2026.NOTE: This is equal to President Obamas worst annual deficit in 2009. He and the Congress put America back on a path that can’t be sustained.
    • The projected cumulative deficit between 2017 and 2026 is $9.4 trillion.
  • Growth in outlays would outstrip growth in the economy, and outlays would rise to 23 percent of GDP by 2026.
    • payments, offset somewhat by a decline (in relation to the size of the economy) in discretionary spending. NOTE: The things that the Federal Government is supposed to do per the Constitution become second tier and are crushed by Mandatory Spending. “A Government That Tries To Do Everything, Will Do Everything…POORLY!”
    • Almost half of the projected $2.5 trillion increase in total outlays from 2016 to 2026 is for Social Security and Medicare.
  • CBO now projects a cumulative deficit that is $1.5 trillion larger than the $7.0 trillion that the agency projected in August 2015. NOTE: In one year the deficit picture worsened by $1.5 Trillion.
  • The fiscal policies embodied in CBOs baseline would dampen GDP growth in 2017 and 2018. In addition, some aspects of fiscal policy under current law, particularly the Affordable Care Act and real bracket creep, are projected to dampen the supply of labor and therefore the growth of output through 2020. NOTE: As stated by Obama care opponents, the ACA is unaffordable, and driving up health care costs.
  • Potential GDP will expand at an annual average rate of 2.0 percent, a significant slowdown from the average growth of potential output that was observed during the 1980s, 1990s, and early 2000s. NOTE: Marxist/Progressive/Socialist policies of massive government spending don’t work, except to impoverish the nation.

Update:

How the House Budget Committee Aims to Save America’s Future

rp_image0011-300x170.pngThe House Budget Committee released its fiscal year 2016 blueprint, A Balanced Budget for a Stronger America for returning to a balanced federal budget within 10 years. The House annually proposes balancing the budget and this year is no different. What is different, however, is that Republicans now also run the Senate.

The evidence clearly shows that the United States is headed for a fiscal disaster if we don’t balance our budget. So how does the House budget proposal plan to accomplish this?

  • It claims to tackle big challenges while restoring accountability.
  • It balances the federal budget in less than 10 years by reducing $5.5 trillion in spending versus Pres. Obama’s FY 16 budget proposal.
  • It would also stave off a severe fiscal crisis that would certainly hit in the future while reforming vital safety net programs.
  • It claims to provide for the defense of our nation fulfilling the first most critical responsibility of our government.
  • It claims to build a foundation for an economy that rewards hard work ingenuity and entrepreneurship while respecting and restoring the principle of federalism.
  • It also aims to reform the Congressional budgetary process, which is designed to reward spending more instead of spending wisely.
  • It recognizes that interest payments on the current path will swamp other spending priorities in the budget if they are not dealt with.

I’ve shown in previous blogs how massive interest becomes as a part of our federal budget:

Top-10 Winners in President Obama’s FY2016 Budget

More Frightening CBO Forecasts from The Budget and Economic Outlook: 2015 To 2025

US Defense Budget vs Interest on Debt

  • It aims to cut out inefficiencies while keeping interest payments from drowning out key priorities.
  • Obama has presided over nearly $2,000,000,000,000 in tax increases in the past six years. The House plan intends to fix the tax code so it is simplified (currently costing America $160 billion annually to comply) and fair for families and businesses.
  • It means to streamline or repeal inefficient, ineffective or counterproductive regulations pouring from agencies like the Environmental Protection Agency and the National Labor Relations Board.
  • It looks to expand US domestic energy production while stopping wasteful government spending on programs that fail to deliver, like Solyndra, while also addressing some of the worst cases of corporate welfare.
  • Across the board the proposal looks to reduce or eliminate duplication among federal programs. Few Americans know about the most recent federal agency created in 2010 called the Corporation for Travel Promotion. One thing the United States does not need is to advertise how wonderful a country we are in order to get people to come here. Our problem involves slowing down the title wave of people every year who attempt to get into America.
  • It proposes complete repeal of Obamacare while saving, strengthening and securing Medicare, Medicaid and Social Security essential entitlement programs that on their current path will bust the budget and the American taxpayers.

In summary, the House plan is meant to balance the budget, reform the tax code, strengthen defense while reforming and saving the major entitlement programs which constitute the Giants in the federal budget. Failure to address these programs now as wisely suggested in the proposal, will force draconian federal budget cuts down the road and further rob our children of their financial futures and God given freedoms.

Considering the admirable goals of the House Budget Committee proposal, it only makes sense that Democrat politicians hate it. Their alternative, like socialism in general, is completely unaffordable!

Alan Greenspan’s Comments On Exploding Entitlements

More Frightening CBO Forecasts from THE BUDGET AND ECONOMIC OUTLOOK: 2015 TO 2025

rp_Slide1-300x225.jpgThe following quotes were taken from the CBO’s Jan 15 report, found here. They continue warning America that if our country doesn’t change the fiscal course that it’s on under excessive tax and spend policies, our country is headed for a disaster. We need to stand up, get vocal, vote out the spenders and force our elected officials to balance the federal budget, before the mounting $ trillions that we owe dooms us!

CBO:

  • Beyond 2017, real (inflation-adjusted) gross domestic product (GDP) will grow at a rate that is notably less than the average growth during the 1980s and 1990s.
  • Cumulative deficits over the 20162025 period are projected to total $7.6 trillion.
  • Outlays rise-to more than 22 percent in; Four key factors underlie that increase:
    • The retirement of the baby-boom generation
    • The expansion of federal subsidies for health insurance
    • Increasing health care costs per beneficiary
    • Rising interest rates on federal debt
  • CBO projected under current law, debt would exceed 100 percent of GDP 25 years from now and would continue on an upward trajectory thereafter;a trend that could not be sustained.
  • Such large and growing federal debt would have serious negative consequences, and are unsistainable.
  • Interest rates on Treasury securities, which have been exceptionally low since the recession, will rise considerably in the next few years.
  • Outlays for the federal government’s major health care programs will increase by $82 billion (or nearly 10 percent) this year
  • Net interest payments increase from $227 billion, or 1.3 percent of GDP, in 2015 to $827 billion, or 3.0 percent of GDP, in 2025.
  • Gross federal debt is projected to rise by $9.5 trillion over that period and to total $27.3 trillion at the end of 2025.
  • The Long-Term Budget Outlook: Beyond the coming decade, the fiscal outlook is significantly more worrisome,public debt would exceed 100% of GDP by 2039.

The following 3 charts were pulled from CBO’s supporting analysis, and show the Federal Budget’s, and America’s future if significant changes aren’t made to control mandatory spending.

Chart 1

Chart 1

Chart 2

Chart 2

Chart 3

Chart 3

Top 10 Winners in President Obama’s FY16 Budget

IMG_0533President Obama unveiled his 2016 BCA busting budget on Monday at the DHS Headquarters. The President extolled the virtues of his budget cutting, stating that he reduced annual deficits by two thirds since coming into office. Let’s examine that statement.

  • President Obama’s starting point was the largest deficit in American, and probably world, history, at over $1.4T in 2009.
  • In absolute terms, he signed the largest tax increase in American History, so he did raise more money by taking it from the American people.
  • Despite the ever-growing threats to our national security, he did substantially cut the US Military.
  • He also increased spending in many social programs and wealth redistribution programs, which more than compensated for defense cuts. The Budget Control Act of 2011 capped his spending increases. The BCA was the real control on spending, and it was thrust upon him when the American voters gave the GOP control of the House.

Now let’s take a look at where the budget increased the most. The Top 10 Largest Increases in FY16 (based upon dollars) – Where possible, color-coding has remained consistent with analysis of Social Programs/Wealth Redistribution.

– The 2015-2016 Delta column is a pure dollar comparison between FY15 and FY16. The % Delta column is added to show the magnitude of the increase compared to total program costs. Similar data is also presented for these same Top Ten comparing growth from 2007 (President Bush’s last pure budget) in purple to President Obama’s 2016 budget. What’s startling is that the combined growth of the top 5 programs in Chart 1 equals nearly $1.1T. That amount of annual growth alone is equal to the entire discretionary portion of the Federal Budget, including the Department of Defense.

2016 Predbud Top 10 Largest Growth Programs

Not surprisingly, the largest FY15 to FY16 increases are, interest and social programs. The defense increase follows two years of significant budget cuts despite an ever more dangerous world.

Also, Immigration Reform (highlighted in Red), totaling $8B, never existed before in the Federal Budget. The President is adding a brand new subfunction, despite the uproar and accusations of illegality over his executive amnesty. Without question it’s an in your face message to the new GOP majority, and unlikely to survive congressional budget hearings.

American Social Spending, How Much Is Enough?

rp_1200px-Seal_of_the_President_of_the_United_States.svg_-300x300.pngPresident Obamas SOTU speech provided the latest fuel on the fire of wealth redistribution in America. The President wants to tax us, funnel the money through the government bureaucracy, and send pennies on the tax dollar to pay for programs like community college. He also called for more regulations, for example to enlarge paid work leave. Forbes described the President’s speech as “More spending, dependency, and regulation”.

The blogosphere, twitter, and comments to online reports are full of the progressive army touting redistribution.

“It’s time that the 1% pay their fair share!”

“A caring country needs to support its citizens in need.”

“Republicans are uncaring and out to fill the pockets of the rich.”

The progressive left is never satisfied with how much tax money their programs cost, acting as if America doesn’t care about its citizens. Most likely however, most have no idea how much America already spends each year on social programs and wealth redistribution. A simple look at the Federal Budget shows that conservatively, over 60% of every federal dollar spent goes to these types of programs.

In 2014, that amounted to over $2.3T, and equaled 61.5% of the budget. In a few years, that amount is projected to climb to $2.7T in FY18. Table 1 below shows those figures, and the years in between. Funding for what I call “Regular Government” loosely aligned to what the US Constitution would support, in only $1.2T in FY14 (32.6% of the budget), and remains nearly unchanged through FY18, but shrinks to 27.8% of federal spending. Interest on the Federal Debt, which is the legacy of America’s social programs/wealth redistribution to date, is $223B in FY14, and more than doubles to $461B in FY18, growing from 5.9% to 10.4% of the budget.

Table 1

Table 1

The same information is shown in Chart 1 below. The bars correspond to the left axis (funding), while the lines correspond to the right axis (% of federal spending).

Chart 1 - Total Social Spending and Wealth Redistribution Funding vs the Rest of the Budget

Chart 1 – Total Social Spending and Wealth Redistribution Funding vs the Rest of the Budget

Progressives are either ignorant of these facts, or willingly hiding them. They speak as if taxpayers aren’t paying a dime in social spending. Americans, Republicans chief among them, are compassionate people, but the social safety net isn’t infinite, and this level of spending escalation is bankrupting our nation, and robbing future generations of their fortunes and liberties. The growth in annual interest alone will soon exceed the DoD budget, just to cover the minimum payment on America’s credit card.

The question is not one of more spending, but one of how to eliminate wasteful, duplicative social programs, and reform of the remaining programs to allow a solvent long term safety net. According to The Heritage Foundation for example, Social Security

“Beneficiaries face a 19 percent indiscriminate benefit cutif the Congress and president fail to act soon.”

Table 2 below breaks out the programs attributed to Social Programs/Wealth Redistribution and Regular Government above.

TABLE 2

TABLE 2

What are The Federal Budget Giants?

What are the giant programs in the US Federal Budget? As promised in my last Blog, I break down OMB’s budget Functions within the Human Resources Superfunction in this Blog. The largest Function is clearly Social Security, exceeding $1T/year starting in 2017. By Comparison, the National Defense Superfunction is only $578B in 2017.

US Federal Budget - Social Security dwarfs the rest of the Functions including National Defense!

US Federal Budget – Social Security dwarfs the rest of the Functions including National Defense!

Note the distinct drop in spending in some of the Functions in (Income Security, Health, Education, Training, Employment and Social Services) after 2010. These Functions are within the Discretionary portions of the Federal Budget and were curtailed as a result of the GOP taking the House in the 2010 midterms. Social Security is within the Non-Discretionary part of the budget and was untouched.

Also note that the Health Function rapidly grew again despite initial reductions. This was due to paying for Obamacare, which was wrongly named the “Affordable Care Act”.

Where are Your Tax Dollars Going?

Do you ever wonder where your tax dollars go? The Office of Manpower and Budget (OMB) uses accounting buckets to aggregate programs and spending. It calls large program groupings “Superfunctions”. The below chart clearly exposes that Superfunction monster. The blue line is the Superfunction named “Human Resources”, and it’s growing at an frightening rate.

US Federal Budget - Human Resources dwarfs the rest of the budget, including National Defense!

US Federal Budget – Human Resources dwarfs the rest of the budget, including National Defense!

The Human Resources Superfunction consists of a number of smaller program groupings called “Functions”. The Functions within it are:

  • Education, Training, Employment, and Social Services
  • Health (Including Obamacare)
  • Medicare
  • Income Security
  • Social Security
  • Veterans Benefits and Services

My next Blog will break out those Functions in another chart, to show the magnitude of each Function. If we are going to solve our unsustainable spending, we all need to understand where the money is going.

Note: The purple line, which is the Superfunction “Interest” (on the National Debt), is growing at nearly the same unsustainable rate as Human Resources.

Why Speaker Boehner Is Channeling Speaker Pelosi

rp_314110554_150_150.jpgNot a single Republican in the House or the Senate voted for the Obama care law. Outrage over the way that the bill was rammed through Congress, literally in the dark of night, and without time for any Senator or Congressman to read, let alone understand the bill continues unabated today.

Remember Nancy Pelosi’s infamous “we have to pass the bill to find out what’s in it’ quote? Now, on the eve of the GOP wresting control of the Senate from Harry Reid, the same disgusting tactic is underway to fund most of the federal government through the rest of fiscal year 2015. Known as the CROmnibus, as it consists of a Continuing Resolution (CR) to temporarily fund the Department of Homeland Security, while using an Omnibus to fund the rest of the government. Since this is being foisted on America without time to read, let alone understand, I suggest that the bill should be called the CRAmnibus, as its being crammed down our throats, much like Obama care.

The GOP controlled House was certainly put in a very bad position. The House did a significant amount of work to pass individual funding bills, know as regular order, but Harry Reid did not reciprocate in the Senate. That was wrong! Forcing the CRAmnibus through is a second wrong, and although it sounds cliche, two wrongs don’t make a right!

Pass a two-month CR. Get the new GOP controlled Congress sworn in next month. Pass the individual bills through regular order, while defunding the President’s illegal amnesty, and begin dismantling Obama care. It’s why Americans elected Republicans in the midterms.

America’s Federal Spending Future In Pictures

CBO Projected Spending: The Budget and Economic Outlook

CBO Projected Spending Feb 2014: The Budget and Economic Outlook

The series of slides in this blog are modified from the Congressional Budget Office’s (CBO) February 2014 report “The Budget and Economic Outlook: 2014 to 2024”. The above slide shows federal spending broken out by major spending category. Note the vertical red dotted line showing where we are today.

CBO Projected Spending Net Interest

Explosive Interest Growth – American Taxpayers On The Hook

The above slide highlights the growth in Net Interest, an increase of 1.9% of our GDP vs current spending levels. This is the largest area of growth projected in the budget, and is like the interest you pay on you credit card. America’s interest payments are just starting to accelerate, having been masked the last few years by historically low interest rates. If the actual interest rates exceed what CBO projects, roughly 5%, the costs of Net Interest will grow.

CBO Projected Spending Other Mandatory

Other Mandatory Spending – Only “Mandatory” Spending Projected To Decrease

Other Mandatory Spending decreases relative to GDP by -0.3%, and is the only Mandatory Spending category that isn’t protected to consume even greater portions of the GDP.

CBO Projected Spending Non Defense Discretionary

Nondefense Discretionary Shrinks Relative To GDP

Non-defense discretionary decreases by nearly 1% relative to GDP. This category, minus the Defense Department, includes most of the federal government’s agencies such as the Department of Homeland Security, NASA, National Science Foundation, Environmental Protection Agency, Departments of Justice, Labor, Agriculture, State, Transportation, Interior, HUD, Commerce…

Slide1

Defense Shrinks Dramatically vs GDP To Levels Not Seen Since The Interwar Years Of The 1930’s

Defense Discretionary, partly due to reductions instituted by Secretary Gates, and partly due to Sequestration, is projected to continue it’s decline relative to GDP. It is projected to drop to levels not seen since the 1930s, and as shown by the red circle and arrow, is projected to drop below interest spending by 2021. Interest spending is projected to begin dwarfing defense spending there on out. The increased cost of interest, along with health care and social security will dominate federal spending.

CBO Projected Spending SS

Social Security If Projected To Continue Eating Ever More Of The Federal Budget – And Cause Ever More Borrowing

Social Security, now that the baby boomer retirements are well underway, continues to swell. Reforming it, in order to save the program from pending collapse, is essential. Despite it’s growth of 0.7% relative to GDP, that increase comes in third behind Interest and Health Care spending.

CBO Projected Spending Maj Health Care

Major Health Care Programs Constitute The Largest Part Of The Federal Budget, Eclipsing Social Security In 2014.

Major Health Care Spending, thanks to the passing of Obama Care, or the “Affordable Care Act” is now the largest part of the federal budget, and is projected to eat an additional 1.3% of America’s GDP by 2024. Combined with Social Security, Interest and Other Mandatory Spending, they are projected to eat 17.2% of GDP. The rest of the federal budget gets the scraps.