Budget Discussion

[vesper]

First off, calling it a "budget" when spending outpaces projected revenues by 25% or so is kind of a misnomer in my book. In the real world it would likely be called a "wish list" but government rarely operates in the real world.

I could come up with about 80 Billion right off the bat by eliminating refundable EITC and ACTC. I could come up with another $1.5 Trillion (over time) if we phased out the current versions of SS/Med and replaced them with private, transferable accounts. Reining in EPA, Education and HUD could save another $20-50 Billion.

It's not impossible to get the "budget" back to being a budget but doing so is going to take a real paradigm shift from where we've been for the past 70 years or so.

Evening Luther,
This budget Obama proposed for 2017 is dead in the water. Even some of the worthless sellout Republicans in Congress know it would be political suicide to pass that boondoggle. It subsidizes uneconomical energy sources. It transfers wealth to the greenie weenies through gasoline taxes to the tune of 22 cents a gallon and a boatload of regulations on oil and coal. And people need to understand a regulation is a hidden tax on these industries.

I don't see it to be a real problem to get the budget back on track because if you had someone in the WH that was willing to cut subsidies out of the budget it would be a wonderful thing. The amount in corporate welfare we taxpayers are left on the hook for is astonishing. If one scoured the budget for this corporate welfare it would be easy to come up with 100 billion in cuts. Americans are sick and tired of “crony capitalism,” and the way to solve the problem is to eliminate business subsidy programs not add new ones as Obama has proposed.
Instead of correcting market failures, federal subsidies misallocate resources and introduce government failures into the marketplace. While corporate welfare may be popular with legislators to bring home the bacon to businesses in their states it amounts to a transfer of wealth from you and I and any other taxpayer to favored firms. It's down right unconstitutional for the federal government to be picking winners and losers.

You know there is only one presidential candidate that stood up to subsidies involving ethanol and doesn't believe in the federal government subsidizing any business. Only one.

 

[KevinKohler]

Tax credits are expensive, I agree, and the totals there are even higher — $67B for EITC and 58 for child care. Those were budgeted to be more or less flat over the next couple of years, but now Obummer is asking for another $50B over ten years for children. Shameless liberal.

We might wanna look at the exclusion for employer-sponsored health insurance, $153B last year and going up more than five percent every year. Or the exclusion for net pension contributions and earnings, $120B and increasing at around ten percent annually. Then there are the preferential rates on capital gains and investments, $115B and growing at around six percent. Deductions of mortgage interest cost us $75B a year, and are of course expanding. That's $463B a year for mostly upper-income households, equivalent to 12.5% of the federal budget, and $24B more than last year's deficit.

Hmm. Nah, stick to the kids living in low-income households. That'll help motivate them, teach 'em how life is in the real world.

>>I could come up with another $1.5 Trillion (over time) if we phased out the current versions of SS/Med and replaced them with private, transferable accounts.

Too bad we didn't start doing that in, say, 2007.

>>Reining in EPA, Education and HUD could save another $20-50 Billion.

Any specific suggestions?



I'm guessing there are more taxpayers than there are "federally elected and appointed workers."

>>It is time the government workers tighten their belt every time they tell us we need to.

I've worked for the federal gubmint since 1999. My pay was frozen 2011-13. Everyone in my group got 1% in 2014. Last year, we got another one percent, and because I go to all the socialist worker party meetings, they gave me another 2.8%.



Again, any specific suggestions?

>>Consolidate the Forest Service into the BLM to eliminate massive redundancy.

Details?

>>no more Navy pilots

:<(



The large and powerful corporations that pretty much control the gubmint. You've heard the expression, "You get what you pay for." The smartest investment we could make would be to publicly fund elections. Of course, then we'd need to survive without all those wonderful negative campaign ads on TV.



Throw 'em out on the streets. There are plenty of bridges not being adequately maintained that they could sleep under. If there's a collapse, that would soften the blow for the commuters.



That's about one percent of the budget, with Israel the largest recipient at around ten percent. A third of it goes to fight diseases like AIDS. Another fifth is military assistance.

View attachment 67197039



The total for the salaries involved is a little more than $800M. In case yer looking for a handle on reality.

Only thing I could think as I read each of these responses was "And BOOM goes the dynamite.".

 

[OpportunityCost]

Apparently this is MMI fronting that we cant cut anything. I don't know. I bet we can. Considering all the doom and gloom that was forecasted when they had a shutdown last time and people barely noticed, I'm betting there are plenty of areas that could be cut.

But, we can't count on Washington to try very hard.

 

[jimbo]

Tax credits are expensive, I agree, and the totals there are even higher — $67B for EITC and 58 for child care. Those were budgeted to be more or less flat over the next couple of years, but now Obummer is asking for another $50B over ten years for children. Shameless liberal.

We might wanna look at the exclusion for employer-sponsored health insurance, $153B last year and going up more than five percent every year. Or the exclusion for net pension contributions and earnings, $120B and increasing at around ten percent annually. Then there are the preferential rates on capital gains and investments, $115B and growing at around six percent. Deductions of mortgage interest cost us $75B a year, and are of course expanding. That's $463B a year for mostly upper-income households, equivalent to 12.5% of the federal budget, and $24B more than last year's deficit.

Hmm. Nah, stick to the kids living in low-income households. That'll help motivate them, teach 'em how life is in the real world.

>>I could come up with another $1.5 Trillion (over time) if we phased out the current versions of SS/Med and replaced them with private, transferable accounts.

Too bad we didn't start doing that in, say, 2007.

>>Reining in EPA, Education and HUD could save another $20-50 Billion.

Any specific suggestions?



I'm guessing there are more taxpayers than there are "federally elected and appointed workers."

>>It is time the government workers tighten their belt every time they tell us we need to.

I've worked for the federal gubmint since 1999. My pay was frozen 2011-13. Everyone in my group got 1% in 2014. Last year, we got another one percent, and because I go to all the socialist worker party meetings, they gave me another 2.8%.



Again, any specific suggestions?

>>Consolidate the Forest Service into the BLM to eliminate massive redundancy.

Details?

>>no more Navy pilots

:<(



The large and powerful corporations that pretty much control the gubmint. You've heard the expression, "You get what you pay for." The smartest investment we could make would be to publicly fund elections. Of course, then we'd need to survive without all those wonderful negative campaign ads on TV.



Throw 'em out on the streets. There are plenty of bridges not being adequately maintained that they could sleep under. If there's a collapse, that would soften the blow for the commuters.



That's about one percent of the budget, with Israel the largest recipient at around ten percent. A third of it goes to fight diseases like AIDS. Another fifth is military assistance.

View attachment 67197040

The total for the salaries involved is a little more than $800M. In case yer looking for a handle on reality.

Which is why I mentioned both salaries and perks.

 

[tres borrachos]

Throw 'em out on the streets. There are plenty of bridges not being adequately maintained that they could sleep under. If there's a collapse, that would soften the blow for the commuters.

You're better than this. What a stupid comment. Nobody is getting thrown out on the streets. From your post you apparently have no idea what HUD does. It isn't a shelter.

 

[tres borrachos]

Great post polgara.

How about this report from the GAO?


$45 Billion Wasted in Redundant Federal Programs: GAO | The Fiscal Times

The federal government has no idea how many tax dollars it’s wasting on redundant federal programs every year—but it’s likely in the neighborhood of $45 billion.

That’s according to the Government Accountability Office, which identified more than two dozen new areas of inefficiency and overlap in its annual report to Congress. This is on top of the more than 160 redundant areas that the GAO has identified in its three previous reports.​

What's $45 billion between friends?

 

[mmi]

Apparently this is MMI fronting that we cant cut anything.

You lose again, but hey, yer used to it. What say we look to shave off some of the cost of the $463B worth of tax expenditures going mostly to upper-income households?

And I'm certainly open to the idea of looking for savings in corporate welfare, as some here have suggested. My favourite component is the $153B paid in benefits to the low-wage employees of giants like Walmart and McDonalds. Walmart alone is responsible for more than six billion dollars annually. Raising the minimum wage would substantially reduce that.

Which is why I mentioned both salaries and perks.

So you estimate the perks as something significantly more than $29.2B, nearly forty times the total for salaries?

You're better than this.

You may be giving me too much credit.

>>What a stupid comment.

Not my first, I'm sure.

>>Nobody is getting thrown out on the streets.

Republicans are always eager to cut the agency's budget.

>>you apparently have no idea what HUD does. It isn't a shelter.

I know a little bit about what it does. It mostly administers voucher and subsidy programs for low-income, disabled, and elderly Americans. It also manages public housing projects. Here's some more:



I figure that last one helps keep 'em off the warpath.

 

[KevinKohler]

Apparently this is MMI fronting that we cant cut anything. I don't know. I bet we can. Considering all the doom and gloom that was forecasted when they had a shutdown last time and people barely noticed, I'm betting there are plenty of areas that could be cut.

But, we can't count on Washington to try very hard.

If you controlled your pay, would you pay yourself more, or less?

 

[Conservative]

149 trillion?

LOL, that is what it seems like but 149 BILLION, my error and apology

 

[NoLeftNoRight]

Who wants more taxation?

 

[OpportunityCost]

You lose again, but hey, yer used to it. What say we look to shave off some of the cost of the $463B worth of tax expenditures going mostly to upper-income households?

And I'm certainly open to the idea of looking for savings in corporate welfare, as some here have suggested. My favourite component is the $153B paid in benefits to the low-wage employees of giants like Walmart and McDonalds. Walmart alone is responsible for more than six billion dollars annually. Raising the minimum wage would substantially reduce that.

Lose? Stop debating like a 12 year old.

People are just brainstorming. For some reason you have nominated yourself as head stick in the mud to shoot all the ideas down, but what is the point other than some sort of ego exercise.

We ought to take a look at Agriculture and Commerce, together they have over $200B in budget.

 

[Lutherf]

Tax credits are expensive, I agree, and the totals there are even higher — $67B for EITC and 58 for child care. Those were budgeted to be more or less flat over the next couple of years, but now Obummer is asking for another $50B over ten years for children. Shameless liberal.

We might wanna look at the exclusion for employer-sponsored health insurance, $153B last year and going up more than five percent every year. Or the exclusion for net pension contributions and earnings, $120B and increasing at around ten percent annually. Then there are the preferential rates on capital gains and investments, $115B and growing at around six percent. Deductions of mortgage interest cost us $75B a year, and are of course expanding. That's $463B a year for mostly upper-income households, equivalent to 12.5% of the federal budget, and $24B more than last year's deficit.

Hmm. Nah, stick to the kids living in low-income households. That'll help motivate them, teach 'em how life is in the real world.

>>I could come up with another $1.5 Trillion (over time) if we phased out the current versions of SS/Med and replaced them with private, transferable accounts.

Too bad we didn't start doing that in, say, 2007.

>>Reining in EPA, Education and HUD could save another $20-50 Billion.

Any specific suggestions?

The EITC and Additional Child Tax Credits are fraud factories The IRS themselves estimate that more than 20% of the payments are based on fraudulent claims and that alone comes to well over $10 Billion per year. The simple solution is to get rid of the refundable portion of the credit. That takes away much of the incentive for fraud, saves the IRS lots of compliance enforcement expense and saves the taxpayers money.

I would actually advocate for (and have done so) making employer provided health benefits taxable. The trade off to that would be to allow everyone an above the line deduction for their health care costs up to a certain limit. There would be no more itemizing of health costs and no "floor" you had to meet before those costs became deductible.

I wouldn't mess with contributions to 401(k) plans and the like UNLESS doing so was part of an overall plan to phase Social Security into a private, transferable, defined contribution plan. The incentive needs to be to encourage people to provide for their own retirement rather than rely on someone else to provide for them.

I would not do away with the preference treatment of capital gains. I would consider basing that preference on age and employment status. Again, this goes back to providing for ones own retirement. I don't want to see the Widow Jones whacked at 35% tax because she had to sell the stock her husband left her to fix the roof.

The mortgage interest deduction is, in my opinion, way overrated. It doesn't help the wealthy all that much and it encourages the less than wealthy to go full on stupid with home purchases. I'd be happy to do away with it in exchange for an increased standard deduction.

 

[mmi]

Lose? Stop debating like a 12 year old.

I made an error. You used the words "bet" and "betting" in a fifty-eight-word post that included, "Apparently this is MMI fronting that we cant cut anything. I don't know. I bet we can." Somehow I read that as "I bet he can't." That's I why I offered a couple of suggestions of things I might support cutting. But I appreciate the admonition and I'll be more careful in the future not to do anything to disappoint you.

>>People are just brainstorming. For some reason you have nominated yourself as head stick in the mud to shoot all the ideas down, but what is the point other than some sort of ego exercise.

Geez, yer just full of ideas for ways that I can improve myself. Thanks for taking to time to critique my behaviour.

Are you saying I should just keep my mouth shut when people suggest that the way to move toward a balanced budget is to eliminate the Earned Income Tax Credit and child care credits? That to do otherwise is to somehow arrogantly argue that the idea should simply not be considered? My experience in this community is that members are not at all reluctant to hold onto their ideas despite any objections I might raise.

Both of those tax policies were proposed by conservative economists and supported by Republican politicians. They provide what amounts to a subsidy to businesses that employ low-wage workers. They represent an alternative to other social welfare programs and require a beneficiary to collect employment income to qualify.

The minimum wage in 1975, when the EITC was first introduced, was $2.10. That's $9.50 in 2016 dollars, 31% more than today's $7.25. I don't see it as unreasonable for me to suggest that this is not at all the first place to go looking for budget cuts, when tax expenditures totalling nearly four times as many dollars are currently directed at upper-income households with large salaries, substantial investment income, comfortable retirement savings, expensive health insurance plans, and high-end homes.

The Right likes to say that people should be able to keep more of what they earn. Well, if a household includes two parents who work full-time and make $12/hr, that's $50K/yr. That places them right at the income limit for the EITC, so the people who benefit significantly from the credit make less than that. Is it fair to put the squeeze on them? Not to my thinking.

I suppose it's simply the case that I've started scanning yer posts rather than giving them careful attention, as I missed this gem:

Considering all the doom and gloom that was forecasted when they had a shutdown last time and people barely noticed​

The 2013 shutdown cost $24 billion. That's something I think a lot of people noticed. And it certainly did interfere with the work in my agency. I'd say I took it in stride really without any problem, but I figure that's because I was certain it wouldn't last long, and it ended up being a couple of weeks. Some of my colleagues were worried that it might last for months. The best thing about it from my perspective is that if Scruz gets nominated, I expect he will pay dearly at the the polls for leading the charge.

 

[mmi]

We ought to take a look at Agriculture and Commerce, together they have over $200B in budget.

USDA is about 148: SNAP 78, School Lunch Program 21, WIC 7, and forest and conservation services 12. The Right is always eager to cut nutritional assistance programs, insisting that Demecrats are deliberately making people dependent and buying votes. This despicable rhetoric doesn't bother me, as I figure it drives moderates and Independents to support candidates on my side of the aisle.

I'm guessing you got a $61B figure for Commerce off of Wikipedia's page. It's wildly exaggerated, perhaps placed there by someone who supports eliminating the department. I'm an editor on the site, and if I remember to do it I'll correct it in a couple of days. The accurate figure is more like 12: National Oceanic and Atmospheric Administration 5.5, Patent and Trademark Office 3.5, Census Bureau 1.5, National Weather Service 1, and a few hundred million for stuff like the National Institute of Standards and Technology and the International Trade Administration. Doesn't look to me like there's much to go after.

The EITC and Additional Child Tax Credits are fraud factories The IRS themselves estimate that more than 20% of the payments are based on fraudulent claims and that alone comes to well over $10 Billion per year.

It's a complicated section of a return for people who often do their own. I'd say it's more accurate to say "improper" than "fraudulent." It needs to be simplified.

>>The simple solution is to get rid of the refundable portion of the credit.

Could you elaborate?

>>The mortgage interest deduction … I'd be happy to do away with it in exchange for an increased standard deduction.

Seems worthy of consideration. And I agree that careful attention to incentives is a critical element in designing tax expenditures. Thanks for the thoughtful response. I say that despite my apparent stick-in-the-mud nature.

 

[OpportunityCost]

USDA is about 148: SNAP 78, School Lunch Program 21, WIC 7, and forest and conservation services 12. The Right is always eager to cut nutritional assistance programs, insisting that Demecrats are deliberately making people dependent and buying votes. This despicable rhetoric doesn't bother me, as I figure it drives moderates and Independents to support candidates on my side of the aisle.

I'm guessing you got a $61B figure for Commerce off of Wikipedia's page. It's wildly exaggerated, perhaps placed there by someone who supports eliminating the department. I'm an editor on the site, and if I remember to do it I'll correct it in a couple of days. The accurate figure is more like 12: National Oceanic and Atmospheric Administration 5.5, Patent and Trademark Office 3.5, Census Bureau 1.5, National Weather Service 1, and a few hundred million for stuff like the National Institute of Standards and Technology and the International Trade Administration. Doesn't look to me like there's much to go after.



It's a complicated section of a return for people who often do their own. I'd say it's more accurate to say "improper" than "fraudulent." It needs to be simplified.

>>The simple solution is to get rid of the refundable portion of the credit.

Could you elaborate?

>>The mortgage interest deduction … I'd be happy to do away with it in exchange for an increased standard deduction.

Seems worthy of consideration. And I agree that careful attention to incentives is a critical element in designing tax expenditures. Thanks for the thoughtful response. I say that despite my apparent stick-in-the-mud nature.

Or, I could be thinking soil banking and direct farmer subsidy payments, not food stamp and assistance programs.

You are speaking about Commerce's discretionary budget, not the whole department.

You assume a lot. There is an old quip about that, isn't there?

 

[ocean515]

What's $45 billion between friends?

Exactly. What's $140 flushed for every man, woman, and child living in the US?

 

[humbolt]

Maybe we should use zero-based budgeting.

 

[mmi]

soil banking and direct farmer subsidy payments, not food stamp and assistance programs.

Fair enough. The good news of course is that outlays for food programs are going down as the economy continues to recover. And yes, I did forget to include in that list the $30 billion spent on crop support programs. I agree there may be an opportunity for savings there.

>>You are speaking about Commerce's discretionary budget, not the whole department.

Well, that's a good point, because I suppose it's possible that the department has budgetary responsibility for something like small business loans that I'm not aware of. And if there's money going through Commerce that's part of some corporate tax benefit that I'm not aware of, I can't say I'd be shocked.

Anyway, I'm obviously no budget expert. But I do know that, once you've let poor kids eat lunch at school and helped low-income working class, retirees, and disabled afford to eat, and after you've paid to help fight all those wildfires out west, and forecast the weather, and issued patents and trademarks, and managed the forests and fisheries, etc., … it's more difficult to find money to cut than it is to talk about it. Ya got the poor, the middle class, and the fat cats, and it's difficult to get money out of all of them.

>>You assume a lot.

You'd help me out if you could give me a link to a summary of that sixty billion. I know only of the twelve.

Maybe we should use zero-based budgeting.

I'd say that can make a difference only if sound budget priorities have been established.

 

[OpportunityCost]

You'd help me out if you could give me a link to a summary of that sixty billion. I know only of the twelve.

http://www.osec.doc.gov/bmi/budget/FY17BIB/AllFilesWithCharts2.pdf

 

[fmw]

I have just read that Congress is having a very difficult time finding ways to cut $30 billion dollars from the latest budget request from President Obama which totals over $4 trillion dollars! If that's true, and I don't doubt that it is, I would like to hear comments and suggestions on what we might do to help them adjust to reality, since the CBO projects our interest payments on our current debt of $19 trillion dollars alone will require interest payments in the neighborhood of $450 billion dollars annually by 2020!

Is $30 billion in cuts too much or too little to make a difference?

Way too little. If they need help, they just need to ask and I'll give them a list of things that should be cut. They all need to be fired.