The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.

Wednesday, January 9, 2013

Connect The DotsUSA and Federal Spending.

Cross posted w/permission from Connect The DotsUSA. Com




How can we have an intelligent debate about cutting spending when most folks have no idea how the federal budget breaks down? So here’s the 2011 federal budget all in one beautiful pie chart. If you master this, you’ll understand way more than most. The "fiscal year" actually begins October 1st of the year preceding, so we are already three months into fiscal year (FY) 2013. 

Because Congress and the President cannot agree on a full-year budget, we kept the government open in 2012 using a series of Continuing Resolutions (aka CRs), which are temporary agreements to continue spending at existing levels. The current Continuing Resolution expires on March 27, 2013. Hence, the looming danger that Teapublicans will use the occasion to shut down the government. 

Total spending in 2011 was approximately $3.6 Trillion, so each 1% sliver equals about $36 Billion or $36,000 Million. Total spending in 2012 was down a little to $3.5 Trillion. 

Everything in red is Mandatory spending, meaning it is dictated by existing law or interest rates and very difficult to change without a battle royale. This makes up about 2/3 of the entire budget and includes Social Security 20%, Medicare 13%, Medicaid 8%, other Safety Net programs 10% and Interest on the long-term debt 6%. 

Note that Social Security and Medicare are SPECIAL because they have dedicated revenue streams through the payroll tax. Social Security is 100% funded through its 12.4% payroll tax and trust fund. Medicare is only 37% funded through its 2.9% payroll tax (specifically for the Part A hospital portion only) and another 13% funded through enrollee premiums for Part B and Part D. Nearly half of Medicare's funding comes from general tax revenues, so Medicare is only 50% an "earned benefit." More to come on that in a future graphic. 

Everything in yellow is Discretionary spending, which is hammered out each year between Congress and the President. What I found most surprising is that almost all Military spending ($718 Billion), including the two wars, is negotiated each year. And it makes up more than half of our Discretionary spending. That leaves only about 14% of the entire budget — the little bitty 1% and 2% slivers in the lower right — that are “non-defense discretionary” spending. It includes important investments like Education, Environment & Science and Transportation. And that's where Teapublicans love to hack away because they count on you not knowing what's included in "non-defense, discretionary spending." 

Note that Foreign Humanitarian Aid is only about 1% of the budget. In a recent poll, most people mistakenly believe it is a whopping 27% and that just eliminating aid to places like Haiti will solve our budget problems.
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Discretionary Spending Forecast for FY 2013.

Connect the Dots and the following chart reflect a noticeable difference in Defense spending totals. We suspect the difference could be based on 2011 actual figures and 2013 projected figures.  In any case we often report that Defense Spending comprises approximately 58% of US Discretionary Spending. (an obscene fact to put it mildly)

The chart above shows Discretionary spending as 36 % of federal spending.  I like to look deeper at how US Discretionary spending breaks-out.


Chart Source

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