The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.
Showing posts with label discretionary spending. Show all posts
Showing posts with label discretionary spending. Show all posts

Monday, April 10, 2017

Chinese Billionaire Hits US Federal Spending

Jack Ma, the Chinese billionaire and founder of Alibaba, spoke out about world economics with a focus on the defense spending laden tendencies of U S politicians spending. Ma spoke among other international "money leaders and industrialist at a recent economic conference.

Despite conservative, GOP and Donald Trump's rhetoric about the fledgling US military (and all associated matters) the US is without question spend more than a collective seven of the top international defense spenders. 

Th graphic does not include a Y" Axis with descriptive spending level, but it clearly shows how U.S. military spending dwarfs the budget of China, the #2 country among world defense spending leaders. 
Take a look at a chart from 2014. The chart offers "Y" Axis details relevant to the topic: expenditures in billions.

If you want a revealing "Y" Axis, the next chart shows 2014 spending.

BI_graphics_Millitary budget compare chart 2
National Priorities provides even more stark evidence of defense spending overkill.

Before we proceed, you may find value in the differentiation between Mandatory Spending and Discretionary Spending: Federal Budget 101.

National Priorities
In the fiscal year 2015, military spending is projected to account for 54 percent of all federal discretionary spending, a total of $598.5 billion. Military spending includes all regular activities of the Department of Defense; war spending; nuclear weapons spending; international military assistance; and another Pentagon-related spending.
Mandatory spending does not include infrastructure expenditures. It seems the Chinese billionaire is point-on in his criticism of what was once a great economic power. 

In 2016, President Obama's economic team proposed a federal budget which looked as such:
Image result for is infrastructure spending mandatory or discretionary spending

Image result for is infrastructure spending mandatory or discretionary spending

You may have noticed something a bit different regarding "Transportation" Spending. Did you notice some transportation (Infrastructure) expenses were proposed in the Mandatory Budget (as well as in the discretionary Budget)?

A quick search doesn't show Obama was at all successful at inserting infrastructure Transportation Spending in the 2016 Federal Budget.

Donald Trump and Paul Ryan have both stated a need to increase defense spending. How ridiculous are Republicans?


Tuesday, March 12, 2013

Defense Spending, Foreign Aid, Human Services, Tax Rates, And "World Police Force"

When I started keyboarding here, my intent was to look closely at defense spending and foreign aid in relation to Human Services Mandatory Spending. We all know, despite our reticence, Mandatory Spending must be trimmed, modified or adjusted in some way.  With acknowledgement of the need to adjust mandatory programs, I will admit to amazement at the graphic above which depicts FY2011 Defense Spending in relation to US Foreign Aid (spending).  Since, I am offering admissions,  allow me to also admit the chart is a bit misleading. My overall point in writing here is related to GOP efforts to slash and burn any program outside Defense while refusing to tackle our deficit and budget issues via increasing revenue.  

All said, the stark and obsessive reality of 58% of the nation's Discretionary Spending on defense is pure overkill, hierarchically convenient (for military brass)  and  'turfdom' for congressional (members).

With aforementioned recognition of a growing (baby boomer) problem with Medicare as part of Mandatory Spending, I continue to wonder why  cuts in defense spending and increase in revenue should not offset the need to slash Medicare.  Even raising the Medicare eligibility age seems a slap against the nation's middle class and lower income strata. It just does not seem a balanced approach and the majority of pooled respondents indicate a preference for a balanced approach to deficit issues.

Since we started this webpage, our commitment to, comment about, and tracking of how we spend as a nation has been consistent.  We continue to receive graphic representations of "spending." One of the most prevalent area of social media graphic representation these days are defense spending and and in some cases aid to foreign nations.

Federal Discretionary and Mandatory Spending 2011
(Specific) Federal Discretionary Spending 2012

Click for larger view  (larger view is a must to facilitate reading)

A few closing points or questions. When will rational minds devote more attention to defense spending?  Even the crafty wire-brains in North Korea and Iran, know full well any attack on this nation would lead to releasing a form of extinction certain to render them dead.  Other countries will not take up arms against the largest consumer market on Earth. I think this is especially true of China and Russia.  As Rachel Maddow and others have posited, "we spend billions on 1950s weapons system."  The real threat is far less costly and has a major anchor in cyber systems.  Other than in South Korea and possibly Japan, due to North Korea, how necessary is our presence in worldwide presence as illustrated below. 

Currently, the United States has military personnel deployed in about 150 Countries…This covers 75% of The World’s Nations. 
December 31, 2011 overseas deployments
Total Active Duty1,414,000
Air Force – 332,724Army – 558,571
Marines – 200,225Navy – 322,629
The Top 14 Countries Where the United States has Active Troops
US Deployment Facts | Top 14 Countries Where US Troops are Deployed
Click here to see larger version of Top 14 Places to Find Troops

The United States employees around 81,425 local foreigners across the World.

All data considered and the case made for need to 'make adjustments' to certain human services programs, there is something wrong with rhetoric such as, "We cannot cut defense spending."  

Since this screed has a greater context of deficit spending and the US National Budget, the graphics above are hard to 'swallow' without some attention to people who are paying taxes at rates that contribute to the nations economic collapse in 2007/2008. 

If we are going to continue with over half the nations discretionary spending devoted to what amounts to a world police force, why not have people who stand to lose more (and can afford more), pay more in taxes?   The question is based in a  very basic form of deductive reasoning, but validate question.


Saturday, February 9, 2013

The Sequester: Federal Government Post George W. Bush

It seems objections to "paying our national debts" via raising the debt ceiling became unacceptable once President Obama took office.  Now, that beckons questions as to why?

Recognizing the Federal Deficit at $16 trillion in 2013 Vs. the following reference to 2011 $14 trillion, we find the follwoing graphic relevant and expedient in locating. 

It is noteworthy to point out Obama's deficit increases are distributed between fighting off an economic depression, healthcare reform and a 'surge' in Afghanistan (foolish decision).

Which US President is "king' of Debt Ceiling increases through 2011? Remember, the 'sequester' was hatched in the fall of 2011. 

As we come closer to yet another artificial deadline in the nation's battles over the deficit, we thought it might be good to find as basic an explanation of the "mess" as we can locate.

Govloop dot com provides such an opportunity.  Emily Jarvis keyed a piece easily readable in three minutes. The piece is also accompanied by an audio embed.

Be honest. You have heard us all talking/worrying/complaining about the potential for sequestration since August of 2011, but do you actually know how it would work? I, for one, only had a loose understanding of the process. 

Todd Harrison is a senior fellow at the Center for Strategic and Budgetary Assessments. He gave Chris Dorobek on the DorobekINSIDER a detailed breakdown of sequestration and its impact government wide.

Harrison's Take

First Off: A History Lesson 
Back in July/August of 2011 when we were approaching the debt ceiling, Congress came together for some last minute negotiations to raise the debt ceiling. That agreement was called the Budget Control Act of 2011. The Act formed the Super Committee tasked with finding $1.2 trillion in deficit reductions. But, the Act also created a binding way to force the cuts in the case the Super Committee failed -- that binding resolution was sequestration.

Sequestration was created from an old 1985 law that Congress amended to make sequestration legal. 
Not surprisingly the Super Committee failed. So that leaves us with the January 2nd deadline for all agencies to cut their accounts across the government not just at the Defense Department. 

How Sequestration Actually Works 
Agencies must calculate the amount of cuts required overall. That's roughly $109 billon that they have to find in savings by fiscal 2013. Half of that (roughly $55 billon) will be taken from DoD.
The cuts have to be applied as a uniform percentage cut across all accounts down at the project level. That amounts to a roughly 10% cut on all projects.
There is one exception, the President has the option to exempt military personnel accounts. President Obama has indicated that he will do that. 

White House Sequestration Plan 
Congress started to get nervous with what the cuts would actually look like, so they passed a new law to force the White House outline in a transparent way what sequestration will look like. 
In a 300 page document the White House went line by line through the budget to show what would by cut and by how much. 

Across the Board Cuts 
Across the board cuts are a cop out. But the real problem, is cuts can have some unintended consequences. Imagine your family budget. You budget so much money every month for rent, food, car and insurance. Imagine if you had to cut each of those areas by 10%. Some things like your grocery bill you can cut fairly easily. But your rent for example you just can't cut by 10%. That would mean moving and breaking your lease.
This is the same problem for the DoD.
Take the 200 tomahawk cruise missiles the DoD buys each year from the contractor Raytheon. The contractor is set up to build at that production rate. So if the DoD comes to Raytheon and says I've got to cut 10%, I can only buy 180 units. The government is going to have to break the current contract and negotiate a new deal. Raytheon is going to need to adjust it's production so maybe they have to lay off some people or change the price per unit. So really with that 10% cut you are paying more for each missile. So in the end you don't end up with 180 missiles you end up with fewer for the the 10% cut. 
Some Program Just Can't Be Cut 
For example the Defense Health Program is the military help system. It is not covered under the military personnel exemption so by law it will have to cut its services by 10%. That means about $3 billon will have to come out of the budget. But they system provides health benefits to 10 million active and retired military personnel. It's not possible for them to make the cuts. So they will have to go to Congress and submit a re-programming request and hope for Congressional approval. 

Will Sequestration Happen? 
It may depend on the election outcome.
If Congress/White House maintain the status quo: Its reasonable that there would be an incentive for lawmakers to work out a compromise in the lame duck session.
If there is a significant change in control in either branch: there may be incentive for the party that is going to gain power to delay things and not work out a compromise until they take power. But sequestration goes into effect on the 2nd of January, the President gets sworn in on the 4, and Congress not until the 20th, so in that case sequestration could go into effect.
A last minute compromise is also possible where they delay starting sequestration until April. Pass the ball down the field a little bit to take the pressure off.
Either way, we won't know until the last minute. 
How Should You Prepare? 
Plan for uncertainty. But that's hard because a 10% cut is a big uncertainty.

Agencies should be looking at funding sources and how they would be affected, they should start to develop contingency plans. This is especially important for civilian employees because they will be the first to be affected. So if sequestration happens, furloughs will also happen to reduce funding in all accounts. Contractors have a little more time to deal with sequestration. The impact will be delayed because they depend on the outlays for funding. Sequestration acts on budget authority (how much money an agency actually has). Contractors probably won't feel a huge delay for 3 years. But uncertainty makes it almost impossible for contractors to hire new employees or build new factories. 
Cuts No Matter What  
No matter if sequestration happens are not the government needs to understand that cuts are coming. It's two fold. First we are facing a record federal deficit. Second, we have very low revenues.
The President has proposed reducing the war budget and reducing the DoD's base budget slightly, and then keeping it stagnant for a few years. 

But if you really want to see major deficit reduction you need to look at Medicare and Social Security. Currently the DoD accounts for 15% of the budget, Medicare 14% and Social Security 22%. But the Social Security and Medicare percentages will continue to grow with the babyboomers expected to retire over the next 10 years. We are facing a big deficit no matter what unless we reform those two elements 
We understand US Politics, and we understand the nature of US politics since the late 1970s and early 1980s.  For the informed, we know GOP mantra about fiscal conservatism is nothing more than the party's egregious use of a southern strategy as a campaign tool in national elections.  As tragic as anything political in 2012/13, 47% of voters fell for GOP mantra, political acuity (even with horrid candidates), and mind altering propaganda from highly compensation media demagogues.  We do not understand how people who consider themselves conservatives have little to no influence over forcing their obstructionist representatives to "See the light". The "light" of potential progress in ridding ourselves of the vestiges of the Bush financial record.  How can so many Americans avoid empirical data, and avoid post election observation (post 2010) as factors that influence their votes.

I find so many conservatives expended inordinate energy and cognitive processes following right-wing social biases, bigotry and divisiveness. 

They watch their politicians write and propose legislation after legislation related to abortion while not taking a moment to rial about jobs.  They fully support GOP efforts to cut Human Services programs without one iota of contemplation of future personal need.  And they do so without pressing for reduction defense spending and raising taxes on the nation's wealthy.

The Federal Deficit is fed by expenditures that costume 57% of the nation's discretionary spending.

The GOP lives and breathes defense spending. Yet, for some reason post 2009 after supporting Bush for eight years, they obstruct at paying debts they helped to accumulate.

Additional Sequester basics source: 2012:

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.

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


Monday, December 31, 2012

Defense Spending: A National Tragedy

...all said, I suppose the US is prepared for the invasion of the Insects.   Why did I not realize the need for such obscene defense suspending!

If you visit from time to time or are linked via email notifications, you know we have long posited about the obscene levels and expenditures on Defense Spending.   Defense spending in the US is an untouchable Goliath that consumes 58 % of 2013 (Budget) Discretionary Spending.  Wile we realize consistent readers know discretionary spending, allow a moment for clarity and differentiation.

What is "discretionary spending"? What is the definition of the term "discretionary spending"?

"Discretionary spending" and "mandatory spending" are the two types of spending that make up the sum total US government expenditures on a yearly basis. 

"Mandatory spending" is spending that is automatically obligated due to previously-enacted laws. This would include things such as Social Security and the interest on the national debt. 

"Discretionary spending", on the other hand, consists of US government expenditures that are set on a yearly basis. This is money that members of Congress can adjust on a yearly basis.  

Examples of discretionary spending in the United States:

-defense budget


-Environmental Protection Agency

-Department of Veterans Affairs 

When looking to cut costs, lawmakers usually look to trimming discretionary spending. 

For those who are not aware or need a nasty reminder.

When you compare our military budget to the rest of the world, it looks like this, which is ridiculous:

military spending
Infographic courtesy Face the Facts USA Dot Org

The World spends on defense. Of particular note,  US allies generally spend more on education. One has to wonder why?  If you also wonder why, take a look at the second pit chart above and think for a moment about why the US defense budget is so astronomically out of sync with our historic adversaries. Of course, Israel is not depicted in the graphic.

Click for larger version

Yes, you have seen it all before. I post because of again awakening this  morning to hearing yet another republican speaking about cutting spending with a focus on Human Services programs. The GOP never will consider rational defense budgets.  Even rational Progressives sometime mentions "jobs" when the words defense spending hits the table. 

There is no sane justification nor rationalization for Defense Spending that consumes 57% to 58% (depending on source data) of the nation's discretionary spending. 

Only one political party serves as guardian of the 58% reality!  Members of that party also consistent vote to cut services to the nation's needy. They always vote to preserve subsidies for Big Oil. And, they crave to rid the nation of the Affordable Care Act that will one day provide medical coverage for millions who do not yet have said coverage. 

Whenever my mind goes to this topic and in comparison the items just above, I think in terms of those who vote at the 47%level for Romney/Ryan.  Are you really a Grim Ripper and do not realize such until you look really deep and ask a few questions?