Budget increases and cuts

Dear Donald –

Yesterday, you released the first details of your first budget request to Congress. It was scarce on details, but it did confirm that you plan to ask for a 10% increase in defense spending, about $58 billion extra.  Clearly, the first question is where that type of money comes from. Supposedly, that funding will be offset by cuts in other non-defense discretionary spending. Let’s go through the basics for a second. 

There are generally two types of funding – mandatory and discretionary. Mandatory funding is money that is authorized to be spent in an existing law and doesn’t require any action from Congress each year to be spent. For example, Medicare funding is mandatory funding, so That money isn’t dependent on Congress every year. Mandatory funding represents about 65% of annual Federal spending. Discretionary funding is the money that Congress appropriates annually. If Congress doesn’t take action, no funds can be spent on that purpose. For example, funding for the National Endowment for the Arts is discretionary, as is funding for a huge swatch of Federal programs. Discretionary appropriations are about $1.1 trillion annually, or about 30% of total annual spending. Your announcement yesterday was just about this piece of the Federal budget. 


Within discretionary funding, there is a clear breakdown – defense and non-defense. You see, he U.S. spends so much on its military that it constitutes over half of all discretionary spending – 54% in 2015 or $598 billion. Everything else combined – foreign aid, education, highways, housing programs, the VA, NASA, and everything in between – is only about $500 billion. 


Now, the other thing to remember is how U.S. military spending compares internationally. Worldwide, nations spent $1,676 billion on their militaries in 2015, meaning we alone constituted more than 35% of the worldwide total. We spend about as much as the next eight countries combined. A list that includes China, Russia, Germany, he United Kingde, France, and Japan. We’re not hurting when it comes to military spending. 


With that context, we have to ask why we need to spend more. What do we get for $650 billion that we can’t get for $600 billion? In a 2015 report, the Department of Defense was found to be wasting $125 billion over a five year period. DOD buried the report because they were afraid their budgets would get cut. With that much waste, why would we increase their annual funding until they’ve realized all possible efficiencies with their current funding?

Then there’s the question of what trade-offs we have to make. You said that the defense increases would be offset by reductions in non-defense discretionary spending, meaning that the extra $58 billion has to be cut from everything else – about a 12% cut across the board for all other programs. And that’s a net decrease. If there are any new initiatives in there, existing programs have to be cut even more.

 For example, you’ve pushed for $20 billion for school vouchers. If we assume that’s over 10 years, that’s about $2 billion per year. In 2016, the Department of Education’s budget was $68 billion. A 12% cut would be more than an $8 billion reduction in funding across the board. If you want to get $2 billion for vouchers, you’ve got to cut another $2 billion from existing programs, meaning a $10 billion cut in existing programs, or about 15%, and that’s assuming Education doesn’t get singled out for deeper cuts than other agencies. When you’re making cuts that deep, there are only a few places you can go – Title I grants to school distreicts, special education funding, teacher quality and training grants, or Pell grants have to take a hit, along with a whole host of other grant programs. 

So, is that worth it?  That’s the question that will ultimately be up to Congress. I can only hope that they don’t agree to this unnecessary military buildup at the expense of critical programs that help our most vulnerable citizens. 

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