MB on Floor

Washington, Mar 3, 2008 -

Budget School Session 1: Class Notes

The Bottom Line Up Front: How Much We Take In, How Much We Spend:
In our first session we, reviewed how Washington spent the taxpayers money last year, breaking it down by household. I would like to thank the Heritage Foundation for helping us with the research on this project.

• Washington spent $24,106 per household in 2007 the highest total since World War II.
• The federal government will collected about $21,992 per household in taxes.

The remaining $2,114 represents the year's budget deficit per household, which, along with all prior government debt, will be dumped in the laps of our children.

$24,106 per household breaks down this way:

• Social Security/Medicare: $8,301. This system can remain sustainable only if there are enough workers to support all retirees, which is why it risks collapsing under the weight of 77 million retiring Baby Boomers.
• Defense: $4,951.
• Anti-poverty programs: $3,550.
• Interest on the federal debt: $2,071. The federal government is $9 trillion in debt. It owes $5 trillion to public bond owners, and the rest to other federal agencies.
• Federal employee retirement benefits: $907.
• Health research/regulation: $664.
• Veterans' benefits: $627.
• Education: $584.
• Highways/mass transit: $418.
• Justice administration: $392.
• Natural resources/environment: $305.
• International affairs: $304.
• Unemployment benefits: $299.
• Community and regional development: $282.

A number of these items are discretionary, congress decides how much to spend on them every year. These items will be discussed when Budget School takes up appropriations bills later in the year.

Other items, like Medicare, Medicaid, and Social Security are entitlement programs. They grow based on the amount Americans are entitled to each year. Unlike discretionary spending, how much Washington spends on these programs is not determined by how much we take in.

Unless we reform this sector of the budget, Congress and the American people will be faced with a stark choice in the not too distant future: unprecedented budget cuts or staggering Income Tax hikes.

Additional Resources:

Heritage Foundation original work can be found at the Heritage Foundation website along with a more detailed account of what the government spent in 2007 and a searchable analysis of the budget.

Homework:
Everyone should take a look at the 2009 budget request for themselves. The President's request can be found here: Office of Management and Budget.