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Here’s 2013 Federal spending 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 halfway through Fiscal Year (FY) 2014.

When Congress and the President cannot agree on a full-year budget, we often keep the government open using a series of Continuing Resolutions (CRs), which are temporary agreements to continue spending at pretty much existing levels. Last fall, the Republicans refused to agree on an FY 2014 budget or temporary CR that did not repeal the Affordable Care Act — hostage-taking the Democrats and President Obama would not allow — so the government shut down on Oct 1st 2013 for sixteen days until public pressure caused Republicans to cave.

Back to the chart... Everything shown in red is Mandatory spending, meaning it is dictated by existing law and very difficult to change without a battle royale. This makes up about 2/3 of the entire budget and includes benefit programs like Social Security (23%), Medicare (14%), Medicaid (8%), and other Income Security safety net programs (10%). Interest on the long-term debt (6%) is dictated by prevailing interest rates.

Everything shown 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 ($625 Billion), including war activities, is negotiated each year. And it makes up more than half of our Discretionary spending.

That leaves only about 16% of the entire budget — the little bitty 1% and 2% slivers in the lower right — that comprise the “non-defense discretionary” spending. It includes important investments like Education, Environment, Science and Transportation. And that’s where Republicans love to hack away. A $100 billion cut is less than 3% of the entire budget, but it’s a gigantic chunk out of just these little slivers.

Note that Social Security and Medicare each have a dedicated revenue stream through the payroll tax. Social Security’s 12.4% dedicated payroll tax currently covers its entire costs, so it is a 100% “earned benefit.” Medicare’s 2.9% dedicated payroll tax, however, was only designed to cover the Part A hospital portion. Because Medicare draws over $200 Billion per year from general tax revenues — for Part B (doctor/outpatient) and Part D (prescription drugs) — it can only be considered about 50% an earned benefit.

Also note that Foreign Aid is only about 1% of the budget (part of the Int’l Affairs sliver). In a recent poll, most people mistakenly believe it is a whopping 27% and that just eliminating foreign aid will solve our budget woes.

Learn more here:
CBO Budget Outlook 2014-2024
http://www.cbo.gov/...

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Comment Preferences

  •  Thanks for posting this and using the entire (3+ / 0-)
    Recommended by:
    GAS, Hoghead99, thomask

    budget. Many diary authors only show the discretionary part.

    "let's talk about that"

    by VClib on Tue Apr 15, 2014 at 10:33:53 PM PDT

  •  IIRC the International Affairs sliver (1+ / 0-)
    Recommended by:
    GAS

    includes ALL of the Department of State. Personnel, security, facilities as well as what ever foreign aid is dispensed.  And is some part of that cash that we give foreign governments to buy our military hardware?

    “that our civil rights have no dependence on our religious opinions, any more than our opinions in physics or geometry.” Thomas Jefferson

    by markdd on Tue Apr 15, 2014 at 10:34:49 PM PDT

  •  U.S. foreign aid: recipients (1+ / 0-)
    Recommended by:
    GAS

    The Dutch kids' chorus Kinderen voor Kinderen wishes all the world's children freedom from hunger, ignorance, and war. ♥ ♥ ♥ Forget Neo — The One is Minori Urakawa

    by lotlizard on Tue Apr 15, 2014 at 10:40:23 PM PDT

  •  Interest (2+ / 0-)
    Recommended by:
    Roadbed Guy, unfangus

    $221 Billion dollars on interest. What a freaking waste.

    That money could be used for so many different things that this country so desperately needs and it doesn't buy us squat.

    Scary part is that interest rates are non-existent and it still costs us $200+ billion to service the debt, if we ever had any kind of recovery and interest rates ever started approaching their historical norms that number would explode.

    In a perverse way the government almost can't afford to see a real recovery because of the effect it would have on the budget via drastically higher debt service payments.

    I hate how much we spend on the military, but at least it provides jobs and such for people and we get something for it.

    Interest payments are just dead money that can't be used for anything more productive.

    We can't extend UI benefits, but we have to send $200+ billion out for money that was long ago spent.

    It is frustrating, and is only going to get worse in the future as the Fed can't keep rates at zero forever.

    •  They're doing pretty well... (1+ / 0-)
      Recommended by:
      John in Cleveland

        ...so far.

         So many oldsters have CD's at the bank, safe, secure, insured, etc, but they feel poor because of the lousy returns...  If interest rates were higher, these same old folks would feel more like spending some, IMO....

         I think these low interest rates are holding the economy back as much as anything else, but what do I know? Not much. Just my 2 cents.

      Peace, HH99

      Compost for a greener planet.............got piles?

      by Hoghead99 on Wed Apr 16, 2014 at 06:36:52 AM PDT

      [ Parent ]

    •  That's the beauty of deficit spending (0+ / 0-)

      it benefits the super wealthy two ways.

      First, they get juicy tax cuts, which is why the deficit exists in the first place.

      Then, they finance the debt, earning interest which for all intents and purposes is simply another way to funnel wealth upwards.

      It's diabolically clever, really.  Which has me totally reconsidering why I didn't opt to be a 1 percenter as a career choice . ..  (or is it now a 0.1% er?)

    •  We could get more return by investing in other (0+ / 0-)

      priorities like infrastructure and education than spending on such a bloated military. It costs about $1 million/year for each troop overseas. We could get more bang for buck by paying 10 to 15 returning veterans to rebuild our crumbling infrastructure and educate our kids.

      Interest payments are not always a waste if they are used to make good longterm investments — like a mortgage or a college education.

      Good news is we make a lot of those interest payments to ourselves, not China:
      http://www.connectthedotsusa.com/...

    •  We could get more return by investing in other (0+ / 0-)

      priorities like infrastructure and education than spending on such a bloated military. It costs about $1 million/year for each troop overseas. We could get more bang for buck by paying 10 to 15 returning veterans to rebuild our crumbling infrastructure and educate our kids.

      Interest payments are not always a waste if they are used to make good longterm investments — like a mortgage or a college education.

      Good news is we make a lot of those interest payments to ourselves, not China:
      http://www.connectthedotsusa.com/....

  •  Why is SS included in federal government (0+ / 0-)

    spending?  

    I've been repeated assured at this very site that it is quite separate from that!!

    •  SS is part of spending but not the deficit. (0+ / 0-)

      I distinguish between federal spending (the Soc Sec checks go out) versus what items contribute to the federal deficit (i.e. are not paid for by a dedicated revenue stream like the payroll tax). That way my federal spending numbers coincide with numbers folks might see from CBO, the media, etc.

      Normally, Soc Sec is entirely paid for by its dedicated payroll tax. I say normally because in 2011 and 2012, the temporary “payroll tax holiday” (when the employee portion went from 6.2% to 4.2%) was reimbursed with general revenue taxes to the Soc Sec fund (about $100 Billion/year).

      That’s why progressives don’t like the payroll tax holiday as the preferred method of getting money in the pockets of working folks. It starts an unsettling trend of turning Soc Sec into a “welfare” program instead of an “earned benefit.”

      Check out my “Soc Sec: A Look At The Books” chart here:
      http://www.connectthedotsusa.com/...

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