Federal budgeting may be Congress’ most important duty.  It determines how much revenue the government collects and how tax dollars are disbursed, the results of which significantly touch the life of every American.  Yet, disingenuous politicians get away with egregious claims about the budget because voters are uninformed or misinformed about how spending decisions by Congress can affect them and their families. 

The numbers alone are mind boggling, dollars and agencies and programs.  Oh my!  No wonder voters are confused, and discouraged from even attempting to understand how the process works. 

Well, since Congress is currently working on the fiscal year 2025 budget, how about we take a little time to consider some budget facts and realities.

Let’s start with the federal budget’s three major categories:

• Discretionary spending – Includes the Department of Defense, congressional operations, the federal courts, and the other federal agencies, as specified by 12 yearly appropriation bills.  This legislation allocated only 27% of total government outlays in FY 2024.  In the budget summary, this spending appears as defense, and nondefense. 

• Mandatory spending – Includes Social Security, Medicare, Medicaid and numerous other programs.  It is not subject to yearly budgeting, so this spending continues year after year and is limited only by formulas that Congress has established in various laws, like the Social Security Act.  It was almost 60% of the total FY 2024 budget. 

• Interest – Service on the national debt was a little over 13% of the total FY 2024 budget.

Congress is required to pass the 12 appropriation bills each year prior to the start of the next fiscal year that begins October 1.  The final six bills for FY 2024, however, were finally completed last month, almost six months late.  In fact, the last time Congress passed all these bills on time was almost 30 years ago.

The largest components of mandatory spending are, in size order, Social Security, Medicare and Medicaid, which total almost 56% of the FY 2024 budget, not including interest.  The $1 trillion cost of other programs in this category – food stamps (SNAP), federal/military retirement benefits, veterans’ benefits and numerous “other” programs – is also quite significant. 

Interest on the debt is equally large, projected to be almost $1 trillion for FY 2025, which will exceed, individually, both defense and nondefense spending that year.  

It is often said, and I agree, that the U.S. government is primarily a huge insurance company with a large military.  Here are just a few examples why:  When a disaster strikes in the United States, which is quite frequent, both blue and red state governors invariable call on the president for federal relief.  Medicare covers over 63 million seniors; Medicaid provides health insurance for millions of other Americans and so does the Affordable Care Act (Obamacare). 

Several mandatory federal programs, like Medicaid, are “means tested,” making them mainly available to low-income Americans.  They include those that provide food stamps, and tax credits for earned income and children.  Republicans often erroneously blame “welfare” programs for the deficits.

Since 2000, however, the most significant causes of large federal deficits have been wars in Iraq and Afghanistan, the Great Recession, and the Bush and Trump administrations’ tax cuts for corporations and the wealthy.  A 2023 study by the Center for American Progress found that these tax cuts added $10 trillion to the federal debt as of FY 2022, accounting for a 57% increase of the debt as a percentage of gross domestic product (GDP). The debt-to-GDP ratio is closely monitored by economists and policymakers, as a higher ratio can signal economic instability.

Still, prior to the covid pandemic and the Russian attack on Ukraine, I was not nearly as worried about yearly budget deficits and the national debt as I am now – and here is why:

• The coronavirus pandemic ballooned the deficits, devastated the economy and killed over a million Americans.  Another pandemic is highly likely; preparing for it and handling it could cost trillions of dollars.

• Russian President Vladimir Putin has crossed the Rubicon by attacking Ukraine and threatening Western Europe and he is allied with Iran, North Korea and China.  Countering this aggressive, authoritarian alliance will cost more trillions.

• Medicare costs are soaring as the population ages and climate change is an existential threat to the U.S. that must be addressed in future budgets.

Recent Congressional Budget Office baseline budget projections show that the expected deficit in FY 2025 will be almost $1.8 trillion, which will exceed the entire discretionary budget that funds government operations and defense.

Clueless presidential candidate Trump and congressional Republicans, however, are planning additional trillion-dollar tax cuts if given the chance and House Republicans have proposed massive reductions in Medicaid programs, which are critical to saving lives during a pandemic. 

Equally concerning is the ultra-conservative Project 2025 report.  It advocates replacing thousands of federal employees with inexperienced ultra-conservatives who are loyal to Trump, the autocrat-loving, climate change denier who bungled the critical early responses to the pandemic in 2020.

I believe that Trump and most Republicans in Congress are either ignorant of these budget realities or simply don’t care about them.  They are adamant that taxes can never be increased, and that spending must be slashed to reduce deficits and balance the budget. 

Well informed voters should realize that these Republican objectives can only be accomplished with massive cuts to Social Security, Medicare and Medicaid.

PS – Readers who are interested in diving deeper into the workings of the federal government and the budget process should click on the “Helpful Info” tab under the picture on the homepage of my blog site.