Tag: budget

The Great Society Meets the Taxpayer

President Lyndon Johnson’s legacy was the so-called Great Society (read: entitlement programs). As these programs have matured, along with the U.S. population, the proportion of the people dependent on the State has soared. Indeed, spending on entitlement programs gobbles up bigger and bigger chunks of the federal budget.

As the population grows older, entitlements will grow. Worryingly, the ratio of people receiving government benefits to those paying taxes will continue to climb, too. As the accompanying chart shows, those who receive government goodies already number the same as those who pay taxes (the ratio is one). With the steady progression of the ratio, it will be very hard to put the genie of the Great Society back in the bottle. Can you just imagine how difficult it will be to cut entitlement programs when those who are dependent on the government outnumber taxpayers by two to one?

Cato Spending Charts

How much does Congress spend on Veterans Affairs, the IRS, or Customs and Border Protection? How much has spending increased over time?

You can answer those questions quickly and easily with Cato’s updated charting tool for the federal budget.

The tool allows you to plot real outlays for about 500 departments, agencies, and programs, 1970-2014. All data is from the Office of Management and Budget.

The chart page opens blank. Click “+” to open a department and then check boxes for the departments, agencies, and programs you want to plot.

To save your chart as an image or a pdf, right click on it.

This chart shows spending on the three largest federal agencies. The data is in constant 2014 dollars.

Congress May Hike VA Spending $400 Billion

Last week the Senate voted to greatly increase health care spending for veterans. If the new spending were made permanent, it would cost at least $385 billion over 10 years, as Nicole Kaeding noted. The House version of the bill would cost at least $477 billion if made permanent. The chambers will now work out a compromise bill, and—going out on a limb here—I’m guessing that the compromise is also a budget buster.

The bills would allow veterans to access health services from facilities outside of the Veterans Affairs (VA) system. The VA system needs a fundamental overhaul, but these bills would appear to just throw money at the problem without creating structural reforms.

The CBO score for the Senate bill is here and for the House bill here. For the House bill, CBO says spending would be $16 billion in 2015 and $28 billion 2016. The House bill would authorize the new spending until 2016, but if Congress extends it permanently the total costs would be $54 billion a year and about $477 billion over 10 years.

I can’t remember an instance when Congress has voted so quickly to spend so much money with so little debate and analysis. The CBO cautioned that their numbers are essentially only rough guesses. So the ultimate spending could be even higher than shown in the chart.

Edwards_VASpendingHouse

Whose Brother’s Keeper? Obama Administration Denies School Choice

The Obama administration’s proposed budget for 2015 would continue unsustainable spending growth at more than twice the rate of inflation and hike taxes by more than $1 trillion. It also includes $69 billion in education spending, much of it on programs that are unconstitutional, proven to be ineffective, or both.

And yet, in one area where the federal government has the constitutional authority to fund and manage education policy—the District of Columbia school system—the Obama administration’s budget cuts all funding to the Opportunity Scholarship Program (OSP), which has proven to be much more effective than the government-run school monopoly.

The administration’s proposal is particularly puzzling in the wake of the president’s announcement last week that he is launching a $200 million charitable initiative called My Brother’s Keeper to help young, male minorities. As Dr. Patrick Wolf of the University of Arkansas points out today at the Choice Words blog, there is solid evidence that school choice programs tremendously aid exactly that population:

Three evaluations of private-school choice programs have followed enough students for sufficiently long to determine their effects on the rates of high-school graduation, college enrollment, or both. A 2010 evaluation of the District of Columbia Opportunity Scholarship Program that I led for the U.S. Department of Education found that students offered private-school choice by winning a random lottery graduated from high school at the rate of 82 percent, compared with 70 percent for the control group. The impact of actually using an Opportunity Scholarship was to increase the likelihood of graduation by 21 percentage points, from 70 percent to 91 percent. Over 90 percent of the participants in the study were African American, and almost all of the rest were Latino American.

Budget Battles Highlight Importance of Federalism

Despite the fears expressed in news stories, federal worker furloughs do not seem to have caused major economic disruptions. While the National Parks were closed, most government workers that provide useful services to citizens are at the state and local level, not the federal level.

Thus one advantage of our system of federalism is that budget battles at the national level do not shut down most government services that citizens actually use, such as police, fire, and the schools. Indeed, the ongoing political dysfunction at the federal level should be a warning to avoid any further centralization of American government in Washington.

At most, about 800,000 federal workers were furloughed, but that figure is small compared to the 16 million workers in state and local governments. The federal government spends far more than all state/local governments combined, but it has less than one-quarter of the number of workers. When you exclude the uniformed military, there are just one-eighth the number of federal workers as state/local workers. 

Outside of the military, the federal government is mainly just a giant cash transfer machine, vacuuming up taxpayer earnings and redistributing them to individuals, businesses, nonprofit groups, and state/local governments through more than 2,000 subsidy programs.

There are two charts below. The first chart shows that state/local government employment has soared since 1950. The second chart shows that federal civilian employment has been comparatively flat.

State/local bureaucracies have grown partly in order to handle the flood of cash and paperwork from the rising number of federal aid-to-state programs. The partial federal shutdown has threatened to turn off the cash spigot to some of these programs, but my view is that the more federal aid programs that we can terminate, the more that we will unhook local activities from future budget chaos in D.C. 

(Data notes: Federal “civilian” employment includes nonuniformed Pentagon workers, but it excludes postal workers. The data are from NIPA Table 6.5. and measured in full-time equivalents).

 

Philly Schools—Is Money Really the Problem?

House majority leader Eric Cantor is in Philadelphia today to pick up Attorney General Eric Holder’s gauntlet. Holder’s DOJ has filed suit to shut down a Louisiana school voucher program that serves an overwhelmingly African American population, on the grounds that… it’s bad for African Americans. Cantor vows to fight the DOJ if Holder doesn’t drop the suit, and he’s delivering his message at a Philly charter school serving mostly African American kids—one that has about six times as many applicants as it has places.

Apart from its proximity to DC, Philly might seem an odd location for Cantor’s presser, but the city of brotherly love is going through an educational drama of its own. The Philadelphia School District has had budget problems for years. It’s seen horrendous violence, plummeting enrollment, and commensurate staff layoffs and school closures. Most media accounts bewail lack of funding as the key problem. Salon.com recently ran a story with the subhead: “Pennsylvania’s right-wing governor drains public schools of basic funds.” CBSNews laments “the same old problem: not enough money.”

What those and all other Philly school district stories I’ve seen have in common is that they fail to say how much the district actually spends per pupil. Not having attended journalism school, I missed whatever class teaches education reporters to omit the single most important fact in their stories, so allow me try to fill in the blank.

A quick Google search reveals that Philly’s 2013-14 budget is $3.03 billion (p. 50), of which $862 million is for charter schools. The district serves 136,000 students in its regular public schools and another 63,000 in charter schools. So the regular public schools, the ones that are being “systematically murdered” by budget cuts, spend $15,941 per pupil. That’s about $3,000 more than the national average. It’s also $1,600 more than the day tuition at Temple University. The city’s charter schools receive about $2,300 less than the regular public schools.

That’s not to say that the district’s classrooms are fully stocked with supplies or that the city’s best teachers are paid what they’re worth. What it does suggest is that the cause of those problems may have less to do with the amount of funding available than with the way it is allocated. After all, Washington, DC spends around $29,000 per pupildouble what Philly does—and it performs worse in both reading and math by the 8th grade.

Please, Just Build Him a Statue

David Fahrentold reports in the Washington Post:

[P]ork, the habit of using taxpayer money for a legislator’s pet cause…. appears to be stronger even than death.

That’s clear from the story of the Robert C. Byrd Highway, a decades-old road project in West Virginia that had received earmarked funds for years from Sen. Robert C. Byrd (D-W.Va.), the longest-serving senator in history, who died in 2010.

The highway has been maligned as a wasteful road to nowhere. But, now, it has outlived earmarks. It has even outlived Byrd.

This year, with continued support from Sen. John D. Rockefeller IV (D-W.Va.) the highway got $40 million in federal money. It will need about that much every year, state officials say, until it’s finished in 2035.

Pages