Guest Column: So Just How Does Our Government Spend Our Money?

By Jeff  Struthers

There is a great furor brewing in the other Washington about  government spending, the deficit, and what to do about it. What’s new is the intensity of the debate and the scope of the proposed changes in policies and spending. Unfortunately, recent public opinion polls also reveal that, as a nation, we do not have a realistic picture of where the money goes.

It might be helpful if we at least had a better common understanding about how we’re spending now, and will five years from now, if we just continue doing what we’re doing now. We’re not likely to learn that from partisan proposals; anyone with a strong political perspective is not likely to trust numbers offered by the “other side”.

Fortunately, the Congress and the President arrived at a way to deal with this issue nearly forty years ago, by structuring their budget deliberations using an agreed “baseline”, i.e., the level of spending that would result if we just keep doing what we’re already doing under current law.

One can go into endless detail on this sort of thing, certainly enough to make the average person’s eyes glaze over in short order. However, gleaning the “big picture” is probably even simpler than understanding today’s more complicated family budgets.  So, at the risk of wading in where angels fear to tread, here is my “simple” summary, U.S. Government spending in just 10 lines:

The negative item at the bottom reflects repayments from the banking and housing bailouts. Foreign aid is included under International Affairs. The cost of the war in Afghanistan is included under Defense & Veterans. Medicare and Health costs are civil only; health costs for Defense are about $50 billion in 2010 and estimated to rise to $65 billion by 2015. Much of Veterans costs are also health related.

The numbers are in billions of dollars. To get a grasp of a billion dollars, imagine you had a hundred dollar bill and put it on your kitchen table. Now, take an even bigger leap and imagine laying down another and another at the rate of one every second for eight hours a day, every day for a year. That would add up to about a billion dollars.

The future being the future, the baseline values forecasted for five years are estimates that float on a sea of assumptions; time will reveal their true values … or not. They are, however, not arbitrary estimates, as they represent the considered and collective judgments of many savvy, experienced and often competing interests. There’s certainly lots opportunity here for “But..!” But, still, you get the picture … the big picture on our government spending, that is.

Jeff Struthers is a former official with the U.S. Official of Management and Budget.