The Five Horsemen of the Federal Budget

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Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

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6 Responses

  1. Avatar Katherine says:

    To what degree are the entitlement programs – Social Security, Medicare and Medicaid – funded by payroll taxes? In other words, how much of the money for those programs is coming from people’s income/non-payroll taxes?Report

  2. Avatar E.D. Kain says:

    Good question, Katherine – anybody know?

    Personally I would like to see more and more of our tax money go directly to local governments, but I am in favor of some federal programs and spending. It’s just not black and white at all.Report

  3. Avatar Badger says:

    Social Security – 100% funded through payroll
    Medicare – Roughly 50% funded via payroll and 50% funded via income taxes.
    Medicaid – Roughly 50% funded via income tax and the rest funded by the States.Report

  4. Avatar Bob says:

    Katherin, taxes are taxes. I don’t care if the money is taken from my paycheck or on April 15th (also taken from my paycheck). If the taxes are spent on meaningful programs, Social Security, Vets, education, libraries, roads, food and drug safety, medicare/aid what does it matter how the money gets to the treasury? It seems a distinction without a difference.Report

  5. Avatar Katherine says:

    Mostly I just wanted to know in order to better understand how the system works. But if you’re looking at debt rather than taxes, there is a difference – if Social Security is wholly funded by payroll taxes, it isn’t contributing to the debt, so it’s not a place you should be looking to cut.

    Which seems to leave Defence, Medicare and Medicaid as the main areas that need serious spending reform. Defence especially. It seems like a good place to start, besides cutting extremely expensive weapons systems, would be pulling back most forces stationed overseas in non-combat zones. European countries have their own militaries, they don’t really need US forces over there. But overall cuts to the size of the armed forces are going to have to happen to make substantial savings: about 55% of the defence budget just goes to paying people and “operation and maintenance” costs (I’m going from the 2006 budget).

    In terms of what’s more plausible for cutting costs, conservatives worried about debt and opposed to taxes would probably argue for ditching income assistance and related programs (housing assistance, food stamps, UI and other programs), which make up about 8% of the budget. “Shaft the poor” is usually the main conservative answer to cost overruns.Report

  6. Avatar James says:

    Exiled have the scoop on this one: http://exiledonline.com/how-freedomworks-gave-the-teabaggers-a-dirty-sanchez/

    Here’s the only outfit organising demos worth attending in the US right now: http://anewwayforward.org/demonstrations/Report