Shrinking the Waistline and the Federal Budget

Consider weight loss programs and government programs.  Both are perpetually in the news. Americans regularly confess they could be a little leaner and so too could the federal budget. But never are the two considered together. Why is it that neither waistlines nor the federal budget ever shrinks? Are the two concepts really that similar?  It turns out yes— more than you think.

Let’s start with weight loss. We all know the formula for reducing weight. You can expend more calories each day (exercise) or you can bring in (eat) fewer calories to match current exercise levels. Budget balancing isn’t much different. You either cut the spending to match the tax revenue now collected or raise the tax revenues to the current level of spending the public enjoys. Of course a third way would be a combination of the two—some spending cuts and some tax increases, or in the case of weight loss, eat less and exercise more. It all seems pretty elementary actually.

But forget those 10 pounds. What about the morbidly obese? A more comprehensive plan would be required that would involve real sacrifice and permanent lifestyle changes. Imagine such a person saying, “I’m all in for your weight loss suggestions doc, but you’ve got to take out all the exercise suggestions and the cuts to sweets.”

And so it is with the federal budget and how the public views it. Getting rid of waste, fraud, and abuse is a common refrain. Others say cut out foreign aid. Politicians exclaim that government is too big and spends too much, at least overall. The public generally agrees. Everyone appears to favor cutting programs, but that only applies in the abstract. Cut which programs specifically? Balancing the federal budget also polls favorably. But Americans don’t have the information needed to be truly informed about what that would actually entail.

The fiscal year for 2023 just ended on September 30^th. Final numbers are due out soon, but it is projected the federal budget deficit for just this past year will be close to $2 trillion. That means almost $2 trillion more was spent than the incoming tax revenue was. The difference was borrowed, and it must be paid back plus interest.

But it’s more complicated because just four federal programs plus interest on the debt (which is all past deficits combined) make up over 80 percent of the federal budget. They are Defense/Military, Social Security, Medicare, and Medicaid. You could completely eliminate the other 20 percent of programs and not balance the federal budget. And note that means eliminate, not cut. That is scary. No national parks. Zero air traffic controllers. No federal court system or prisons. No scientific research. No Pell grants. No maintaining federal roads or highways. The list goes on. Just four items—spending for troops plus social insurance benefits for the aged and the poor. In fact, just a few years back a former undersecretary of the Treasury named Peter Fisher famously declared that our government is “little more than an insurance company with an army.” He was not wrong.

This knowledge is important because politicians have their talking points about getting rid of welfare abuse or eliminating the Department of Education. The merits of each notwithstanding, neither yields any savings. It’s a grain of sand on the beach. It’s turning off nightlights to cut a bloated household budget. It’s walking up and down your driveway one extra time each day to try to lose weight. The problem with all of these solutions is they’re all for naught.

Are Americans ready to have conversations about draconian cuts to Medicare and Social Security? This isn’t about a few bucks more each month in premiums. Are we ready to make deep cuts to the military industrial complex? Canceling a few new ships or plane orders isn’t enough. How about deep cuts to Medicaid, which is health care for the poorest? 

The answer is we do not appear ready. Politicians are not rewarded by voters for speaking the hard truths, and so we voters do not get told the hard truth. But this is the hard truth. Facts are facts. Four programs plus interest payments comprise 80 percent of spending. And with interest payments growing and the population aging, it can only get worse, even though that might seem impossible.

Honest conversations need to happen soon. The federal budget is morbidly overweight. The national debt is $33 trillion. A permanently diminished standard of living is the result of our doing nothing, and we’re already seeing the first signs of that.

Jeff Szymanski works in political communications at AMAC, a senior benefits organization with 2.2 million members.  He previously taught high school government and economics for 15 years.