The way the federal budget works is often a mystery to Americans. But it shouldn’t be to the president of the United States.
Here, the president makes a basic mistake. He asserts that even though he signed into law a bill cutting taxes in 2017, revenue has kept going up — a fact he attributes to a robust economy. Some listeners might even have gotten the impression that the tax cuts were paying for themselves — a false claim the administration made repeatedly before the passage of the tax bill.
But revenue was always supposed to be going up year after year, despite the tax cuts. And revenue is way down from what had been anticipated before Congress approved the tax cuts, which (along with higher spending) is the reason the federal budget deficit is soaring despite a good economy.
Raw numbers don’t tell the whole story, of course. When comparing budget numbers over time, it’s generally more useful to look at revenue as a percentage of the gross domestic product (GDP), the broadest measure of the U.S. economy. As a percent of GDP, revenue was expected to drop from 17.2 percent in 2017 to 16.3 percent in 2019 and 16.4 percent in 2020, the CBO said.
That’s a key reason the federal deficit is soaring — from $665 billion in 2017 to more than $1 trillion in 2020. That’s not supposed to happen when the unemployment rate is below 4 percent. Recall that in Bill Clinton’s presidency — he raised taxes and Congress cut spending — that the budget actually went into surplus. But Trump has signed bills that cut taxes and also dramatically increased spending — the exact opposite approach.
One of my biggest wishes is for the citizens of the United States to collectively decide that the office of the President is important, and should only be staffed by competent, smart people, and not award it to someone who proves again and again he is not competent, nor smart.
Trump probably would have been even more upset [with signing a $1.3 trillion omnibus spending plan] had he read the provision that could sharply curtail his plan to reorganize the government.
Section 740 of the 2,232-page document (PDF) makes it clear, as Bloomberg Law previously reported, that Congress, not Trump, is in charge. “None of the funds made available in this or any other appropriations Act may be used to increase, eliminate, or reduce funding for a program, project, or activity as proposed in the President’s budget request for a fiscal year” unless Congress approves, according to the omnibus legislation.
That could make it more difficult for Trump to impose the cuts he wants. His March 2017 “Comprehensive Plan for Reorganizing the Executive Branch” seeks “to eliminate unnecessary agencies, components of agencies, and agency programs.” Among other cuts, his proposed budget for this fiscal year called for the elimination of 19 small agencies, from the African Development Fund to the Woodrow Wilson International Center for Scholars.
Members of Congress, including Republicans, are not eager to be Trump’s hatchet men. The omnibus spending plan provides a clear declaration that he cannot act alone. It is Congress that creates and eliminates.
The Defense Department got more money than it needs, but on the other hand, many Democratic priorities were strengthened. Some like the National Endowments for the Arts and Humanities got even more money than requested1
Sarah Binder writes:
One of the reasons GOP leaders were keen to rush the bill to a vote is that they didn’t want their partisan base to notice that it both funds innumerable Democratic priorities and blocks the Trump administration from doing such things as expanding detention of immigrants, defunding sanctuary cities, and ending federal funding for the arts, to name a few. The Trump White House and many conservatives wanted deep cuts to domestic programs. Party leaders ignored that. The more quickly the two chambers vote, the less time potential opponents have to unearth details that could outrage the GOP base, who might pressure their representatives to vote against the deal.
Trump is so lazy that I don’t see this process changing much in the future, even if a resurgent Democratic Party takes over the House and Senate in November, 2018. Trump isn’t going to waste his precious Executive Time reading 2,232 page documents and fighting about what it contained therein, he will only react if Trump TV spoon feeds him any of it. Let’s be honest, neither are we2, but I’d like to think if we were in the White House we’d at least make the attempt to understand a bill before signing it.
I laugh at the number of times Defense Department spending is discussed during talks of deficits and tax burdens, and slashing the social insurance of our nation. Rarely, if ever, do either party of our political elites want to mention how many dollars are squandered without oversight, feeding the maw of our military…
Americans rarely think about these bases, let alone how much of their tax money—and debt—is going to build and maintain them. For Dal Molin and related construction nearby, including a brigade headquarters, two sets of barracks, a natural-gas-powered energy plant, a hospital, two schools, a fitness center, dining facilities, and a mini-mall, taxpayers are likely to shell out at least half a billion dollars. (All the while, a majority of locals passionately and vocally oppose the new base.)
How much does the United States spend each year occupying the planet with its bases and troops? How much does it spend on its global presence? Forced by Congress to account for its spending overseas, the Pentagon has put that figure at $22.1 billion a year. It turns out that even a conservative estimate of the true costs of garrisoning the globe comes to an annual total of about $170 billion. In fact, it may be considerably higher. Since the onset of “the Global War on Terror” in 2001, the total cost for our garrisoning policies, for our presence abroad, has probably reached $1.8 trillion to $2.1 trillion.
How Much Do We Spend?
By law, the Pentagon must produce an annual ” Overseas Cost Summary” (OCS) putting a price on the military’s activities abroad, from bases to embassies and beyond. This means calculating all the costs of military construction, regular facility repairs, and maintenance, plus the costs of maintaining one million US military and Defense Department personnel and their families abroad—the pay checks, housing, schools, vehicles, equipment, and the transportation of personnel and materials overseas and back, and far, far more.
The latest OCS, for the 2012 fiscal year ending September 30th, documented $22.1 billion in spending, although, at Congress’s direction, this doesn’t include any of the more than $118 billion spent that year on the wars in Afghanistan and elsewhere around the globe.
While $22.1 billion is a considerable sum, representing about as much as the budgets for the Departments of Justice and Agriculture and about half the State Department’s 2012 budget, it contrasts sharply with economist Anita Dancs’s estimate of $250 billion. She included war spending in her total, but even without it, her figure comes to around $140 billion—still $120 billion more than the Pentagon suggests.
Ever the fool and armed only with the power of searchable PDFs, I nonetheless plunged into the bizarro world of Pentagon accounting, where ledgers are sometimes still handwritten and $1 billion can be a rounding error. I reviewed thousands of pages of budget documents, government and independent reports, and hundreds of line items for everything from shopping malls to military intelligence to postal subsidies.
If logic were part of the budget negotiations in Washington, the Pentagon would not be able to play such games. Why should taxpayers like you and me subsidize the military contractors who profit from bases in Kosovo? or wherever? If Medicaid and Medicare is on the table, why shouldn’t our insanely over-funded military budget be on the table too?
But don’t for a second think that that’s the end of our garrisoning costs. In addition to spending likely hidden in the nooks and crannies of its budget, there are other irregularities in the Pentagon’s accounting. Costs for 16 countries hosting US bases but left out of the OCS entirely, including Colombia, El Salvador, and Norway, may total more than $350 million. The costs of the military presence in Colombia alone could reach into the tens of millions in the context of more than $8.5 billion in Plan Colombia funding since 2000. The Pentagon also reports costs of less than $5 million each for Yemen, Israel, Uganda, and the Seychelles Islands, which seems unlikely and could add millions more.
When it comes to the general US presence abroad, other costs are too difficult to estimate reliably, including the price of Pentagon offices in the United States, embassies, and other government agencies that support bases and troops overseas. So, too, US training facilities, depots, hospitals, and even cemeteries allow overseas bases to function. Other spending includes currency-exchange costs, attorneys’ fees and damages won in lawsuits against military personnel abroad, short-term “temporary duty assignments,” US-based troops participating in exercises overseas, and perhaps even some of NASA’s military functions, space-based weapons, a percentage of recruiting costs required to staff bases abroad, interest paid on the debt attributable to the past costs of overseas bases, and Veterans Administration costs and other retirement spending for military personnel who served abroad.
Beyond my conservative estimate, the true bill for garrisoning the planet might be closer to $200 billion a year.