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Where Does the Money Go? Your Guided Tour to the Federal Budget Crisis

Where Does the Money Go? Your Guided Tour to the Federal Budget Crisis. Philanthropy Northwest 2008 Annual Conference Presented by Scott Bittle and Jean Johnson September 26, 2008 Coeur d’Alene, ID. The Six Points You Need To Know To Understand The Federal Budget Crisis.

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Where Does the Money Go? Your Guided Tour to the Federal Budget Crisis

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  1. Where Does the Money Go?Your Guided Tour to the Federal Budget Crisis Philanthropy Northwest 2008 Annual Conference Presented by Scott Bittle and Jean Johnson September 26, 2008 Coeur d’Alene, ID

  2. The Six Points You Need To Know To Understand The Federal Budget Crisis • For 31 out of the last 35 years, the country has spent more on government programs and services than it has collected in taxes. • Every year the government comes up short, it borrows money to cover the difference. We’ve now built up a very big debt – soon to be $10 trillion, and yes, that is trillion with a “t.” • The country will have humongous additional expenses over the next couple of decades as the baby boomers begin to retire and need more medical care. • There is no realistic way government can lower taxes (or even keep them at current levels) and still spend money on everything people want government to do (at least according to the polls) and still end up with a balanced budget. • If we keep on going the way we’re going, the debt will get bigger and begin to endanger the U.S. economy and our own personal finances and plans. • A substantial portion of the country’s debt is held in foreign countries.

  3. Some Favorite Targets For Budget Cuts Science, Space And Technology • Total savings: $25.6 billion, less than 1 percent of the budget. The Arts and Humanities: • Total savings: NEA, $124 .4 million, NEH $141 .1 million, less than .01 percent of the budget Foreign Aid And International Relations • Total savings: $28.5 billion, 1 percent of the budget The Program Formerly Known As Welfare • Total savings: Temporary Aid to Needy Families; food and nutrition assistance, including food stamps: $65.5 billion, 2.39 percent And it all adds up to? A grand total of a little over 4 percent of the budget.

  4. Six Glib Statements That Are Not Helping Solve The Problem • “Social Security and Medicare just aren’t on the table. These benefits were promised to people.” • “Let’s just privatize Social Security right now.” • “Social Security? What a rip-off! I could do better keeping the money and investing it myself.” • “The government can’t do anything right. Look what a mess they’ve made of this. They ought to just get out of it. ” • “Not to worry. The Social Security Trust Fund doesn’t run out of money until 2041.” • “The government spends too much on the elderly and not enough on kids.”

  5. What Should We Do First? • Go cold turkey on deficit spending. • Fix Social Security first. • Fix the tax system first. • Get a grip on health care costs first. • Improve the budget process first. • Clean up politics first.

  6. Six Realities We Need To Accept To Solve The Problem • We have to start now. • We have a short-term problem and a long-term problem -- we need to address them both. • We need to address the waste, fraud, and abuse issue, and then we need to move on • We need voters to demand that candidates take a stand on this • We need to think about what we can live with – not what we personally want. • To solve this problem, we need a different state of mind. And now, the choices will be tougher than ever . . .

  7. Promises They Can’t Keep • Reality: New president will be short on cash • So far, both candidates plan to stick with campaign promises • Senator McCain’s plan: $5 trillion more debt • Senator Obama’s plan: $3.5 trillion more debt • Few specifics on Social Security • Health care: The double bind

  8. What can philanthropybring to the table? • Helping Americans understand the challenge and make sensible decisions • Neutral voices/spaces • Better campaigns/media coverage • Avoiding a generational war

  9. What can philanthropybring to the table? • Providing information, tools, new solutions to make the money go further • Health care -- how to get more from what we have • Education – how to make sure money yields results • A government that works for all • Transparency • The public good • Getting/keeping good people in government

  10. What can philanthropybring to the table? • Picking up the pieces • Burdens on states and cities • Areas that could be hurt: • The arts • Libraries, the humanities, historic sites • National parks, treasured places • Basic science/non-utilitarian projects • Fallout from hard times • Mental health services

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