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Sat Dec 1, 2012, 08:41 PM

"Seventy percent of the federal budget goes to individual assistance programs"

My local paper, which is not online has a right wing columnist who states that in his recent weekly column about freedloading Americans, a problem that he thinks will get worse over the next 4 years of Obama. Most of this columnist evidence is antedotal. I do wonder where he got the 70% figure. It just doesn't seem correct.

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Reply "Seventy percent of the federal budget goes to individual assistance programs" (Original post)
Nikia Dec 2012 OP
Dyedinthewoolliberal Dec 2012 #1
Loudly Dec 2012 #3
liberal N proud Dec 2012 #4
Loudly Dec 2012 #5
liberal N proud Dec 2012 #14
Loudly Dec 2012 #19
PSPS Dec 2012 #21
Loudly Dec 2012 #24
JDPriestly Dec 2012 #32
PoliticAverse Dec 2012 #41
HiPointDem Dec 2012 #16
Loudly Dec 2012 #22
HiPointDem Dec 2012 #23
Loudly Dec 2012 #25
HiPointDem Dec 2012 #26
Loudly Dec 2012 #28
JDPriestly Dec 2012 #36
HiPointDem Dec 2012 #38
PoliticAverse Dec 2012 #43
JDPriestly Dec 2012 #35
HiPointDem Dec 2012 #39
JDPriestly Dec 2012 #40
HiPointDem Dec 2012 #47
wildbilln864 Dec 2012 #20
BlueStreak Dec 2012 #29
Nikia Dec 2012 #8
PoliticAverse Dec 2012 #10
JDPriestly Dec 2012 #31
Loudly Dec 2012 #33
liberal N proud Dec 2012 #2
WinkyDink Dec 2012 #6
BlueStreak Dec 2012 #30
banned from Kos Dec 2012 #7
Nikia Dec 2012 #9
Mariana Dec 2012 #15
tsuki Dec 2012 #27
JDPriestly Dec 2012 #37
Mariana Dec 2012 #42
JDPriestly Dec 2012 #45
Mariana Dec 2012 #46
HiPointDem Dec 2012 #17
2naSalit Dec 2012 #11
HiPointDem Dec 2012 #12
Democrats_win Dec 2012 #13
HiPointDem Dec 2012 #18
nadinbrzezinski Dec 2012 #34
L0oniX Dec 2012 #44


Response to Dyedinthewoolliberal (Reply #1)

Sat Dec 1, 2012, 08:50 PM

3. Mandatory spending and interest on the debt is shown there at total 69%.

 

Actually seems to agree pretty closely with the columnist.

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Response to Loudly (Reply #3)

Sat Dec 1, 2012, 08:51 PM

4. How does mandatory spending equate to individual spending?

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Response to liberal N proud (Reply #4)

Sat Dec 1, 2012, 08:54 PM

5. Mandatory spending is so-called "entitlement programs."

 

Appropriations are based on pre-defined eligibility.

There's nothing you can do about them except re-define program eligibility such as raising the age to qualify.

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Response to Loudly (Reply #5)

Sat Dec 1, 2012, 10:07 PM

14. Social Security is NOT an entitlement!

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Response to liberal N proud (Reply #14)

Sat Dec 1, 2012, 10:41 PM

19. Sure it is. What do you mean? Even the Social Security Administration calls it that:

 

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Response to Loudly (Reply #19)

Sat Dec 1, 2012, 11:03 PM

21. Wat he means is that Social Security is not a welfare program and is not part of the federal budget

Social Security plays no role in the deficit. It is an entirely separate program funded entirely by FICA and it has a healthy surplus.

If you don't believe me, here's Saint Ronnie saying the same thing:


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Response to PSPS (Reply #21)

Sat Dec 1, 2012, 11:26 PM

24. Excess FICA collections available to borrow from the Trust Fund

 

began to occur at approximately the same time Saint Ronnie was speaking those words.

And the debt service on those borrowings is now very much a part of the deficit.

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Response to Loudly (Reply #5)

Sun Dec 2, 2012, 12:14 AM

32. Actually, Social Security and Medicare are paid for out of

specific tax revenue raised for the purpose of supporting those programs and nothing else.

So, in addition to redefining eligibility for the programs, you can raise more taxes specifically for the purpose of supporting them.

At this time, the special Social Security or payroll taxes are imposed only on the first $110,000 or so that a working person earns. Democrats want to raise the cap, impose the taxes up to a higher income level in order to avoid raising the retirement age.

At my age, 69, I think Democrats are right. A large proportion of Americans over age 65 are disabled and cannot work or cannot do jobs they might otherwise be able to get. And, right now, we have a shortage of jobs, not cash in this country.

Encouraging or requiring older people to work longer will reduce the numbers of jobs available for younger people. It would be very unwise to raise the age for Social Security. A lot of older people would be unemployed and have to go on welfare -- which does come out of state and federal general funds.

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Response to JDPriestly (Reply #32)

Sun Dec 2, 2012, 12:30 PM

41. Not true, about 42% of Medicare spending comes from general revenue...

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Response to Loudly (Reply #3)

Sat Dec 1, 2012, 10:28 PM

16. why do you lump interest on the debt (6%) in there? SS & Medicare are the bulk of spending

 

on social programs, and *all* SS spending & *most* (historical, before George Bush's Part D boondoggle) Medicare spending have been financed by workers as payroll deductions, not from the general budget through the income tax.

Actual safety net programs that don't require vesting or payments from recipients, i.e. 'welfare" = 13% of the budget.

defense = 20% (& likely more than that hidden in non-defense areas).

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Response to HiPointDem (Reply #16)

Sat Dec 1, 2012, 11:05 PM

22. $3 trillion of federal debt is owed to the Social Security Trust Fund.

 

So allow me at least the interest on that portion as applicable to benefits under the program.

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Response to Loudly (Reply #22)

Sat Dec 1, 2012, 11:16 PM

23. You're double counting. The interest owed to the TF so far is already *in* the TF.

 

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Response to HiPointDem (Reply #23)

Sat Dec 1, 2012, 11:36 PM

25. When it accrues to the trust fund it becomes added to the deficit.

 

It's not double counting, it's the yin and yang sides of the same book entry.

That's why no one can claim the entitlement doesn't have a budgetary impact on the general fund.

And this will become truer and truer now that the trust fund no longer runs surpluses but is now running deficits. That $3 trillion is callable when and as needed.

Hey, just remove the ceiling from FICA wages and the self employment tax.

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Response to Loudly (Reply #25)

Sat Dec 1, 2012, 11:46 PM

26. SS is running surpluses. $69 Billion in 2011.

 

In 2011, Social Security had a surplus – revenue plus interest income in excess of outgo – of $69 billion. Reserves are projected to grow to $3.1 trillion by the end of 2020.

http://www.nasi.org/research/2012/social-security-finances-findings-2012-trustees-report

The TF assets are mirrored US debt is correct, but it's not correct that the 6% of the budget devoted to paying debt interest = proportional payments to SS.

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Response to HiPointDem (Reply #26)

Sat Dec 1, 2012, 11:55 PM

28. That's pretty illusory though.

 

"$114 billion in interest and $103 billion in reimbursements from the General Fund—almost exclusively resulting from the 2011 payroll tax legislation."

What that says to me is that the payroll tax break flowed right down to the deficit.

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Response to Loudly (Reply #28)

Sun Dec 2, 2012, 12:22 AM

36. As I recall, that is Reaganomics. That was a Reagan administration

idea. There really isn't any other way that they could have prepared for the baby boomer retirement.

Had Bush not fought two wars and simultaneously given everybody tax breaks, we would be in good shape.

That is why the Bush tax breaks, at least for the rich, have to go. They should never have been given. The money has been wasted on fighting unwinnable, useless, phony wars. Bush just gave Cheney and his friends at Halliburton and other such companies a big gift with those two wars.

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Response to Loudly (Reply #28)

Sun Dec 2, 2012, 02:16 AM

38. Illusory? How so?

 

If not for the tax holiday, the status would

SS took in $805 B in income.

$114B was interest income paid on the debt that already exists to the program. Interest paid on SS is below market, a better deal than the government can get from any private borrower.

About $107B came from the general fund, to make up the difference from the 'tax holiday'.

SS paid out $736B, leaving a surplus of $69K.

Which means that $38K of the money from the general budget actually redeemed debt instead of adding to it.

Had it not been a tax holiday, there would still be a $69K surplus, but more debt.

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Response to Loudly (Reply #28)

Sun Dec 2, 2012, 12:33 PM

43. Exactly. The payroll tax cut was ultimately made up for by borrowing. n/t

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Response to Loudly (Reply #22)

Sun Dec 2, 2012, 12:19 AM

35. Plus all the payroll or Social Security and Medicare

taxes that don't get paid out in benefits go into the Trust Fund and are loaned to the government.

The information in the newspaper quoted in the OP is misleading and false as are the charts at the link the post beneath it.

Social Security does not compete with other expenditures for general fund money.

Unfortunately, Obama and Congress have given a payroll tax vacation which means that the government is not collecting all the Social Security and Medicare taxes that they should. They are doing that to stimulate the economy and encourage more hiring. But it reduces the amount of money that is specifically raised for Social Security and Medicare. That is very, very bad because sooner or later conservatives will charge that we don't have enough money to fund Social Security and Medicare. And yet they are not collecting the taxes that should be collected for that purpose.

Cut the military spending. We have bases all over the world including quite a number in countries like Germany where they really aren't needed.

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Response to JDPriestly (Reply #35)

Sun Dec 2, 2012, 02:27 AM

39. I think it's not quite like that. Say there's $1000 in the TF, representing a debt the gov't

 

owes to the people. And say every year $100 in SS taxes is collected & immediately paid out to support beneficiaries, leaving the principal debt of $1000 plus whatever interest it accrues over the year - say $10.

So we have:

TF starting: $1000
FICA iincome: $100
interest income: $10
= $1110
- Outgo = Ending balance of $1010

Then say the gov declares a tax holiday for half the FICA % ($50)

So we have:

TF starting: $1010
FICA income: $50
Gen fund income: $50
Interest income $11
Total income $111
TF balance = $1121
- Outgo = $1021

But: the $50 the government paid in cancels $50 worth of the TF debt, so at the end of the period we have $1021 - $50 = $971.

Whether that is a good thing or a bad thing depends on what the government's secret plans for SS are.

For most of its history, the TF ran a one-year cushion in the TF. It was up to 5 years last time I looked seriously at the numbers.

I favor the traditional pattern & the pay-go structure. I don't favor running up huge balances by over-taxing the population before it's needed.

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Response to HiPointDem (Reply #39)

Sun Dec 2, 2012, 12:21 PM

40. My generation was overtaxes because the baby boomers

are such a huge bump. Baby boomers had fewer children than their parents.

The real problem is that the US no longer has much of a manufacturing base. We import too much. We make too little for ourselves. We export too little, and what we export is often intangible and easily imitated and stolen.

We are, when you get down to it, living on our capital and not creating much that is tangible that we can trade.

The desire to cut Social Security and other safety net features is a symptom of a very serious underlying economic weakness. Sooner or later someone will have to pay for that weakness.

It's the people like Romney, the take-over artists, pirates posing as businessmen who have dragged our economy and our country to the bottom. They harbor their pirated fortunes off-shore and then advocate that the elderly and poor should walk the plank.

No, thanks. Americans are prouder and smarter than that.

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Response to JDPriestly (Reply #40)

Sun Dec 2, 2012, 03:27 PM

47. yes, i agree. just saying that the long-term effect of the tax holiday isn't so clear. there's no

 

economic benefit to building up an ever-larger trust fund, & a political detriment.

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Response to Loudly (Reply #3)

Sat Dec 1, 2012, 10:51 PM

20. hmmm...

what is this " debt" we speak of and who gets the interest?

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Response to Loudly (Reply #3)

Sun Dec 2, 2012, 12:05 AM

29. No. Let's look at some of the things that are not payments to individuals

(ignoring the fact that things like Medicare and Social Security are funded by the individuals in the first place)

Military 18%
Interest 7%
Ag 4%
Transportation 2%
Education 2%
International 1%
Energy 1%
Science 1%
Government 1%

That is 37%, and there is plenty of money in the big slices (Social Security and health) that is not paid directly to individuals.

Now some of that military budget goes to soldier pay, so in that sense, it is payments to individuals, but that would be extremely misleading if included in your right-winger's 70%. Moreover, most of hte budget goes to pay for weapons systems and operations costs.

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Response to Dyedinthewoolliberal (Reply #1)

Sat Dec 1, 2012, 08:56 PM

8. Should social security and medicare be considered part of the Federal Budget?

Since it is a separate tax that is specifically designated.
The columnist was probably adding in these programs, but then he was probably incorrect when he said that 47% of Americans don't pay Federal taxes since even low earners pay SS and Medicare.

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Response to Nikia (Reply #8)

Sat Dec 1, 2012, 09:30 PM

10. Medicare is certainly part of the federal budget,

about 42% of all Medicare spending comes from the general fund and not from specifically designated Medicare taxes.

http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2012.pdf




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Response to Dyedinthewoolliberal (Reply #1)

Sun Dec 2, 2012, 12:08 AM

31. That chart includes Social Security as part of the budget.

In fact, Social Security is funded out of taxes dedicated to that purpose and from a Trust Fund that present and future recipients created through special taxes for that purpose.

It should not be included as part of the budget at all. That is why it is mandatory spending -- because the money spent for it is specifically collected for that purpose and promised for that purpose.

The chart is misleading. If Social Security did not exist, people would not pay Social Security taxes. In fact, Social Security taxes are collected only on the first $110,000 or so of a person's salary. It is not a tax from which money can be drawn for, say, the military.

The military is the big problem.

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Response to JDPriestly (Reply #31)

Sun Dec 2, 2012, 12:16 AM

33. When excess FICA and self-employment collections were lent to the general fund

 

they were in fact being used for the military and every other outlay of discretionary spending.

The military is an awesomely huge problem, and I miss Chalmers Johnson.

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Response to Nikia (Original post)

Sat Dec 1, 2012, 08:47 PM

2. FY12 Federal Budget Spending Estimates for Fiscal Years 2011 - 2016

https://chart.googleapis.com/chart?cht=p3&chs=600x200&chf=bg,s,e8e8ff&chd=t:22,23,3,25,12,2,3,1,4,6&chl=Pensions%2022%|Health%20Care%2023%|Education%203%|Defense%2025%|Welfare%2012%|Protection%202%|Transportation%203%|General%20Government%201%|Other%20Spending%204%|Interest%206%&chtt=Budgeted%20Federal%20Spending%20for%20%20-%20FY%202012

,
http://www.usgovernmentspending.com/welfare_budget_2012_4.html


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Response to Nikia (Original post)

Sat Dec 1, 2012, 08:56 PM

6. So what? "For the people" and all that.

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Response to WinkyDink (Reply #6)

Sun Dec 2, 2012, 12:07 AM

30. Exactly. Why wouldn't it be 100% of the government costs going to the benefit of Americans?

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Response to Nikia (Original post)

Sat Dec 1, 2012, 08:56 PM

7. SS/Medicare are individual assistance.

 

Sounds like he is lumping lots of programs together.

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Response to banned from Kos (Reply #7)

Sat Dec 1, 2012, 08:59 PM

9. If he is including these as Federal budget, it is inconsistent to then say

that 47% of Americans don't pay Federal taxes since low earners pay SS and Medicare taxes.
He seems to be using different criteria on "Federal" to fit his agenda.

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Response to Nikia (Reply #9)

Sat Dec 1, 2012, 10:22 PM

15. The RW media assholes are usually pretty careful to say that the 47%

don't pay any Federal Income Tax. Of course they don't mention that most of those people do pay other taxes such as FICA. They fully expect their readers/viewers/listeners will construe the statement that "47% pay no Federal Income Tax" to mean the 47% pay no taxes whatsoever. Naturally, their readers/viewers/listeners rarely let them down.

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Response to Mariana (Reply #15)

Sat Dec 1, 2012, 11:50 PM

27. Of course they pay Federal Income Tax.

The Social Security Trust Fund is an accounting trick. It is entered in the "Trust Fund", but spent like Federal Taxes. The US Bonds are worthless.

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Response to tsuki (Reply #27)

Sun Dec 2, 2012, 12:30 AM

37. They are not worthless to those of us who are retired or baby

boomers. We paid the bulk of the payroll, Social Security and Medicare taxes that are in the trust fund. We rely on our benefits that come out of the current Social Security taxes and the Trust Fund just to stay alive.

The US government is not permitted to renege on its obligations. It has to pay all its debts. That is in the Constitution.


The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

14th Amendment, section 4

The phrase "validity of the public debt of the United States, authorized by law, . . . shall not be questioned." is defined by the language, "including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion" is inclusive. All debts of the US are included. The Congress is obliged by the Constitution to pay all debts including those to the Social Security Trust Fund as I read that language.

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Response to JDPriestly (Reply #37)

Sun Dec 2, 2012, 12:32 PM

42. You might want to take a look at Flemming v. Nestor.

The Supreme Court ruled in 1960 that no one has a right to receive SS benefits, regardless of how much SS tax they've paid.

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Response to Mariana (Reply #42)

Sun Dec 2, 2012, 12:39 PM

45. The law about the Trust Fund changed in the 1980s.

So a 1960 decision might be reviewed by a more favorable court.

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Response to JDPriestly (Reply #45)

Sun Dec 2, 2012, 03:19 PM

46. I certainly hope so, but for now, the 1960 decision stands.

The only thing that protects current and future beneficiaries at this time is political pressure.

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Response to Nikia (Reply #9)

Sat Dec 1, 2012, 10:29 PM

17. good catch. we should use their tactics and say that workers at all levels fund half the budget.

 

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Response to Nikia (Original post)

Sat Dec 1, 2012, 09:47 PM

11. Merely for those who might be interested (and willing to read a lot of tables)...

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Response to Nikia (Original post)

Sat Dec 1, 2012, 09:51 PM

12. it's wrong. get a bunch of others together & send a letter of complaint with the correct data.

 

and write a letter to the editor as well.

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Response to Nikia (Original post)

Sat Dec 1, 2012, 09:58 PM

13. Harper's index had an interesting statistic

They compared a percentage of federal benefits going to people in poverty in 2010 versus the amount going to people in poverty in 1976. It was a few percentage points less in 2010 compared to 30 years ago!

In other words, the government is giving more to people who aren't in poverty. I imagine that if the Republicans have their way, this trend will accelerate.

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Response to Democrats_win (Reply #13)

Sat Dec 1, 2012, 10:31 PM

18. or maybe poverty has been defined down. some evidence for that, too.

 

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Response to Nikia (Original post)

Sun Dec 2, 2012, 12:19 AM

34. His ass

He is also conflating social security (not technically part of the budget) and Medicare, technically part of it, for public assistance. DOD and you have the three biggest spenders in the Federal Budget. It's a nice trick I admit.

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Response to Nikia (Original post)

Sun Dec 2, 2012, 12:37 PM

44. Ironic that 70% of what he says is horse shit.

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