According to the Treasury Department’s “Monthly Treasury Statement of Receipts and Outlays of the United States Government,” the U.S. government took in $2.449 trillion in revenue during fiscal year 2012 — but spent $3.538 trillion. That means the government spent $1.089 trillion more than it took in.
Although it was under George W. Bush that the United States first had a trillion-dollar budget deficit (fiscal year 2009), the deficit has also been above one trillion dollars each fiscal year that Barack Obama has been in office (fiscal years 2010, 2011, 2012). Since World War II, the federal government has taken in an average of about 18 percent of gross domestic product (GDP) as revenue. However, for fiscal years 2009–2011, expenditures as a percentage of GDP exceeded 24 percent each year.
According to the Congressional Budget Office’s “Monthly Budget Review,” fiscal year 2013 is looking even worse: “The federal budget deficit was $292 billion for the first two months of fiscal year 2013, $57 billion more than the shortfall recorded in October and November of last year.” Although “revenues rose by $30 billion (or 10 percent),” government spending “increased by $87 billion (or 16 percent).”
That means that the federal government has borrowed $4.8 billion each calendar day so far in fiscal year 2013 — and spent even more. This unsustainable level of deficit spending speedily increases the national debt. And because the debt level is fast approaching its legal limit of $16.394 trillion, Congress is yet again facing the dilemma of either raising the debt ceiling (the maximum amount of money the federal government is legally allowed to borrow) so the government can borrow yet more money or allowing the government to default on its obligations and possibly shut down.
How is all that possible? Under the Articles of Confederation, the central government could neither levy taxes nor borrow money. All money received by the central government had to be given to it by the states. But under the Constitution, Congress has the power
To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;…
As a consequence, under the Constitution the United States has been a debtor nation for its entire existence, except for a brief period under Andrew Jackson in 1835.
The Constitution mentions neither a debt ceiling nor a federal budget; both are twentieth-century creations of Congress. A balanced budget negates the need for a debt ceiling.
According to the Budget and Accounting Act of 1921, the president must annually submit a budget to Congress by the first Monday in February. Within six weeks of his budget request, congressional committees are required by the Congressional Budget and Impoundment Control Act of 1974 to submit their “views and estimates” of federal spending and revenues to the House and Senate budget committees. The budget committees hold hearings on the president’s budget and then draft and report a concurrent resolution on the budget. Action on the concurrent resolution is supposed to be completed by April 15. It is only then that appropriation bills are enacted.
The U.S. government has rarely in its history had a balance of receipts and outlays. Deficit spending has been the norm, with the last real budget surplus occurring in 1957 under a Republican president (Eisenhower) with Democratic majorities in the House and Senate. The handful of budget surpluses since then under Lyndon Johnson and Bill Clinton were the result of creative accounting practices involving the Social Security “trust fund.”
But is a balanced budget the answer?
Would it have been a good thing if during fiscal year 2012 (Obama’s most recent budget) the federal government had taken in $3.538 trillion in revenue to match the $3.538 trillion that it spent? Would it have been a good thing if during fiscal year 2010 (Obama’s first budget) the federal government had taken in $3.456 trillion in revenue to match the $3.456 trillion that it spent?
The answer, of course, is “No way.” Such a level of federal spending is obscene whether the budget is balanced or not.
Okay then, but what about federal spending when Republicans were in charge of the government? They often talk about rolling back spending to some level that it was during Bush’s presidency.
Would it have been a good thing if during fiscal year 2009 (Bush’s last budget) the federal government had taken in $3.517 trillion in revenue to match the $3.517 trillion that it spent? Would it have been a good thing if during fiscal year 2001 (Bush’s first budget) the federal government had taken in $2.011 trillion in revenue to match the $2.011 trillion that it spent?
If it looks to you as though Bush and the Republicans almost doubled the federal budget, you are correct. Just as he and the Republicans almost doubled the national debt.
The only thing we can say about federal budgets of $2.011 and $3.517 trillion is that they were better than federal budgets of $3.456 and $3.538 trillion. But that doesn’t mean that there is anything good about them.
Clearly, the problem is not a budget that is out of balance; the problem is the outrageous level of wasteful, unconstitutional, and immoral government spending. Proponents of a balanced budget usually focus on eliminating wasteful spending, sometimes focus on reducing unconstitutional spending, but rarely focus on putting an end to immoral spending.
Take, for example, federal spending on education.
The U.S. Department of Education employs about 3,600 bureaucrats in Washington, D.C., and at five other locations. There are also another 1,400 staff members who work in ten regional offices. Spending money on federal education bureaucrats instead of spending it on educating students is certainly wasteful spending that needs to be cut.
But using the taxpayers’ money to pay the salaries of federal education bureaucrats is also unconstitutional spending. It is unconstitutional because there is nothing in the Constitution that authorizes the federal government to spend anything on education: no Pell Grants, no Elementary and Secondary Education Act, no No Child Left Behind Act, no Race to the Top Fund, and no Department of Education.
But even if educational spending were authorized by the Constitution (as it is in state constitutions), it would still be illegitimate because it is immoral spending. It is immoral to take money under threat of violence from one American and use it to pay for the education of the children of another American. And it would be just as immoral to take money under threat of violence from an American to educate his own children. The federal government has no business being involved in the education of anyone’s children.
But federal spending on education is just the tip of the iceberg. According to the CBO’s aforementioned “Monthly Budget Review,” during the first two months of fiscal year 2013,
Expenditures for each of the three largest entitlement programs were higher than in the same period last year. Outlays for Social Security benefits increased the most — by $8 billion (or 7 percent). Spending for Medicare rose by $6 billion (or 8 percent) and outlays for Medicaid rose by $4 billion (or 9 percent).
It is federal spending on Social Security, Medicare, and Medicaid that is the largest chunk of wasteful, unconstitutional, and immoral spending. They and other entitlement programs don’t need to be trimmed around the edges to bring into balance and legitimize a bloated federal budget; they need to be abolished to eliminate wasteful, unconstitutional, and immoral federal spending.
Should the U.S. government have a balanced budget? Certainly. But is a balanced budget the answer to ending wasteful, unconstitutional, and immoral federal spending? Certainly not.