May 31, 2023 at 4:33 p.m. EDT
Editor’s Note: This editorial is part of a series that looks at the challenges of tackling the growing federal debt and the specific programs that drive it. Read the first installment on the debt problem and the previous installment on the defense budget.
Republicans frequently say the federal government has a “spending problem” because more money has left than arrived at the U.S. Treasury for the past 22 years. That kind of language muddies the truth. The nation is $31 trillion in debt largely because of tax cuts, wars, recessions and a pandemic. But going forward, it’s different. The top expenses worsening the national debt in the years to come are the rising costs of Social Security, Medicare and interest. Unfortunately, President Biden and congressional leaders refuse even to discuss these key drivers. So politicians in search of savings turn again and again to the remaining 30 percent of the budget known as “discretionary spending.” They do this even though this budget slice has grown modestly in the past decade (with the exception of a temporary spike during the covid-19 crisis) and is projected to decline in the coming years as a share of the economy.
Defense accounts for just less than half of discretionary spending. The other half, often referred to as “nondefense discretionary,” funds about everything else: schools, roads, space exploration, energy, courts, public safety, veterans benefits and aid for the poor, among other areas.
Budget experts across the political spectrum make this point: There are savings to be had in the discretionary budget, but the nation won’t fix its fiscal problems without raising additional revenue and addressing fast-growing budget items such as Social Security. We agree. This editorial is part of a series on how to stabilize the debt over the next decade. It began with ways to address entitlement programs because that’s where the bulk of the change should occur. But it also makes sense to reexamine the discretionary budget to better prioritize it for America’s future. New technologies such as artificial intelligence are revolutionizing work and education, and the nation’s shifting demographics present different needs than in the past.
Below are examples of where lawmakers can begin to rethink nondefense discretionary spending priorities.
Corporate subsidies are an area of the nondefense discretionary budget that is ripe for scaling back, especially after the largest corporate tax cut in U.S. history in 2017 — and the fact that last year’s corporate profit margins were the largest since 1950. This Editorial Board has already called out the excessive subsidies in the farm bill that overwhelmingly benefit the richest farmers. The nation also provides more than $10 billion a year to subsidize the fossil fuel industry through tax breaks and production aid. Enacting permitting reform, which would make it easier for new projects to get built, offers a better way to help all types of energy companies.
Health-care costs are another rapidly rising part of federal expenses. While this is mainly driven by Medicare and Medicaid, the discretionary budget covers veterans’ health care, Medicare administrative costs, and organizations such as the National Institutes of Health and the Food and Drug Administration. This Editorial Board has proposed (to much criticism) modest updates to veterans’ disability payments. In past budget deals, NIH grant money for research has also been scaled back, but that has long-term impacts on U.S. innovation. On the mandatory spending side, it is worth revisiting the balance between federal and state funding for Medicaid. A small change, such as capping the administrative expenses the federal government pays, could be a fairer arrangement and generate nearly $70 billion in savings over the next decade.
Mr. Biden’s push to forgive up to $20,000 of student loans for 40 million Americans would also be a costly mistake, with a total price of about $400 billion. The plan was not approved by Congress and is currently halted while the Supreme Court decides whether it is legal.
In his final budget, for fiscal 2017, President Barack Obama suggested eliminating or reducing numerous initiatives that he said were “unnecessary” or “low priority.” Examples include the Justice Department’s payments to reimburse local law enforcement for detaining migrants, the Environmental Protection Agency’s grants for water quality research, and various energy and economic impact grants at the Agriculture Department. That almost all of these programs still exist is a reminder of how difficult it is to ax programs from the federal budget.
Technology and the rise of working from home are shifting government services — and so much of society — in dramatic ways. The federal government is likely to sharply reduce its need for physical buildings going forward. That will entail selling real estate as well as giving up leases. Already, the General Services Administration rental budget is declining, and this could accelerate in the years to come. Similarly, it might be worthwhile to rethink organizations such as AmeriCorps, founded in 1993 to help connect Americans with volunteer opportunities around the country. Today the vast majority of people find jobs and volunteer positions on their phones. While AmeriCorps has done great work over the years and has a $1 billion budget, it is the type of area that might be better served differently going forward.
The savings outlined here are modest and will inevitably trigger outrage and pushback, which is why politicians rarely want to discuss specific parts of the budget they want to eliminate or reduce. Realistically, any freeze or cut in nondefense discretionary spending will entail less money for education and transportation since those are the two largest items after health-related spending. They are popular because they impact so many Americans and are viewed as investments for a strong future, especially in a world where global competition is rising. The Biden-McCarthy debt limit deal notably takes the approach of applying small cuts across most of the nondefense budget.
Moving forward, there are also clear areas where the nation should be spending more money. At the top of the list are fighting fentanyl distribution and addiction and addressing mental health problems. Many are also calling for more aid to the unhoused and more resources to fight crime — challenges that nearly every community is facing.
Nondefense discretionary spending accounts for only about 15 percent of total federal expenses. Despite what many Republicans claim, costs are not out of control in this part of the budget, especially after many lean years in the 2010s when Mr. Obama and GOP lawmakers enacted tight spending caps. But the nation is changing rapidly. Our spending priorities should shift, too.
Editorials represent the views of The Post as an institution, as determined through debate among members of the Editorial Board, based in the Opinions section and separate from the newsroom.
Members of the Editorial Board and areas of focus: Opinion Editor David Shipley; Deputy Opinion Editor Karen Tumulty; Associate Opinion Editor Stephen Stromberg (national politics and policy); Lee Hockstader (European affairs, based in Paris); David E. Hoffman (global public health); James Hohmann (domestic policy and electoral politics, including the White House, Congress and governors); Charles Lane (foreign affairs, national security, international economics); Heather Long (economics); Associate Editor Ruth Marcus; Mili Mitra (public policy solutions and audience development); Keith B. Richburg (foreign affairs); and Molly Roberts (technology and society).
Popular opinions articles