Uncontrollable Spending

Date: 2015-10-07; view: 346.

Certain spending programs are effectively immune to budget reductions because they have been (1) enacted into law, and (2) enshrined in politics. For example, social security legislation guarantees certain benefits to participants in the program when they retire from work. The same applies for other programs, among them, Medicare and veterans' benefits—which entitle citizens to certain payments. Because these payments have to be made under existing law, they represent uncontrollable outlays.In Bush's FY 1992 budget, about two-thirds of all budget outlays were uncontrollable or relatively uncontrollable—mainly payments to individuals under social security, Medicare, public assistance, interest on debt, and farm price supports. Most of the rest goes for defense, leaving about 15 percent in domestic discretionary spending for balancing the budget.

To be sure, Congress could change the laws to abolish entitlement payments, and it does modify them through the budget process. But politics argues against major reductions. The only major social program that escaped cutting during the Reagan administration was social security—the largest single domestic program and, according to many surveys, the most popular one. (Even Senator Gramm, co-author of Gramm-Rudman, admitted that trying to cut spending for the elderly is "not winnable." His mother, in her eighties, told her son to "keep your mouth shut" when it came to that part of the budget.)

What spending cuts would be popular or even acceptable to the public? When voters in 1988 were asked how they felt about spending cuts in twelve different areas, a majority rejected any decrease in any of the domestic programs. In fact, clear majorities of both Republicans and Democrats wanted increases in spending in six areas—aid to the homeless, education, programs to fight AIDS, help for the poor, help for farmers, and cleaning up the environment. A perplexed Congress, trying to reduce the budget deficit, faces a public that favors funding programs at even higher levels than those favored by most lawmakers. Moreover, spending for the most expensive of these programs—social security and Medicare—is uncontrollable. Americans have grown accustomed to certain government benefits, but they do not like the idea of raising taxes to pay for them.

The largest controllable expenditure in the budget lies in the area of defense. Out of the twelve programs in the 1988 survey, the public proposed cuts only in defense and in the Strategic Defense Initiative (Star Wars), no doubt reflecting the easing of the Soviet threat. Bush's FY 1992 budget, which was prepared prior to the outbreak of the war with Iraq, contained the first cut in defense spending in twenty years, and the 1990 budget agreement guaranteed increases below the inflation rate through 1993. Whether the war and its aftermath will alter the budget agreement and the public's support of cuts in the military remain to be seen.

(from “The Challenge of Democracy”)

Tasks:

do the phonetic reading and written literary translation of the first and the second passages;

put 12 questions to the texts;

give the summary of the texts;

retell the texts as if you were:

1) a government member;

2) an authority capable in uncontrollable spending;

3) an officer of OMB;

4) an economist;

5) a member of some political party.