What's so big about the US government?

As debt-ceiling negotiations continue and members of both parties express a desire for "leaner" government, James Kwak at The Atlantic offers an important reminder: Measuring the size of the US government by how much money it spends can be misleading. Social Security and Medicare, both of which are extremely popular, account for a huge chunk of federal expenditures; this Center for Budget and Policy Priorities big-picture breakdown shows that roughly 20% of FY 2010 federal expenditures went to Social Security, and another approximately 21% to Medicare, Medicaid, and the Children's Health Insurance program (with Medicare accounting for nearly two-thirds of that amount). "Defense and security" accounted for another 20%, safety net programs for 14%, and interest on the national debt for 6%.

When people complain about "big government," I don't think most of them are objecting to Social Security, Medicare, or defense and security. Kwak thinks what they have in mind is agencies like the Consumer Financial Protection Bureau, but he points out that the CFPA's budget is less than one-hundredth of 1% of federal spending (in exchange for what Kwak describes as the worthwhile idea of "fewer screwed consumers"). He illustrates the different ways that a government can pursue the same objective, with very different impacts on the federal budget:

Most government policies can be accomplished at least three different ways: spending, tax credits, and regulation. For example, let's say we want to help low-income people afford rental housing. We can pay for housing vouchers; we can provide tax credits to developers to build affordable housing; or we can have a regulation saying that some percentage of new units must be affordably priced. The first increases the amount of cash flowing in and out of the government; the second decreases it; and the third leaves it the same. Yet all increase government's impact on society.

Or, to take an example with an even clearer connection to public health, consider the goal of ensuring a safe food supply. Since few (if any) of us have the capability to test all of our food for harmful bacteria before consuming it, we rely on taxpayer-supported agencies to set and enforce food safety rules - and, when foodborne illness outbreaks occur, to trace pathogens to their sources and prevent further illness.

Here's where I'd add an important caveat to Kwak's piece: passing a regulation might not have much of an effect on the government's cash flow, but enforcing it effectively requires money. In 2008, for instance, the inadequacy of China's food-safety enforcement became clear when more than 50,000 children were sickened by melamine added to dairy products by the country's biggest dairy producers. Producers who are tempted to adulterate their products or cut corners on safety procedures need to think there's a good chance they'll get caught if they break the law. For that threat to be credible, the country needs to have agencies capable of following up on tips and complaints and conducting inspections -- and then you also need a system to adjudicate when producers are accused of wrongdoing.

While the US food-safety system may be much stronger than China's, it could still use improvement. That's what Congress evidently thought when it passed the Food Safety Modernization Act in late 2010. While passing the Act didn't cost much, implementing it will take a substantial increase in FDA's budget - and, as I noted last month, the House appropriations subcommittee overseeing that agency not only failed to fund the necessary increase in FDA's food-safety budget, but reduced that budget below its current level. In either case, FDA's budget represents a small fraction of overall federal spending, but it's apparently a target for cost cutting.

If those who vilify "big government" don't favor cuts to Social Security, Medicare, or defense and security, maybe what they do want is less enforcement of national laws that protect the public's health and safety. That might be good for the companies who profit from illegal activities, but it's dangerous for the rest of us.

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I don't think "reality" or "logic" are any part of the thought process of people who think the US government is too large. The number of people who think they want a smaller government but also think that the government should regulate the gender of who people have sex with and/or marry provides a pretty clear illustration of this.

Actually, yes, Republicans very much want to dismantle Social Security, Medicare, et al., although they rarely come out and say so. At least, those who direct the party do; the rank and file may not, but if they don't, then they don't know what they're voting for.

People of my ilk, on the other hand, would be very happy to cut defense, although we rarely complain of "big government".

I don't know what's so complicated about this. "Big Government" is any regulation of any industry in which one has an interest (such as receiving campaign donations), or any safety net for any group of which one is not a member or cannot capture as a voting bloc. Simple!

Nemo got it about right. We certainly don't need "Big Gubbiment" to waste money on the poor, sick or lame, but it should supply all the resources Bidness can use, even if that Bidness ships jobs overseas and doesn't pay any taxes.

And if that isn't lame, I'll vote Peepublican.

Pay everybody back the money they have contributed to social security with 3% interest and then dismantle social security.

By Bryan Root (not verified) on 22 Jul 2011 #permalink

Bryan Root 3% interest is to low it should be 4 to 5%.
I have repeatedly sent letters to my Senators asking that they support a bill that would allow tax payers to sign waivers on social security and give me my money back and I will take care of myself. Keep 10% of my money to pay for the citizens that need it such as physically and mentally disabled, etc. But working able citizens should pay their own way. Enough of useless government and the Nanny society.