Here are the rest of the federal budget numbers re-classified in a way that I think makes them understandable. They are approximate because the government figures use varying classifications depending upon where you get the numbers from. These amounts also ignore unemployment insurance, but the net impact of doing so is relatively small. The inflows are without including any payroll taxes as that is dealt with in the Social Security and Health Care pieces referred to below. Outflows are without Social Security and the portion of Medicare paid for by payroll deductions. My hope was to isolate those programs from the other government programs that we fund through general revenues rather than payroll taxes that fund Social Security and a portion of Medicare. By doing it this way, if you want to know how much you are paying toward any particular item you can get a very rough estimate by multiplying the amount you paid in federal income tax times the percentage to the right of the outflow category (plus your share of the additional national debt used to fund the shortfall, so add another 30% or so).
Interest expense is not "net interest" because the portion that the government considers a wash (about $169 billion) is "paid" to trust funds like Social Security but then immediately re-borrowed. Because of this the government accounting figures a net interest amount as though it really wasn't paid. In any event, about $100 billion of the interest expense is paying the interest on the money borrowed from Social Security, so if you like you can add that to your retirement costs.
Non-SS Mandatory Income Security includes all of the means tested entitlements.
The difference between the inflow and outflow explains the additional half trillion or so of national debt from end of year 2005 to end of year 2006 (approximately $574 billion).
A final note - to really understand who benefits and who pays in our system it is necessary to go beyond a simple inflow/outflow analysis. It requires a real analysis of the tax code to understand who is getting a better deal and who is not. One example of this is the capital gains treatment of carried interest for hedge fund and private equity managers that allows them to pay 15% on large portions of their (often seven figure) incomes. I hope, however, that this analysis provides some insight.
For health care go here.
For Social Security go here.
For welfare go here.
Wednesday, January 9, 2008
Federal Budget for 2006
Social Security Figures
2006, Dollars in million
Here is my estimate of the 2006 Social Security budget. These are estimates as they come from different sources (which is necessary to obtain the full picture). The data represent 2006 Old Age & Survivors Insurance (SSI) and Disability Insurance (DI) which are both funded through payroll deductions.
For the revenue side, I used both The Office of Management and Budget (OMB) 2008 Budget Of The United States Government Fiscal Year 2008 Historical Tables Tables 2.4 (page 43) & 8.5 (page 142), and Status of Social Security and Medicare Programs, A Summary Of The 2007 Annual Report. On the outflow side I used the OMB report.
Net savings to the fund is the amount of the increase in the Old Age & Survivors Insurance (SSI) and Disability Insurance (DI) trust funds for the period. Note that a significant contribution to Social Security revenue comes from interest on funds borrowed by the Federal Government from the trust funds and taxes on benefits. These get ignored when looking only at the OMB Budget figures but are certainly relevant here. The interest represents interest paid (and, of course, re-borrowed) by the Federal Government to the trust fund. Although I am calling these estimates, the net increase to the fund based on the SSA figures is within $1.5 billion looking at their figures vs. my estimates. This is pretty good, especially considering the fact that the OMB Budget report has Social Security outlays of $548,549 million in table 3.2 and $543,900 million in table 8.1. But hey, what's $4.5 billion among friends? (It was explained to me by an intern at OMB that this is due to classification differences.)
For "Welfare" costs go here.
For health care go here.
For the balance of the budget go here.
