July 19, 2019

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One Federal Department Now Spending $100 Billion Per Month

Jul 12, 2019 | , ,

By Terence P. Jeffrey | CNSNews

For the first time in our nation’s history, there is now a federal department spending an average of more than $100 billion per month.

No, it is not the Department of Defense, which is charged with the core federal responsibility of defending us from foreign enemies.

It is the Department of Health and Human Services, which, if Democratic Sen. Bernie Sanders of Vermont has his way, will run the “Medicare for All” program.

As it now stands, HHS runs Medicare for many and Medicaid for more.

“In 2019, the program will cover an estimated 61 million persons (52 million aged and 9 million disabled),” the Congressional Research Service said of Medicare in a report published in May.

“Medicaid is a means-tested entitlement program that finances the delivery of primary and acute medical services as well as long-term services and supports (LTSS) to an estimated 75 million people at a cost to states and the federal government of $616 billion in FY2018,” CRS said in a report published in June.

“CBO also estimates that federal Medicare spending (after deduction of beneficiary premiums and other offsetting receipts) will be about $637 billion in 2019, accounting for about 14% of total federal spending and 3% of GDP,” said CRS.

“Mandatory spending typically accounts for the majority of the HHS budget,” CRS explained in a report published in March.

“Two programs — Medicare and Medicaid — are expected to account for 86% of all estimated HHS spending in FY2019,” it said.

In the first eight months of this fiscal year, which began in October, HHS spent $834,346,000,000, according to the Monthly Treasury Statement for May. That is up from $731,724,000,000 in the first eight months of last fiscal year.

Through all of fiscal 2018, HHS spent approximately $1,120,500,000,000 — or $93,375,000,000 per month.

Through this full fiscal year, according to the estimate published in the Monthly Treasury Statement, HHS will spend approximately $1,230,273,000,000 — or $102,522,750,000 per month.

In May alone, according to the Monthly Treasury Statement, HHS spent $146,552,000,000.

That equaled about $4.9 billion per day, or $196.98 million per hour, or $3.28 million per minute.

In the same month, the Department of Defense and military programs were spending $61,801,000,000 — or about 42.17 percent of what HHS was spending that month. In the first eight months of the fiscal year, the DOD and military programs spent $439,289,000,00 — or about 52.65 percent of the $834,346,000,000 billion that HHS spent.

The Monthly Treasury Statement estimates that the DOD and military programs will spend a total of approximately $652,234,000,000 this fiscal year — or about 53 percent of the $1,230,273,000,000 it estimates HHS will spend.

Most other departments of the federal government spend just a small fraction of what HHS spends.

The Department of Homeland Security, which is charged with securing our borders and enforcing our immigration laws, will spend an estimated $62,267,000,000 — or just 5.06 percent of the $1.23 trillion HHS will spend.

The Department of Justice, which is charged with enforcing federal laws, will spend an estimated $41,366,000,000 — or just 3.36 percent of what HHS will spend.

The Department of State, which manages U.S. relations with foreign nations, will spend an estimated $29,690,000,000 — or just 2.41 percent of what HHS will spend.

The legislative branch, which makes the laws, will spend an estimated $5,826,000,000 — or just 0.47 percent of what HHS will spend.

Only one other federal agency or department rivals HHS for spending money. It is the Social Security Administration.

It is the federal government’s other trillion-dollar baby.

In fiscal 2019, according to the estimate published in the Monthly Treasury Statement, it will spend $1,104,449,000,000. In the first eight months of this fiscal year, it spent $730,000,000,000 — or an average of $91,250,000,000 per month.

In fiscal 2018, according to the Monthly Treasury Statement for September 2018, the Social Security Administration spent $1,039,902,000,000 while HHS was spending $1,120,500,000,000.

Those two elements of the federal government spent a combined $2,160,402,000,000 in a year when total federal spending was $4,107,741,000,000. HHS and the Social Security Administration accounted for 52.59 percent of all federal spending.

To be sure, HHS spent money on many other things in fiscal 2018 besides Medicare and Medicaid — including, for example, $33.2 billion on the National Institutes of Health and $7.97 billion on the Centers for Disease Control and Prevention. But its main charges, as the Congressional Research Service noted, are Medicaid and Medicare.

Medicaid, Medicare and Social Security have one thing in common besides being the primary factors that have driven federal spending above $4 trillion per year: They make people dependent on government.

RELATED:

By Roll Call

Pelosi: Debt limit vote possible before August recess

One Federal Department Now Spending $100 Billion Per Month [your]NEWSSpeaker Nancy Pelosi, D-Calif., speaks during a news conference held by Senate and House Democrats on health care coverage of preexisting conditions on the Senate steps on Tuesday July 9, 2019. Also on Tuesday, she gave some indications about when the House might vote on raising the federal debt limit. (Caroline Brehman/CQ Roll Call)

House Speaker Nancy Pelosi, D-Calif., on Tuesday didn’t rule out voting on a debt limit increase before the August recess, though she indicated the need to raise the discretionary spending caps for fiscal 2020 is still an integral part of the discussions.

“Let’s see how the conversations go,” she said. “We certainly do not want any thought of default on the part of the full faith and credit of the United States of America. That’s never been what we’ve been about, but there are those on the Republican side who have embraced that again and again.”

Estimates from the Treasury Department and the Congressional Budget Office have put the deadline for raising the debt limit, required for the U.S. to continue to be able to pay for all government services and benefits, sometime in the latter half of 2019, likely by early October.

Pelosi’s hard line in the debt limit talks has to do with the federal fiscal year deadline of Oct. 1, after which there could be another partial government shutdown if lawmakers and the White House can’t agree on appropriations levels. House Democrats’ view has been that their best leverage to extract higher nondefense spending is to merge the two deadlines so the administration has to play ball on appropriations in order to get the timely debt limit ceiling increase they want.

But the Bipartisan Policy Center, which tracks federal inflows and outlays carefully, said Monday the true “X date” could be moved up to early September given softer projections of corporate tax receipts. That was injecting a greater sense of urgency into the discussions as lawmakers trickled back into town from the July Fourth recess.

“I would hope that we would never think about default. We have not defaulted on our debt, to my understanding, since 1812,” Senate Appropriations Chairman Richard C. Shelby, R-Ala., said Tuesday. “If we have the thought of default or going right up to the brink of default, it sends shock waves through the financial markets of the world. We, the Congress and the administration, owe the American people a lot better than that.”

The discretionary spending talks have been stuck over House Democrats’ insistence on a nondefense number that is over $100 billion more than the White House wants. There’s been no apparent budging on Democrats’ adherence to about $647 billion in nondefense funds, which would be a 7 percent boost over the current year. The comparable White House figure is about 10 percent below fiscal 2019.

House Democrats have passed 10 out of the 12 fiscal 2020 appropriations bills at those levels, plus a $733 billion figure for defense, which is $17 billion shy of what the White House wants.

“The administration knows where we are on that. We’ll just wait to hear back from them,” Pelosi said, adding there were no further meetings planned between senior Capitol Hill and administration officials. Two earlier meetings that included the top congressional leaders of both parties and acting White House Chief of Staff Mick Mulvaney, acting budget chief Russell Vought and Treasury Secretary Steven Mnuchin haven’t borne any fruit.

Full Article Here

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By The Hill

Make America’s deficits great again

Two and a half years into his term, President Trump has little to show for breaking with erstwhile Republican Party orthodoxy on trade and budget policy.

Indeed, far from delivering on his promise to cut America’s trade deficit, Trump has presided over a ballooning deficit that’s on pace to be some 25 percent higher than when he took office. This is happening at a time when the budget deficit is widening and the country’s public debt is well on its way to exceeding 90 percent of GDP.

Sadly, the Trump administration seems unfazed by the country’s deteriorating long-run financial position. It shows no indication of correcting policy course to put the economy on a sounder long-run economic footing. This makes it all too likely that the country’s incipient twin deficit problem will only worsen in the remaining 18 months of Trump’s first term. That in turn will further mortgage the country’s economic future and diminish the U.S. dollar’s attractiveness as an international reserve currency.

Two defining pillars of the Trump administration’s macroeconomic policy have flown in the face of pre-Trump-era Republican Party orthodoxy.

The first involved the ready resort to import tariffs and the repeated calls for a weak dollar with the supposed intention of leveling the international playing field and eliminating the trade deficit.

The second involved the introduction in 2017, a time of relative economic strength, of a massive unfunded tax cut centered on a large reduction in the corporate tax rate. This budget-busting tax cut gave short shrift to earlier Republican Party strictures that budget deficits mattered and that a rising public debt effectively mortgaged our children’s future. The supposed intent of the Trump tax cut was to spur corporate investment as a means to put the country on a faster growth track.

Needless to say, it is far too early to make a definitive assessment of the major shift in U.S. trade and budget policy on Trump’s watch. But the initial indications give reason for considerable concern.

Far from strengthening the country’s external accounts, the Trump import tariffs and budget largesse are doing the reverse, as indicated by a widening U.S. trade deficit.

The import tariffs are doing so by raising the prospect of a world trade war, by sowing economic uncertainty in our trade partners and by contributing to a generalized economic slowdown abroad. That in turn is inducing our trade partners to demand less of our exports and to loosen their monetary policies. By causing the dollar to appreciate, that relative monetary policy loosening worsens the international competitive position of our exporters in foreign markets.

For its part, our widening budget deficit is damaging our external position by reducing the country’s saving level. That perpetuates a situation whereby the U.S. continues to consume more than it produces, thereby forcing it to import more than it exports.

If the Trump import tariff and budget policy has weakened our external position, the Trump budget stimulus has seriously undermined our long-run public finances. And it has done so without delivering the promised investment boom that was supposed to put our economy on a very much faster growth path than that experienced over the past decade.

According to the independent Congressional Budget Office (CBO), even on optimistic assumptions regarding economic growth, over the next decade the Trump tax cuts will result in an increase in the U.S. budget deficit to an average 4.25 percent of GDP. That would be up from an average of less than 3 percent of GDP over the preceding fifty years. The CBO estimates that those deficits will result in a disturbing rise in the public debt-to-GDP ratio from 78 percent at present to 92 percent by 2029.

An undisciplined budget policy at a time of economic strength limits the scope for fiscal policy support at a time of economic weakness.

Full Article Here

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