Just Two Friends Talking About the Federal Budget And What It Means Exactly

by Mary Mann

Mattea Kramer is Research Director for National Priorities Project, a non-profit dedicated to making the federal budget transparent. She gives great budget briefs. I have never actually made enough money to have to pay federal taxes. I talked to her about the federal budget, and why I should care.

Mary Mann: So I guess the big news now is that Obama just put through his budget. But he wrote this thing on this paper, and now what happens to it? Do I have any say in that? Can I be like: “Will you add this, sir?”

Mattea Kramer: No, you can’t get anything new into the President’s budget that came out last week, but here’s the unfortunate thing about that budget: it’s not going to become law. That’s not a good reason for it not to contain your priorities — it should still reflect the priorities of the American people — but it doesn’t matter because it basically has no hope of being passing through Congress.

MM: Then what’s it for? Just for them to look at it and say: “We hate this, we’re going to write a new one?”

MK: Well, in the last few years, yes. Exactly.

See, it’s supposed to come out in February, not April — that’s the start of the annual budget process. The President comes out with his proposal in February, and then that goes to the House and the Senate and they look it over and use it as the starting point to write what hopefully becomes the new budget, which goes into effect at the start of the new fiscal year, October 1st. But in recent years, Obama’s budget has not done anything more than what you just said: lawmakers’ look at it and decide that they hate it, or they don’t even look at it.

MM: Do they just write their own, then he just decides whether to sign this brand-new thing or not?

MK: He does have to sign it into law, and that’s sort of been why what we’ve gotten lately is the most… watered-down doesn’t even begin to describe it. What we have right now for 2013 is basically a budget that’s a continuation of 2012 funding levels because nobody could agree on anything else.

MM: Aren’t those numbers totally wrong?

MK: Yeah. Like, if you think we should invest money in job training and education so that millennials don’t flail and fail — we’re not doing that right now, because we’re still using the 2012 budget. It’s also wrong if you think old programs are wasteful or ineffective or have run their course, because they’re still being funded this year. We’re basically just living in a time warp where it’s still 2012.

MM: That sucks.

MK: Yeah, it’s bad.

MM: Okay, so if Congress decides what to do, is my input just down to who I elect? After they’re elected I really can’t do anything, right?

MK: I think most people feel that way, like they have no power in Washington, but Congress works for us, each individual lawmaker is acutely aware of what it will take to get reelected, so if they hear from constituents on particular issues, they are paying attention. They have legislative aides that are keeping track of constituents who are getting in touch with them, saying “I’m in favor of this” or “I’m not in favor of that.” If all of us were in touch with our elected officials on a regular basis about what we believe should happen in this country… I think this country would look really different.

MM: But… well, this is dumb, but from watching shows like West Wing I imagine that lobbyists are the only people with any real power. Is there a lobby for people in their twenties and thirties?

MK: Yeah, there is! At the National Priorities Project, we have a great partner organization called Young Invincibles. We actually put out a report with them in November about how budget debates are totally shortchanging millennials, not including job creation or education reform, but it’s an uphill battle in part because of what you just mentioned: the power of lobbying. Basically, these narrow interests are well-organized and well-funded, and this huge swath of people born in the eighties are disorganized and poorly funded.

MM: There’s a great South Park episode where everyone over a certain age, 65 or something, has to take their driver’s tests again and everyone is losing their licenses so AARP sends a bunch of old people parachuting into town to save the day and get the old people their licenses back. That’s sort of the impression that I have, that these lobbies like AARP have been around so long that they’ve built this solid organization that can really solve problems for their generation. I don’t really feel protected in that way, where there’s an organization to whom I can just say “take care of this.”

MK: You’re spot on. Young people have far less power. We have less money, we’re less likely to vote, under eighteen we can’t vote, so there’s disproportionate power to older people. When you look at where our tax dollars go, a huge amount goes to Social Security and Medicare which by and large are for the elderly. That’s not saying that those programs aren’t important, they definitely are, but young people, I think most people would agree, are really important too.

MM: And we probably won’t get Social Security, right? Is that a myth or is that true?

MK: That’s a myth. Right now Social Security is fully solvent for the next two decades, after that it’s about 75% solvent through 2086, and it only needs some small tweaks to be 100% solvent for that time and beyond. So it’s well within the ability of our lawmakers to make those tweaks, and in their interests. That’s an intentionally created myth. Under President Bush, a lot of people wanted to privatize Social Security, so it behooved them to make it look like we were facing an immediate crisis.

MM: Well, thank God. Social Security! The other thing is, half my friends are uninsured and everyone is paying student loans, and I don’t have a good sense that either of those things will change anytime soon. I mean, I know that now we all have to have health care now, but who’s enforcing that?

MK: For student loans, there’s not much change on the horizon, unfortunately. For now. But with health care, there’s good news and bad news: the good news is that the Affordable Healthcare Act allows people to be on their parent’s insurance until twenty-six, which has helped a lot of people, but after that you have to be insured. You’ll have to pay a fine on your taxes if you’re not insured.

MM: A fine? Woah. When does that start?

MK: On your 2014 taxes, so in 2015. Two years. It’ll be a big change. It’s kind of crazy to think about.

MM: So let’s say you’re me, and you’re going to be just finishing grad school, and you’ll owe a ton of student loans… Who’s going to give me healthcare? Is it going to be insanely expensive?

MK: Don’t worry, you’re going to be alright. Medicaid is changing the thresholds for who qualifies for healthcare, so you’’ll qualify and that will be very affordable.

MM: But how will people know about that? Can I just google Medicaid and click “help me”?

MK: Oh man, I don’t know. We haven’t even gotten there yet. How will the federal government and the states tell billions of people that they have to have health insurance or pay more taxes? It’s going to be interesting.

MM: They’re going to have to partner with Google and do an “Apply for Medicaid” Google Doodle or something.

MK: Well yeah, except that there’s a lot of Americans who aren’t on the good old Interwebs, and if you’re going to require health insurance, there’s a lot of people that will need to be reached in non-wifi communities. I’d guess that a portion of the people who aren’t on the Internet are elderly and they’re already insured on Medicare so they’ll be okay, but low-income people who don’t have access to technology… I don’t know. It’s an enormous task.

MM: A shitshow.

MK: Absolutely.

MM: Here’s another thing: I’ve never had to pay my federal taxes, except Social Security and Medicare, I always get it all back. Since a lot of us in our twenties aren’t making that much money, I always wonder how many of us get all our money back and how that’s going to effect the government as we get older. Is that a thing? This might be a weird question.

MK: No, I hear what you’re saying. It is a thing. It does not bode well for the federal tax revenue. Our generation’s earning power is permanently reduced because of the Great Recession. In key years if you don’t have work experience, or if you have big gaps in your employment, you pay for that for the rest of your career. A generation-wide reduction in employment and income prospects will definitely have implications for federal tax revenue and it’s not good. One of the things in the budget the President just came out with was a limit on all the deductions and loopholes that the wealthiest taxpayers enjoy, because they’re big. It’s not at all clear whether that will get passed into law though.

MM: Yikes. Are there things that I can do that will make it better for me later, or will make it better for me now? It’s kind of scary that we’re going to have such a low earnings potential as a generation because of the recession. That it lasts forever.

MK: I didn’t mean to be such a downer on that one.

MM: Maybe that’s why everyone is obsessed with canning things now. We’re all going to be poor.

MK: Ha, yeah, we have to store away food! Well, see all the stuff we’ve just talked about, this is not set in stone — none of it — not the budget process or where our tax dollars go or what’s going to happen in the future. It’s a path that we’re on right now. But we can change it. We can change the laws that are on the books. All of this is organic and should come from the people. So if we want it to look different from how it looks right now or what it’s projected to, we can change it. But it takes some work. It takes rolling up your sleeves and getting involved. Voting, writing letters, getting informed, informing other people — all that stuff.

MM: How should I get informed though? For example, what happens with the budget that they’re making now? Will we get to see it? Will we understand it? How do you know to write a letter if you don’t know what’s going on?

MK: Actually, that’s one of the things that has been going wrong lately. Remember when I told you about how they’re still funding the 2013 government like it’s 2012? One of the things that happens when they’re doing these temporary spending bills or continuing resolutions is that we don’t get to see it — there’s a last minute backroom deal and then gazillions of pages come out. So not only is it stupid policy, it’s really bad democracy, because there is no opportunity for us to give input. The way this process is supposed to work is that there are should be all these moments where we can talk to elected officials — whether it’s budget committees or appropriation committees or our own legislators. The way things are happening right now is really bad for our democracy.

MM: What are you saying? We won’t be able to see it before it’s done?

MK: Well I don’t know how it will go for the 2014 budget — for the 2013 budget that was the case, but I don’t know how it will go this year. It’s possible we’ll get to read it. Obama certainly didn’t help us by releasing his budget two months late.

MM: Is that even allowed?

MK: It’s not, it’s illegal.

MM: Really? It’s illegal? Is anything going to happen to him?

MK: Nope.

MM: What was his excuse? Like, did the dog eat the first one?

MK: (laughs, graciously) It was bullshit, honestly, and here’s the thing, his administration gave the excuse that they couldn’t release the budget because they didn’t know what was going to happen with sequestration…

MM: Wait, can you explain the sequestration stuff?

MK: Sequestration is a silly budget word for across-the-board spending cuts, and it took affect on March 1st. In February, when he was supposed to have his budget done, the President didn’t know whether or not these cuts would take effect because Congress was trying to figure out how to avoid them, so his administration said they couldn’t release the budget because they wouldn’t know what was happening in 2013 until sequestration got sorted out. There were some other things up in the air too, but then he comes out with his budget two months late and the numbers don’t show what happened with sequestration because the President’s administration said they wrote the budget before that! (Throws up arms in frustration.)

MM: But what happened with sequestration? Did they cut things?

MK: Yeah, these across-the-board spending cuts are in effect for this year, for 2013, and they’re slated to do more cuts in 2014 if Congress doesn’t do anything to prevent them. So for this year, the Department of Defense is seeing some cuts, and also Title 1 grants for some schools, and Head Start and lots of other things.

MM: But what does that look like? I mean, let’s say you and I are the congress…

MK: That would be so great.

MM: I know! So, do I say, dude, Mattea, I feel like doing some sequestering, here’s a whiteboard, I’m gonna write down some shit, you tell me which things I should cut? Is that how it goes?

MK: (laughs) No, no, they wrote this nonsensical law in 2011 that basically said that if Congress didn’t do this debt reduction plan there would be these across-the-board spending cuts and the idea was that the cuts would be so stupid and so bad that the lawmakers would have to come up with a plan to avoid them. It was like a gun to the head so they’d have to act.

MM: Wait, so if the gun’s to the head, who put the gun there? Did the lawmakers put the gun to their own collective head?

MK: Yes, they cocked their own trigger to force themselves into action. That is how bad things are.

MM: That’s ridiculous.

MK: I know! (laughs) And then they didn’t do anything!

MM: Let me get this straight. So if you and I are the Congress, last year we were like, uh, if we don’t do anything this year then next year these things are going to be cut whether we want to or not?

MK: Yup.

MM: And then we didn’t do anything…

MK: …Then we didn’t do anything and then we started blaming each other.

MM: Back then when Congress set that gun to their heads, was that when they wrote those things on the whiteboard and said: “These are the things that we’ll cut?”

MK: Yeah, you could say that, they wrote these things on the whiteboard. Yeah. That’s basically what they did, but back in 2011. The cuts affect only the discretionary budget, so that’s separate from mandatory spending. It doesn’t affect Medicare, Social Security, Medicaid…

MM: Why can’t they just do these things in an easier way and make them more accessible so that I can know and understand what’s going on before it’s affecting me?

MK: They should. Like, I shouldn’t have a job explaining this. This stuff should be transparent, they should do what I do at the government level so that we can understand it, but they don’t.

MM: I wish there was a .gov that I could go to that would say “here’s this law, this is the deal with it, here’s pictures that describe what it means…”

MK: There’s definitely not that. They do put every word of every piece of legislation online for all of us to see and read — the government printing office has a lot of that stuff, and the site Thomas has the status of legislation and tax bills — but it’s all in legislative language so most people can’t read it.

MM: Why is that even a thing? I don’t understand why they can’t write a bill that isn’t painful to read.

MK: Yeah, I know. I actually once asked an attorney friend why and apparently, according to her, the impossible legislative language is important because you have to be very very specific when you’re writing a law.

MM: But can’t you be super specific without being weird about it?

MK: I would think so. I wish. Oh! There’s also a site called PopVox that has plain language, or it’s intended to be plain, with summaries and status of laws so that you can know what’s happening and have a chance to do something. And know when your moment is to talk to legislators about it. So that’s pretty cool.

MM: So, one last question, let’s say you had to make some sort of chart that showed how me and the federal budget intersect — what would that look like? Are we even on the same page? Are the feds the whole page and I’m like a dot somewhere in there?

MK: Hmmmm… it would be an illustration. A picture. And it would be like, oh the water is safe to drink, and there’s roads, and there’s a rule of law enforced, and there’s a justice system (that’s not perfect but it’s there), and there’s public education and national security and community development and parks…. so there’s all these things, and arrows coming from all of them pointing at you. Arrows, arrows, arrows…

MM: That’s not a chart at all!

MK: …arrows, arrows…

MM: So everything affects me.

MK: Exactly.

Mary Mann lives in New York. Photo: Leader Nancy Pelosi

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