Why It’s So Hard to Cut the Federal Budget

by John Sides on April 8, 2010 · 20 comments

in Political Economy,Public opinion

A new Economist/YouGov poll asked people “If government spending is reduced in order to balance the budget, which of the following government programs should receive lower federal funding than they currently do?” Respondents could check all that apply.

Not surprisingly, as Kevin Drum noted, few people wanted to cut most programs. The exception was foreign aid, which, as The Economist pointed out, makes up a tiny fraction of the budget. Jon Bernstein is skeptical that people would be that opposed to foreign aid if they knew where it went (e.g., a significant chunk to Israel).

I want to suggest that the problem goes even deeper. The programs that make up the largest share of the federal budget are typically the ones that the fewest people want to cut. Consider this graph, in which I attempted to match most of the YouGov categories to a plausible counterpart in Obama’s FY 2010 budget proposal. (I drew on additional stories for information about the budgets for health research and highways. Foreign aid is estimated at 0.5% of the budget.) Of course, Obama’s budget proposal is not the ultimate budget, but the comparison between it and the poll is still instructive:

budgetpoll.png

As you move downward, into categories of spending that are increasingly popular, you get to the largest federal programs, particularly entitlement spending. Really, there is only one area of federal spending—national defense—that is sizable and that even a modest fraction (22%) is willing to cut.

In fact, there is a negative relationship between the budgetary share allocated to a policy area and the fraction who want to cut it. The correlation coefficient between the poll percentages and the budget percentages is -.33 (with or without the obvious potential outlier, foreign aid, included).

If Americans are forced to be specific, their recipe for cutting federal spending would do little to reduce spending.

UPDATE: Annie Lowrey had the same idea.

[Hat tip to Matt Dhaiti for sending me the poll.]

{ 20 comments }

LpL9 April 8, 2010 at 10:56 am

I suspect I’ve been reading stories about surveys like this poll, and commentaries about the meaning of the gaps for a couple decades.

I’m led to ask “why do we ask these questions this way? Beyond just affirming that ‘yup, people sure are dumb.’ ”

Given that foreign aid is .5% of the Federal budget & thus that even cutting it 100% won’t do much to dent the defecit, why are pollsters even asking?

What if you polled people and asked them about a similarly stilted list of typical household expenses (about which they are, of course, relatively expert):

What would you be willing to cut to save money around the home?

1. Transportation
2. Food
3. Entertainment
4. Education
5. Air Fresheners

I’m pretty confident that when the surveyor got to option Five, most people would respond with something like “what, are you an idiot?” But when someone reads aloud a list of national spending priorities, surely the typical respondent is inclined to assume that the items on the list wouldn’t be there if they didn’t matter. No?

There’s something methodologically fishy going on here, neglected, perhaps, because it makes all the analysts (and readers, myself included) feel superior.

William Ockham April 8, 2010 at 12:57 pm

I’ve never understood why this relationship surprises anyone. The spending choices of the federal budget are made by people we send to Washington. Isn’t it a good thing that the things we spend the most money on are things that people like? All this poll says is that we love the stuff that we spend a lot of money on. That’s a great thing in a democracy. The obvious inference to draw from this is that we should tax ourselves at a higher rate to pay for the stuff we love. If politicians faced our budgeting issues honestly, that’s exactly what would happen.

Brent Clanton April 8, 2010 at 6:40 pm

Interesting piece William. Might this line of reasoning be in future years labeled, “Ockham’s Razor?” The devil is in the details, and how funds are appropriated for these areas. Do the various Budget Item expenditures take into account the “pork” that is attached to the spending bills that fund these departments?

Robert Burton April 8, 2010 at 7:14 pm

I agree with William Ockham. I firmly believe that major cuts to important services, whether at the federal, state, or local level, lead to higher costs in the long run, whether from increased crime, higher welfare needs, a poorly educated populace, more widespread health problems, or so on down the line. The only areas where I believe real cuts can be made without adverse consequences are to some ridiculous and wasteful expenditures in the area of national defense and in farm subsidies, which should be eliminated altogether. Smart tax reform, including targeted tax increases on those who can most afford it and including eliminating the ceiling on the wage base for SS taxes, is essential as we move forward, but I don’t think Congress has the guts to do it.

mike shupp April 8, 2010 at 7:49 pm

We’ve spent FORTY YEARS under Presidents who have been trying to whittle down the Federal budget with little cuts here to NASA, little cuts to energy R&D programs, little cuts to highway construction projects, little cuts to programs aimed at employment assistence to ex-cons, little cuts to programs that assist farmers in trying new planting methods, little cuts to Army Corps of Engineers construction projects, little cuts to library building programs, little cuts to …..

And now there isn’t a whole lot to cut that isn’t politically impossible. Gosh, what a surprise!

Andrew April 8, 2010 at 9:07 pm

Is that graph on the right for real? If so, a huge amount of money is being spent on highways!

Jeff Alexander April 8, 2010 at 10:22 pm

Equating “science & technology” with the NSF budget request grossly underestimates federal science funding. NSF isn’t the largest source of funding in the federal government–I think it just makes the top 5 (Defense being the largest funder, of course). But that’s a quibble.

The other item missing from the right-hand table is interest on the national debt, which obviously cannot be cut (unless we decide to default), and would dwarf all of those other items. That of course further supports what William Ockham has to say.

And for Brent Clanton–the President’s budget request does not include “pork,” as those items are added by Congress later in the budget process. However, I can guarantee that if you put all “pork” projects together as a line item on the right-hand chart, it would be a fraction of 1%. It really is NOT a lot of money compared to the overall budget.

Thomas April 8, 2010 at 11:20 pm

re Andrew at 9:07

Dept of Trans. expenditures on Highways are $41 billion in fy 2010.

http://tinyurl.com/y9lpocr

Chris Day April 9, 2010 at 12:18 am

The graphs list the National Science Foundation as the primary spender for Science and Technology. Leaving out the Department of Energy, among others, makes this so wrong that, while the conclusion is probably true, the graphs should not be taken as credible evidence of anything.

mndasher April 9, 2010 at 12:24 am

All of those little blips on the right, add up. Eliminate; EPA, Highways, HUD, DofAg, DofEd.
Medicaid/SCHIP was just expanded, cut them back to 2008 levels.
Medicare/Social Security – Repeal Obama care, privatize Social Security.

Passerby April 9, 2010 at 9:34 am

I think LpL9 up there has a good point. I’d be really interested to see how people would respond if they were forced to choose only from the more realistic options (the ones that would make a difference.#

I’d like to see a question something like this:

Medicare, Social Security and Defense are the three largest areas of government spending. Reducing spending substantially would require cuts to at least one of those three things. Given that, what do you think the government should do to reduce the deficit? #Choose all that apply.#

#Of course, there are some people who would just flat-out not believe this. Maybe it should be “For the purposes of this question, assume that …” or “Suppose that …” one of those three things would have to be cut if we were going to cut somewhere.#

Anyway, the choices would be:
-cut Medicare
-cut Social Security
-cut defense spending
-raise income taxes
-institute a national sales tax or value-added tax.

#I doubt many people have a very clear idea of what a VAT is or how it differs from a sales tax, and anyway they’re conceptually similar, so it probably wouldn’t hurt to lump them together.#

Anyhow, I’m not a professional pollster or political scientist, so the question could probably be made better. The thing I’m trying to get at is that it’s pretty obvious that these two things are important values/preferences for most people–1)keeping Medicare, Social Security, and #probably# defense spending as high as they are; and 2) keeping taxes as low as they are. If they’re given choices that don’t include messing with these things, of course they’re going to take them! But then that doesn’t give any insight at all into which of the two is more important than the other–just that they’re both more important than other spending. And that’s what I’d really like to know.

Well, maybe someday someone will come up with a poll that gets at that. I can dream, anyway.

John Sides April 9, 2010 at 9:42 am

Jeff, Chris: The match between “science and technology” and the NSF is of course imperfect. I sought a “plausible counterpart” but obviously a lot of spending in this category is spread around. I don’t think, however, that Chris is right to say that the graphs therefore contain no “credible evidence.”

William: You could interpret this fact — that the gov’t spends the most money on popular things — as a good thing. The problem, of course, is that the public seems to want the government to spend less money in general and to reduce the deficit, but yet the signal it sends to policymakers is to keep their hands off the areas of the budget where cuts would most reduce the deficit. Your notion of simply raising taxes is fiscally sound but also politically unpopular. That’s the democratic dilemma in this case: we want the free lunch.

LpL9 and Passerby: I agree that there needs to be some new formulations of these sorts of questions. I like Passerby’s proposal.

William Ockham April 9, 2010 at 10:57 am

John,

I completely disagree with your interpretation of what the public wants. The conclusions you draw are a direct result of the way these questions are asked in public opinion polls. Pollsters elicit seemingly contradictory responses by the way the questions are presented. The evidence that people “want the government to spend less money in general and to reduce the deficit” comes from responses to questions which don’t present the consequences of that choice. These type of questions only tell us that people like the idea of reducing the deficit. If you look at this particular poll and start with the notion that people aren’t really stupid, then you can come to a different conclusion. Sure, if you ask them when they think the deficit should be balanced 32% will say immediately and another 14% will say next year. Does that mean that 46% of adults are hopelessly naive. No, the question was “should” and it was presented without specifying any costs involved. All they are saying is they like the idea. When they asked people if they thought Obama would succeed in cutting the deficit in half by 2013, only 29% thought that was very or somewhat likely. But take a look at what people say are the important issues. The economy is the most important issue for 39% of respondents. Health care is the most important for 20%. Social Security and the budget deficit come next at 9% each. People aren’t really saying that they want the budget deficit cut at all. Addressing the more important issues means the budget deficit will stay the same or get worse in the short term and people are OK with that. They aren’t the ones that want the free lunch. It’s the political elites in this country who want the free lunch, particularly Republicans who seem to only be interested in the deficit when there is a Democrat in the White House.

We don’t need any new formulations of these questions. We should stop asking them. They are essentially meaningless. This poll asked 11 fairly stupid questions about the budget deficit and only 2 about the economy. There were 6 questions about health care and 4 questions about offshore drilling. There were even 3 questions about Tiger Woods. There were no questions at all about Social Security or education, two areas of concern that are at least as important to real people as the budget deficit. It’s not just this poll either. There is a concerted effort on the part of political elites to gin up concern about the budget deficit. You can bet that nothing that comes out of all this deficit cutting will impact the rich and powerful. This is a stalking horse for cutting Social Security and Medicare, which will affect the poor and the middle class.

John Sides April 9, 2010 at 2:09 pm

William, if you have JSTOR access, you may be interested in this article:

http://www.jstor.org/stable/2585478

It analyzes a poll that made the trade-offs in budgeting explicit. The author, Mark Hansen of the U of Chicago, argues that people’s preferences are remarkably well-structured (i.e., transitive over various outcomes, such as cutting spending, increasing taxes, cutting the deficit, etc.). He thinks this suggests that the public is by and large pretty rational about this subject, although I’m a bit less convinced for reasons too detailed for a blog comment.

But one of his other findings is important here too: the public actually shows a lot of status quo bias. They’re not necessarily inclined to change much about any of these things (taxes, spending, the deficit), even though other polls seemingly suggest that the public was and is concerned about the deficit. Thus, perhaps we should just continue to expect the status quo in policy as well. Policywise, that may not be a bad thing. As you note, it’s unclear how concerned we should really be about the deficit.

John April 10, 2010 at 2:40 pm

I’m sure this is a chart you won’t see Sarah Palin using when she gives her stupid speeches.

Mike Fenton April 12, 2010 at 11:10 am

Should “Foreign Aid” include the portion of DoD’s budget for “nation building”?

Gabriela April 12, 2010 at 4:49 pm

@William Ockham: Excellent point. The “pork” is what was Not mentioned in this poll and also it is also one of the most relevant factors. It is a definite game changer. Thanks for bringing it up.

Fed April 13, 2010 at 8:25 am

As I read one of the readers suggested targets to save $ on, (his choices were: -cut Medicare -cut Social Security -cut defense spending -raise income taxes -institute a national sales tax or value-added tax.
I thought them through and offer these options for consideration: Eliminate foreign aid (except for disaster relief), & the Dept’s. of Agriculture, IRS, Education and HUD. They’re money pits that perpetuate waste, welfare and create a society of beneficiaries who won’t/don’t work (in many cases), groups who get paid to not plant crops, etc. First, the dept. of Agriculture is too fat and times have changed. We have so few farmers now that it could be done away with. Concentrate on food safety (that should be the Food & Drug Admin.). Education should be eliminated. Let the states take care of themselves. Forget “no child left behind.” Education hasn’t improved because of it. Eliminate the IRS and go to a “flat tax.” Everyone pays a flat rate based on gross income, businesses & individuals. No writeoffs or exceptions. Make the rate ten percent (yes 10%). That’s much more than the govt. get now through taxes. Require witholding for all business and individuals. No exceptions. The govt. gets their money up-front. The DoD can’t continue to be a “sacred cow.” They need to cut costs too. There’s a lot of “fat” still in DoD, just as in the rest of the federal govt. The other suggestion was to institute a national sales tax or value-added tax. I spent many years in the military and as a civilian in Europe. They’ve had VAT’s forever. Once started they never go away. Don’t do it. Germany has a 19% VAT now. Oh, by the way, they also pay income tax on top of that. The last thing I recommend is that we not allow any more earmarks or “pork” in our National budget process. Also term limits (two terms maximum – Senate & House), and they get the same benefits and retirement package that all regular civil servants get, not the “special hybrid” (don’t talk about it) package they use. Give the POTUS “line-item-veto” and require balanced budgets. That’s my wish list. It won’t be popular, but we’ve got to start somewhere, before this country goes bankrupt.

Maurice O'Brien April 15, 2010 at 2:50 am

Social Security and Medicare don’t necessarily have to be “cut.” Simply raise the entitlement age to 70, and this would cut billions from the budget.

Maurice O'Brien April 15, 2010 at 2:50 am

Social Security and Medicare don’t necessarily have to be “cut.” Simply raise the entitlement age to 70, and this would cut billions from the budget.

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