Never Waste a Crisis: Re-examining Our Monthly Federal Budget Priorities

Across the country, millions of people are taking stock of their personal budgets as an economic zeppelin of woe casts its shadow over all we once took for granted. There's nothing like layoffs, pay cuts, and unemployment to inspire some serious financial soul-searching. What's behind that premier $120 monthly cable bill? Perhaps more time with the kids is in order. Those fancy $50 haircuts? Time to break out that Flowbee you bought in 1992. Cigarettes costing $150 a month? Kick the habit.

Now that Tax Day is upon us, it's a perfect time to extend that spirit and re-examine our federal budget too. “You never want a serious crisis to go to waste” Rahm Emanuel stated recently, and its with this advice that we consider our annual U.S. membership fees known as federal income taxes. What exactly are our 2009 taxes paying for? Is that money going toward what we value most?

According to the report, Where Do Your Tax Dollars Go? [1], just released by the National Priorities Project [2], the median income family will be paying about $4,450 in federal taxes this year on their 2008 income. That's about $370 a month, a pretty sizable bill when you consider it could cover a month of heating in the Northeast, a car payment, groceries, or a student loan payment. Instead, its our monthly bill sent to us by the federal government. Just what are we paying for? Let's peruse the three biggest ticket items.

For starters, military-related spending is the 800lb gorilla in the room, gobbling about 40¢ of each tax dollar. That's about $135 a month to pay for military actions both past and present. Unbeknownst to many, part of that bill is for imported fossil fuels [3]: gas for our cars, oil or propane to heat our homes, fuel for airliners. This funds a global U.S. military presence to maintain access to foreign sources of petroleum. Just add that to the price you pay at the pump or when your natural gas or oil bill arrives.

Coming in a distant second at $85 a month is health care. This covers things like health insurance for low income children and adults as well as for older and disabled adults. Despite our contribution in taxes atop our own health insurance payments, co-pays, deductibles, and our employers' contributions, nearly 46 million people in the U.S. remain uninsured.

Then there is the debt. Included in our payment for the military is the interest we pay on debts for wars past, but there is also the accumulated interest on the debt for all of the other things the government is doing. We're making “minimum payments” on interest for non-military debt to the tune of about $45 a month.

What about money to provide veterans' benefits? Food for the hungry and support for agriculture? How about money for our sagging transportation infrastructure, income security, running the government, and attending to international affairs? All of that is accomplished with only $85 a month, $50 less than military-related spending alone.

So there's a quick perusal of the priorities embedded in Bush and Co.'s most recent bill to America. Will our tax dollars be better spent in the future? There's cause for optimism. For example, Obama's first budget overview suggests priorities are likely to change with more spending on environment, energy, and science. Believe it or not, these programs combined only received $10 a month under Bush. And the cost for education? Just $10 a month goes to supplement property tax payments for local schools. Any thoughtful increases here would be a welcome sign of intelligent design.

Still, our optimism should be guarded. Even as glimmers of light break through the budgetary clouds with news of Secretary Gates cutting elements of Cold War spending, the Obama administration will still preside over the largest military budget in U.S. history. Yes, Bush's gorilla in the middle of the room lives on, packing on the pounds. As we re-examine our budgets during these trying times, can we honestly say we value militarism above all else? Given the groundswell for clean energy and the concern about mounting debt, can we defend a monthly military budget that enables our costly oil addiction and raises our interest payments?

Of course not -- the United States can do better. Like those hefty cable bills, fancy haircuts and cigarettes, we can revamp some spending habits and emerge a happier and healthier nation. Let's heed Emanuel's advice and use this economic crisis to push the administration toward more sensible spending priorities in the years to come. After all, that gorilla could certainly stand to shed some pounds.

This post was co-written with Barb Chalfonte.