The CEPR “It’s the Budget, Stupid” Budget Calculator — Because Size Matters

June 03, 2021

We’re relaunching an update to our critically acclaimed federal budget calculator (okay, I’m sure someone somewhere said something good about it) because it really is important that people have some idea about the budget. The basic issue is that almost no one has any sense of what’s big and what’s small in the budget because the numbers are standardly reported as millions, billions, or trillions, with no context whatsoever. Often, budget stories don’t even report the number of years over which an amount is expected to be spent.

The fact that almost no one has any idea what these really big budget numbers mean is not a secret. Margaret Sullivan, currently the Washington Post’s media columnist, wrote a very nice piece on this topic when she was the public editor at the New York Times. When she asked David Leonhardt, who was the paper’s Washington editor at the time, he said we might as well just write “really big number,” instead of putting in a huge number that will be meaningless to almost everyone who sees it.

The piece came with a commitment to put big numbers in a context that would make them meaningful to readers. They can be expressed as a share of the budget, as a per person amount, or in a number of other ways that would make them comprehensible to readers. This was a huge deal because if the New York Times adopted this practice, other major news outlets would almost certainly have followed.

Unfortunately, nothing changed. It is still possible to read budget articles in the New York Times referring to billions or trillions, giving no context whatsoever. This really does matter because we know the public is hugely confused about where the money in the budget goes.

They think that huge amounts go to things like foreign aid or Temporary Assistance to Needy Families (TANF), both programs that account for far less than 1.0 percent of the budget. Some of this exaggerated view of the cost of these programs is surely politically motivated, as people with a dislike for these programs may tend to exaggerate their cost, but polling shows that even many people who support the programs hugely exaggerate their share of the budget.

If we want to have serious debates on budget priorities it is important that people know where their money is being spent. While we would not want to waste even smaller amounts of money, people may be less upset over the $201 million that President Biden has proposed for the National Endowment for the Arts in 2022 if they knew it comes to less than 0.004 percent of projected spending, or a bit more than 60 cents per person. The $445 million that the Corporation for Public broadcasting gets from the government is a bit more than 0.007 percent of the budget proposed for 2022.

The real money in the budget is not any secret. For 2022, Social Security is projected to cost $1,196 billion, or 19.9 percent of total spending. The tab for the military is $756 billion, 12.6 percent of total spending. Medicare and Medicaid come to $766 billion and $571 billion, which are 12.7 percent and 9.5 percent of total spending. Interest on the debt is $305 billion, 5.1 percent of spending.

The total from these categories is 59.8 percent of spending. The rest is everything from federal prisons and the park service to the State Department and Education Department. But, you can get the numbers yourself and go to the CEPR budget calculator and see how big a deal an item is.     


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