Episode 782: Budget Time

Jul 7, 2017

On today's show, we are going to explain every dollar the federal government spent last year — nearly $4 trillion — in 10 minutes.

And to get a real feel for how the money is divided up, we're going to divide up our 10 minutes exactly the way the government divided up the money last year. The more money a program gets from the government, the more time it gets from us.

We dig into social security's origin story, find a nice thing lobbyists do, and write a haiku about infrastructure. Experience the budget in real time.

Music: "With A Little Soul." Find us: Twitter/ Facebook.

Subscribe to our show on Apple Podcasts or PocketCast.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.


Hello, and welcome to PLANET MONEY. I'm Stacey Vanek Smith.


And I'm Jacob Goldstein. Today on the show, the entire federal budget.

VANEK SMITH: Don't go.

GOLDSTEIN: Keep listening because we're going to explain every dollar the federal government spent last year, $3.9 trillion. And we're going to do it in just 10 minutes.

VANEK SMITH: We're going to divide up our 10 minutes exactly the way the government divided up its budget last year. So the more money a program got from the federal government, the more time it's going to get from us.

GOLDSTEIN: We are going to hit everything - Social Security, defense, mowing the lawn at the White House, everything. Also, there's a poem.


VANEK SMITH: OK. Here's how it's going to work. We're going to put 10 minutes on the clock, and we're going to cover the entire federal budget.

GOLDSTEIN: Every second of that 10 minutes will be worth $6.4 billion.

VANEK SMITH: So the small programs, they're going to go superfast.

GOLDSTEIN: Big programs - nothing but time.

VANEK SMITH: And we're going to bring in a bunch of people from PLANET MONEY to help us out. So the first piece in our show today, Robert Smith is going to talk about Medicare and Medicaid. They've got just over a trillion dollars. That is 29 percent of the federal budget, so they will get 29 percent of our 10 minutes.

GOLDSTEIN: Start the clock - now.

ROBERT SMITH, BYLINE: You know how there's always this debate about whether the federal government should have a responsibility to pay for health care? Well, I got news for you. It already does. The federal government pays for the health care of 120 million Americans. People over the age of 65, families with low income, people with long-term disabilities - they're all covered by Medicare and Medicaid, Medicaid and Medicare, although I always mix them up. Everyone does.

SARAH KLIFF: I had some embarrassing errors when I was a new health policy reporter, where I would mistake these in stories. And lots of people send me angry emails.

SMITH: This is Sarah Kliff, a writer for vox.com. She co-hosts "The Weeds" podcast.

KLIFF: I heard a terrible way to remember it.

SMITH: Oh, I want to hear it.

KLIFF: Ages ago, someone told me, you care for the old and aid the sick. Or no, aid the poor. That what it is. See, it's a (laughter)...

SMITH: It's a terrible one. OK, I have a better one - silver hair, Medicare; underpaid, Medicaid. If we live long enough, we all get Medicare. But even if you don't consider yourself poor, you might also find yourself on Medicaid.

KLIFF: It actually finances a lot of long-term nursing home stays. So a lot of middle-, upper-class Americans eventually do end up on Medicaid when they need that kind of coverage, and they've kind of whittled away their savings.

SMITH: And there you have it.

Hey, Stacey, how much time do I have left?

VANEK SMITH: Uh, you've got about a minute and a half.

SMITH: Minute and a half.

VANEK SMITH: Yeah, you got a - this is the big - this is the biggest part of the budget. You got some time.

SMITH: OK. Let's go get some coffee.

VANEK SMITH: (Laughter) OK.

SMITH: Let's go. We got time.

VANEK SMITH: We have some time.

SMITH: And I've got to explain one more thing about Medicaid. OK, so we've all heard about Obamacare. We've all heard about how in Congress right now, the Republicans are undoing Obamacare. But what the fight is really about is the future of these programs we're talking about, the future of Medicaid.

VANEK SMITH: Underpaid.

SMITH: Underpaid.

You want - should I get you a cup?

VANEK SMITH: A black coffee, please.

SMITH: One of the big ways that Barack Obama got people insured was to expand Medicaid. Medicaid costs are shared between the federal government and the states; states run the programs. And Obama essentially said, we are going to give you more federal money, a larger share of our budget, if you just cover more people. And so this part of the budget pie I'm talking my way through just got larger.

So when the Republicans are thinking - God, how do we undo Obamacare? - what they thought is, let's put some caps on the growth of Medicaid. And what that means, in sort of real world terms, is that if the Republican plan passes, 15 million fewer people covered by Medicaid. So if we were going to do this show again in 10 years, there might be slightly less time for government health care, perhaps.

VANEK SMITH: No coffee break?

SMITH: Maybe time for a short coffee break.

VANEK SMITH: You going to drink that, by the way?

SMITH: Um, no.


GOLDSTEIN: Transportation - 2 percent of the budget, Kenny Malone.

KENNY MALONE, BYLINE: We asked former Secretary Ray LaHood to write us a haiku. He declined, so I made one for him using words from his old speeches.


RAY LAHOOD: A highway crumbles.

Neath our wheels.

One big pothole. It spreads cross the roads. Thank you all very much. Thank you very much.


VANEK SMITH: Next up, Social Security. It accounts for 24 percent of federal spending. Jacob, take it away.

GOLDSTEIN: Social Security is really big because almost everybody gets it. In particular, almost every American over the age of 66, including billionaires. You know, if Warren Buffett wants Social Security, he can get it. I called up Ted Marmor to ask about this. He's an emeritus professor at Yale, expert on Social Security.

Why does Warren Buffett get Social Security checks?

TED MARMOR: That's a classic dumbbell...


MARMOR: ...Underformulation.

GOLDSTEIN: (Laughter) OK. Marmor says billionaires getting Social Security is not a bug. It's a feature. When Social Security was created back in the '30s, some Democrats did want to create a version of the program where the money just went to poor people.

But President Roosevelt was like no, a program like that just won't survive politically. What we need is something that almost all working people are eligible for. And, he said, we should fund it with a special tax that almost all working people pay. That way, people will say, I paid into Social Security; I deserve Social Security when I retire. And I will vote out of office any politician who tries to take it away from me.

MARMOR: His terms, in which he expressed it, was, goddamn it, I'm going to be sure to have a program that no damn Congress is going to mess with because people are going to feel entitled.

GOLDSTEIN: But I do think this leads to a lot of confusion. You know, people seem to think, oh, I contributed to Social Security. They're holding on to my money in a special box. This is not how it works. My money is paying for retired people right now.

MARMOR: Absolutely.

GOLDSTEIN: And I'm crossing my fingers that in 30 years when I'm retired, there will be 40-year-olds who are paying me.

MARMOR: Jacob...


MARMOR: ...I'll bet you any money - and I want you to pay me off by putting it in my grave...


MARMOR: ...The probability that you will receive Social Security benefits for retirement is so high that you should be declared irrational...

GOLDSTEIN: (Laughter).

MARMOR: ...For believing so.


MARMOR: And the...

GOLDSTEIN: Why are you...

MARMOR: Now, I understand...

GOLDSTEIN: Why are you so confident?

MARMOR: Why am I so confident? Because I understand the political economy of the United States, that's why.

GOLDSTEIN: Because Roosevelt was right.

MARMOR: Correct.

GOLDSTEIN: Because almost everybody pays in and gets paid out, including billionaires, Marmor says Social Security is politically bulletproof.


VANEK SMITH: Social services and education, 3 percent. And for this segment, we wanted to get someone who was currently a beneficiary of public education, aka Jacob's kid.

UNIDENTIFIED CHILD: Most spending in this area comes from state and local governments.

GOLDSTEIN: The federal government's big...

UNIDENTIFIED CHILD: The federal government's biggest education line item is grants for low-income college students.


GOLDSTEIN: National defense is 15 percent of federal spending. Stacey.

VANEK SMITH: We spend $1.5 billion every day on defense. And this is famously one of the most controversial parts of the budget. I mean, Democrats often come in, and they want to cut defense spending. Then Republicans come in, and they want to raise defense spending. But somehow, in spite of all of this, if you look back over the last 20 years, the share of the budget devoted to defense has not really changed that much. And actually, that is pretty much true for most of the federal budget. It stays pretty steady.

And I was totally shocked by this, so I talked to this guy Bill Valdez about it. He worked for the Energy Department for more than 20 years. He wrote a lot of budgets, and he told me his theory of what's going on here.

BILL VALDEZ: You know, the real thing that keeps the budget stable is that there are all these special interest groups.

VANEK SMITH: Hundreds of lobbyists battling for government funds, hammering out deals with different states and different politicians. Bill says the budget status quo is really this hard-earned equilibrium. And he thinks this is a good thing ultimately. It creates stability.

So we actually have lobbyists to thank for our stable budget?

VALDEZ: Yeah. In many respects, yeah.

VANEK SMITH: It's like a little shoutout to the lobbyists.

VALDEZ: (Laughter) Well, I mean...

VANEK SMITH: They get so little love. I feel like that's OK. Right? Don't you think that maybe the budget should be their valentine?

VALDEZ: (Laughter).

VANEK SMITH: President Trump has proposed increasing defense spending by cutting other parts of the budget. Bill says, he will have to get through the lobbyists first.


GOLDSTEIN: Next up - income security, 13 percent of the budget. Here is Noel King.

NOEL KING, BYLINE: Yes, income security. So think of this as programs for poor people. It includes a bunch of different things like the Earned Income Tax Credit, housing assistance, unemployment. Foster care is a small part of it. I'm going to talk about food stamps, which are officially known as SNAP, for two reasons. No. 1, food stamps are a really big program. Usage spiked during the recession. If you look at graphs, it's basically, like, a straight line going up, and it has stayed pretty high.

More than 40 million people are getting food stamps right now. And I think there is a lot of confusion over who gets them, so let's clear that up. Two out of every 3 people on food stamps are kids, the elderly or they are disabled. Of the rest, it's roughly split between people who are working but making very low wages, low enough to qualify for food stamps, and people who are not working but should be working soon because SNAP comes with work requirements. For the most part, if you are able-bodied and you don't have a job, you get cut off from food stamps after a couple of months ago.

There you go.


VANEK SMITH: Interest on the national debt, 6 percent of the budget.

GOLDSTEIN: And you can look at this in two ways. One, interest rates are really low right now, so the government was able to borrow money, spend it on goods and services for Americans - great.

VANEK SMITH: But you could also say this whole chunk of the budget is just the interest on all the money we owe. And what we get in return for all this money is nothing.


GOLDSTEIN: Four more seconds.

VANEK SMITH: This is feeling awkward.


GOLDSTEIN: Veterans Affairs, 5 percent. Sally Helm, go.

SALLY HELM, BYLINE: Yes, they provide things like health care and disability benefits for vets. President Trump wants to boost funding for the VA but is proposing some cuts, including one for disabled vets once they're old enough to get Social Security.

President Eisenhower tried to do something kind of like this in the '50s. He was a five-star general, so maybe he thought he could get away with it. But he got totally shut down by Congress. We'll see how Trump does.


VANEK SMITH: International affairs, 1 percent. Nick Fountain, go.

NICK FOUNTAIN, BYLINE: Yeah, this goes to operating U.S. embassies and consulates throughout the world, providing military assistance to allies, aiding developing nay (ph)...


GOLDSTEIN: Everything else makes up about 3 percent of the budget. Let's bring it home.

VANEK SMITH: Justice - that's FBI, DEA, prisons, Homeland Security.

GOLDSTEIN: Natural resources and the environment.

VANEK SMITH: Science, space and technology.

GOLDSTEIN: General government - that's like mowing the White House lawn and paying congressional salaries.

VANEK SMITH: Community and regional development.

GOLDSTEIN: Agriculture.




VANEK SMITH: Woo, we did it (laughter). So we made it through the whole budget in 10 minutes. And I have to say, the thing that strikes me about the budget is that half of it - more than half of it is just made up by three programs - Medicare, Medicaid and Social Security.

GOLDSTEIN: And then, in the rest, overwhelmingly the biggest chunk is defense. And so there is this old line that I still love, which is, the federal government is basically a big insurance company backed by a large standing army.

VANEK SMITH: We really did cover almost the entire budget. Like, this is almost everything we spend money on - except, it is not the whole budget.


LINDSAY KOSHGARIAN: There's a part of the budget that is known as the black budget.

VANEK SMITH: The black budget?


VANEK SMITH: What is the black budget?

GOLDSTEIN: The black budget.

VANEK SMITH: Jacob, we will talk about the black budget after the break.

GOLDSTEIN: Oh, come on.

VANEK SMITH: (Laughter).


GOLDSTEIN: All right, Stacey, give me the black budget story.

VANEK SMITH: The black budget - I talked to Lindsay Koshgarian, who is the research director at the National Priorities Project, and asked her what it is.

KOSHGARIAN: So the black budget is a part of the federal budget that is devoted to national security. It's top secret.

VANEK SMITH: And Lindsay says that most of what we know about the black budget comes from the Edward Snowden leak in 2013.

KOSHGARIAN: So it includes things like the CIA, you know, secret agents, drone programs and the National Security Agency.

VANEK SMITH: And a bunch of other secret agent-type stuff.

GOLDSTEIN: So this is all hidden?

VANEK SMITH: Off the books.

GOLDSTEIN: Like - so when you took your spreadsheets and spent a week trying to do the math for this show, all this stuff you're describing is not in those spreadsheets. It's not on those pie charts. It's secret money.

VANEK SMITH: It's secret money.

GOLDSTEIN: Fantastic. So for all of this, do we know how much money the government spends?

VANEK SMITH: So before the Snowden leak, we really had no idea. But there was kind of an unofficial official number floating around of half a billion dollars or so.

GOLDSTEIN: OK, half a billion dollars.

VANEK SMITH: And then the Snowden leak came out, and we learned that it was a lot more than that. It's about $70 billion.

GOLDSTEIN: Oh, that's profoundly more.


VANEK SMITH: Seventy billion - that's about 2 percent of the budget. But, I mean, that number is from a few years ago. And to be honest, we really don't know how big the black budget is today.


VANEK SMITH: We always love to hear what you think of the show. Send us an email at planetmoney@npr.org, or find us on Facebook or Twitter. And we have a few people we would like to thank - Stephen Basiaga (ph), Eduard Saakashvili, Bernard Rostker Thomas Meyer and Dorothy Rosenbaum.

GOLDSTEIN: Our show today was produced by Elizabeth Kulas. Our editor is Bryant Urstadt. The supervising producer of PLANET MONEY is Alex Goldmark.

VANEK SMITH: And if you're looking for another podcast to listen to, check out It's Been A Minute With Sam Sanders. It's a new podcast from the co-host of the NPR Politics podcast. Check it out on the NPR One app or wherever you get your podcasts. I'm Stacey Vanek-Smith.

GOLDSTEIN: And I'm Jacob Goldstein. Thanks for listening.

PLANET MONEY intern Eduard Saakashvili, go.

EDUARD SAAKASHVILI, BYLINE: PLANET MONEY is looking for its next intern. It is paid. For more information, go to npr.org/money. Being an intern is incredible, and it's a lot of fun.