Before we criticize federal budget, we have to understand it

In the wake of Congress' torturous path to fund the government for the remainder of this year, some in Congress complained they did not know what had been stuffed into the 1,665-page bill. So what chance does the average citizen have?

Indeed, polling through the years shows that many Americans don't have a strong grasp of the numbers. As a foreign affairs professional, I ran into this from time to time. Some Americans think we spend up to 25 percent of the federal budget on foreign aid when the actual number is less than one percent.

It is also important to remember that more than 60 percent of the budget is legislated to be mandatory while the remaining portion is discretionary.

Take the $4.4 trillion FY-2019 budget proposed by the Donald Trump Administration. To simplify things in my mind, I often think of the federal government doing five things.

First, it pays the interest on our debt. It has to. This is the "full faith and credit of the U.S. government." That will total about 8 percent of the budget, or about $363 billion. However, rising interest rates could make that number go up as we service our $21 trillion debt.

Second, the government provides pensions. Primarily, this is Social Security but the government also pays pensions to federal employees. Social Security remains fully funded through payroll taxes and the Social Security Trust Fund, but we are warned that by 2036, retired Baby Boomers will tip that into deficit. Pensions represent nearly $1.1 trillion or just about a quarter of the federal budget.

Third, the government provides health care. This is primarily Medicare and Medicaid. Medicare funding will not be completely covered by payroll taxes and Medicaid comes out of general revenue. However, there are special programs for children's health, the Center for Disease Control, the National Institutes of Health and a variety of other programs. Most fall under mandatory expenditures and constitute more than 27 percent of the federal budget and that percentage is growing.

Fourth, the government provides security. The Department of Defense takes more than half of total discretionary spending, but add the Department of Veterans Affairs, State, Homeland Security, our intelligence agencies, the Department of Justice, Treasury departments that shut down terrorist financing, half the Department of Energy budget that deals with nuclear weapons, and a more than $100 billion contingency fund that is largely used to support overseas military operations (think Afghanistan) and you quickly approach more than $1 trillion. That is another quarter of the budget.

Fifth is what I call "everything else." For the most part, "everything else" consists of transfers. Money flows to Washington in taxes and flows out to the states in programs. Some states get more than they send, but Illinois is not one of them. It is a "donor" state.

For example, the Department of Agriculture provides SNAP (what used to be called food stamps) and subsidies to farmers. The Department of Transportation's budget is largely the Highway Trust Fund. Housing and Urban Development provides housing assistance to the poor. Education gives grants to schools and students. "Everything else" comprises something in the range of 14-15 percent of the federal budget.

In FY-2019, we are planning to pay for $3.4 trillion of this with our tax dollars and borrow the other trillion to balance the books. The combination of tax cuts and a lifting of budget caps by the Congress insured that our deficit would increase. Supporters of this budget path believe that this stimulus will promote faster economic growth and bring in more revenue. Many are skeptical.

In this election year, we will be asked to judge the proposed programs of those running for office and if we don't understand the fundamentals it will be hard to judge. Politicians who fudge the facts and make unsupported claims could also mislead us. Democracy - the idea that people can govern themselves - gives power to the governed. But with power comes responsibility to know enough to ask good questions.

Keith Peterson, of Lake Barrington, served 29 years as a press and cultural officer for the United States Information Agency and Department of State. He was chief editorial writer of the Daily Herald 1984-86.