2008 Federal Budget

Letter: Balance federal budget is key to helping local residents

Editor: Members of Congress supporting an amendment to the U.S. Constitution that requires the federal budget to be balanced each year are being reckless with our economic future. Clearly, the federal deficit must be addressed, but such an amendment is the wrong method.

A balanced budget amendment requires federal spending in any year to be offset by revenues collected in the same year. Sounds enticing, but a closer look reveals a serious flaw. During a weak economy - like we've been experiencing since 2008 - revenues may decrease while simultaneously demand will likely increase for federal expenditures such as unemployment insurance, food stamps, job training and placement, Temporary Assistance to Needy Families and the overall cost of healthcare including Medicaid. At a time when more people would need help, less funding would be available to provide it. Increasing expenditures would only be possible by a supermajority approval of Congress - a herculean feat not likely to occur in a timely manner for many families.

Last year, the Northeast Florida Community Action Agency helped 32,000 people in its seven-county service area, which includes St. Johns County, a 39 percent increase from the previous year. Not only did we serve more people, we saw our client profile change, as people who never before needed help with food, shelter, utility costs, and job training and education sought help. Under a balanced budget scenario, thousands of First Coast families likely would not have received assistance.

We must reduce the federal deficit, but a balanced budget amendment is not the answer. Too many families would be hurt and economic recovery would take much longer with this approach.

Healthcare Economist · Share of Federal Budget Spent on Health ...

In 2008, 38 percent of the federal government’s revenue was spent on health care.  In 2009, however, this figure jumped to 54 percent of total revenues.  Although federal health spending only increased by 17.9%, a decline in revenues of a similar magnitude caused this large change.  Surprisingly, state and local spending on healthcare barely budged.  In 2008, state an local spending was 26 percent of total revenues, and this figure only inched up to 27 percent in 2009.  In 2009, households still contributed 6% of their income (just like in 2008) and business’s health care expense remained constant at 8 percent of cost in 2009.

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