The federal government is spending $46,000 a year per family (or group of four) and could balance its budget by dropping that to $30,000.
Mark Neumann on Friday, September 16th, 2011 in a television interview
Mark Neumann says federal government spends $46,000 a year per family of four
Mark Neumann, the first Republican to enter the 2012 U.S. Senate race in Wisconsin, says it would make perfect business sense to balance the federal budget at the current revenue level of $2.3 trillion -- immediately.
And although he says it is more practical and realistic to phase it in over time, he frames the issue in terms of what balancing the budget means for a typical family.
We interviewed the former GOP congressman after listening to his Sept. 16, 2011, appearance on Wisconsin Public Television’s "Here and Now" program.
On the show, Neumann described his view of narrow federal government authority, his hopes for across-the-board tax-rate cuts and his emphasis on as-yet unspecified spending cuts.
And the former math teacher unveiled an ear-catching bit of budget arithmetic:
"Let me lay out a number for you, it’s a staggering number," Neumann told anchor Frederica Freyberg. "Did you know that if the federal government spent $30,000 on behalf of every family of four or group of four in America, that the federal budget would be balanced today? They’re spending $46,000 on behalf of every family of four in America today, every year."
He concluded: "If that number was $30,000 -- $30,000 is a lot of money – – if they spent $30,000 on behalf of every family of four, the federal budget would be balanced today."
With fiscal matters likely to dominate the race to replace U.S. Sen. Herb Kohl, the four-term Democrat, we thought it was worth checking Neumann’s math and to explore the point he was making with it.
First, we did a little homework of our own.
Balancing the budget immediately would be a dramatic move.
In 2011, the U.S. government is expected to run a 35% deficit -- spending $1.28 trillion more than the $2.3 trillion in revenue it takes in, according to Congressional Budget Office estimates.
We asked Neumann his timetable for how quickly it could be balanced and he said less than nine years -- maybe five or seven. He promised a detailed spending cut plan as the campaign unfolds.
He said a phase-in is dictated by political realities, and avoiding a shock to the economy that an all-at-once change might bring.
Neumann told us that he’d like to see federal spending sink even lower than $30,000 a year per family of four -- and it can, he said, if people take more personal responsibility for their lives.
Now let’s look at the math, and Neumann’s presentation of it.
To be sure, Neumann is not talking about actually sending money to any families, and he’s not suggesting that all families receive the same benefits. What he means is that the federal government exists to serve the public, so every expense – from the White House light bill to the cost of a grenade launcher – is "spent" on the public. By taking the total amount of money the government spends, dividing the U.S. population by four and spreading the money evenly over that theoretical family, Neumann arrives at the $46,000 amount.
We crunched the numbers ourselves and asked three outside experts for help: all agreed Neumann’s math is on target.
And if the government pulled back and only spent what it actually took in, the per-four amount would be about $30,000.
Neumann told us he chose a family of four because it was a common size.
Some federal budget experts found mild fault with Neumann’s approach, but none said it was misleading.
A better way to illustrate the size of the budget is by households, the standard unit used by the U.S. Census Bureau, said Chris Edwards, an economist at the libertarian Cato Institute. Based on that measure, the current figure is about $30,000 per household, compared with the $46,000 figure that Neumann’s approach generated.
Jason Peuquet of the Committee for a Responsible Federal Budget, a bipartisan budget-hawk group, said Neumann’s numbers didn’t provide a very useful road map to thinking about solutions.
"We do need to start thinking about bringing spending and revenues more in line, but given the depth of our fiscal challenges we likely won’t be able to fully ‘balance the budget’ this decade," Peuquet said.
Neumann said he would outline his proposals for entitlement reform and other moves later in the campaign.
He’ll face tough choices, said Scott Lilly, a senior fellow at the liberal Center for American Progress.
The federal government’s growth has been fueled by spending on wars and the aging of the population, Lilly said. "The first problem we can fix by agreeing that if we are going to war we will raise the taxes to pay for it. The second we can fix by raising taxes or cutting benefits."
Neumann said you could balance the federal budget by reducing the amount spent from $46,000 per family of four to $30,000 -- a reduced amount that is, in his view, still too high.
We can’t rule on his opinion, but the math claim adds up. It’s not a common calculation and therefore limited in its meaning, but experts agreed it’s not misleading. We rate the statement True.