Good News in the President’s Budget!

No, it’s not that this year’s budget contains glossy ads. Nor is it that the 1/2 trillion dollar in the red federal government will be paying a Republican ad agency (the makers of RATSTM brand Democrats) $9.5 million to tout the benefits of the $400b $535b Medicare package.

Instead, the good news from the NYT is that, based on Bush’s budget, domestic security will be 10% higher than it otherwise would be:

Mr. Bush would increase military spending by 7 percent and domestic security by 10 percent but would limit growth in discretionary domestic programs to just one-half of 1 percent.


P.S. Yes, it’s just a carelessly crafted sentence, but I thought it was a funny phrasing nonetheless.

UPDATE: More substantively, the same NYT article contains this nugget:

On Tuesday, barely 24 hours after Mr. Bush unveiled his $2.4 trillion budget for next year, the administration threatened to veto a $311 billion transportation bill that the Republican-controlled Senate passed on Monday. The Senate bill would authorize $55 billion more for highways and mass transit over the next six years than Mr. Bush has proposed, and a bill in the Republican-controlled House would authorize nearly $100 billion more.

Why the big concern in the Congress over transportation? It’s pork. Highway and transit money gets spent directly in supporters’ home districts, or states. I’m generally in favor of infrastructure spending, but this is more not-taxing and spending. If the programs are worthwhile and not pure pork, then politicians should be able to garner support for taxes, fees, and bond issues to fund those programs.

This is a great example of how the concentrations of costs and benefits affect decision-making. If passed, this highway money comes from all taxpayers — even at $100b, the cost to the average taxpayer is under $100. But, particularly for House members, the political benefits are very concentrated — a new road project in a moderately sized district is a big deal. As a result, even if a given project is not worth it from a society-wide view, it’s worth it to any given district precisely because all the benefits accrue to that district while the costs are spread over all tax payers.

The same is true, to a lesser extent, for Senators. For the president, however, the benefits are very diffuse, roughly as diffuse as the costs. Thus, the numbers in the above paragraph are ordered exactly as a cost-benefit analysis would predict: House members want the most ($150b), Senators want less ($55b), and the President wants $0.