Why Cutting Spending to Balance the Budget is Easier Said than Done

When you have lived beyond your means for any length of time, it's never easy to find ways to spend less than you make. This applies to individuals, business and the U.S. government. 

One challenge for the federal government is the length of time it has been overspending. Having only balanced the budget once in the last 55 years, there is clearly a mindset and pattern of overspending that will be hard to change. A majority of Senators, Representatives and the President must be willing to endure the potential wrath of disgruntled voters who are affected by the spending cuts or tax increases to balance the budget, which is something they have generally been reluctant to do for more than 50 years.

It may seem like the simple answer to achieve a balanced budget is to cut spending. However, the composition of federal spending makes it more difficult task than it sounds.

For Fiscal 2015, the federal government spent approximately $3.6 trillion. Of that amount $2.6 trillion was for Social Security, means-tested entitlements (e.g., unemployment benefits, Medicaid, food assistance, children's health programs and interest on the debt). You can't cut the interest payments on the debt, and it would be a major political battle to reduce Social Security and other entitlement programs. If none of these programs can be reduced, that leaves about $1 trillion of spending available to cut.

The total deficit for Fiscal 2015 was $438 billion. Consequently, all of the remaining programs would have to be slashed by more than 40% to achieve a balanced budget. That includes defense, education, transportation, homeland security and virtually every other federal agency. Fiscal 2015 defense spending was $538 billion, so if defense spending was excluded, all other federal spending would be effectively be eliminated.

Given the parameters of paying interest on the debt and maintaining Social Security and other entitlement spending, it's understandable why Congress has been unable to reduce spending to balance the budget. Although it will be necessary to reduce spending in order to balance the budget, the idea of simply cutting spending to balance the budget, without some form of Social Security or entitlement reform, is much easier said than done.