Allocating the Discretionary Budget

Procedure
Before deciding how to distribute funds in the national budget, respondents were shown a spreadsheet with twelve key areas of the discretionary budget. All the figures they saw were based on actual allocations for the last complete fiscal year (1999). They were given the following information:

As you may know, Congress debates a budget each year. In this survey, you will make up a budget for twelve major areas. These include Space and Science Research, Environment, Job Training, Defense, Humanitarian and Economic Aid to foreign countries, Transportation, the State Department, the UN and UN peacekeeping, Federal Administration of Justice and Medical Research. We’re not including some big entitlement programs like Medicare or Social Security. For these twelve areas, plus debt reduction, the US spends about $460 billion, which comes out to approximately $1,000 for the average taxpayer. I’d like you to imagine that you have $1,000 of your tax money to divide among these twelve areas. For each area, you’ll see how much of the $1,000 currently goes to that area, and then you can indicate how many dollars you’d like to see go to that area. You’ll be able to monitor how much of the $1,000 you have left as you make decisions.

Respondents were able to work with the spreadsheet, adjusting numbers up or down until they were satisfied with their choices. The visual format encouraged a far greater number of miniscule adjustments -- shaving or augmenting an item by just one dollar -- than would be possible in a poll conducted by telephone, enhancing in this respect the simulation of budget adjustments faced by policymakers. For this reason, movements within a range of $1 up or down are described in this study as maintaining a spending level.

Over the last four years, the twelve-area discretionary budget actually grew by 15%, from $401 billion to $461 billion. Since different areas within the discretionary budget grew, shrank or even mushroomed, the respondents of 2000 were reacting to much different proportions among the twelve areas than were the respondents in 1996. For instance, in 2000 defense comprised 60% of the whole, while in 1996 it was 66%. In 2000, transportation comprised 9% of the whole, while in 1996 it was 3%. Thus, in trying to make complex tradeoffs, the respondents of 2000 began from a very different set of baselines.

Findings
By far, the largest reallocation of the discretionary budget, in dollar terms, was a dramatic reduction in defense spending -- on average by 24%.

Broadly, the biggest overall movement made by respondents was to cut defense spending. On average, defense was cut from $597 to $454 -- a cut of 24%. Sixty-eight percent of respondents cut defense, while just 23% increased it.

What is striking about this finding is that in poll questions that ask respondents how they feel about the current level of defense spending, there is not a majority that calls for the US to reduce. For example, in May 2000, Gallup found that 31% believed the US spends “too little” for “national defense and military purposes.” Forty-four percent said current spending was “about right,” and 22% thought it was “too much.”[1]

What this suggests is that most Americans are not aware of the size of the defense budget. It is only when they are given the information about the size of the defense budget relative to other items in the budget that they have the response of wanting to cut.

Respondents in the focus groups expressed strong surprise at the amount of defense spending.

I couldn’t believe the defense budget and military spending. I knew it was high but I had no idea. (Frederick woman)

You’re telling me that this is the way my money is spent. Well, I guess I find that obviously unbelievable. Everything else, just in comparison to the military, I mean, I just can’t believe we spend that much money on the military. (Cleveland woman)

Blew me away…the defense budget and the military spending, that’s hard to believe. (Frederick man)

This should be on the front page of every newspaper so every voter can see this. I think we’d have another Boston Tea Party... I think the majority of the people will be upset by the high defense. (Cleveland woman)

Several respondents also clarified that before seeing the distribution they had not held the position that they favored cutting defense.

If you had told me before I walked into this room that I was going to cut [defense] spending, I wouldn’t have believed it. But I was just amazed at how much of a portion it is. (Frederick man)

I would not have thought that I would have cut it. Actually, I’m amazed at the total amount that is there. (Frederick woman)

I probably would have thought I’d have left it alone. Until I saw the way it is working out and how much is there. (Frederick man)

Naturally, this raises the question of whether respondents cut defense simply because it was the largest item. This is unlikely for several reasons. In this budget exercise the relatively larger items were not cut more or even given smaller increases than smaller ones. Also in other polls that asked respondents to make up a budget and which showed respondents how much was going to Social Security, Social Security was not cut, even though it was larger than defense (see Alan Kay, Locating Consensus for Democracy, pp.148-155).

There are also several other poll findings that show that attitudes are consistent with the response of wanting to cut a defense budget that is perceived as relatively large. Various polls show that most Americans do not want the United States to play the role of world hegemon. For example, in a July 2000 COPA poll, 68% said that “the US is playing the role of world policeman more than it should be.”[2] Given three options for America’s role in the world, only 11% opted for the US to play the role of “the preeminent world leader.”[3] It may well be that Americans view a large defense budget as associated with this role.

Americans also appear to reject some of the principles that currently prompt the size of the defense budget. For example, a current principle in US defense sizing is that the United States should have the ability to fight two regional wars at once without the help of allies. As a general principle a very strong majority rejects the idea that US defense sizing should be based on the assumption that the US will be acting on its own. In July 2000, COPA asked the following question:

Right now, the size of the US defense budget is based on the need for the US to have the capability to fulfill commitments it has made to protect a number of other countries if they are attacked. I will read three positions people have taken on US defense spending. Please tell me which one you agree with most. A. The US should only spend enough to protect itself, but not to protect other countries. B. The US should spend enough so that it can protect itself and other countries all on its own. C. The US should only spend enough to protect itself and to join in efforts to protect countries together with allies or through the UN.

An overwhelming 74% agreed with statement C, while only 13% chose statement A and 11% chose statement B.[4] Earlier polls have also shown that Americans specifically reject the two-war requirement (see Steven Kull and I.M. Destler, Misreading the Public, page 149).

As mentioned, comparisons to earlier surveys based on budget exercises cannot be made on a precise basis because of variations in the amounts of the budget items. Nonetheless, during the last decade in all cases when respondents have been shown the distribution of the budget they have cut defense. In a Times-Mirror survey in 1989, defense was cut 9%; in the 1991 Americans Talk Issues survey, it was cut 17%; and in a 1996 PIPA survey, it was cut 42%.[5] The pattern suggests that support for cutting increased at the tail end of the Cold War and then reached a peak in the mid-1990s, as it was completely clear that the Cold War was over. More recently, perhaps in response to the actual cuts that have occurred, the average cut has decreased.

The areas of the budget to receive the highest dollar increase were related to 'human capital.' These included educational programs -- federal support to education and job training -- and medical research. The area receiving the highest percentage increase was the reduction of the national debt. Spending on the environment and space and science research rose modestly, while spending on transportation was nearly flat. The federal administration of justice was the only item other than defense to be cut significantly.

The area of the budget to receive the greatest increases, in dollar terms, could be roughly categorized as spending on ‘human capital,’ i.e. federal support to education, job training and medical research. On average ‘human capital’ spending was increased from $121 to $222 -- an 84% increase.

Educational Programs

Support for educational programs was very high. Federal support to education was increased on average from $72 to $104 -- a 44% rise -- with 69% of respondents increasing it. Job training and employment-related programs went from $18 to $41 -- a 128% increase -- with 67% of respondents increasing it. Together, these educational programs saw an increase of $55.

Enthusiasm for spending on educational programs was very strong in the focus groups.

I gave more money to education so I cut out the defense almost all the way. And I gave more to job training. (Cleveland woman)

Education is what I increased the most. I think we are moving away from an industrialized society towards an information-based society, and if we don’t have people that are smart enough to take advantage of that then our economy will go down the tubes. (Frederick man)

The classes are overcrowded, they just need more money. (Frederick woman)

I increased education very, very much, in the sense that it will have a trickle down effect to Head Start and other programs, especially inner-city programs. My personal opinion is that we cannot spend enough on education. (Cleveland man)

There is not enough put into education. I feel that the urban schools are really the ones that are missing out. (Richmond woman) Well, my idea was that some of these people that are on welfare that probably don’t know anything to do except put on a pair of boots and slog around in the mud -- if you give them some job training, they could probably get a good paying job. (Frederick man)

Other polls have also found strong support for increased spending on educational programs. For example, an ABC News poll from April 2000 reported that 65% wanted “spending on education “ to be increased (42% wanted it increased “a great deal”). Twenty-six percent preferred to keep it about the same, and only 8% wanted it decreased. [6] Similarly, in March 1999 Gallup found that 41% considered “increas[ing] spending on education” to Congress’ “top priority,” and another 46% considered it a “high priority.” Only 13% considered it a “low priority” or “not a priority at all.” [7]

Medical Research

Medical research received the highest dollar increase, going from $31 to $77 -- a steep 149% increase. An overwhelming 80% of respondents increased it.

Focus group participants voiced strong support for increases in this area.

I don’t think we can put too much money into trying to find a cure for cancer and AIDS. Especially AIDS right now. People are dropping like flies. (Frederick man)

We are the most technologically advanced society and the richest society, and we can’t find cures to things like cancer and AIDS and all sorts of diseases. (Frederick man)

Paying Down the National Debt

The biggest percentage increase was for the reduction of the national debt from $2 to $22 -- a 990% increase. Fifty-eight percent of respondents increased spending on the national debt.

Focus group comments reinforce this strong support for debt reduction.

The reduction of the national debt: I would like to raise that. In the long run, it will result in more tremendous savings if you can pay off the debt that you owe. (Richmond man)

I know that we were spending money that wasn’t there and just kept pushing it off and saying that we would take it from next years budget or whatever and kept passing the buck, literally and I think it’s time that that stopped and they balance the budget and make up for past excesses. (Frederick man)

I think half the problems we have today is because we lived on credit for so l long. And if we have the chance to knock a piece of that off with the budget surplus let’s start. (Cleveland woman)

If we’re ever going to start, we have to do it when we have the money. And that is now. (Cleveland man)

Other Domestic Programs

The environment and natural resources, the space program and science research, and transportation (including highways and mass transit) -- were a middle priority for respondents. Environmental spending rose on average to $66 from $52 (a 27% increase). Space and science was increased slightly, moving to $43 from $39 (a 10% increase); and transportation spending was kept nearly flat, increasing only two dollars to $94 (up 2%).

The only item other than defense to be cut significantly was the federal administration of justice, which was cut from $56 to $49 for a 12% decrease. A majority of 57% cut this item.

Overall, respondents modestly increased spending on international programs. The United Nations and UN peacekeeping received the highest percentage increase of all programs in the discretionary budget, while the State Department and humanitarian and economic aid received modest increases. Military aid was slightly reduced.

The international budget -- UN and UN peacekeeping, the State Department, humanitarian and economic aid, and military aid to foreign countries -- was given a mild increase of 22%, with $9 added to an existing budget of $41. This is less of a percentage increase than the 'human capital' budget received, but a larger one than the average for the remainder of the domestic budget.

The UN and UN peacekeeping got a massive percentage increase (218%) from $3 to $10. On a percentage basis this was the largest increase of all programs in the discretionary budget. However, just 36% of respondents increased spending on the UN and UN peacekeeping, while 42% wanted to maintain it. Thus those that raised it did so quite substantially. Only 22% wanted to cut it.

Other polls have also found strong support for the United Nations. For example, in a Pew poll conducted in September 1999, 77% said they had a favorable view of the UN.[8] This is consistent with the attitude, discussed above, in support of the US moving away from the role of being the dominant world leader and emphasizing instead a more multilateral approach in US foreign policy. Polls have also shown support for the US paying its UN dues. For example, in December 1998, a Zogby poll informed respondents that “the US owes $1.4 billion in back dues to the UN” and asked whether “the US should pay all of its back dues.” Sixty-two percent agreed that it should and only 27% disagreed (11% were not sure). [9]

Interestingly, items directly related to the US’s own foreign policy agenda did less well than the United Nations. The State Department was given a moderate average increase of 19%, going from $9 to $11. Humanitarian and economic aid was increased 6% on average, rising from $21 to $22. Military aid dropped slightly below its prior level of $8 to $7.

In the focus groups a number of participants talked about shifting money from the defense budget to other nonmilitary forms of approaching international problems.

I cut defense budget and military spending the most, and the money that I took from there went to peacekeepers. They keep the peace more than your defense and military spending. (Frederick man)

Areas that I was a little surprised by were the State Department. I thought it was a little low. And actually, peacekeeping, military aid to foreign countries and humanitarian, those all saw some of the increase that I took away from defense. I thought if we put a little more effort into relations with other countries I, thought we wouldn’t have to do it in a defensive manner. (Cleveland woman)

I took away from the military and gave to the peacekeeping. The world gets smaller every day. With all the modern travel and everything, it’s a smaller world. There is no ‘out there’ anymore, it’s your backyard. And you need to get along with your neighbors. And that’s where the money should be spent. (Frederick woman)

ATTITUDES TOWARD FOREIGN AID

Based on follow-up questions, it appears that most respondents did not believe that the amount of humanitarian and economic foreign aid presented in the discretionary budget was the full amount of such aid, and that respondents would actually support substantially higher spending on such items than was suggested by the allocations made.

Based on earlier polling data, we were somewhat surprised that the average increase in humanitarian and economic aid was just 6% and that only a bare majority maintained or increased it. Military aid was also cut slightly by 8%. In several polls conducted by COPA/PIPA, as well as other organizations, when asked to estimate how much of the federal budget goes to foreign aid, the median estimate was 20%. Asked then how much it should be, the median response was 10% -- ten times the actual amount of 1%. Thus in the current survey, it was curious that when respondents were told that humanitarian and economic aid constituted just over 2% of the discretionary budget ($21 out of $1,000), they only increased it marginally.

We suspected that respondents did not really believe that the amount they heard in the current survey was the full amount of aid in the federal budget. In past surveys, overestimation of the foreign aid budget was very robust, with overwhelming majorities grossly overestimating the amount, even among those with high levels of education. Thus it would be understandable to find that this assumption was not simply eliminated by seeing a line item in a list of 12 budget items.

To find out more, we conducted a follow-up set of questions with the same respondents just two weeks later. The findings were consistent with our hypothesis.

We asked respondents to estimate what percentage of the total federal budget goes to “humanitarian and economic aid.” The median answer was 15% -- just slightly lower than estimates in other polls of the percentage of the federal budget devoted to all foreign aid, despite these respondents’ recent one-time exposure to information to the contrary. The mean estimate was 19%.

Respondents were then asked what they thought would be an appropriate percentage of the federal budget to go to humanitarian and economic aid. The median response was 10%; the average was 13%, essentially the same as other earlier polls for foreign aid in general. The annual percentage for humanitarian and economic aid is about 1/2 of 1 percent of the budget.

To find out if the response in the context of the budget exercise might have been prompted by the presentation of dollar amounts as opposed to percentages, we probed further. The amount that the respondent gave in percentage terms for the appropriate amount to spend on humanitarian and economic aid was translated into the amount it would represent for the average taxpayer. For example, the median response was 10%. Respondents who gave this amount were told that this would be equal to $350 for the average taxpayer. Each respondent was asked whether he or she wanted to accept the amount shown, or revise it. Fully half (50%) accepted the amount first given -- for most, vastly higher than the actual taxpayer average of $21 -- while about half (49%) rejected it.

In the next step, the half of respondents who rejected the amount shown were then asked to fill in the dollar amount they thought appropriate. The group’s average answer was $169.

Combining all the answers, the average response was that the amount spent on humanitarian and economic aid should be $280. The median response was $105 -- corresponding to 3% of the entire federal budget.

Thus it appears that in the original budget exercise, most respondents did not really believe that the 2% of the discretionary budget devoted to humanitarian and economic aid was the full amount and that, in fact, Americans are ready to support substantially higher amounts of spending than were suggested by their initial response in the discretionary budget exercise.

Cognitive psychology suggests that when a person receives correct information on one occasion, they weigh the new information against the many times they have received contrary information, and that-while the new information may make some headway-it does not prevail with the person all at once. In the case of aid, the collective sense of the US having made a lengthy historical effort, and the frequent references by politicians to foreign aid as an enormous burden, provide the body of contrary information with which correct information must contend. To take one example, U.S. Senator Jesse Helms combined both the elements just mentioned in his widely quoted 1994 statement that “the foreign aid program has spent an estimated $2 trillion of the taxpayers’ money” -- a figure far in excess of actual spending even going back to the end of World War II. Such statements in public discourse partially explain the tenacity of misperceptions about foreign aid in the American mind.