off many desirable social goals against each other when resources are not unlimited. A “good” budget shows clearly whether there is a match between plans to spend and plans to pay for spending and whether the spending implied by current and proposed policies is sustainable.

In this report we insist that it is critical in assessing a budget to take the long view—to be concerned about future generations’ opportunities and well-being. Because current policies as projected are not sustainable, either spending must be reduced or revenues must increase. Budgets quantify the priority given to every public objective, from the oldest and most basic, such as national security, to newer ones, such as environmental protection. Federal government responsibilities have expanded gradually over many years. The oldest federal functions included building interstate transportation networks and securing the nation’s borders. For example, George Washington’s administration built the lighthouse at Montauk Point in New York. The newest functions include protecting endangered species, reducing greenhouse gas emissions, and expanding broadband access.

Public priorities change over time. Although federal spending as a proportion of the nation’s gross domestic product (GDP) was relatively stable from 1962 to 2008—increasing from about 19 percent to 20.5 percent—the distribution of spending by function changed dramatically. Social Security and health benefits, mainly to the poor and elderly, roughly tripled as a proportion of total spending, while the share going to defense and veterans fell from about one-half of the total to about one-fourth; see Figure 2-1.

Budget debates reflect fundamental differences: in people’s values, interests, and beliefs; about questions of budget priorities or tradeoffs concerning the best allocation of resources among public goals; and on practical questions about the best way to use resources to advance agreed-on priorities.

People hold sharply differing views of what they want or need from government, what they believe government can deliver, and what role they believe government should have in the economy and other aspects of life. In general, people favor policies that they believe will benefit themselves, their families, others like themselves, and the society as a whole—whether “benefit” is seen largely in material or in other terms.

Logically and appropriately, differences in values, interests, and beliefs about government’s role will lead people to widely different positions about what the budget should support and how. Differences in values, interests, and beliefs need to be recognized and at least partly reconciled in order to make long-range budget decisions. Fortunately, people who differ in their values and beliefs can and do often find common ground when it comes to practical solutions. In the next section we discuss the values that are most often reflected in budget debates. In the last section we consider practical concerns about how value preferences relate to budget choices.

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