To spend or not to spend? That is the question today nationally and globally. It is also the issue before members of Congress as they consider whether to extend unemployment benefits, continue higher Medicaid reimbursements or make other adjustments in federal spending.
The instinctive response of most Kansans likely would be an emphatic "Cut spending!" And most candidates on the campaign trail would give a hearty salute.
Such reactions, however, may not reflect an appreciation of the impact of governmental spending on the Kansas economy and, most important, its disproportionate impact on the rural economy of Kansas.
A recent report, "Rural America's Fiscal Challenge," published by the Federal Reserve Bank of Kansas City, Mo., documents the vulnerability of rural counties to cuts in state and local spending, such as education and social services. Data from the report shows that in 39 of 105 Kansas counties, state and local government payrolls made up 25 percent or more of nonfarm earnings in 2008.
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The rural impact of federal spending is even more dramatic. In 2008, before any "stimulus" funding arrived, more than $25 billion flowed from the U.S. Treasury into Kansas, representing 23 percent of all personal income in Kansas for that year.
In other words, nearly one in every four dollars in the Kansas economy came from federal spending — big-ticket items such as Social Security, Medicare, Medicaid, agricultural supports and roads, plus an array of smaller tickets.
If the five largest counties (Douglas, Johnson, Sedgwick, Shawnee and Wyandotte) are removed from the calculation, 31 percent of all personal income in the remaining 100 Kansas counties is tied to federal spending, just short of one in every three dollars in the state's rural economy.
A focus on the federal piece suggests that a huge disconnect exists between the reality of federal spending and the campaign rhetoric of most of the 14 candidates seeking office in the 1st and 4th districts. These two congressional districts together cover 77 rural counties, representing roughly four-fifths of the land area of Kansas, running from the Colorado border to within two or three counties of the Missouri border. Sedgwick County is the only metropolitan county in these two districts.
Based on their websites, media ads and public statements, most candidates campaigning in these two districts make vague promises to cut spending, cut taxes and balance the federal budget, but give no specifics.
There is still time to close the gap between rhetoric and reality. A website on "consolidated federal funds" (harvester.census.gov/cffr/) provides congressional candidates and voters the opportunity to engage in a more serious discussion of whether to spend or not. The website presents in some detail federal spending in each Kansas county.
The website would allow, for example, aspiring 4th District candidates who advocate spending cuts to tell voters of Elk County and Harper County where they would cut. In 2008, 56.1 percent of personal income in Elk County was federal spending; the comparable figure for Harper County was 42.6 percent. Voters in Elk and Harper counties could ask candidates the same question.
First District candidates could engage in a similar discussion in Comanche and Clark counties, where federal spending in 2008 represented 50.4 and 45.4 percent, respectively, of personal income in those counties.
Such candor likely would shock voters and scare campaign managers. But in the process, it might just be instructive of the grim realities involved in cutting federal spending.